Major crypto lender Celsius freezes withdrawals as markets tumble(reuters.com)
reuters.com
Major crypto lender Celsius freezes withdrawals as markets tumble
https://www.reuters.com/technology/crypto-firm-celsius-pauses-all-transfers-withdrawals-between-accounts-2022-06-13/
427 comments
As a contributor the mentionned fund that invested 750m into that exchange (it is a mandatory government saving taking ~10% of our paycheck each month) I must say I am really pissed off. They don't invest in our own early stage startup citing "risk" and then they go and invest in a foreign crypto exchange of all things.
You should call a securities lawyer and also the legal department of the pension, and threaten to sue. Whichever idiots have done this deserve to suffer some consequences — even if you sue and it gets tossed out, they will think twice before trying some sort of ridiculous nonsense like this again.
Pensions are extremely difficult to pitch for any sort of deal, even when it’s safe and makes sense. There is definitely some sort of back-channel relationship that led to this deal. You need to figure out how this happened, because there’s likely to be more of this sort of corrupt junk in your pension’s portfolio.
You should also question how economically benefiting from proof of stake mining has any place in any fund that purports to care about ESG (that applies to everyone!).
Pensions are extremely difficult to pitch for any sort of deal, even when it’s safe and makes sense. There is definitely some sort of back-channel relationship that led to this deal. You need to figure out how this happened, because there’s likely to be more of this sort of corrupt junk in your pension’s portfolio.
You should also question how economically benefiting from proof of stake mining has any place in any fund that purports to care about ESG (that applies to everyone!).
It's pretty obvious. Look at the history of big union pensions in the USA, e.g. the Teamsters.
Maybe they were offered more guarantees on their investment, or they already exited that position after a heads up. For Celsius, saying a major pension fund was a key investor was worth a lot.
I wonder if there's indeed grounds for a class action against those who made the due diligence work. Should it be found that they might not have acted in the fund's best interest or that there was some back-channeling the repercussions might be interesting.
But your money is definitely gone.
Now, on the other hand, forcing everyone to invest in that fund 10% of their earnings, considering the huge amount of risk they are taking and the very speculative nature of their investments... that sounds like something else that would be great to challenge in courts.
But your money is definitely gone.
Now, on the other hand, forcing everyone to invest in that fund 10% of their earnings, considering the huge amount of risk they are taking and the very speculative nature of their investments... that sounds like something else that would be great to challenge in courts.
The round was 750m, la Caisse invested 150 millions.
What's absolutely bunkers is that no major Quebec news sites are talking about this news this morning. La Presse, Journal de Montreal, TVA, nothing. (TVA is mentioning that the crypto market is down and casually mention la Caisse investment down in the article, but it's hardly an important news) Radio-Canada did make a major investigation into this investment few weeks ago (how timely!) but has yet to update it https://ici.radio-canada.ca/recit-numerique/4095/caisse-depo...
What's absolutely bunkers is that no major Quebec news sites are talking about this news this morning. La Presse, Journal de Montreal, TVA, nothing. (TVA is mentioning that the crypto market is down and casually mention la Caisse investment down in the article, but it's hardly an important news) Radio-Canada did make a major investigation into this investment few weeks ago (how timely!) but has yet to update it https://ici.radio-canada.ca/recit-numerique/4095/caisse-depo...
Better than 750m I guess, but with my napkin math its still 1200 old YC deals / 300 new YC deals which are most likely to have a better ROI than a crypto exchange. But la Caisse doesn't invest in small businesses, they want big deals to reduce risk (ironically).
They could’ve invested in StableGains!
I have no numbers to back this up but only an observation which I thought completely trivial until now, that of the hundreds of crypto people that I've interacted with since I first started dabbling with it in 2013, it always felt a bit odd, as someone who mainly lived and worked in the federal district in DC, how an outsized proportion of them - and especially ones that stand out as being the most ideologically strident type of crypto-bro - were French Canadians.
Journal de Montreal has this (published 6 minutes ago) https://www.journaldemontreal.com/2022/06/13/cryptomonnaie-c...
Indeed. The same decline in pension funds occurred in the 2007 crash and other crashes. Unfortunately that’s often the reality when people manage other’s people’s money. The gains result in large bonusses for the money managers and the losses result in large losses for the investors. The incentives are wrong.
Heads I win, tails you lose.
Same problem in government as well.
People that manage expensive assets are not punished if they make bad decisions
People that manage expensive assets are not punished if they make bad decisions
I would argue that authority without responsibility is the core issue in societies today.
That’s the case with a typical hedge fund but is it the case for pension funds like this one? I thought pension fund managers were not particularly incentivised to take risks for larger returns, but I don’t really have evidence for this assertion.
Pension funds going into high-risk company ventures operating in a regulatory grey area is insane.
Unfortunately, a lot of pension funds are behind so the started taking more risk. Frontline did a good piece called "The Pension Gamble" on this: https://www.pbs.org/wgbh/frontline/film/the-pension-gamble/
Thanks for the great link (just watched it).
The whole idea of a "defined benefit" pension seems insane to me. It's essentially a promise that some entity will still exist and be solvent in 40+ years (start teaching around 22, retire around 65...)
The whole idea of a "defined benefit" pension seems insane to me. It's essentially a promise that some entity will still exist and be solvent in 40+ years (start teaching around 22, retire around 65...)
Defined benefit pension funds have always been a nice pot of money to enable corruption. That is why IRA/401k is better. Just let people choose what they want from Vanguard/Fidelity/Schwab.
Alternatively, one could imagine a pension system where the state gives one money to ensure one can continue living, paid for by taxes, without inserting a casino in the middle. But perhaps that's a tad radical.
While it might not be sufficient to ensure one can continue living, in the US, Social Security has been in effect since 1940 or so.
Indeed, but it's been steadily deliberately undermined as the idea that a government has no responsibility to it's citizens except to keep the line going up and trickle down economics took root. It's easy to see how pension funds play into this. They are a tool that ties up millions of people's future and savings into the stock market, providing the financial sector with a huge number of retail investors who can be made to hold the bag for financial crashes. Under this angle, it is not at all surprising that they would end up investing into incredibly risky ventures.
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Defined Benefit pensions went the way of the dodo ages ago because it's too expensive for employers. Everybody is now at the mercy of defined contribution plans.
Taxpayer funded DB pensions are very alive today. Lots of big pots of money for politicians and government employee union leaders to play with (or influence), and extremely easy way to pay government employees with debt without actually having to admit it is debt due to taxpayer funded DB pensions being exempt from regulations regarding proper accounting such as ERISA 1974 and PPA 2006.
See: http://www.data-z.org/pension_database
See: http://www.data-z.org/pension_database
It's wild to me that public pensions are allowed to invest in individual companies.
There is a big difference in Canadian pension funds and US pension funds.
Canadian pension funds are run more akin to a private equity firm. They invest directly in growth stage deals and therefore take commensurate risks like any other private equity firm.
That means that they make bets with more asymmetric risks and balance their entire portfolio rather than staying at a specific risk band with all of their investments. They pay for professional staff commensurate with that model. A canadian pension fund's employees earn salary and bonuses comparable to a investment bank or private equity firm.
You can't necessarily look at one off investments and have to look at return over time which is generally healthy and their funding ratio, which is generally much healthier than US pension counterparts.
There is a reason the "Canadian Model" is held up as one of the ideal pension management models.
Canadian pension funds are run more akin to a private equity firm. They invest directly in growth stage deals and therefore take commensurate risks like any other private equity firm.
That means that they make bets with more asymmetric risks and balance their entire portfolio rather than staying at a specific risk band with all of their investments. They pay for professional staff commensurate with that model. A canadian pension fund's employees earn salary and bonuses comparable to a investment bank or private equity firm.
You can't necessarily look at one off investments and have to look at return over time which is generally healthy and their funding ratio, which is generally much healthier than US pension counterparts.
There is a reason the "Canadian Model" is held up as one of the ideal pension management models.
This sounds roughly equivalent to an actively-managed mutual fund. To anyone paying attention the past few decades, these have been widely discredited in favor of passive index funds.
Why would this model be held up as the ideal, and by whom? Why would pensioners be better served by expensive and underperforming active management rather than more cheaply balancing risk through a pension manager picking a balance of index funds and periodically rebalancing?
Perhaps I’m missing a crucial detail unique to pensions, but it just sounds like yet more expensive financial industry snake oil to me.
Why would this model be held up as the ideal, and by whom? Why would pensioners be better served by expensive and underperforming active management rather than more cheaply balancing risk through a pension manager picking a balance of index funds and periodically rebalancing?
Perhaps I’m missing a crucial detail unique to pensions, but it just sounds like yet more expensive financial industry snake oil to me.
https://documents1.worldbank.org/curated/en/7807215106396985...
FTA:
"Canada is home to some of the world’s most admired and successful public pension organizations" and "The core characteristics of the Canadian pension model, articulated in more detail in the next section, have been demonstrated to improve performance. Strong, independent governance is often cited by experts as a driver of outperformance. Inhouse investment management tends to result in improved returns after taking costs into account."
The pension funds all take a much more broadly diversified AND deeper approach than actively managed mutual funds. They are more akin to a Blackstone or Apollo.
Almost all of the top Canadian pension funds have better performance to benchmark over a 3 decade horizon including during the financial crisis, so arguably the proof is in the pudding so to speak.
FTA:
"Canada is home to some of the world’s most admired and successful public pension organizations" and "The core characteristics of the Canadian pension model, articulated in more detail in the next section, have been demonstrated to improve performance. Strong, independent governance is often cited by experts as a driver of outperformance. Inhouse investment management tends to result in improved returns after taking costs into account."
The pension funds all take a much more broadly diversified AND deeper approach than actively managed mutual funds. They are more akin to a Blackstone or Apollo.
Almost all of the top Canadian pension funds have better performance to benchmark over a 3 decade horizon including during the financial crisis, so arguably the proof is in the pudding so to speak.
I question whether the supremacy of index funds is a self-fulfilling prophecy. When vast quantities of your stock is demanded not because people think it's a good opportunity but because it was on a list, that demand will itself drive prices up, inflating the performance of the index fund over non-index peers.
You don’t even need to rebalance with a worldwide distributing index like VWCE.
It's pretty amazing watching crypto speedrun the last 200 years of financial history failures all over again.
Part of me feels like this is actually somewhat a feature. It's like a research implementation of an economy that iterates more rapidly than the current economy. What if the real value in all of this is finding out mechanisms to bake consumer protections, transparency, anti-money laundering and fraud detection into the main economy in an automated fashion?
It's a very costly experiment, both in terms of the energy required to power the experiment, and financial losses of the participants (many of whom are almost definitely not treating their investments as an experiment)
The real economy actually produces value. It feeds people, clothes people, entertains people, etc. even if it does so imperfectly. The economy's value dropping 20% a day would represent a real problem that needs to be addressed.
We saw this when COVID began. The stock markets were plummeting as people increasingly realized that COVID was not gonna be gone by Easter, and that this would affect us for some time and how impactful it would be.
With crypto, the only thing that the falling prices is tell us that another layer of the onion of scams that crypto is built upon has been peeled, and the only real question is how deep the layers go and whether there even is something of value deep inside.
We saw this when COVID began. The stock markets were plummeting as people increasingly realized that COVID was not gonna be gone by Easter, and that this would affect us for some time and how impactful it would be.
With crypto, the only thing that the falling prices is tell us that another layer of the onion of scams that crypto is built upon has been peeled, and the only real question is how deep the layers go and whether there even is something of value deep inside.
You could just observe the economy of an MMORPG - no blockchain needed.
Nothing to add here, but this is fascinating to think about. Thank you for this perspective.
Ah, so it's like AlphaZero, it learns from scratch, starting by making random moves.
The real treasure was all the regulators we suborned along the way
On the individual level, a few years of bitcoin helped me get an intuitive-level understanding of why common investing advice works.
When brogrammers try to do finance from 'first principles'.
Can you explain? What happened in the past 200 years that cryptocurrencies are mirroring?
Banks running out of money and just failing outright leaving their customers high and dry for one. In addition to this, the scams, the lack of any consumer protection. The hype bubbles, the sheer amount of personal faith that is required to have confidence etc etc.
Also the lack of standards and the terrible promise of decentralization, yet the reality of centralized markets and brokers. (This is a more modern failure).
Also the lack of standards and the terrible promise of decentralization, yet the reality of centralized markets and brokers. (This is a more modern failure).
Difference here is I don't think the government is going to step in and regulate them so they're safer. I think the government is going to treat this all as fraud eventually
As they should, Don't get my started on NFT's.
I firmly believe crypto is useless. Unlike gold (with metallic and useful properties) or other floated currencies that map back to an economy. Crypto essentially represents spent energy.
If crypto, esp BTC was able to be back converted into the energy used to produce it, that'd be great. But it can't so it's just a net negative IMO.
I firmly believe crypto is useless. Unlike gold (with metallic and useful properties) or other floated currencies that map back to an economy. Crypto essentially represents spent energy.
If crypto, esp BTC was able to be back converted into the energy used to produce it, that'd be great. But it can't so it's just a net negative IMO.
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>Crypto essentially represents spent energy
All traded goods and services essentially represent spent energy.
All traded goods and services essentially represent spent energy.
You can eat an apple. And plant its seeds. It is spent energy, but it has intrinsic value.
Crypto is only valuable if you can find a bigger fool, and you are not the one holding the proverbial hot potato.
Crypto is only valuable if you can find a bigger fool, and you are not the one holding the proverbial hot potato.
Sure, but you can't eat a hash.
>Unlike gold (with metallic and useful properties)
gold was useless for 99.5% of human history, until the advent of electronics
gold was useless for 99.5% of human history, until the advent of electronics
Gold was a corrosion free metal that held it's shape with jewelers.
Even Silver corrodes. Gold never corrodes. It's excessively stable, malleable, and perfect for art pieces.
Since Gold is excessively stable, there are no worries about rashes or itchiness if you wear it all day.
In an age before modern plastics, that is basically miraculous.
Even Silver corrodes. Gold never corrodes. It's excessively stable, malleable, and perfect for art pieces.
Since Gold is excessively stable, there are no worries about rashes or itchiness if you wear it all day.
In an age before modern plastics, that is basically miraculous.
Exactly. Gold still has these properties btw ;)
If people don't understand stone age economics and why gold was seen as valuable even before modern electronics, oh boy... How do they make sense of more modern concepts? We often discuss a lack of education, especially in terms of science and technology. The situation regarding economics education is so dire most aren't even aware there is an issue.
If people don't understand stone age economics and why gold was seen as valuable even before modern electronics, oh boy... How do they make sense of more modern concepts? We often discuss a lack of education, especially in terms of science and technology. The situation regarding economics education is so dire most aren't even aware there is an issue.
Does that explain why gold has been used to make coins and ingots, held in large reserves by governments, etc.? Surely the value of gold is and has for most of human history been much higher than what would be expected if it were merely a nice metal to make pretty jewelry with.
> Does that explain why gold has been used to make coins and ingots
Over say, Iron?
Yes. Because iron rusts. An iron-coin does not last forever. Copper, Silver, and Gold are easier to take care of, but even old copper/silver coins tarnish and corrode away with time.
Gold does not. A gold coin made 100 years ago would be as brilliant today as it was back then... with minimal maintenance.
There's a _REASON_ why gold was chosen, all across the world, from MesoAmerica, to Europe, to Asia, as a unit of currency.
Over say, Iron?
Yes. Because iron rusts. An iron-coin does not last forever. Copper, Silver, and Gold are easier to take care of, but even old copper/silver coins tarnish and corrode away with time.
Gold does not. A gold coin made 100 years ago would be as brilliant today as it was back then... with minimal maintenance.
There's a _REASON_ why gold was chosen, all across the world, from MesoAmerica, to Europe, to Asia, as a unit of currency.
This is a disingenuous argument because you pretend like gold has no downsides. The major, and very real downside of gold is that it's costly to store. The risk of confiscation is high unless you protect yourself with weapons. (And, in that case, doesn't that make weapons more valuable?)
> The risk of confiscation is high
If that's your worry (and not that you shouldn't), consider that the risk of confiscation of your bank balance or stock accounts is far higher given that those are merely entries in a database held by a third party.
If that's your worry (and not that you shouldn't), consider that the risk of confiscation of your bank balance or stock accounts is far higher given that those are merely entries in a database held by a third party.
> The risk of confiscation is high
I got a buddy with a bunch of money in Celsius right now, that feels like its been confiscated.
Apparently, cryptocoins can also be "confiscated", and are unable to be sold during these times of duress.
I got a buddy with a bunch of money in Celsius right now, that feels like its been confiscated.
Apparently, cryptocoins can also be "confiscated", and are unable to be sold during these times of duress.
I'm not saying that gold is magic, I'm just pointing out it has utility beyond it's value holding utility.
And historically, that was the case for all wealth stores, at least ones you could spend.
>jewelry
>art pieces
yeah, so exactly like I said, it was pretty much useless
>In an age before modern plastics, that is basically miraculous.
have you heard about glass?
yeah, so exactly like I said, it was pretty much useless
>In an age before modern plastics, that is basically miraculous.
have you heard about glass?
Jewellery is a store of value with additional attached utility.
Have you ever worked with glass vs gold?
Dropped a piece of art(isanal good) made of glass and see it shatter and one made of gold and not much happening to it?
That's just two of dozens of reasons why your comparison makes no sense.
Have you ever worked with glass vs gold?
Dropped a piece of art(isanal good) made of glass and see it shatter and one made of gold and not much happening to it?
That's just two of dozens of reasons why your comparison makes no sense.
>Jewellery is a store of value with additional attached utility.
we're in the bi-hourly crypto hate thread. the threshold for being useful is set to "is it necessary for basic survival?". "a store of value with additional attached utility" doesn't make the cut, and must be banned to atone for our carbon sins
>Have you ever worked with glass vs gold?
the post above compares gold to plastics
we're in the bi-hourly crypto hate thread. the threshold for being useful is set to "is it necessary for basic survival?". "a store of value with additional attached utility" doesn't make the cut, and must be banned to atone for our carbon sins
>Have you ever worked with glass vs gold?
the post above compares gold to plastics
> the post above compares gold to plastics
No one wears glass all day.
My Nylon strap for my watch is pleasant and cheap. But the very material itself didn't exist before the 1930s IIRC.
If we're talking about materials that existed even in 2000BCE, gold is one of those metals that you could wear all the time, and never get a rash, allergic reaction, or otherwise get itchy.
--------
Glass isn't flexible or malleable. Even if we use fiberglass today, its a carcinogen and very bad for the human body. Certainly not a material you want to be wearing all the time.
No one wears glass all day.
My Nylon strap for my watch is pleasant and cheap. But the very material itself didn't exist before the 1930s IIRC.
If we're talking about materials that existed even in 2000BCE, gold is one of those metals that you could wear all the time, and never get a rash, allergic reaction, or otherwise get itchy.
--------
Glass isn't flexible or malleable. Even if we use fiberglass today, its a carcinogen and very bad for the human body. Certainly not a material you want to be wearing all the time.
It may not have been useful, but people from all time periods and all corners of the globe agree that it sure is pretty. That appeal counts for something.
Yes, but we have electronics now don't we. So it's useful.
I've been thinking about how the original vision for cryptocurrency was basically "once this exists, governments will fail because they can't tax it" and how far reality had strayed from that.
It only gained popularity by people hoping to get rich in regular currency from the value changing. It morphed into being basically another type of security that gets traded and rises and falls with the general stock market.
And that's ignoring all the scam and theft that has happened. I used to feel bad I didn't buy bitcoin when I was younger, but these days I feel good that I stayed away from cryptocurrency in general.
It only gained popularity by people hoping to get rich in regular currency from the value changing. It morphed into being basically another type of security that gets traded and rises and falls with the general stock market.
And that's ignoring all the scam and theft that has happened. I used to feel bad I didn't buy bitcoin when I was younger, but these days I feel good that I stayed away from cryptocurrency in general.
> I've been thinking about how the original vision for cryptocurrency was basically "once this exists, governments will fail because they can't tax it" and how far reality had strayed from that.
mind if a propose this as an example of a strawman on wikipedia? it doesn't get any better
mind if a propose this as an example of a strawman on wikipedia? it doesn't get any better
The market crash is going to be used by the government to show why the new U.S. Federal digital coin is the path forward.
How are scams and hype a thing only since 200 years ago? I'm trying to understand but the comment makes no sense if you know the history of finance.
Btw it's somewhat ironic because Celsius is essentially a bank and not a blockchain company at all. They've simply found this niche where they're largely unregulated because they're dealing with tokens that are not considered legal tender in most countries and have super shady business practice when you look into it deeper. So this is essentially the old model, branded as blockchain and taking money from people who hold cryptocurrency but do not understand it. The likes who buy Dogecoin on Robinhood.
If lending business were on-chain, everyone could look at the exact figures and observe the risks. Maker vaults aren't defaulting, are they? Also a smart contract once securely deployed can not be arbitrarily stopped. So there is no chance for anyone freeze your funds like this centralized platform does now. These are exactly the problems blockchains can solve, if people only understood and used them. With traditional banks, we've tackled the problem trying to use government regulation, but we all know it doesn't really work. Contracts that can not easily be gamed are a much better solution, at least for the base layer of financial system.
Btw it's somewhat ironic because Celsius is essentially a bank and not a blockchain company at all. They've simply found this niche where they're largely unregulated because they're dealing with tokens that are not considered legal tender in most countries and have super shady business practice when you look into it deeper. So this is essentially the old model, branded as blockchain and taking money from people who hold cryptocurrency but do not understand it. The likes who buy Dogecoin on Robinhood.
If lending business were on-chain, everyone could look at the exact figures and observe the risks. Maker vaults aren't defaulting, are they? Also a smart contract once securely deployed can not be arbitrarily stopped. So there is no chance for anyone freeze your funds like this centralized platform does now. These are exactly the problems blockchains can solve, if people only understood and used them. With traditional banks, we've tackled the problem trying to use government regulation, but we all know it doesn't really work. Contracts that can not easily be gamed are a much better solution, at least for the base layer of financial system.
This kind of stuff doesn't happen with normal banks. Wachovia and Washington Mutual essentially failed in 2008 and no one lost anything
That's the regulation I mentioned. I don't know these banks but would guess it's because they were insured. In the US and the EU all banks have to be insured to a degree. That's not necessarily true elsewhere, people around the world regularly do lose money in bank defaults. And entire countries can go bankrupt too, because the system ultimately has no failsafe. People in more stable countries like to dismiss that but depending on where you're from you can find examples of the entire nation losing practically everything only a few decades ago.
Of course you could do the same with companies like Celsius and insure and regulate them better, but in the end customers are paying for it, it doesn't come free. Also big banks do still fail, are you aware how much money has been paid for bank bailouts just in the past decades? The thing is many don't notice they're paying for it, because they don't understand where the money comes from.
My argument is that Celsius would never have gotten as big if the customers knew what happens with their money. This business model shouldn't even be legal, same as what many more traditional banks are involved in. In fact, often it isn't legal in the first place even according to current regulation. But once they get to a certain size, laws don't apply to them as they apply to the rest of us. This is a problem, regulation is clearly not working properly in the banking sector.
Of course you could do the same with companies like Celsius and insure and regulate them better, but in the end customers are paying for it, it doesn't come free. Also big banks do still fail, are you aware how much money has been paid for bank bailouts just in the past decades? The thing is many don't notice they're paying for it, because they don't understand where the money comes from.
My argument is that Celsius would never have gotten as big if the customers knew what happens with their money. This business model shouldn't even be legal, same as what many more traditional banks are involved in. In fact, often it isn't legal in the first place even according to current regulation. But once they get to a certain size, laws don't apply to them as they apply to the rest of us. This is a problem, regulation is clearly not working properly in the banking sector.
> Wachovia and Washington Mutual essentially failed in 2008 and no one lost anything
Account holders shouldn't have lost (haven't checked) but the stock evaporated overnight, so anyone holding any shares lost everything in a blink.
Account holders shouldn't have lost (haven't checked) but the stock evaporated overnight, so anyone holding any shares lost everything in a blink.
I had around $47,000 in Wachovia in 2008. I was a Wachovia customer since 1991. I didn't lose a penny. Wells Fargo bought Wachovia and over the next year they automatically transitioned us to Wells Fargo accounts with the same login/password, account numbers, and my account balance. I'm still with Wells Fargo 14 years later and everything is fine.
I would say definitely look at the “Gilded Age” of banking in the US. History may not repeat but it sure rhymes.
https://www.federalreservehistory.org/essays/banking-panics-...
https://www.federalreservehistory.org/essays/banking-panics-...
Crypto solves a bunch of problems of its own making while retaining all the human problems (fraud, etc) of the existing banking system without hundreds of years of regulations and policy to stabilize systems and attempt accountability.
Tether is analogous to the gold standard but without verifying the gold exists in reserves, or ever existed at all. Exchanges are facilitating billions in money laundering and fraud while eating massive fees and paying millions to founders. Transactions can be hidden behind shell wallets/groups and filtered through many exchanges reducing transparency and increasing odds of successful illegal activity.
There is a ton of legitimate criticism just looking at the fraud side of Crypto and how lack of regulation in that space enables a ton of crime. It's often drowned out by PR or the next big blockchain based thing that seems flashy but still comes with all the same problems as regular physical money.
It's like asking your IT group to install spyware on users workstations instead of respecting or enforcing HR policy. It's a people problem, not a tech problem.
Tether is analogous to the gold standard but without verifying the gold exists in reserves, or ever existed at all. Exchanges are facilitating billions in money laundering and fraud while eating massive fees and paying millions to founders. Transactions can be hidden behind shell wallets/groups and filtered through many exchanges reducing transparency and increasing odds of successful illegal activity.
There is a ton of legitimate criticism just looking at the fraud side of Crypto and how lack of regulation in that space enables a ton of crime. It's often drowned out by PR or the next big blockchain based thing that seems flashy but still comes with all the same problems as regular physical money.
It's like asking your IT group to install spyware on users workstations instead of respecting or enforcing HR policy. It's a people problem, not a tech problem.
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S&L, FDIC, 10k, subprime lending, etc.
I don't see why all countries would outlaw "crypto".
I hate that term for it's semantic shift, but that kind of rebellious tribalism fueled this drum beat.
Each class of cryptocurrency technologies, institutions and securities has an analog in the list above. And each will lead to new protections. Maybe Big Brokerage will invest at most X% in cryptocurrencies but not ones repackaged into NFTs.
Etc.
This isn't a bull market, or a bear. To borrow a perhaps racist or outdated term, it's a Buffalo market, and regulators are at the buffet.
I don't see why all countries would outlaw "crypto".
I hate that term for it's semantic shift, but that kind of rebellious tribalism fueled this drum beat.
Each class of cryptocurrency technologies, institutions and securities has an analog in the list above. And each will lead to new protections. Maybe Big Brokerage will invest at most X% in cryptocurrencies but not ones repackaged into NFTs.
Etc.
This isn't a bull market, or a bear. To borrow a perhaps racist or outdated term, it's a Buffalo market, and regulators are at the buffet.
I mean, they basically only use it for structuring or tax evasion most of the time.
Bitcoin et al are a Paypal killer, as in a low cost way to transmit currency or whatever, but you can do that in other less wasteful ways.
It's a shame what it turned into is something people place on comprmised mnachines to silently siphon up CPU cycles for profit.
(Especially since often those profits went towards things like Juche nukes.)
Bitcoin et al are a Paypal killer, as in a low cost way to transmit currency or whatever, but you can do that in other less wasteful ways.
It's a shame what it turned into is something people place on comprmised mnachines to silently siphon up CPU cycles for profit.
(Especially since often those profits went towards things like Juche nukes.)
> Bitcoin et al are a Paypal killer, as in a low cost way to transmit currency or whatever, but you can do that in other less wasteful ways.
You're talking about Proof of Stake or you imagine some other novel way of transferring currency digitally, without centralization and securely?
You're talking about Proof of Stake or you imagine some other novel way of transferring currency digitally, without centralization and securely?
I'm genuinely glad crypto enthusiasts spend more time defending their position than they do being as obtuse against fiat as this comment is towards crypto (in my opinion). If they were as unnecessarily hostile, I imagine it might sound something like this:
It takes nearly half of the US budget with their military to secure the USD value by destabilizing poor countries and exploiting them for their crude oil, which is the most traded commodity in the world by fiat. In relation it's trivial to dissociate your identity from crypto you own, making it impossible for someone to prove you have crypto to steal, even with a gun to your head. All secured by harmless nerds using fractions of a percent of the worlds electricity usage, which doesn't even begin to approach the electricity the military utilizes from even a single one of the largest militarized nations.
It's obvious to me that neither of these are honest positions to take in a debate about the benefits and costs of these classes of assets.
It takes nearly half of the US budget with their military to secure the USD value by destabilizing poor countries and exploiting them for their crude oil, which is the most traded commodity in the world by fiat. In relation it's trivial to dissociate your identity from crypto you own, making it impossible for someone to prove you have crypto to steal, even with a gun to your head. All secured by harmless nerds using fractions of a percent of the worlds electricity usage, which doesn't even begin to approach the electricity the military utilizes from even a single one of the largest militarized nations.
It's obvious to me that neither of these are honest positions to take in a debate about the benefits and costs of these classes of assets.
I've had this conversation in the past, but our military doesn't exist just to stabilize the USD. The USD is one of the tools the United States uses to exert control over other markets and to stabilize US markets in general. That goal exists independently of what currencies are involved.
Even if the USD vanished completely and Bitcoin took over, there is basically no reason to believe that the US military would go away or that the US would stop interfering in foreign markets. And banking regulation/enforcement would just switch to targeting exchanges/platforms, blocking specific coins, and move on.
Independent of the whole cryptocurrency thing, there are good reasons to want better payment methods that give people more freedom/privacy, but "this will dismantle the military-industrial complex" isn't really one of them. Last I checked, there's nothing in the Bitcoin protocol that says it can't be used for bribes, oil, or guns.
It's just a wild fantasy. Imagine going back to the Cold War and thinking that if the USD wasn't around that the US and the Soviet Union would have stopped building nukes.
Even if the USD vanished completely and Bitcoin took over, there is basically no reason to believe that the US military would go away or that the US would stop interfering in foreign markets. And banking regulation/enforcement would just switch to targeting exchanges/platforms, blocking specific coins, and move on.
Independent of the whole cryptocurrency thing, there are good reasons to want better payment methods that give people more freedom/privacy, but "this will dismantle the military-industrial complex" isn't really one of them. Last I checked, there's nothing in the Bitcoin protocol that says it can't be used for bribes, oil, or guns.
It's just a wild fantasy. Imagine going back to the Cold War and thinking that if the USD wasn't around that the US and the Soviet Union would have stopped building nukes.
>The USD is one of the tools the United States uses to exert control
Why should we "exert control"? Maybe if folks didn't think they needed to build a bunch of aircraft carriers they'd stop building coal plants.
We should adopt a second strike nuclear policy, decommision our silos, and shift to an array of submarine and other movable launchers for a smaller set of nuclear weapons rather than the old cold war model, now that we live in a multipolar world.
Why should we "exert control"? Maybe if folks didn't think they needed to build a bunch of aircraft carriers they'd stop building coal plants.
We should adopt a second strike nuclear policy, decommision our silos, and shift to an array of submarine and other movable launchers for a smaller set of nuclear weapons rather than the old cold war model, now that we live in a multipolar world.
Okay, but Bitcoin won't make that happen.
We didn't build nukes because we wanted to protect the USD, it was a fight about ideas like Communism, national control, etc...
We didn't build nukes because we wanted to protect the USD, it was a fight about ideas like Communism, national control, etc...
Next thing you will be telling everybody is that Bitcoin was promoted as a hedge against inflation.
>It takes nearly half of the US budget with their military to secure the USD value
The US spends a little less than 12% of its annual budget on its military
https://www.cbo.gov/publication/57170
The US spends a little less than 12% of its annual budget on its military
https://www.cbo.gov/publication/57170
sorry, I was confusing that with the US spending nearly half the worlds budget on defense - thanks for the correction.
52% of it's discretionary, no?
Which is like saying "That family is spending 52% of the money it doesn't spend on rent/mortgage, food, and fuel on guns and ammo." Doesn't really tell you a lot if you don't know how much they're spending on rent/mortgage, food, and fuel.
Also, discretionary here is entirely a political/legal term.
I think one would find it very hard to argue that military spending is discretionary for any major nation in the layman sense of that word, even if the US's military spending is beyond control (on the flip side, the US also gets much less value for its military spending relative to say the value China gets for its military spending).
I think one would find it very hard to argue that military spending is discretionary for any major nation in the layman sense of that word, even if the US's military spending is beyond control (on the flip side, the US also gets much less value for its military spending relative to say the value China gets for its military spending).
What fantasy land do you live in where a military’s only job is to secure … the national currency?
This is one of those things where it's very general.
The value of a national currency is a reflection of the rest of the world's confidence in that nation to meet its obligations. The money is essentially a marker for future goods and services.
The US military's reason for being is to protect the US from other nations, thereby keeping the US's resources available for its own use, its citizens capable of performing services, etc. It is also used to secure US interests abroad. Having its current resources, a populace capable of processing those resources, and the ability to acquire more is the reason the rest of the world is confident in our ability to provide future goods and services. A marker for US resources is a solid bet. That marker is called the US Dollar. Ergo, the military's job is to secure the dollar.
That's the rough train of thought that leads you to claiming that every dollar spent on defense is a dollar spent on defending the dollar.
The value of a national currency is a reflection of the rest of the world's confidence in that nation to meet its obligations. The money is essentially a marker for future goods and services.
The US military's reason for being is to protect the US from other nations, thereby keeping the US's resources available for its own use, its citizens capable of performing services, etc. It is also used to secure US interests abroad. Having its current resources, a populace capable of processing those resources, and the ability to acquire more is the reason the rest of the world is confident in our ability to provide future goods and services. A marker for US resources is a solid bet. That marker is called the US Dollar. Ergo, the military's job is to secure the dollar.
That's the rough train of thought that leads you to claiming that every dollar spent on defense is a dollar spent on defending the dollar.
Right but just like every square by definition is a rectangle, that does not also imply that every rectangle is also a square.
How would thousands of computers spinning in circles computing useless sha hashes protect your national borders, coasts, and other physical assets, resources and people?
How would thousands of computers spinning in circles computing useless sha hashes protect your national borders, coasts, and other physical assets, resources and people?
I'm not defending the position, I'm explaining it.
And it's not the defense that's the issue, it's the money spent on the defense that they're comparing. They're saying that while crypto may cost $X to support, it's less than $Y where $Y is the total expenditure of the US Army.
And it's not the defense that's the issue, it's the money spent on the defense that they're comparing. They're saying that while crypto may cost $X to support, it's less than $Y where $Y is the total expenditure of the US Army.
The proponents are making a fallacy that's a little hard to explain, basically mixing up a measurement/indicator with a cause. This comes up in a lot of places, because it can be difficult to tell when the fallacy is happening and when it's not.
For example, Linux has fewer desktop viruses written to target it than Windows, which is a big part of why it can be a good security decision to use Linux. And genuinely, regardless of the reason, Linux desktop environments do tend to have fewer viruses targettng them.
However, the reason why Linux has fewer desktop viruses is because it's not the OS that most ordinary people use, so it would be incorrect for people to say, "Linux should be the dominant OS for everyone because it has fewer viruses." Because if it was the dominant desktop OS that everyone used, it would have more viruses. Primarily targeting Windows is an effect of malware authors wanting to target as many people as possible. But Windows is not the cause of them writing viruses, they are not writing viruses because they want to target Windows, they want to target people and they use Windows to do so.
And in the same way, in theory yeah, you could look at something like Bitcoin and say that it's not being used in the same ways that the USD to fund certain actions/industries. But to argue that Bitcoin is a better currency because it doesn't get used to fund military spending... The military uses the USD to accomplish its goals. The USD is not itself the goal.
Like you said:
> The value of a national currency is a reflection of the rest of the world's confidence in that nation to meet its obligations.
The US would still want to signal and defend that confidence in a world where it used Bitcoin. So really when we talk about the cost and energy use of Bitcoin, we're assuming that in a world where Bitcoin was the dominant US currency those energy costs would be in addition to all of the existing military spending and energy usage. Because when say that the US military is defending a signal of stability/confidence, it's not the signal itself that the US is defending, it's defending what the signal says.
For example, Linux has fewer desktop viruses written to target it than Windows, which is a big part of why it can be a good security decision to use Linux. And genuinely, regardless of the reason, Linux desktop environments do tend to have fewer viruses targettng them.
However, the reason why Linux has fewer desktop viruses is because it's not the OS that most ordinary people use, so it would be incorrect for people to say, "Linux should be the dominant OS for everyone because it has fewer viruses." Because if it was the dominant desktop OS that everyone used, it would have more viruses. Primarily targeting Windows is an effect of malware authors wanting to target as many people as possible. But Windows is not the cause of them writing viruses, they are not writing viruses because they want to target Windows, they want to target people and they use Windows to do so.
And in the same way, in theory yeah, you could look at something like Bitcoin and say that it's not being used in the same ways that the USD to fund certain actions/industries. But to argue that Bitcoin is a better currency because it doesn't get used to fund military spending... The military uses the USD to accomplish its goals. The USD is not itself the goal.
Like you said:
> The value of a national currency is a reflection of the rest of the world's confidence in that nation to meet its obligations.
The US would still want to signal and defend that confidence in a world where it used Bitcoin. So really when we talk about the cost and energy use of Bitcoin, we're assuming that in a world where Bitcoin was the dominant US currency those energy costs would be in addition to all of the existing military spending and energy usage. Because when say that the US military is defending a signal of stability/confidence, it's not the signal itself that the US is defending, it's defending what the signal says.
> But to argue that Bitcoin is a better currency because it doesn't get used to fund military spending
I don't see anyone arguing that. The contrived argument I made was that USD requires a military to be stable. Bitcoin only requires proof of work. It's not a straight forward argument and I don't think it's quite a genuine argument because the US would have a military regardless (I think?) but it does stand to reason that without the US military the USD would not be the reserve currency of the world and therefore would not be nearly as stable.
Do keep in mind the context I proposed the argument was not intended to be a genuine argument, but rather an example of someone making a more all-or-nothing, bad-faith argument.
I don't see anyone arguing that. The contrived argument I made was that USD requires a military to be stable. Bitcoin only requires proof of work. It's not a straight forward argument and I don't think it's quite a genuine argument because the US would have a military regardless (I think?) but it does stand to reason that without the US military the USD would not be the reserve currency of the world and therefore would not be nearly as stable.
Do keep in mind the context I proposed the argument was not intended to be a genuine argument, but rather an example of someone making a more all-or-nothing, bad-faith argument.
> The contrived argument I made was that USD requires a military to be stable. Bitcoin only requires proof of work.
I'm not sure I agree.
Proof of work requires a functioning Internet, functioning supply lanes for GPUs, low-ish latency, general consumer confidence in the chain, proportional miners to Bitcoin's value so that it's actually secure, etc... Not to mention that Bitcoin itself requires a lot more than proof of work to function as a usable currency.
----
Further, this is kind of begging the question a bit. Saying that the USD requires massive military presence to sustain is not the same as saying that Bitcoin requires massive energy to sustain, for all of the reasons people have talked about.
The fact that the USD military would still be around if the USD went away is the reason why the argument that military energy usage should be counted in Bitcoin's favor is a flawed argument. But if cryptocurrencies went away, we wouldn't need proof of work at all. That energy cost would legitimately vanish. And I just want to kind of jump back to that point, because if feels like there's kind of a weird slight-of-hand happening here.
----
The flow of logic we're following is:
- It's good that Bitcoin proponents otherwise play defense, otherwise we'd start talking about military costs of the USD
- Military costs of the USD are not dependent on the USD and likely wouldn't disappear if the USD went away
- Nevertheless this was just an example of a flawed argument, not a real argument
- ???
- Therefore, the arguments against crypto are similarly flawed.
But that doesn't follow. The fact that you can come up with a flawed argument for trying to use military costs as an argument for crypto, and the fact that we all kind of agree that it's a flawed argument, does not automatically imply that therefore all criticism of crypto is similarly flawed.
I'm not sure I agree.
Proof of work requires a functioning Internet, functioning supply lanes for GPUs, low-ish latency, general consumer confidence in the chain, proportional miners to Bitcoin's value so that it's actually secure, etc... Not to mention that Bitcoin itself requires a lot more than proof of work to function as a usable currency.
----
Further, this is kind of begging the question a bit. Saying that the USD requires massive military presence to sustain is not the same as saying that Bitcoin requires massive energy to sustain, for all of the reasons people have talked about.
The fact that the USD military would still be around if the USD went away is the reason why the argument that military energy usage should be counted in Bitcoin's favor is a flawed argument. But if cryptocurrencies went away, we wouldn't need proof of work at all. That energy cost would legitimately vanish. And I just want to kind of jump back to that point, because if feels like there's kind of a weird slight-of-hand happening here.
----
The flow of logic we're following is:
- It's good that Bitcoin proponents otherwise play defense, otherwise we'd start talking about military costs of the USD
- Military costs of the USD are not dependent on the USD and likely wouldn't disappear if the USD went away
- Nevertheless this was just an example of a flawed argument, not a real argument
- ???
- Therefore, the arguments against crypto are similarly flawed.
But that doesn't follow. The fact that you can come up with a flawed argument for trying to use military costs as an argument for crypto, and the fact that we all kind of agree that it's a flawed argument, does not automatically imply that therefore all criticism of crypto is similarly flawed.
I intended for that to be an example of an obtuse, divisive argument - it is not an argument I'm actually attempting to defend. Sorry if I didn't make that as clear as I could have.
>USD value by destabilizing poor countries and exploiting them for their crude oil
The US is a net exporter of oil and has been for years now.
The US is a net exporter of oil and has been for years now.
Was this intended on negating my comment about crude oil being used to establish USDs relative stability? Because I don't think this fact does anything of the sort, although it's still informative and interesting, I'm just not sure I understand the point you might be trying to make in this context.
The USD isn’t pegged to oil.
USD is just pieces of paper https://www.theonion.com/u-s-economy-grinds-to-halt-as-natio...
I don't understand your link to the Onion here.
Are you joking or do you not realize that the Onion is satire?
Are you joking or do you not realize that the Onion is satire?
What justifies Bitcoin being valued at 30k vs 20k?
The answer is nothing. And same applies to 10k. Since there's no measurable intrinsic value, there's zero fundamental factor limiting the downside
The answer is nothing. And same applies to 10k. Since there's no measurable intrinsic value, there's zero fundamental factor limiting the downside
The funny thing to me is that the BTC promoters keep talking about the blockchain being used to pay for stuff, like the occasional Tesla, or bananas in third world countries. However, last time I checked, about 90% of transactions involving BTC happened off the blockchain. It happened in marketplaces where no actual crypto is transacted and it's all in the databases of these marketplaces. The value of BTC has nothing to do with the actual use of the Bitcoin Blockchain.
If anything, the ETH blockchain might have more value in the real world, since it's used to transact stupid monkey pictures and stuff like that.
If anything, the ETH blockchain might have more value in the real world, since it's used to transact stupid monkey pictures and stuff like that.
This is shortsighted and won’t age well. Consider the world in 2030. Another 8 years of advancements into bitcoin infrastructure, point of sale devices, mobile wallet integrations, etc
Plus failed central banks, failed paper currencies, etc
Plus failed central banks, failed paper currencies, etc
Bitcoin's first block dates back to January 2009, or 13 years. POS devices have existed since, at least, 2017, or five years. Despite that people are using crypto less as a currency today than they ever have. What are the next 8 years going to bring us that the past 13 haven't?
It seems like as time goes on crypto becomes less useful rather than more as a general utility for buying stuff. Most crypto "currencies" are also a not a great store of value currently.
Just for context, the Ukrainian Hryvnia has lost less value since the Russian invasion than bitcoin has lost today. A financial system more volatile than the economy of a country outmatched in a war with a superpower, is perhaps, not a system you want doing things that require stability.
It seems like as time goes on crypto becomes less useful rather than more as a general utility for buying stuff. Most crypto "currencies" are also a not a great store of value currently.
Just for context, the Ukrainian Hryvnia has lost less value since the Russian invasion than bitcoin has lost today. A financial system more volatile than the economy of a country outmatched in a war with a superpower, is perhaps, not a system you want doing things that require stability.
> It seems like as time goes on crypto becomes less useful rather than more as a general utility for buying stuff.
I said: Bitcoin. Not crypto.
(The longer I’m in this space, the more I realize that scammy crypto is one of the biggest enemies of bitcoin adoption.)
It may seem this way to you but you’re clearly not paying enough attention. Adoption curve is up. Many advancements have been and continue to be made on the front of consumer products. Let’s face it, companies like Square will drive mainstream usage. Consumer products will only get better and better and over time will be on par with products that use the dollar under the hood.
I said: Bitcoin. Not crypto.
(The longer I’m in this space, the more I realize that scammy crypto is one of the biggest enemies of bitcoin adoption.)
It may seem this way to you but you’re clearly not paying enough attention. Adoption curve is up. Many advancements have been and continue to be made on the front of consumer products. Let’s face it, companies like Square will drive mainstream usage. Consumer products will only get better and better and over time will be on par with products that use the dollar under the hood.
My arguments is even less generous and more applicable if you scope it only to BTC. Bitcoin as a common currency is basically a non existent use case for most people.
So let me amend my argument: It seems like as time goes on, bitcoin specifically, has seen decreased general use as anything but a speculative greater-fool investment. As far as I can tell, the only people that use bitcoin as a currency are 1. trying to prove a point, or 2. doing illegal shit. That used to be less true 5 years ago.
Why would square drive mainstream usage? Square needs people on both sides of the transaction to have already adopted in order to drive business.
So let me amend my argument: It seems like as time goes on, bitcoin specifically, has seen decreased general use as anything but a speculative greater-fool investment. As far as I can tell, the only people that use bitcoin as a currency are 1. trying to prove a point, or 2. doing illegal shit. That used to be less true 5 years ago.
Why would square drive mainstream usage? Square needs people on both sides of the transaction to have already adopted in order to drive business.
Only another 8 years, eh? Does this assume a ceteris paribus scenario where Apple, Google, Visa, MC, PayPal stand still on infrastructure and mobile wallets?
I didn’t mean to suggest 8 years was required and only arbitrarily picked 2030 as a round number.
I suspect that Apple, Google, visa, MC, and PayPal will continue to build bitcoin into their product.
Bitcoin does not compete at all with these companies. Just like the US dollar is not a competitor to Apple, visa, etc. these are products that incorporate currencies.
I suspect that Apple, Google, visa, MC, and PayPal will continue to build bitcoin into their product.
Bitcoin does not compete at all with these companies. Just like the US dollar is not a competitor to Apple, visa, etc. these are products that incorporate currencies.
As long as the primary reason for holding BTC is to make USD, it will never be a viable currency
Now this I totally agree with. BTC only realizes its true potential when it replaces the dollar. It may have some more boom/bust cycles to go before it gets there but it’s the top contender to do so.
BTC will never replace the dollar, the US gov will shut it down before it does so as it’s not considered legal tender here. Same with every other country that wishes to maintain some control over their economy (all of the smart ones)
Failed central banks? Can you elaborate?
Yes here is an example happening in real-time:
https://www.japantimes.co.jp/news/2022/06/13/business/yen-13...
I suspect it’s going to be a domino effect that gets much much worse..
I suspect it’s going to be a domino effect that gets much much worse..
To reiterate, you're basically saying it's just speculation and greater fool theory, correct?
Because that's to me what it looks like functionally, while some people I know seem to deny this is what they're doing and telling themselves "it's the future of everything" for no other reason than that's what they want it to be (so they can make bank off of their speculative bet).
Because that's to me what it looks like functionally, while some people I know seem to deny this is what they're doing and telling themselves "it's the future of everything" for no other reason than that's what they want it to be (so they can make bank off of their speculative bet).
Yes, Bitcoin is worth nothing but it is a "consensual reality" among a large group of people that it is worth something and thus it is.
It is incredibly hard to predict if such a consensual reality will collapse -- but it can collapse if there is a strong "vibe shift" towards something else that competes effectively with the current "consensus."
It is like fashion. What is considered stylish and not is just a group consensus. And it can shift relatively quickly, but it is hard to predict and certain people in key nexus have a lot more influence than the ramble.
It is incredibly hard to predict if such a consensual reality will collapse -- but it can collapse if there is a strong "vibe shift" towards something else that competes effectively with the current "consensus."
It is like fashion. What is considered stylish and not is just a group consensus. And it can shift relatively quickly, but it is hard to predict and certain people in key nexus have a lot more influence than the ramble.
It's basically Beanie Babies, but with more direct environmental damage
Collective mythologies underpin most of modern life. Does the Turkish Lira have more or less intrinsic value than Bitcoin?
To say that state-backed currencies are equivalent to private currencies is to greatly misunderstand how things work in finance.
Traditional state-based currencies mostly exist because the government pays its obligations in that currency and also collects taxes in that currency. The state's population is forced to use that currency as a result for these behaviors.
This is the main difference between a state-backed currency and "private currencies."
This isn't to say that state-backed currencies can be a mess just like "private currencies." But these state-backed currencies fail with the governments based on balance of payments and debt and money printing, etc and it is very infrequent.
Traditional state-based currencies mostly exist because the government pays its obligations in that currency and also collects taxes in that currency. The state's population is forced to use that currency as a result for these behaviors.
This is the main difference between a state-backed currency and "private currencies."
This isn't to say that state-backed currencies can be a mess just like "private currencies." But these state-backed currencies fail with the governments based on balance of payments and debt and money printing, etc and it is very infrequent.
This. For a currency to have value you need to be able to buy things or satisfy obligations in it. What does a theoretical country named Bictoinalia export? Drugs, ransomware and speculation. And they're starting to lose drug export market share because the public ledger is easy to track people with.
No need to put private currencies in quotes. Here ECB talks about the interplay between public and private money [1] when discussing their CBDC (digital EUR) plans. I think this is a pretty interesting topic and just reducing it to 'private money == not real/useless' doesn't serve it justice.
At all times in unstable monetary conditions, such as hyperinflation, funny-money issued by occupation authorities, unrecognized governments, fiat currency mismanagement, etc, people have flocked to alternative means of exchange. Usually using foreign currencies or other assets (precious metals, whatever). Now there is more choice here. There are reports from places in such conditions of people actually using digital assets for this. Whether it's better to hold Lira or Dash at this particular moment in time though, is a pretty open question.
[1] https://www.ecb.europa.eu/press/key/date/2022/html/ecb.sp220...
At all times in unstable monetary conditions, such as hyperinflation, funny-money issued by occupation authorities, unrecognized governments, fiat currency mismanagement, etc, people have flocked to alternative means of exchange. Usually using foreign currencies or other assets (precious metals, whatever). Now there is more choice here. There are reports from places in such conditions of people actually using digital assets for this. Whether it's better to hold Lira or Dash at this particular moment in time though, is a pretty open question.
[1] https://www.ecb.europa.eu/press/key/date/2022/html/ecb.sp220...
> No need to put private currencies in quotes. Here ECB talks about the interplay between public and private money [1] when discussing their CBDC (digital EUR) plans. I think this is a pretty interesting topic and just reducing it to 'private money == not real/useless' doesn't serve it justice.
I think that most major currencies will have mirror cryptocurrency versions as state-backed entities, replacing USDT and the similar more hand-wavy versions. This is definitely going to happen.
But this isn't "private currency" rather it is just the evolution of state-backed currency.
> At all times in unstable monetary conditions, such as hyperinflation, funny-money issued by occupation authorities, unrecognized governments, fiat currency mismanagement, etc, people have flocked to alternative means of exchange.
Make sense. If your country is in hyperinflation, do not hold its currency.
> There are reports from places in such conditions of people actually using digital assets for this. Whether it's better to hold Lira or Dash at this particular moment in time though, is a pretty open question.
Dash lost most of its value in the last 2 months. I am unsure what your point is. Dash obviously is a speculative asset and it is super hard to predict its future direction.
I think that most major currencies will have mirror cryptocurrency versions as state-backed entities, replacing USDT and the similar more hand-wavy versions. This is definitely going to happen.
But this isn't "private currency" rather it is just the evolution of state-backed currency.
> At all times in unstable monetary conditions, such as hyperinflation, funny-money issued by occupation authorities, unrecognized governments, fiat currency mismanagement, etc, people have flocked to alternative means of exchange.
Make sense. If your country is in hyperinflation, do not hold its currency.
> There are reports from places in such conditions of people actually using digital assets for this. Whether it's better to hold Lira or Dash at this particular moment in time though, is a pretty open question.
Dash lost most of its value in the last 2 months. I am unsure what your point is. Dash obviously is a speculative asset and it is super hard to predict its future direction.
And the Turkish lira is liable to the whims of an authoritarian leader who doesn't believe in fiscal orthodoxy and keeps firing his central bank leaders as soon as they even hint at raising the interest rates in order to try and reign in inflation. Not great either.
EDIT: When ECB talks about private money they mean non central bank issued digital assets, among other things. Not their CBDC which would of course be public money.
EDIT: When ECB talks about private money they mean non central bank issued digital assets, among other things. Not their CBDC which would of course be public money.
Year over year the Dash is down 75% and the Lira is right around 50%. The Lira has much lower short term volatility. Plus, everyone knows what Turkey is, and there is an entire millenia old society interested in maintaining the value of the Lira.
$DASH meanwhile is a speculative "investment" with no underlying assets that most people has no idea exists.
$DASH could go to 0 tomorrow and it would probably not be reported on outside of crypto sites. Neither of those things is true for the Lira
$DASH meanwhile is a speculative "investment" with no underlying assets that most people has no idea exists.
$DASH could go to 0 tomorrow and it would probably not be reported on outside of crypto sites. Neither of those things is true for the Lira
> forced
Ultimately through threat of violence or depriving of liberty. That is, it is the state's monopoly on violence which makes a currency. Bitcoin, being state-less, has no such monopoly and must ultimately fail.
Although Venezula seems to have been making a first pass at it.
Ultimately through threat of violence or depriving of liberty. That is, it is the state's monopoly on violence which makes a currency. Bitcoin, being state-less, has no such monopoly and must ultimately fail.
Although Venezula seems to have been making a first pass at it.
To be clear - the Lira is worth far more intrinsically than bitcoin.
The reason is simple: The Turkish Lira has a government (complete with courts, military, bureaucrats, police, banks, etc) that has committed to enforcing transactions in the Lira.
Does that mean the speculative market for Lira must be bigger than bitcoin? No, of course not. But it does mean there's fundamental utility to the Lira that absolutely does not exist for bitcoin.
The reason is simple: The Turkish Lira has a government (complete with courts, military, bureaucrats, police, banks, etc) that has committed to enforcing transactions in the Lira.
Does that mean the speculative market for Lira must be bigger than bitcoin? No, of course not. But it does mean there's fundamental utility to the Lira that absolutely does not exist for bitcoin.
I think a key difference with traditional currencies is that the countries that issue that currency will do anything in their power to maintain at least some of the value of that currency. I'm not sure how true that is for crypto investors. It's likelier they'll cut their losses and run.
Getting too hung up on the precise philosophical definition of intrinsic misses the point, imo.
Things that make Lira less mythological and more intrinsicly valuable include:
- It is a more stable store of value
- It holds a more stable relationship to the value of everything else in the Turkish economy
- It is more widely accepted for buying and selling good and services
These three things are real world practical differences.
Things that make Lira less mythological and more intrinsicly valuable include:
- It is a more stable store of value
- It holds a more stable relationship to the value of everything else in the Turkish economy
- It is more widely accepted for buying and selling good and services
These three things are real world practical differences.
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Yes.
If you can't point to any math to justify a given price, there is no intrinsic value. Thus price is only driven by speculative factors.
With stocks there are earnings that can be distributed back to shareholders. This is a measurable and explainable fundamental factor.
Real estate has rents... Bonds have coupon payments. Crypto has nothing. Though some will pay you "yield" by diverting money from newer entrants... Aka pyramid-esque structure
If you can't point to any math to justify a given price, there is no intrinsic value. Thus price is only driven by speculative factors.
With stocks there are earnings that can be distributed back to shareholders. This is a measurable and explainable fundamental factor.
Real estate has rents... Bonds have coupon payments. Crypto has nothing. Though some will pay you "yield" by diverting money from newer entrants... Aka pyramid-esque structure
One of the major problems with Bitcoin is that it is being treated as both a currency, and an investment vehicle.
As an investment vehicle, it's exactly as you say; there is no fundamental value it represents. As a currency, it has no governmental backing, and while it's possible to trade in currencies, the profit lies in the trade, and the various differing rates of exchange, NOT in the underlying currencies themselves. No one holds currency expecting deflation to make them better off.
As an investment vehicle, it's exactly as you say; there is no fundamental value it represents. As a currency, it has no governmental backing, and while it's possible to trade in currencies, the profit lies in the trade, and the various differing rates of exchange, NOT in the underlying currencies themselves. No one holds currency expecting deflation to make them better off.
Does your argument exclude foreign currency holdings?
Currency value is relatively stable through actual use as a medium of exchange, salaries paid in the currency, government backing to maintain relatively stable pricing.
Crypto has none of these. And if it's a good investment, then it's definitely not a good currency
Crypto has none of these. And if it's a good investment, then it's definitely not a good currency
>if it's a good investment, then it's definitely not a good currency
The Bank of England would like a word with you.
The Bank of England would like a word with you.
That's kind of the point. Currencies which are pegged to other currencies at fixed exchange rates aren't good currencies at all. They're subject to sudden catastrophic revaluation. Fortunately most of the major fiat currencies now have floating exchange rates so that's generally no longer a problem.
I was introduced to Bitcoin in 2011 by a friend. I'd never heard of it before, and it sounded like something I'd not be interested in. I didn't go all-in with him renting an apartment where the cost of electricity was paid by the landlord, it's basically free, but he 'gave' me some in lieu of his bar bill, just a handful, with the proviso I hang on to it and spread the word that there was use for it.
In that long conversation, the most compelling 'use' was it's 'non use'. That it is intrinsically rare and so as long as it's achieved a sufficient momentum to continue to exist (aside from transactions, we went over various uses for the blockchain that I was struggling to understand), just having some is itself a diversification and thus valuable for that. Diversification like having some precious metal is too. 'Having' being an important point. Another friend was a gold nut (I mean that in a non-pejorative sense, a term he used) that wouldn't touch gold futures or any form of 'contractual gold' and wasn't that keen even on security boxes.
In this, Bitcoin did make some sense. Just hanging on to some. Not for investment purposes, and not for speculative purposes, but for, depending on your perception, the value you may find in something 'rare' in your (somewhat) physical possession. This may be for a time of turmoil when 'rare' assets are extremely valuable, especially divisible ones (sufficiently 'rare' cash, for example, is well documented to be valuable at these times). 'How much' depending on your appetite: appetite for an asset _held for this purpose_ (a purpose that isn't investment or from-time-to-time speculation), and this 'how much' (price*quantity) re-balanced not based on a Bitcoin's price (nor gold's price per ounce) - from this perspective the day-to-day 'price' of Bitcoin becomes less relevant, re-balancing better smoothed than marked-to-market daily given it's volatility.
[A small aside, but on this 'rarity': I remember clearly the first time I held a gold bar, by no means a common occurrence in my life. It was beautiful. Shaped more like a house brick than something stacked in Fort Knox, it had the portrait a family embossed on it, two parents, three children, the family dog, the chateau in which they lived, and their signatures. It was cast at the time of the French Revolution, and sits, certainly when I handled it and I imagine still today, unclaimed, in London, where it was sent for safe keeping. Sad.]
In that long conversation, the most compelling 'use' was it's 'non use'. That it is intrinsically rare and so as long as it's achieved a sufficient momentum to continue to exist (aside from transactions, we went over various uses for the blockchain that I was struggling to understand), just having some is itself a diversification and thus valuable for that. Diversification like having some precious metal is too. 'Having' being an important point. Another friend was a gold nut (I mean that in a non-pejorative sense, a term he used) that wouldn't touch gold futures or any form of 'contractual gold' and wasn't that keen even on security boxes.
In this, Bitcoin did make some sense. Just hanging on to some. Not for investment purposes, and not for speculative purposes, but for, depending on your perception, the value you may find in something 'rare' in your (somewhat) physical possession. This may be for a time of turmoil when 'rare' assets are extremely valuable, especially divisible ones (sufficiently 'rare' cash, for example, is well documented to be valuable at these times). 'How much' depending on your appetite: appetite for an asset _held for this purpose_ (a purpose that isn't investment or from-time-to-time speculation), and this 'how much' (price*quantity) re-balanced not based on a Bitcoin's price (nor gold's price per ounce) - from this perspective the day-to-day 'price' of Bitcoin becomes less relevant, re-balancing better smoothed than marked-to-market daily given it's volatility.
[A small aside, but on this 'rarity': I remember clearly the first time I held a gold bar, by no means a common occurrence in my life. It was beautiful. Shaped more like a house brick than something stacked in Fort Knox, it had the portrait a family embossed on it, two parents, three children, the family dog, the chateau in which they lived, and their signatures. It was cast at the time of the French Revolution, and sits, certainly when I handled it and I imagine still today, unclaimed, in London, where it was sent for safe keeping. Sad.]
> What justifies Bitcoin being valued at 30k vs 20k?
That it's a safeguard (not hedge) against tyrannical money.
This will play out over the next few years as governments will introduce digital currencies (CBDCs) to replace their own failing currencies (simultaneously robbing citizens of their savings). The bait-and-switch of this is that they will give out free money (it costs them nothing to do so) to entice people but not tell them that their money can expire, have its purchases limited to "approved" vendors, and be taken from them instantly without recourse.
Bitcoin is a safeguard against this if you hold it in your custody. This is its ultimate value: it cannot be manipulated or stolen by the state. Something that's never existed in the history of humanity.
There's a reason the genesis block contained this: https://en.bitcoin.it/wiki/File:Jonny1000thetimes.png
That it's a safeguard (not hedge) against tyrannical money.
This will play out over the next few years as governments will introduce digital currencies (CBDCs) to replace their own failing currencies (simultaneously robbing citizens of their savings). The bait-and-switch of this is that they will give out free money (it costs them nothing to do so) to entice people but not tell them that their money can expire, have its purchases limited to "approved" vendors, and be taken from them instantly without recourse.
Bitcoin is a safeguard against this if you hold it in your custody. This is its ultimate value: it cannot be manipulated or stolen by the state. Something that's never existed in the history of humanity.
There's a reason the genesis block contained this: https://en.bitcoin.it/wiki/File:Jonny1000thetimes.png
How many, or what percentage, of crypto owners/holders actually have their crypto in their own custody? I would hazard to say somewhere south of 1%.
So what benefit is it? Everyone has only traded one form of vendor lock in to another (that is deserving of vastly less trust, as evidended by the Wild West of scams, rug pulls and outright frauds)
So what benefit is it? Everyone has only traded one form of vendor lock in to another (that is deserving of vastly less trust, as evidended by the Wild West of scams, rug pulls and outright frauds)
That's not a fault of the technology. Many people want to pin the flaw of human behavior on Bitcoin but there's nothing inherent in the technology that forces people to do that. The literal "quickstart" of Bitcoin is to hold it in your own custody (running the Bitcoin software on your computer gives you a wallet you 100% control).
If your tech exhibits bad results due to "flawed human behavior" that's a usability concern, which is absolutely a fault of the technology. Tech doesn't exist in a bubble without humans.
The tech doesn't exhibit anything. Bitcoin has continued to run, as intended, since 2009. The market for Bitcoin however exhibits exactly what I've suggested above: human behavior.
I know how it works, and I’d argue it is a flaw of the technology.
Money works because I can hand $10 to a 5 or a 95 year old and they know what to do with it. Very few people do anything other than speculate in crypto, and even fewer hold it in their own wallets as opposed to on exchanges. If the friction of getting started in the future of money requires IT support, then it isn’t going to work
Money works because I can hand $10 to a 5 or a 95 year old and they know what to do with it. Very few people do anything other than speculate in crypto, and even fewer hold it in their own wallets as opposed to on exchanges. If the friction of getting started in the future of money requires IT support, then it isn’t going to work
It doesn't require IT support, it requires reading (a limited amount depending on how much you want to know).
This perspective is far from universal. Obviously, HN readers are a super-technical strata of society, and people here have little trouble understanding the concept and usage of cryptocurrency. The vast majority of the general population is nowhere near this level of technical proficiency. Just downloading and installing a software is firmly out of grasp for lots of people, probably more than half of them if I had to guess.
> This perspective is far from universal.
It doesn't need to be universal. The need for personal computers wasn't universal when Steve Jobs was running around Silicon Valley selling the Apple I in the 70s. They didn't even understand email in the 90s: https://www.youtube.com/watch?v=UlJku_CSyNg.
Look at us now.
> The vast majority of the general population is nowhere near this level of technical proficiency.
Right. Just like all technology, that's our responsibility as "the nerds." We take something that's complex and distill it down into something that's easily digested by people with limited or no technical aptitude.
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I find it deeply alarming that the supposed technical elite that wander this site are so averse to something that can liberate and help so many people, worldwide. Even if they have the capacity to understand it, it's clear that many here haven't done their homework and are relying on second or third-hand knowledge (or at best, outdated information) to form their opinions.
Despite their hubris and narcissism, they're no better than "the general population" on understanding this.
It doesn't need to be universal. The need for personal computers wasn't universal when Steve Jobs was running around Silicon Valley selling the Apple I in the 70s. They didn't even understand email in the 90s: https://www.youtube.com/watch?v=UlJku_CSyNg.
Look at us now.
> The vast majority of the general population is nowhere near this level of technical proficiency.
Right. Just like all technology, that's our responsibility as "the nerds." We take something that's complex and distill it down into something that's easily digested by people with limited or no technical aptitude.
---
I find it deeply alarming that the supposed technical elite that wander this site are so averse to something that can liberate and help so many people, worldwide. Even if they have the capacity to understand it, it's clear that many here haven't done their homework and are relying on second or third-hand knowledge (or at best, outdated information) to form their opinions.
Despite their hubris and narcissism, they're no better than "the general population" on understanding this.
Just because you support an alternative money system doesn't mean you have to be against the concept of a bank altogether. Bank exists because people suck at protecting their money. You don't keep cash in your house because you get breaked in. And same goes for crypto. You could get your key stolen. You could forget your passphrase. You could get hacked. And so on. Bank aren't invulnerable, but they sucks much less than average people at protecting their assets, and this is why people uses them.
Right. No argument from me, except that isn’t the post I’m replying to, there the poster has said that a key safeguard is having custody of it. And without this magic piece, which as op points out is quite revolutionary, you’re literally at the mercy of opaque organisations that are able to screw you over with none of the protections of the current financial system (not to say people don’t get mercilessly screwed today, but default or bank run protection is a pretty sweet deal)
I'm sorry, but this doesn't make any sense to me.... What I am missing ?
> as governments will introduce digital currencies
Governments generally don't create money, central banks do. Famously, some central banks are actually private entities, not government (public ones)
> own failing currencies
What exactly currency is failing, and which are the indicators ? USD and EUR are roaring successes in facilitating value exchanges on a global scale.
> simultaneously robbing citizens of their savings
If that's the intention, banks can do that right now by printing money. Oh wait, they do.
> will give out free money (it costs them nothing to do so)
Yes, printing money has a small marginal cost.
> not tell them that their money can expire
Why somebody would expire money when they try to prop the economy on which they base their own support ?
> have its purchases limited to "approved" vendors
Again, why anybody would shoot themselves in the foot by killing the economy that keeps them alive ?
> it cannot be manipulated or stolen by the state
I'm sorry all your post reads some like crypto-prepper thing. If you feel that the state is out to steal you, you'd better start arming too, because if the state is out to get you, they'll not do it via obscure economic means, they will send the state-sponsored-thugs to violence it out - see Russia.
> Something that's never existed in the history of humanity.
Gold?
> as governments will introduce digital currencies
Governments generally don't create money, central banks do. Famously, some central banks are actually private entities, not government (public ones)
> own failing currencies
What exactly currency is failing, and which are the indicators ? USD and EUR are roaring successes in facilitating value exchanges on a global scale.
> simultaneously robbing citizens of their savings
If that's the intention, banks can do that right now by printing money. Oh wait, they do.
> will give out free money (it costs them nothing to do so)
Yes, printing money has a small marginal cost.
> not tell them that their money can expire
Why somebody would expire money when they try to prop the economy on which they base their own support ?
> have its purchases limited to "approved" vendors
Again, why anybody would shoot themselves in the foot by killing the economy that keeps them alive ?
> it cannot be manipulated or stolen by the state
I'm sorry all your post reads some like crypto-prepper thing. If you feel that the state is out to steal you, you'd better start arming too, because if the state is out to get you, they'll not do it via obscure economic means, they will send the state-sponsored-thugs to violence it out - see Russia.
> Something that's never existed in the history of humanity.
Gold?
> What exactly currency is failing, and which are the indicators ?
The USD's value has declined 90+% over the last 100 years. As Charlie Munger suggests, "My [the] working thesis is that the currency goes to zero."
> If that's the intention, banks can do that right now by printing money. Oh wait, they do.
Correct. That's a bad thing. They can't do that on a Bitcoin standard.
> Why somebody would expire money when they try to prop the economy on which they base their own support ?
Because it forces participation in the economy. If it's going to expire, you're forced to spend it, thus boosting the economy. Also, you're guaranteed to keep working because you can't save your money and exit the system so you can repeat this cycle ad nausea.
> Again, why anybody would shoot themselves in the foot by killing the economy that keeps them alive ?
Because the goal is to limit the number of people "kept alive." As for an individual case: fear of the sword. https://twitter.com/PezntJournalist/status/15095444990133739...
> I'm sorry all your post reads some like crypto-prepper thing. If you feel that the state is out to steal you, you'd better start arming too
The floor of my bedroom closet is a small arsenal and yes, I've mentally prepared to die in a shoot out (if it comes to that) with the powers that be. Being prepared does not mean being ignorant/stupid/foolish. I lose nothing by thinking ahead while those who foolishly buy into what they're told—despite persistent evidence to the contrary—potentially lose everything.
> Gold?
That can be confiscated.
The USD's value has declined 90+% over the last 100 years. As Charlie Munger suggests, "My [the] working thesis is that the currency goes to zero."
> If that's the intention, banks can do that right now by printing money. Oh wait, they do.
Correct. That's a bad thing. They can't do that on a Bitcoin standard.
> Why somebody would expire money when they try to prop the economy on which they base their own support ?
Because it forces participation in the economy. If it's going to expire, you're forced to spend it, thus boosting the economy. Also, you're guaranteed to keep working because you can't save your money and exit the system so you can repeat this cycle ad nausea.
> Again, why anybody would shoot themselves in the foot by killing the economy that keeps them alive ?
Because the goal is to limit the number of people "kept alive." As for an individual case: fear of the sword. https://twitter.com/PezntJournalist/status/15095444990133739...
> I'm sorry all your post reads some like crypto-prepper thing. If you feel that the state is out to steal you, you'd better start arming too
The floor of my bedroom closet is a small arsenal and yes, I've mentally prepared to die in a shoot out (if it comes to that) with the powers that be. Being prepared does not mean being ignorant/stupid/foolish. I lose nothing by thinking ahead while those who foolishly buy into what they're told—despite persistent evidence to the contrary—potentially lose everything.
> Gold?
That can be confiscated.
> "My [the] working thesis is that the currency goes to zero."
And that's a good thing. As currency goes to 0, we'll have an economy of abundance, a Star Trek utopia where you can get anything for free (because currency is 0) from a friendly replicator.
> That's a bad thing.
That's a good thing - as the economy grows the supply of money that represents the value of the economy needs to grow. You can buy together things that would've been utopia 100 years ago (iPhones - the knowledge of the world in your pocket; travel anywhere in the world in under a day) for next to nothing (in the developed world). The value of these new things needs to be represented.
> you're guaranteed to keep working
What makes you think it's fair for you to stop working when other people are working their asses off to feed you, give you shelter, etc ? We all need to contribute to the society, unless you have a leach mentality.
> the goal is to limit the number of people "kept alive." ... my bedroom closet is a small arsenal
I'm not going to discuss conspiracy theory-driven paranoia, except to mention that if the state is "out to get you", unless you have tons of like minded friends, and you all have your own airforce, "they" WILL get you, because you can't fight an F-16 bombing you.
Oh, and bitcoin can be seized, exactly as gold https://www.dlapiper.com/en/us/insights/publications/2022/02....
And that's a good thing. As currency goes to 0, we'll have an economy of abundance, a Star Trek utopia where you can get anything for free (because currency is 0) from a friendly replicator.
> That's a bad thing.
That's a good thing - as the economy grows the supply of money that represents the value of the economy needs to grow. You can buy together things that would've been utopia 100 years ago (iPhones - the knowledge of the world in your pocket; travel anywhere in the world in under a day) for next to nothing (in the developed world). The value of these new things needs to be represented.
> you're guaranteed to keep working
What makes you think it's fair for you to stop working when other people are working their asses off to feed you, give you shelter, etc ? We all need to contribute to the society, unless you have a leach mentality.
> the goal is to limit the number of people "kept alive." ... my bedroom closet is a small arsenal
I'm not going to discuss conspiracy theory-driven paranoia, except to mention that if the state is "out to get you", unless you have tons of like minded friends, and you all have your own airforce, "they" WILL get you, because you can't fight an F-16 bombing you.
Oh, and bitcoin can be seized, exactly as gold https://www.dlapiper.com/en/us/insights/publications/2022/02....
> As currency goes to 0, we'll have an economy of abundance, a Star Trek utopia where you can get anything for free (because currency is 0) from a friendly replicator.
You don't understand economics.
> as the economy grows the supply of money that represents the value of the economy needs to grow
You really don't understand economics.
> What makes you think it's fair for you to stop working when other people are working their asses off to feed you, give you shelter, etc ?
Where did I say that? If I save money—the result of my labor—and then live off of that, it's not a crime (this is literally the basis for the concept of retirement) or a threat to anyone (they get compensated for their current labor with the proceeds of my past labor). Assuming that it is a threat in some esoteric way, to be honest, is a bit disturbing.
> I'm not going to discuss conspiracy theory-driven paranoia
It's not paranoia, it's awareness. Paranoia implies I think it's going to happen, while awareness implies that I think it could. I don't think the government is actively out to get me—I'm relatively harmless—but I can certainly foresee people like me being sought out if the circumstances necessitate it (in the eyes of the authority).
> Oh, and bitcoin can be seized, exactly as gold
The headline of what you shared proves me right, not wrong: "Aided by cryptocurrency exchanges."
You don't understand economics.
> as the economy grows the supply of money that represents the value of the economy needs to grow
You really don't understand economics.
> What makes you think it's fair for you to stop working when other people are working their asses off to feed you, give you shelter, etc ?
Where did I say that? If I save money—the result of my labor—and then live off of that, it's not a crime (this is literally the basis for the concept of retirement) or a threat to anyone (they get compensated for their current labor with the proceeds of my past labor). Assuming that it is a threat in some esoteric way, to be honest, is a bit disturbing.
> I'm not going to discuss conspiracy theory-driven paranoia
It's not paranoia, it's awareness. Paranoia implies I think it's going to happen, while awareness implies that I think it could. I don't think the government is actively out to get me—I'm relatively harmless—but I can certainly foresee people like me being sought out if the circumstances necessitate it (in the eyes of the authority).
> Oh, and bitcoin can be seized, exactly as gold
The headline of what you shared proves me right, not wrong: "Aided by cryptocurrency exchanges."
> That it's a safeguard (not hedge) against tyrannical money.
Then why isn't BTC and other cryptocurrencies skyrocketing right now and seeing widespread adoption by Russian oligarchs looking to move around their money?
After all, if you're on the losing end of it sanctions are "tyrannical money".
There's also an argument to be made that it is precisely the tyranny behind fiat currency to ultimately gives it its value. The United States has a vast array of coercive means (from locking you in prison for forgery to trade weapons that can destroy your economy) to ensure that the USD has value.
There is never a technical solution to realpolitik. We'll increasingly see this in the coming months with crypto as powerful people will get their piece of the pie from the crypto boom, while most average players will be left with nothing.
Then why isn't BTC and other cryptocurrencies skyrocketing right now and seeing widespread adoption by Russian oligarchs looking to move around their money?
After all, if you're on the losing end of it sanctions are "tyrannical money".
There's also an argument to be made that it is precisely the tyranny behind fiat currency to ultimately gives it its value. The United States has a vast array of coercive means (from locking you in prison for forgery to trade weapons that can destroy your economy) to ensure that the USD has value.
There is never a technical solution to realpolitik. We'll increasingly see this in the coming months with crypto as powerful people will get their piece of the pie from the crypto boom, while most average players will be left with nothing.
> Then why isn't BTC and other cryptocurrencies skyrocketing right now and seeing widespread adoption by Russian oligarchs looking to move around their money?
Because people are and have always been foolish and ego/pride driven.
> The United States has a vast array of coercive means (from locking you in prison for forgery to trade weapons that can destroy your economy) to ensure that the USD has value.
Do you view that as a positive? I sure don't. That's a really depressing reality when you have something like Bitcoin which doesn't necessitate any of that.
> We'll increasingly see this in the coming months with crypto as powerful people will get their piece of the pie from the crypto boom, while most average players will be left with nothing.
"Crypto" isn't Bitcoin. The conflation of the two is, in part, why the market fluctuates as violently as it does.
Because people are and have always been foolish and ego/pride driven.
> The United States has a vast array of coercive means (from locking you in prison for forgery to trade weapons that can destroy your economy) to ensure that the USD has value.
Do you view that as a positive? I sure don't. That's a really depressing reality when you have something like Bitcoin which doesn't necessitate any of that.
> We'll increasingly see this in the coming months with crypto as powerful people will get their piece of the pie from the crypto boom, while most average players will be left with nothing.
"Crypto" isn't Bitcoin. The conflation of the two is, in part, why the market fluctuates as violently as it does.
Maintaining the value of fiat currency through a state monopoly on violence is absolutely a positive. It works out better overall than anything else we've ever tried, including cryptocurrency.
If by "working out better" you mean obliterating the value of it and effectively enslaving your own citizenry because your greed incentivizes you to do so, then sure.
"tyrannical money"
The USA has an elected legislature, independent courts, multiple levels of appeals in the judicial system, a strong system of civil rights, the right to trial for anyone accused of a crime, the right to an attorney, an independent press, and an active civil society made up of tens of thousands of organizations; all of which shapes the political environment which in turn shapes monetary policy. In what sense is the USD tyrannical?
The USA has an elected legislature, independent courts, multiple levels of appeals in the judicial system, a strong system of civil rights, the right to trial for anyone accused of a crime, the right to an attorney, an independent press, and an active civil society made up of tens of thousands of organizations; all of which shapes the political environment which in turn shapes monetary policy. In what sense is the USD tyrannical?
You didn't read what I wrote. I'm not concerned about what's currently true, I'm concerned about where we're headed. As Bitcoin has a supply limited to 21M, it's prudent to acquire as much as you can (while you can) before the system I described is implemented. When that happens, you will have no other options save for covert means.
Edit: this is a more long-form articulation of what I'm getting at https://www.youtube.com/watch?v=MtX6AKEO8ok
Edit: this is a more long-form articulation of what I'm getting at https://www.youtube.com/watch?v=MtX6AKEO8ok
> it cannot be manipulated or stolen by the state.
How's that different from the paper notes in a Monopoly game box? The Fed can't steal it or debase its value either. I still need a large group of people that also hold monopoly money and are willing to transact goods and services for it, with the understanding that the monopoly notes have zero fiat cash value.
How's that different from the paper notes in a Monopoly game box? The Fed can't steal it or debase its value either. I still need a large group of people that also hold monopoly money and are willing to transact goods and services for it, with the understanding that the monopoly notes have zero fiat cash value.
> The Fed can't steal it or debase its value either.
This is literally what money printing does.
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If you view it as Monopoly money, then don't use it. I don't know what to tell you; Bitcoin's transaction volume clearly shows that people use it. I've been paid with it and I've paid others with it.
> the monopoly notes have zero fiat cash value
Bitcoin is currently trading at $23,678. That's quite a bit of fiat cash value. Like I've said elsewhere in this thread, if that number goes down, I'll just acquire more of it because the properties I care about remain intact irrespective of USD price. Your opinion of what I do or do not view as money is, frankly, irrelevant.
This is literally what money printing does.
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If you view it as Monopoly money, then don't use it. I don't know what to tell you; Bitcoin's transaction volume clearly shows that people use it. I've been paid with it and I've paid others with it.
> the monopoly notes have zero fiat cash value
Bitcoin is currently trading at $23,678. That's quite a bit of fiat cash value. Like I've said elsewhere in this thread, if that number goes down, I'll just acquire more of it because the properties I care about remain intact irrespective of USD price. Your opinion of what I do or do not view as money is, frankly, irrelevant.
I wonder if even 1 in 100 current Bitcoin owners would articulate an opinion such as this.
Most likely not, but they should.
But don’t you see that if that number can’t be lifted, crypto will never be capable of doing what it’s theoretically capable of? It’s like being the first to market with some revolutionary product, totally screwing the implementation and adoption and then leaving the population so jaded with the technology that it’s going to have a hard time recovering
I'm not preoccupied by the number (and neither should anyone else). If the number goes down, I'll just acquire more of it (I'm actively doing this as we speak). The point is the ability to transact without worrying about coercion.
The implementation works fine, the people are flawed (and this will always be true).
The implementation works fine, the people are flawed (and this will always be true).
It's true but it's also true of fiat currencies (more or less).
Creating a valuable fiat currency is easy. If you pay your kids in your own currency for chores, it will initially be worthless. If you however declare that hours spent on YouTube must be paid for in chore dollars, you'll suddenly see that it has some value. Note that it would not be so easy for your kids to create a valuable currency.
The value will be proportional to the effort the kid must provide. If you says that a chore dollar is worth 1 human hour, that's a very strong and valuable currency. But FIAT currencies are from defined as such. As a single example, their value partially depends on the amount in circulation, which might change anytime without notice nor democratic consultation.
Fiat currencies are created by sovereign entities which control fundamental things like land and people (they can even draft their population and send them into war).
If you own land in the United States, you pay property tax in USD. That's just one of myriad ways that the dollar is backed by the physical assets of the nation.
If you own land in the United States, you pay property tax in USD. That's just one of myriad ways that the dollar is backed by the physical assets of the nation.
In Romania, the M3 monetary mass has gone up by at least 9% each year since 2016, while monetary velocity went down.
Now that velocity is picking back up, we are seeing astronomical inflation.
Just because a govenrnment controls the currency doesn't mean it's in your interest to save long-term in it.
Now that velocity is picking back up, we are seeing astronomical inflation.
Just because a govenrnment controls the currency doesn't mean it's in your interest to save long-term in it.
To many cryptocurrency enthusiasts, the fact that such an entity does not govern cryptocurrency is one of its main appeals. They're indeed different beasts but both lack an "intrinsic value": their value is entirely derived from the belief that they can be traded for something else eventually.
The US Government has an absolute monopoly on taxing every single American person and business indefinitely. That's, uh, substantially different.
Still, what determines the actual value of one USD?
not trying to be 100% tongue in cheek because this is basically true. The link below is what determines value in USD
https://en.wikipedia.org/wiki/United_States_Strategic_Comman...
https://en.wikipedia.org/wiki/United_States_Strategic_Comman...
Taxation makes up $4T, which is less than a fifth of GDP ($23T).
That still ensures a certain price for, which i personally believe does not exist in btc.
I believe its supply-side economics attract a certain demand.
But sadly the price increases also attract a different kind of demand, much more volatile (80% crashes now and then).
But sadly the price increases also attract a different kind of demand, much more volatile (80% crashes now and then).
Real currencies are backed by the goods and services people offer for a predetermined quantity of that currency. In a gold-backed currency, one of these goods happens to be gold, but the same also applies to fiat. The Chipotle in my area is "backing" the dollar by allowing you to exchange $10 for a chicken burrito. When sign an offer letter to your employer, you are also essentially "backing" the US dollar with your labor. Meanwhile, when goods or services exchanged with bitcoin, they still priced in fiat currency, so you're still backing your local fiat. The only thing Bitcoin is backed by is speculators who want to well Bitcoin to someone else in the future for more fiat.
Fiat currency has intrinsic value. You need it to pay taxes, don't have enough and you go to jail.
That's why I said more or less. Taxes probably only account for a small portion of this value and it is now possible to pay taxes in crypto (in some countries and cities).
Even in those jurisdictions, taxes are still assessed in the local currency. Cryptocurrency is just a medium of exchange, so it has value in the same way that Visa the company has value.
Assessing taxes in currency X does not give it value if those taxes can be paid in currency Y. It does not create any demand for it, unlike in the scenario where the taxes must be paid in it.
Let's go back to the three basic roles of currency. A currency is a medium of exchange, a medium of account, and a store of value.
Bitcoin certainly has value as a medium of exchange because it can be (and is) exchanged between people. A government that accepts bitcoin for payment of taxes adds to the exchange-value of the currency, certainly.
Bitcoin also has some merit as a store of value, in that people observably hold bitcoin with the expectation that it will remain valuable. Ultimately, however, this role of currency is speculative: it requires belief that people will want the currency in the future at a reasonable price. This is also where crypto bulls and bears most disagree.
Bitcoin has a much more ephemeral status as a medium of account, however. Stores aren't pricing their wares primarily in bitcoin; when they accept the currency they price primarily in local currency and perform a spot conversion. This is also what I was referring to above with jurisdictions not assessing taxes in bitcoin even if they accept it.
The medium of account is the least flashy but perhaps most fundamental role of a currency; it provides a backstop of price stability. Repricing goods and services is hard. It obsoletes marketing campaigns, it confuses contractual expectations, and it can require literal printing costs re: price tags and the like. That stability, however, lets people think of one currency-unit as worth something real, not just some amount of another, more important currency.
Bitcoin does not yet have this status, and this is where lack of tax assessment in bitcoin matters. I can't say that (e.g.) 0.1BTC will definitely pay my property taxes for a year, no matter what else happens to the currency in the meantime.
Bitcoin certainly has value as a medium of exchange because it can be (and is) exchanged between people. A government that accepts bitcoin for payment of taxes adds to the exchange-value of the currency, certainly.
Bitcoin also has some merit as a store of value, in that people observably hold bitcoin with the expectation that it will remain valuable. Ultimately, however, this role of currency is speculative: it requires belief that people will want the currency in the future at a reasonable price. This is also where crypto bulls and bears most disagree.
Bitcoin has a much more ephemeral status as a medium of account, however. Stores aren't pricing their wares primarily in bitcoin; when they accept the currency they price primarily in local currency and perform a spot conversion. This is also what I was referring to above with jurisdictions not assessing taxes in bitcoin even if they accept it.
The medium of account is the least flashy but perhaps most fundamental role of a currency; it provides a backstop of price stability. Repricing goods and services is hard. It obsoletes marketing campaigns, it confuses contractual expectations, and it can require literal printing costs re: price tags and the like. That stability, however, lets people think of one currency-unit as worth something real, not just some amount of another, more important currency.
Bitcoin does not yet have this status, and this is where lack of tax assessment in bitcoin matters. I can't say that (e.g.) 0.1BTC will definitely pay my property taxes for a year, no matter what else happens to the currency in the meantime.
I agree with this criticism. But it seems more like a practical obstacle than a fundamental one, which is important to distinguish. A practical obstacle can be overcome while a fundamental one cannot. While it's unknown whether Bitcoin will ever become a unit of account, it is in the realm of possibility. It's also possible that Bitcoin will just remain a store of value, similar to gold. And yes, gold has some intrinsic value but it is negligible compared to its actual value.
More like less. You cannot pay your taxes in Bitcoin. And the U.S. dollar is backed with petroleum.
It would be a combination of:
* supply
* demand
The supply is well-known in advance, and is an advantage to Bitcoin. US M2 money supply grew 8.04% in the past year [0], while Bitcoin's grew ~1.75% [1].
Demand is very volatile, and suffers from the bandwagon effect (price increase -> buy, price decrease -> sell).
[0] - https://ycharts.com/indicators/us_m2_money_supply_yoy
[1] - https://charts.woobull.com/bitcoin-inflation/
* supply
* demand
The supply is well-known in advance, and is an advantage to Bitcoin. US M2 money supply grew 8.04% in the past year [0], while Bitcoin's grew ~1.75% [1].
Demand is very volatile, and suffers from the bandwagon effect (price increase -> buy, price decrease -> sell).
[0] - https://ycharts.com/indicators/us_m2_money_supply_yoy
[1] - https://charts.woobull.com/bitcoin-inflation/
Yes, I heard there was a huge demand for Tulips back in the day...
The tulip bubble did not have 80% crashes going to higher and higher floors.
And what justifies gold being worth any particular amount of money?
The answer is the same: nothing.
Except that that's not true for gold and it's not true for Bitcoin. Something has value if people want it.
That's it.
People want Bitcoin, therefore it has value.
Your search for fundamentals is simply inappropriately applied. It's like asking what color is a smell, it's simply the wrong question.
The answer is the same: nothing.
Except that that's not true for gold and it's not true for Bitcoin. Something has value if people want it.
That's it.
People want Bitcoin, therefore it has value.
Your search for fundamentals is simply inappropriately applied. It's like asking what color is a smell, it's simply the wrong question.
Gold's intrinsic value is defined by its chemical properties and value for use in manufacturing. A large percentage of mined gold is used for productive purposes, not simply to sit in a vault.
Companies buy gold for use in electronics manufacturing, believe it or not.
But a portion of gold's market value is driven by a speculative spread over the intrinsic value, similar to BTC. Except for BTC the intrinsic portion is close to 0.
Companies buy gold for use in electronics manufacturing, believe it or not.
But a portion of gold's market value is driven by a speculative spread over the intrinsic value, similar to BTC. Except for BTC the intrinsic portion is close to 0.
Air has a extremely high intrinsic value for its use in keeping humans alive. Yet the price of air is zero. Intrinsic value does not determine the price of something, the only determination of price is by a market.
Its price is 0 because there are vast quantities of it.
Price is a function of both supply/demand, with intrinsic value creating the rationale for the demand. I bet air would sell for a lot more out in Space or at the bottom of the ocean
There is no rationale to the demand for Bitcoin beyond a greater fool, or edge use cases like illicit transactions. It's obvious that 95%+ of people buying Bitcoin are doing it to make USD returns.
Price is a function of both supply/demand, with intrinsic value creating the rationale for the demand. I bet air would sell for a lot more out in Space or at the bottom of the ocean
There is no rationale to the demand for Bitcoin beyond a greater fool, or edge use cases like illicit transactions. It's obvious that 95%+ of people buying Bitcoin are doing it to make USD returns.
In your belief system, what perpetuates for example the price difference between a .com domain and a .net domain? Is there an intrinsic value of .com over .net? Or do you believe that they should be equally priced.
The intrinsic value of one domain over the other is the signal it sends to your customers.
If .com is culturally considered higher quality and thus will drive more business to you, then it carries a higher value than .net
But perceptions of value can change over time. This is not my belief system by the way, this is how the intrinsic value of something is determined.
If .com is culturally considered higher quality and thus will drive more business to you, then it carries a higher value than .net
But perceptions of value can change over time. This is not my belief system by the way, this is how the intrinsic value of something is determined.
So a cultural convention for consensus on using a particular TLD is part of your definition of intrinsic value for a domain name. But for gold, the monetary premium for a similar social consensus is entirely distinct from the intrinsic value:
> But a portion of gold's market value is driven by a speculative spread over the intrinsic value, similar to BTC.
What is the definition of intrinsic value that allows both of these interpretations to be true?
> But a portion of gold's market value is driven by a speculative spread over the intrinsic value, similar to BTC.
What is the definition of intrinsic value that allows both of these interpretations to be true?
Because marketing and appeal drives revenue for your business. It's a multi variate system where the values aren't known, but they're there all the same.
Buying gold and storing it in your basement is just speculation. It doesn't provide any value on its own. You aren't using the gold for any immediate purpose, but just hoping that value increases beyond the market value in use for production.
Gold could have some intrinsic value as a signaling tool via jewelry etc, and this could conceivably drive value.
But you can't wear bitcoin
Buying gold and storing it in your basement is just speculation. It doesn't provide any value on its own. You aren't using the gold for any immediate purpose, but just hoping that value increases beyond the market value in use for production.
Gold could have some intrinsic value as a signaling tool via jewelry etc, and this could conceivably drive value.
But you can't wear bitcoin
Thanks for elaborating, I think this distinction does actually make sense. I do however still think that the this definition of intrinsic value does not really matter for justifying a "real" price. The intrinsic value ultimately is still backed by transactions that are at some point themselves market set prices without intrinsic value. There isn't any natural law that would say fix the price of 2 oranges to 1 apple that could support any particular trade. You could also for example use this definition to talk about the intrinsic value of equity in a bitcoin only exchange (from trading fees), which would obviously become zero if bitcoin went to zero.
You're right that price is always defined by supply/demand and not directly by intrinsic value.
It's also true that intrinsic value can be different for different people, depending on how subjective it is. Gas may be worth up to $10/gallon for me, because without it I can't make any money. If I work from home, I may only be willing to pay $1/gallon for gas. Thus intrinsic value is usually a function rather than a static property, and inputs change over time. A consumer who is a billionaire may also be willing to pay a far higher amount for a good than somebody who's middle class. This could push market price higher, despite the core value of the good being unchanged. The value function is always there though, and it likely has millions or more parameters with different weightings.
So TLDR; price is a market determined value, intrinsic value provides justification for demand, which feeds into price.
A bubble is usually a result of price running far ahead of any justifiable intrinsic value. When price is far ahead of intrinsic value, it usually means it's being driven by "speculative value". Pokemon Cards, Fine Art, Wine, Beanie Babies. The actual use value of these is minimal, but people buy on the expectation that people in the future will value it even higher. You can make a lot of money via speculation on things like this, but there's also nothing supporting the price.
For an alternative example, if I buy a stock that yields a safe 10% dividend, then I can easily quantify the worth. I put $1m into it, and I get $100k a year forever. Can it fall 50% in value to a 20% yield? It's pretty much impossible, assuming the market believes the yield is safe. This is why fundamentals and intrinsic value matters a lot in investing
It's also true that intrinsic value can be different for different people, depending on how subjective it is. Gas may be worth up to $10/gallon for me, because without it I can't make any money. If I work from home, I may only be willing to pay $1/gallon for gas. Thus intrinsic value is usually a function rather than a static property, and inputs change over time. A consumer who is a billionaire may also be willing to pay a far higher amount for a good than somebody who's middle class. This could push market price higher, despite the core value of the good being unchanged. The value function is always there though, and it likely has millions or more parameters with different weightings.
So TLDR; price is a market determined value, intrinsic value provides justification for demand, which feeds into price.
A bubble is usually a result of price running far ahead of any justifiable intrinsic value. When price is far ahead of intrinsic value, it usually means it's being driven by "speculative value". Pokemon Cards, Fine Art, Wine, Beanie Babies. The actual use value of these is minimal, but people buy on the expectation that people in the future will value it even higher. You can make a lot of money via speculation on things like this, but there's also nothing supporting the price.
For an alternative example, if I buy a stock that yields a safe 10% dividend, then I can easily quantify the worth. I put $1m into it, and I get $100k a year forever. Can it fall 50% in value to a 20% yield? It's pretty much impossible, assuming the market believes the yield is safe. This is why fundamentals and intrinsic value matters a lot in investing
You've just described money. Is BTC good at being money? No. But your argument isn't the reason.
The only things that give money value are leadership (faith in the government) or military (punitive damage).
Generically, perhaps. But specific money like the USD has value backed up at the point of a gun.
That is not the only thing that has backed the value of money in the history of humanity. It (violence) is arguably the most inferior social mechanism for enforcing value that has been tried.
Why does the paper dollar have buying power? What justifies its value?
> The answer is nothing. Since there's no measurable intrinsic value, there's zero fundamental factor limiting the downside
> The answer is nothing. Since there's no measurable intrinsic value, there's zero fundamental factor limiting the downside
The fact that it's the mandated unit of exchange for commerce in the US, and the government ensures it maintains a relatively stable value.
It doesn't have intrinsic value, but it certainly has value by fiat/authority
It doesn't have intrinsic value, but it certainly has value by fiat/authority
So USD’s value comes from authority, force and violence. We accept the USD because of the USA’s army, bombs, etc.
We accept the fed and central banks and money printing. We accept the rigged point system.
And how long is this sustainable before people have had enough? We now have an alternative. There is no bitcoin print button to bail out Washington at the expense of the regular people.
We accept the fed and central banks and money printing. We accept the rigged point system.
And how long is this sustainable before people have had enough? We now have an alternative. There is no bitcoin print button to bail out Washington at the expense of the regular people.
Even if I agreed with all your points (which I don't) why would the US government switch to BTC if that limited what the Fed could do? This is a debilitating flaw of BTC.
I suppose if a vast majority of Americans demanded a switch to BTC it could be done but if that was a real possibility it would be much easier to demand laws to stop the Fed instead of switching to a new currency.
But the government won't switch to BTC and the people will never demand it because a limited currency would hurt the economy by limiting growth.
I suppose if a vast majority of Americans demanded a switch to BTC it could be done but if that was a real possibility it would be much easier to demand laws to stop the Fed instead of switching to a new currency.
But the government won't switch to BTC and the people will never demand it because a limited currency would hurt the economy by limiting growth.
> I suppose if a vast majority of Americans demanded a switch to BTC it could be done but if that was a real possibility it would be much easier to demand laws to stop the Fed instead of switching to a new currency.
Stopping the fed would certainly be a great start. But we still need to switch currencies to one that cannot be created or controlled by the government.
Whether bitcoin or something else, currency creation schedule should be damn near immutable, predictable, and the protocol should be ossified.
A currency that is unpredictable and can be created whenever the government pleases is unacceptable.
Stopping the fed would certainly be a great start. But we still need to switch currencies to one that cannot be created or controlled by the government.
Whether bitcoin or something else, currency creation schedule should be damn near immutable, predictable, and the protocol should be ossified.
A currency that is unpredictable and can be created whenever the government pleases is unacceptable.
[deleted]
(Number of people into bitcoin) x (average amount of portfolio they stick in bitcoin) = bitcoin price / number of bitcoins.
In practice the bottom will probably be about $10k as people will start thinking that used to be $65k, maybe it'll go back, and buy some.
It's all human psychology but so is the value of a lot of things.
In practice the bottom will probably be about $10k as people will start thinking that used to be $65k, maybe it'll go back, and buy some.
It's all human psychology but so is the value of a lot of things.
Price is defined by the most recent trade, nothing else. It doesn't matter how much money is in crypto accounts.
When you buy crypto with USD that's a one time transaction that has no bearing on future price.
E.g. the ARKK etf has had massive net dollar inflows YTD despite falling over 50% in the same timeframe
When you buy crypto with USD that's a one time transaction that has no bearing on future price.
E.g. the ARKK etf has had massive net dollar inflows YTD despite falling over 50% in the same timeframe
Something is wrong with the equation. The right hand side of the equation is:
> bitcoin price / number of bitcoins
$23,304 / 19,066,500 BTC = $0.001 /BTC
If there is one human into bitcoin, then they invested $0.001 ? If there are more people into bitcoin then they invested even less on average?
It doesn't make any sense.
> bitcoin price / number of bitcoins
$23,304 / 19,066,500 BTC = $0.001 /BTC
If there is one human into bitcoin, then they invested $0.001 ? If there are more people into bitcoin then they invested even less on average?
It doesn't make any sense.
This is text based Technical Analysis, which is possibly the only thing that has less predictive power than actual TA
But it won’t because « it will converge towards the world’s GDP in the end ». LOL.
The downside is at least limited at 0. The upside is unlimited.
There is actually no upside limit, but there is a fundamental downside limit of zero.
What justifies oil being $130 dollars a barrel vs $100? The answer is also nothing.
What justifies oil being $130 dollars a barrel vs $100? The answer is also nothing.
I wonder if comments like this are representative of the average crypto buyer. "The value of real commodities used in daily productive activity, is also entirely made up".
But it is entirely made up, it entirely depends on someone buying the oil and the price they are willing to pay. The fact that there is in principle a use for oil does not mean that there is a buyer, especially since oil is not truly fungible in that it has storage and transit costs. As an example, oil famously via future contracts traded at negative $37 during the covid crisis, meaning that you would have to pay someone to take oil off your hands.
The fact that it is used in daily productive activity might be an argument that oil should in theory have a > 0 price, however the actual price is still made up by a market! There is still not a way to say that the intrinsic value of oil must be X dollars.
The fact that it is used in daily productive activity might be an argument that oil should in theory have a > 0 price, however the actual price is still made up by a market! There is still not a way to say that the intrinsic value of oil must be X dollars.
back to first principles. We have wishes and desires. If we can't get everything we want in quantities we want then we prioritise. I want good food, some mobility and a lot entertaiment. Oil is needed for mobility. Take the average over priorities of the population and you know the price for oil. Markets are just there to determine desires/priorities of the population.
I agree with all of this, when I said "nothing" I meant just that "intrinsic value" is not what determines the price of something, in response to the parent's assertion about intrinsic value setting a price floor on oil
Yeah, I'm sure supply and demand mechanics around production and consumption of oil don't influence the price.
I actually never considered that!
I actually never considered that!
How can you measure the intrinsic value of oil other than with a market? I agree it should have a non zero value in theory, but my point is that the price of anything is determined only by what someone else is willing to pay for it. The fundamental value could be $1000 a barrel or $0.01 a barrel, the only way to find out is to have a market. Also, just because the fundamental value is > 0, it does not mean that the price must be > 0. If there is no buyer or no functional market, the price can be exactly 0.
People are willing to pay up to the perceived value for themselves. That's how an equilibrium price is determined.
If I can make $10/hour running a generator, then I'm willing to pay up to $10 in fuel to operate it
If I can make $10/hour running a generator, then I'm willing to pay up to $10 in fuel to operate it
I think that's just an extra step in your argument about intrinsic value. Now you have to analyze why the price of energy is $10/hour. That transaction is just another thing determined by a market where there isn't actually intrinsic value that sets the price, but another buyer. You can analyze this series of transactions forever, but you won't ever arrive at a point where the intrinsic value of something is what sets a price directly.
Note: I completely agree with you on the concept of an equilibrium price being a real thing, I just don't think equilibrium is determined by intrinsic value.
Note: I completely agree with you on the concept of an equilibrium price being a real thing, I just don't think equilibrium is determined by intrinsic value.
The buyers and sellers reach an equilibrium price, determined by a market, yet justified by the intrinsic value of what you're purchasing.
em1sar(2)
I like the balls on the CEO of Celsius calling out people for saying they can not withdraw right before they lock down withdraws...
https://twitter.com/SilvermanJacob/status/153617697375127961...
Classic run on the bank scenario. And the bank behind all of this is not secured or even worse, so it makes sense.
https://twitter.com/SilvermanJacob/status/153617697375127961...
Classic run on the bank scenario. And the bank behind all of this is not secured or even worse, so it makes sense.
One of his recent retweets is also hilarious:
https://twitter.com/davthewave/status/1535760979333873665?s=...
"#Bitcoin lows around these levels lining up with previous lows as time-relative to previous halvings.
Previous halving cycle shows a mini parabolic breakout from the lows.
Chart shows a regularity and logic for the ongoing macro bull."
The amount of pseudo-science bullshit is mind boggling.
https://twitter.com/davthewave/status/1535760979333873665?s=...
"#Bitcoin lows around these levels lining up with previous lows as time-relative to previous halvings.
Previous halving cycle shows a mini parabolic breakout from the lows.
Chart shows a regularity and logic for the ongoing macro bull."
The amount of pseudo-science bullshit is mind boggling.
Frankly that not too atypical to regular chartist's talk. Draw some lines on some charts and make up a whole story. To give the cryptoists some credit, there's no fundamentals in cryptos so they have to use the only other tools available aka tea leaves.
Only an idiot thinks past performance equals future performance in markets. The ARKK out front should have told you
Plenty of idiots are happy to invest in crypto. A very common sentiment in crypto ads is "$100 invested into crypto in 2012 would be $zilliard today. Invest today, and tomorrow you'll be rich too!"
How do these fine folks sleep at night?
In extremely soft beds in rooms that the people they're defrauding will never ever be able to afford.
Or reach.
It's probably hard to sleep after all the cocaine they take tbh.
Because they've been getting obscenely rich. It's amazing what making loads of money can do to one's morals.
[deleted]
[deleted]
“A loan worth more than $278 million, one of the biggest single loans on decentralized lending platform MakerDAO, is labeled as a loan made by Celsius, according to data tracker Block Analitica. If Bitcoin falls below $22,534.89, the position will be liquidated, adding more sell pressure for Bitcoin, the analytics firm said.
Data shows that the address used 17,919 wrapped Bitcoin, a version of Bitcoin that can be used in decentralized finance, as collateral for a loan worth $278,490,419 in the decentralized stablecoin DAI. While the blockchain explorer Etherescan didn’t labeled the wallet as Celsius, a wallet from Celsius sent additional 2,000 wrapped Bitcoin to support the position. Celsius did not immediately respond to a request for comment on the wallets.”
https://www.bloomberg.com/news/articles/2022-06-13/bitcoin-s...
Data shows that the address used 17,919 wrapped Bitcoin, a version of Bitcoin that can be used in decentralized finance, as collateral for a loan worth $278,490,419 in the decentralized stablecoin DAI. While the blockchain explorer Etherescan didn’t labeled the wallet as Celsius, a wallet from Celsius sent additional 2,000 wrapped Bitcoin to support the position. Celsius did not immediately respond to a request for comment on the wallets.”
https://www.bloomberg.com/news/articles/2022-06-13/bitcoin-s...
Seems they're trying to deposit more BTC into the contract to push down the liquidation price:
https://nitter.net/DU09BTC/status/1536353233156902914#m
Seems to have managed to push it to 18k. Quite the gamble.
https://nitter.net/DU09BTC/status/1536353233156902914#m
Seems to have managed to push it to 18k. Quite the gamble.
[deleted]
22 534.89 * 17 919 = 403 786 746
So, am I reading this right that 403 M$ are used to secure 278 M$?
Or maybe are they accounting for market impact (by way of thin order book) for when the position is liquidated?
So, am I reading this right that 403 M$ are used to secure 278 M$?
Or maybe are they accounting for market impact (by way of thin order book) for when the position is liquidated?
Loans in DeFi are generally highly over collateralized, so you are probably reading it correctly.
This is not looking good for Crypto. Bitcoin is around 24K USD today after a ~10% fall. Other major crypto are following or likely to follow .. Terra Luna fiasco was just the trailer .. The whole movie is going to be more horrifying ..
bitcoin falls 99% in one day to 1 cent - 2011
bitcoin falls 56% - 2012
bitcoin falls 83% to $50 - 2013
bitcoin falls 84% to 12k - 2017
bitcoin falls ~50% to ~30k - 2021
"crypto is not looking good long term" - numerous people on hacker news every single time crypto is down.
bitcoin falls 56% - 2012
bitcoin falls 83% to $50 - 2013
bitcoin falls 84% to 12k - 2017
bitcoin falls ~50% to ~30k - 2021
"crypto is not looking good long term" - numerous people on hacker news every single time crypto is down.
I mean with that volatility idk what kind of usage it can get besides pure speculation.
So either way you're making the same argument as the "crypto is not looking good long term" people
So either way you're making the same argument as the "crypto is not looking good long term" people
[deleted]
Volatility isn't a virtue for a currency. It's fine for speculative financial vehicles that involve cryptography in some way, though. That vehicle might be driving to $0, though.
This crash has the sparkle of DeFi, which makes it more toxic. With the amount of leverage we're seeing peek it's head up, and the size of these yield farming ponzis, the fallout could finally breach the barrier into real-world finance.
Bitcoin at 12k in 2017? Really?
You should welcome all the nay saying here if you think Bitcoin is bound to go up again.
You should welcome all the nay saying here if you think Bitcoin is bound to go up again.
I hope this is not a revealing comment on who you are, because I read that as "you should hope to speculate on some asset to make money off of other people simply because they were wrong"
I'd much rather see a stabilized crypto that could act as an amazing tool for people in poor countries to lift themselves out of poverty than I would see it be a vehicle to take me from top 1% wealth in the world to a higher tier of top 1% wealth in the world.
I'd much rather see a stabilized crypto that could act as an amazing tool for people in poor countries to lift themselves out of poverty than I would see it be a vehicle to take me from top 1% wealth in the world to a higher tier of top 1% wealth in the world.
> I hope this is not a revealing comment on who you are
Get off your high horse. Literally the entire stock market is based on trying guess better than other people and make money off of other people's poor decisions.
Get off your high horse. Literally the entire stock market is based on trying guess better than other people and make money off of other people's poor decisions.
> stabilized crypto that could act as an amazing tool for people in poor countries to lift themselves out of poverty
If cryptos were stable, no-one would be making any money "investing" in them.
(Genuine) Q: How exactly would that lift anyone out of poverty?
If cryptos were stable, no-one would be making any money "investing" in them.
(Genuine) Q: How exactly would that lift anyone out of poverty?
I'm not a fan of crypto, but having a stable currency that the local government can't inflate/manipulate for their own gain would go a long way in many developing countries.
Think about it this way, how much trade would the US have if our currency changed every 10-20 years and all of our old debt was effectively thrown out? How would people save to build a business? How secure would they feel investing in their own future?
Think about it this way, how much trade would the US have if our currency changed every 10-20 years and all of our old debt was effectively thrown out? How would people save to build a business? How secure would they feel investing in their own future?
> having a stable currency
The devil's in the detail: "stable" but vs what, exactly? Local prices? Local incomes? Gold? USD? SDRs[0]?
[0] https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/14...
The devil's in the detail: "stable" but vs what, exactly? Local prices? Local incomes? Gold? USD? SDRs[0]?
[0] https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/14...
Stable, to some degree, in all of those respects, since they are interdependent. Being stable with respect to any of the above indicates a degree of stability with respect to the rest. You can't be stable against gold without a degree of stability against USD, as USD/Gold is pretty stable, and arbitrage would close the gap. Likewise with local prices and income.
I'm not familiar with SDRs.
I'm not familiar with SDRs.
> USD/Gold is pretty stable
Umm, I'm not sure I can agree with that[0]
To be fair, it was fairly stable until about 2006. However the whole point of "being stable" is also to be stable in times of external stress. USD/Gold fails that one quite spectacularly.
[0] https://goldprice.org/charts/gold_30_year_o_x_usd.png
Umm, I'm not sure I can agree with that[0]
To be fair, it was fairly stable until about 2006. However the whole point of "being stable" is also to be stable in times of external stress. USD/Gold fails that one quite spectacularly.
[0] https://goldprice.org/charts/gold_30_year_o_x_usd.png
That's significantly less volatile than Yen/USD. Stability in currencies is pretty relative.
> see a stabilized crypto that could act as an amazing tool for people in poor countries to lift themselves out of poverty
Would you mind explaining to me, or linking to some resource you find convincing, how crypto would succeed in this goal? (or even which organisation or coin has this as a goal)
Would you mind explaining to me, or linking to some resource you find convincing, how crypto would succeed in this goal? (or even which organisation or coin has this as a goal)
[deleted]
Step 1) Person in Malawi buys Bitcoin.
Step 2) ???
Step 3) Person's village experiences famine due to severe draught exacerbated by climate change driven by, among many other things, Bitcoin.
Step 4) ???
Help, I can't find the step where they lift themselves out of poverty.
Step 2) ???
Step 3) Person's village experiences famine due to severe draught exacerbated by climate change driven by, among many other things, Bitcoin.
Step 4) ???
Help, I can't find the step where they lift themselves out of poverty.
Step 5) lift themselves out of poverty
Do these line up with major markets downtowns? Fwiw, all major markets are down like 3% (so far) today. Crypto behaves more like a stock and typically when there are market downturns the more volatile stocks are impacted much more.
The irony of course being that for a while the pitch behind some crypto assets (at least Bitcoin) was that it was a hedge against inflation (which I would argue is what is roiling the traditional market now) and not correlated to overall stock market performance
The bad look is that major exchanges are freezing up with these drops
And BTC just dropped below $24k... a lot of people trying to catch falling knives today.
24k is too high. Way way way too high.
I am confused as how this is a story about crypto and not story about Celsius. If Robinhood stopped withdrawals, would we be having a conversation about solvency about of US government? It is interesting, but it shows that crypto has an oddly rabid opponent base.
Just to put it in perspective, everything is falling today.
For the record, I don't disagree with some of the criticisms, but the knee-jerk reaction to anything crypto is just odd.
minor edit: I have minor stake in crypto, but nothing that would make me retire/commit suicide over losses.
Just to put it in perspective, everything is falling today.
For the record, I don't disagree with some of the criticisms, but the knee-jerk reaction to anything crypto is just odd.
minor edit: I have minor stake in crypto, but nothing that would make me retire/commit suicide over losses.
Yeah, I'm also not a whole-heart fan of everything cryptocurrencies, it has plenty of problems. But I have the same perspective as you, both bases have very intense knee-jerk reactions to anything happening.
I think it has to do with how new the field is. People reacted to the internet in the same way when it was new. No, I'm not saying cryptocurrencies are as useful as the internet is. But when the internet first appeared, people who didn't like the internet, grouped everything on the internet together. I was called porn-addicted because someone had heard there was porn on the internet and that I worked with the internet, so obviously I must be doing something related to porn.
Similarly people hear "cryptocurrency" and they immediately think of scams, although there is currencies that obviously aren't scams (Bitcoin, for one). But they've seen a scam using Bitcoin, so everything related to Bitcoin must be a scam too.
I have nothing to gain/lose by cryptocurrencies going up/down, so I don't really care. But it makes me slightly scared to see how for example many HN users react to cryptocurrencies, when this audience usually seems pretty calm and collected to me.
Makes me wonder what other subjects gets treated the same way as cryptocurrencies, but I don't realize it yet.
I think it has to do with how new the field is. People reacted to the internet in the same way when it was new. No, I'm not saying cryptocurrencies are as useful as the internet is. But when the internet first appeared, people who didn't like the internet, grouped everything on the internet together. I was called porn-addicted because someone had heard there was porn on the internet and that I worked with the internet, so obviously I must be doing something related to porn.
Similarly people hear "cryptocurrency" and they immediately think of scams, although there is currencies that obviously aren't scams (Bitcoin, for one). But they've seen a scam using Bitcoin, so everything related to Bitcoin must be a scam too.
I have nothing to gain/lose by cryptocurrencies going up/down, so I don't really care. But it makes me slightly scared to see how for example many HN users react to cryptocurrencies, when this audience usually seems pretty calm and collected to me.
Makes me wonder what other subjects gets treated the same way as cryptocurrencies, but I don't realize it yet.
> I am confused as how this is a story about crypto and not story about Celsius.
Because it's a relatively small eco system and everything is tied together. As soon as one domino is falling the whole eco system follows.
And look at the graph of the top 20 cryptos, they all follow the exact same graph as BTC. Anything bad happening at a relatively large scale to BTC = BTC goes down = the whole crypto world panics = they all go down
Because it's a relatively small eco system and everything is tied together. As soon as one domino is falling the whole eco system follows.
And look at the graph of the top 20 cryptos, they all follow the exact same graph as BTC. Anything bad happening at a relatively large scale to BTC = BTC goes down = the whole crypto world panics = they all go down
I will admit this is an interesting argument.
I would question the characterization of small. Even today, total crypto market cap is just shy of 1T. Even relative to more established plays it is nothing to sneeze at.
But note that the same could be argued about USD system("Look at this market today. Everything is falling. Everything is tied together. One bad inflation reading and domino is falling down and the whole ecosystem follows."). I am exaggerating for effect, but not that much.
I would question the characterization of small. Even today, total crypto market cap is just shy of 1T. Even relative to more established plays it is nothing to sneeze at.
But note that the same could be argued about USD system("Look at this market today. Everything is falling. Everything is tied together. One bad inflation reading and domino is falling down and the whole ecosystem follows."). I am exaggerating for effect, but not that much.
> Even today, total crypto market cap is just shy of 1T.
That doesn't mean there's that much money in it.
I bought a glass jar of sand on vacation, for $5. That doesn't make the beach worth trillions based on how many $5 jars it could be made into, but that's how crypto market caps are calculated.
That doesn't mean there's that much money in it.
I bought a glass jar of sand on vacation, for $5. That doesn't make the beach worth trillions based on how many $5 jars it could be made into, but that's how crypto market caps are calculated.
Maybe not, but that's how market cap is calculated in the stock market also, and it's considered an important metric in the stock market regardless.
"Market cap—or market capitalization—refers to the total value of all a company's shares of stock. It is calculated by multiplying the price of a stock by its total number of outstanding shares. For example, a company with 20 million shares selling at $50 a share would have a market cap of $1 billion."[1]
That's the same thing as Bitcoin's market cap being calculated at $438 billion right now, because there's 19.06 million coins multiplied by the current going price of $23k.
[1]: https://www.fidelity.com/learning-center/trading-investing/f...
"Market cap—or market capitalization—refers to the total value of all a company's shares of stock. It is calculated by multiplying the price of a stock by its total number of outstanding shares. For example, a company with 20 million shares selling at $50 a share would have a market cap of $1 billion."[1]
That's the same thing as Bitcoin's market cap being calculated at $438 billion right now, because there's 19.06 million coins multiplied by the current going price of $23k.
[1]: https://www.fidelity.com/learning-center/trading-investing/f...
They're not quite the same for a variety of reasons; lost private keys, companies having physical assets, unregulated wash trading, etc.
Lost private keys I get (but we don't know for sure how much are lost, we can only take a guess based on wallets that haven't had activity in a decade, I'm sure it's a decent percent of those but not all of them), but I'm not following on the other examples. Why would those others make a difference?
There's intrinsic value to, say, McDonalds, because they own something like 50k acres of prime retail real estate. The same is not true for a cryptocurrency coin.
There are protections in the stock market against me selling a stock back and forth between accounts I control to pump up its value. It's a common tactic in the crypto marketplace. https://www.sciencedirect.com/science/article/abs/pii/S15446...
There are protections in the stock market against me selling a stock back and forth between accounts I control to pump up its value. It's a common tactic in the crypto marketplace. https://www.sciencedirect.com/science/article/abs/pii/S15446...
Intrinsic value is an interesting term, but say we are not talking about McDonalds, but rather say Acacia Research ( ticker: ACTG ). Is their value intrinsic or imaginary? Without going down the rabbit hole of what is 'value' rabbit hole, the argument of value ( intrinsic or not ) may not hold much; mostly because value is what is valuable at a given time.
You will find not argument from me saying that crypto has tons of scams going, but.. quite honestly, same is true in regular finance. Traditional finance is just more regulated. And, before we get to that point in other posts, it seems like crypto regulation was just hatched the other day.
You will find not argument from me saying that crypto has tons of scams going, but.. quite honestly, same is true in regular finance. Traditional finance is just more regulated. And, before we get to that point in other posts, it seems like crypto regulation was just hatched the other day.
I don't think market cap is really the best metric to look at for the meaningful "size" of a speculation-driven market like cryptocurrency. Admittedly, I'm far from the most financially-savvy, but it seems to me that more relevant figures are the number of people invested in the market and the percentage of people's income/wealth invested in it.
Actually, probably even more relevant (though more difficult to measure) than the absolute number of people invested in the market is some kind of measure of the "distribution" or "spread" of such people—something like distinct groups of people without direct connections to each other, since (positive) interest in cryptocurrency seems to cluster somewhat based on word of mouth networks.
Would actually be an interesting kind of study to do, finding the most useful ways to measure the "size" of a market of this nature. I would guess that there are probably at least 2-3 different measures of "size" that would be relevant to different kinds of effects on the market, but I'm afraid that's about where my understanding of all this ends.
Actually, probably even more relevant (though more difficult to measure) than the absolute number of people invested in the market is some kind of measure of the "distribution" or "spread" of such people—something like distinct groups of people without direct connections to each other, since (positive) interest in cryptocurrency seems to cluster somewhat based on word of mouth networks.
Would actually be an interesting kind of study to do, finding the most useful ways to measure the "size" of a market of this nature. I would guess that there are probably at least 2-3 different measures of "size" that would be relevant to different kinds of effects on the market, but I'm afraid that's about where my understanding of all this ends.
> If Robinhood stopped withdrawals, would we be having a conversation about solvency about of US government?
If it turned out the USG had a significant amount of its funds stored in Robinhood, yes.
If it turned out the USG had a significant amount of its funds stored in Robinhood, yes.
People like to generalize. Celsius is supposed to be backed by enough collateral for customer funds to be safe, just like many other crypto projects. If it turns out it can't honor the agreement it will become a story about crypto because the alternative are government-insured accounts, which would honor the agreement.
Also, it looks even worse because these are not even "extreme market conditions" by crypto standards.
Also, it looks even worse because these are not even "extreme market conditions" by crypto standards.
crypto is the ponzi on which other ponzis are build.
Without crypto, there would be no celsius ponzi.
It sounds like money is the ponzi, then.
> everything is falling today
Seems like it is.
> oddly rabid opponent base
> anything crypto is just odd
Well if nothing else it has unnecessarily huge carbon footprint. Probably not all, I haven't checked recently, maybe ETH is already PoS.
Seems like it is.
> oddly rabid opponent base
> anything crypto is just odd
Well if nothing else it has unnecessarily huge carbon footprint. Probably not all, I haven't checked recently, maybe ETH is already PoS.
I suppose that partially explains it. The concern from the opponents is based on ecological impact and any bad news is a way to bring it down ( not completely unlike fossil fuels ).
Joyous day! I'm glad to watch each and every one of these burn to the ground. I feel sorry for anyone who got suckered, but this needs to happen.
Crypto is starting to invoke a tribal, emotional response in people now. It's bizarre to see these comments. Scammers scam. Surprise. Unregulated waters are dangerous unless they're tread carefully. Surprise. People using a technology for a completely different reason than it was invented for are ruining it for the rest of us. Surprise.
Should the tribal response really be so unexpected, considering the relentless way Crypto Enthusiasts, especially the NFT variety, hounded every other online community with hype?
I believe OC addressed this under “scammers gonna scam” section.
That attitude is exactly it though. If you produce tools mostly used by scammers, are promoted almost exclusively by scammers, and the community's answer is washing its hands of any responsibility with 'scammers gonna scam' that's just not impressive. That's a strong case for anyone outside the community treating it as bad faith actors.
The complete disconnect between the ethos of the tech behind crypto and the ecosystem has been weird.
A friend of mine loves his freedoms and avoiding the terrible big banks who he thinks might steal his money / do things he doesn’t like …
A friend of mine loves his freedoms and avoiding the terrible big banks who he thinks might steal his money / do things he doesn’t like …
"Crypto is real."
- Billboards all over Austin, TX right now
- Billboards all over Austin, TX right now
Ohio has a somewhat notorious billboard that reads "Hell is real."
Crypto is real.
Hell is real.
Therefore, crypto is hell.
This is the one time I'll accept the fallacy of the undistributed middle without question.
This is the one time I'll accept the fallacy of the undistributed middle without question.
indiana has one too with jesus is real on the other side.
I drive past that billboard between Columbus and Cincinnati all the time! FC Cincinnati and Columbus Crew have coopted it for their rivalry games, calling it the "Hell is Real derby". Seems like this week maybe hell and crypto are the same thing?
I believe in that case it's pronounced "reál".
>Ohio has a somewhat notorious billboard that reads "Hell is real."
What an odd way to welcome people to Ohio, surely they already know where they are? /s
What an odd way to welcome people to Ohio, surely they already know where they are? /s
I've seen fly posters recently for a coin with an expletive as its name.
When financial instruments get named after vulgarities, it shows the kind of people who are running this space.
When financial instruments get named after vulgarities, it shows the kind of people who are running this space.
There was another billboard in Austin promoted by the same company that read "Crypto is a revolution disguised as a Casino." Feels like the opposite...
IMO part of the issue is that 'crytocurrency' refers to two things: the first is the technology to do things without trust, the second is the social movement.
The social movement is bananas but gets defended with arguments for the technology.
It was no secret that the banks could run. Not being on-board with the vices of the social movement is decried as FUD.
The social movement is bananas but gets defended with arguments for the technology.
It was no secret that the banks could run. Not being on-board with the vices of the social movement is decried as FUD.
Bitcoin is at 24k now, down 20% in a few days... at 21K the Microstrategy margin call kicks in. That may cause 130000 bitcoin to be dumped onto the market.
This is what I call a significant bear case.
This is what I call a significant bear case.
[deleted]
Do you happen to have any source for these numbers?
According to their CFO, they have more collateral to put in to avoid margin call.
https://www.marketwatch.com/story/microstrategy-shares-slump...
https://www.marketwatch.com/story/microstrategy-shares-slump...
Has anyone done an investigation into how this current issue, Luna previously, etc. is hitting the various VC cheerleaders? a16z in particular for their rampant pumping.
VCs got in at stupid early prices on a lot of these projects, unlikely they're hurting. a16z if you hadn't noticed was shilling Solana hard through their latest "State of Crypto" deck. What is hurting though is all the project and company grants that rely on the value of the underlying token. You've got a lot of crypto startups who have to sell on the open market to continue ops that will start to feel the heat.
Let me see if I understand this: I put 10 bitcoin into this bank, and it gets loaned to you. If you cash it out to 10 bucks immediately, and bitcoin later drops to half a buck, you can buy 10 bitcoin, pay back the loan and keep 5 bucks, right? Not including whatever interest, I guess.
So this is a way to short bitcoin?
Edit: Sorry, maybe just to short Celsius' own tokens, although maybe it's indirectly shorting other currencies
So this is a way to short bitcoin?
Edit: Sorry, maybe just to short Celsius' own tokens, although maybe it's indirectly shorting other currencies
I still remember looking at Bitcoin and Ethereum back in day. I was just curious and I know my friends bought and sold some. Back in 2017 (video is earlier) I looked at a video that explains, what Ethereum is: https://www.youtube.com/watch?v=Clw-qf1sUZg
This video has not aged well. It's full of so many buzzwords that my mind can't keep up. Also, the idea of anonymity and privacy...clearly they gave up on that as everybody is using their real names, addresses, etc so sign up for exchanges.
Again, I don't know enough about it, but since I've looked it back in 2017, until today, I'm still as confused, which is why I've stayed away from it.
This video has not aged well. It's full of so many buzzwords that my mind can't keep up. Also, the idea of anonymity and privacy...clearly they gave up on that as everybody is using their real names, addresses, etc so sign up for exchanges.
Again, I don't know enough about it, but since I've looked it back in 2017, until today, I'm still as confused, which is why I've stayed away from it.
So is this the bubble people talked about when crypto was starting to become mainstream?
Yup it’s popping. But it’s not just crypto. The whole economy is popping. Crypto is first because it’s the most leveraged and least regulated. But it’s not going to end there, not by a long shot.
The whole economy is not popping. Only assets. Equity and crypto were both inflated and experiencing corrections. We're still hovering around 50/50 on likelihood of a real recession. Labor market is still incredibly tight. We could lose a million jobs in the US tomorrow and it would just alleviate upward pressure on wages. Equity will start to recover once inflation is tamped. Crypto, nobody knows. Could recover completely, could go to zero.
I think you're wrong. Fed seems determined to crush price inflation, but the inflation is largely driven by supply side issues, which they hold no control over. That means the only way to tamp inflation is by crushing demand into the ground, AKA causing a recession.
Soft landing talk was always talk, I think a recession is in the cards and they know it.
Soft landing talk was always talk, I think a recession is in the cards and they know it.
Ah, yes, "alleviate upward pressure on wages." What a nice way to say "give employers an excuse to continue refusing raises to employees so they can pocket higher profits at the expense of the entire working class."
I'm describing reality, not philosophizing on ideal outcomes.
The way we describe reality is indicative of, and somewhat shapes, our perception of it. Describing the likelihood that a long-overdue increase in real wages would be cut short by a recession as "alleviating upward pressure on wages"—with "alleviate" being a word with very strong connotations of referring to removing something negative—has a pretty clear implication of wanting that to happen.
I’m not parent but I think you’re reading too much into it. There is upward pressure and reducing that can be described as alleviating without any further connotation.
What’s next?
Subprime auto loans, most likely.
Mortgage backed securities couldn't be sold for any price on Friday: https://www.cherrycreekmortgage.com/lous-credit-news
There is a very low amount of subprime mortgage loans. Risk isn't the same as it was during the last recession. Delinquency rate is also trending down.
https://fred.stlouisfed.org/series/DRSFRMACBS
https://fred.stlouisfed.org/series/DRSFRMACBS
To me, this was very alarming. Shades of 2019 repo crash.
Commercial real estate. A lot of contracts will be up for renewal / renegotiation in the next 6-18 months. Many companies will take the opportunity to downsize their physical footprints due to WFH.
People have been warned about high inflation before the war in Ukraine. Then the war broke out, and lots of things got more expensive (fuel, energy), and other commodities are yet to shoot up. Interest rates are going up to fight inflation.
So people are facing higher prices from all fronts. What are the first things to get sold off to afford all the various "real life" necessities? high-risk investments. Or any kind of investment, as most people simply do not have any investments.
So people are facing higher prices from all fronts. What are the first things to get sold off to afford all the various "real life" necessities? high-risk investments. Or any kind of investment, as most people simply do not have any investments.
That's why I have a problem with someone else managing my money (outside of direct fund managers, of course, who take a fixed percentage fee and are incentivized to have the fund grow, not to fleece me).
https://www.youtube.com/watch?v=gvZSpET11ZY
https://www.youtube.com/watch?v=gvZSpET11ZY
Reminds me of the South Park investment report: aand it's gone.
This is what happens when you centralize a decentralized currency
[deleted]
if you can't realistically use crypto as money (which you can't), then there is no reason to hold it unless it is rising
crypto does not generate revenue
crypto does not generate dividends
crypto is only something you try to sell to a bigger fool
if crypto even just goes sideways....then its just a cash-equivalent with no real-world utility
these pyramid schemes have a long way to fall still...crypto will be the greatest ponzi scheme of the last 100 years
if you like exotic cars, the crypto kids will be liquidating soon...keep your eyes open
crypto does not generate revenue
crypto does not generate dividends
crypto is only something you try to sell to a bigger fool
if crypto even just goes sideways....then its just a cash-equivalent with no real-world utility
these pyramid schemes have a long way to fall still...crypto will be the greatest ponzi scheme of the last 100 years
if you like exotic cars, the crypto kids will be liquidating soon...keep your eyes open
I couldn't agree more.
The only real value I saw with crypto was for anonymous transactions a la Silk Road. Turns out immutable ledgers aren't the privacy boon we thought they'd be.
The only real value I saw with crypto was for anonymous transactions a la Silk Road. Turns out immutable ledgers aren't the privacy boon we thought they'd be.
It also provides a great way to pay ransoms, which allowed crypto locker ransomware to be monetized and scaled up to a new and exciting level.
I hate crypto.
I hate crypto.
If I were to receive a ransom payment, I'd much rather do it with cash rather than cryptocurrencies. Using a technology whose main point is to have a immutable ledger of all transactions, forever, seems to be against my interest of wanting to be able to hide the receive ransom transaction somehow.
I think the key is that if you have to pick up money it requires someone to be physically in some location. Where they can be arrested. The rest of the ransomware experience from the attacker side is hanging out in their living room in their non-extradition county. Why ruin a good thing by going somewhere were someone might have a gun.
[Of course an immutable ledger might allow people to use a gun on you in the future, but it pushes the experience into an uncertain and hazy future. Safe to ignore in the present.]
[Of course an immutable ledger might allow people to use a gun on you in the future, but it pushes the experience into an uncertain and hazy future. Safe to ignore in the present.]
> if you can't realistically use crypto as money (which you can't), then there is no reason to hold it unless it is rising
i'm glad i've been able to convince those suckers over at Mullvad to continually sell me hours for this not-money btc.
They're really going to have egg on their face once they realize how I pulled the wool over their eyes.
i'm glad i've been able to convince those suckers over at Mullvad to continually sell me hours for this not-money btc.
They're really going to have egg on their face once they realize how I pulled the wool over their eyes.
The old “Madoff’s staff can buy groceries, no way it’s a scam!”
"Look, they're paying me 20% guaranteed yield! How can this not be real?"
I mean, some cryptocurrency projects do generate revenue and pay dividends because they are selling a service to people, whether it be storing files, transferring data, or running computations (encoding video, training AI models, etc.).
Can you name some of them? I'd be very interested to see what they're doing.
I guess? I will note, though, that if you search for any of the things I said--such as "video encoding crypto"--you'd find them in less time than it took to ask me for a list. Here are a handful of ones I can think off of the top of my head.
Storj, Filecoin, Sia; Golem, Akash, iExec; Livepeer, Helium, Orchid (the last one being mine)
Like, some cryptocurrency projects are working on "big business". I keep hearing that Helium has been getting carrier partners for its LTE hotspot rollout, and its IoT hotspot product is not inherently any more stupid than Amazon Sidewalk ;P.
https://twitter.com/MessariCrypto/status/1514694855070556170
Storj, Filecoin, Sia; Golem, Akash, iExec; Livepeer, Helium, Orchid (the last one being mine)
Like, some cryptocurrency projects are working on "big business". I keep hearing that Helium has been getting carrier partners for its LTE hotspot rollout, and its IoT hotspot product is not inherently any more stupid than Amazon Sidewalk ;P.
https://twitter.com/MessariCrypto/status/1514694855070556170
Do these coins somehow actually verify that the storage sellers are actually storing the files they claim to store? If not, the introduction of blockchain to the equation sounds like an unnecessary externality.
Impossible to cheat: Assuming "ongoing storage costs", on every payment cycle, rotate the blocks somewhere else (non-predictably). The hashes are probably stored on blockchain, so the receiver can verify them. So to cheat, you need to produce a collision or miss out on your payment.
Practically that's impossible, since the network would need to swap the whole datastore once every payment cycle.
Say each block is stored on three nodes, then these nodes could each generate a nonce, compute a hash of the stored block (using all nonces as IV) and then vote on whether they still have the original file or not. This is much more feasible, as only nonces and hashes are transferred (a few dozen bytes instead of e.g. 64MB blocks). In that case they can store nothing and instead cooperate to generate spoofed hashes, so you probably want some auditor nodes.
I am not sure why any of these would strictly need blockchain to solve the problem of safely storing data in a pool of untrusted, unreliable nodes.
Practically that's impossible, since the network would need to swap the whole datastore once every payment cycle.
Say each block is stored on three nodes, then these nodes could each generate a nonce, compute a hash of the stored block (using all nonces as IV) and then vote on whether they still have the original file or not. This is much more feasible, as only nonces and hashes are transferred (a few dozen bytes instead of e.g. 64MB blocks). In that case they can store nothing and instead cooperate to generate spoofed hashes, so you probably want some auditor nodes.
I am not sure why any of these would strictly need blockchain to solve the problem of safely storing data in a pool of untrusted, unreliable nodes.
Yeah, I wonder how their pricing compares to e.g. S3. The Filecoin website claims "hypercompetitive pricing" but does not actuall dress that to numbers: https://filecoin.io/store/#decentralize
It sure is a neat hack if they have changed to PoW to Proof-of-Storage, but whether is it actually usable for real-world applications of storing data at scale?
It sure is a neat hack if they have changed to PoW to Proof-of-Storage, but whether is it actually usable for real-world applications of storing data at scale?
I think the point of a lot of blockchain tech is not to actually solve a real-world problem. For most of these problems you don't need blockchain or there is little extra value to be derived from blockchain.
Most of the time, the real-world problem solved by selling "something something blockchain" is that the person selling it needs to earn money somehow.
Honestly, if you pay me money for, I'd sell you "something something blockchain" if that's what you want me to do. Though shutting up about telling you my opinion ("fuck blockchain") will cost extra.
Honestly, if you pay me money for, I'd sell you "something something blockchain" if that's what you want me to do. Though shutting up about telling you my opinion ("fuck blockchain") will cost extra.
Not sure about others, but Filecoin uses cryptographic storage proofs to verify that data is stored correctly.
Otherwise I'd agree with you, if there is no guarantee that data is stored correctly, there is no point, might as well use S3.
Otherwise I'd agree with you, if there is no guarantee that data is stored correctly, there is no point, might as well use S3.
Indeed, here is an explanation of the proof protocol used: https://spec.filecoin.io/algorithms/pos/post/
I wonder if that has ever been tested by bad actors. For Bitcoin, the proof of how the network is resilient against sub-50% attacks is simple enough.
I wonder if that has ever been tested by bad actors. For Bitcoin, the proof of how the network is resilient against sub-50% attacks is simple enough.
For the file storage people, there's a bunch of startups (like Storj and SIA) that have an S3-like API but slice up the files and store the (encrypted) chunks on the disks of "miners" who get paid each month for disk space and bandwidth used. Because most were started during the ICO boom they all use a blockchain token, even though there are usually centralized servers keeping track of which client uploaded which file. The clients could pay normal currency to those servers, who could distribute it amongst the miners.
I used to have a spare PC with a 13TB HDD mining Storj for a couple of years and it worked fine, but converting the tokens to currency I could use was a major hassle.
I used to have a spare PC with a 13TB HDD mining Storj for a couple of years and it worked fine, but converting the tokens to currency I could use was a major hassle.
What's the point here? Why would anyone use this over S3 or whatever?
S3 has quite a significant markup over the HW and electricity costs. Sometimes up to 10x, you can see this by how much discount percentages sales reps are willing to apply to cost of storage. Many of these smaller providers charge a smaller markup and are thus cheaper than (non-discounted) S3.
Cheaper storage alone is enough to lure some people away. There are also people that simply hate AWS for reasons of their own and choose a startup provider for ideological reasons. Finally there is the obvious application of encrypted storage, to store material that is illegal in your jurisdiction.
Cheaper storage alone is enough to lure some people away. There are also people that simply hate AWS for reasons of their own and choose a startup provider for ideological reasons. Finally there is the obvious application of encrypted storage, to store material that is illegal in your jurisdiction.
S3 is highly redundant, so there's quite a bit of software and networking alongside the HW and electricity.
And even then, go with Blackblaze or Wasabi or R2 or whatever S3 competitor that is cheaper.
And even then, go with Blackblaze or Wasabi or R2 or whatever S3 competitor that is cheaper.
Similar to IPFS or Freebase, these censorship-resistant distributed storage solutions can help oppressed journalists in third-world countries get the stories of their oppression out.
Still sounds useless. Those third world countries aren't blocking AWS..
For child porn
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most of the dividends are in the native token (or the blockchain token) which, unless the price remains stable or up, constantly reduces in value
A great example is OpenSea. Their trading volume crashed at the same time ETH prices crashed. A sale of 100 ETH in January earned them $7,500 (@$3k ETH).
The same sale now will earn them $3,000 (@$1.2k ETH).
A great example is OpenSea. Their trading volume crashed at the same time ETH prices crashed. A sale of 100 ETH in January earned them $7,500 (@$3k ETH).
The same sale now will earn them $3,000 (@$1.2k ETH).
Selling shovels to prospectors is not the same as being a prospector yourself
In what way is selling video encoding or file storage to someone "selling shovels to prospectors"?
Are people buying it because they think it's fundamentally a good idea? Or because they think it'll go up amid the manic gold rush?
Humorously, if they're investing in your company that mines gold, that seems fairly equivalent to paying you to buy shovels and hire diggers.
Humorously, if they're investing in your company that mines gold, that seems fairly equivalent to paying you to buy shovels and hire diggers.
Gold does not generate revenue... its still worth 11 trillion
At least you'd still have the physical gold (which has utility) if the price went to zero. With crypto, all you'd be left with is a wallet address.
If the market price of gold goes to zero, then no, by definition it has no remaining utility.
That's also why it'd probably never get close to zero - its utility means it'd always have some value to someone.
Even if we were to come up with a way to produce a synthetic gold, the price of gold would only fall as far the cost of synthetic gold.
Even if we were to come up with a way to produce a synthetic gold, the price of gold would only fall as far the cost of synthetic gold.
Does this line of reasoning imply that if Bitcoin never goes to zero then it must have some utility even if the random person on HN cannot articulate it?
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Crypto offers very little in terms of intrinsic value (it's not zero though)
Crypto’s problem is that it has the most actual utility when it goes sideways. Being a decentralizing cash equivalent has some value.
But, it can’t be stable. If it goes sideways long enough to demonstrate utility as a currency, then more people would want it, which would drive up the price and hurt that underlying value.
But, it can’t be stable. If it goes sideways long enough to demonstrate utility as a currency, then more people would want it, which would drive up the price and hurt that underlying value.
I think DeFi was an interesting idea with some potential. It seems like nobody was able to come up with a solution that found widespread use, but with the right application it might have worked. But for now, it looks like that window of opportunity is gone. Maybe with the next crypto generation...
The problem with DeFi is that can't be used for financing. Financing requires seizable assets whereas blockchain assets are intrinsically unseizable. It can still be used for things like swaps, but that market isn't very large.
You could create seizable assets if you find a way to create a legal framework that allows you to hold and transfer physical or intellectual property via NFTs. If you could own the copyright to an ape picture, instead of an NFT with the URL to an ape picture, it could be actually worth something.
Trading physical property as NFTs would create a lot of possible applications. I always thought that trading-property-as-NFTs and the insurance market would be the most interesting applications for DeFi.
Trading physical property as NFTs would create a lot of possible applications. I always thought that trading-property-as-NFTs and the insurance market would be the most interesting applications for DeFi.
If stocks and bonds were allowed to be traded as digital NFT-like contracts than true settlement could be completed in ~minutes rather than ~days.
Swaps aren't very large? It's very easily a trillion-dollar market even without the misleading quoting of notional as market size.
Where does this number come from?
Here's one source: https://www.bis.org/publ/otc_hy2111.htm
Reports notional as in the hundreds of trillions and market value over ten trillion.
Unless I'm misreading you and you're talking about defi swaps? Though surely the analagous tradfi market shows the potential there.
Reports notional as in the hundreds of trillions and market value over ten trillion.
Unless I'm misreading you and you're talking about defi swaps? Though surely the analagous tradfi market shows the potential there.
These are credit default swaps. I don't know if they are implementable as smart contracts (I don't think so, but I could be wrong). I was thinking about overcolateralised DeFi loans which can be seen as a kind of swap where two parties exchange the returns of two different assets.
What was the best application of defi in your view?
Bitcoin is a quantum leap. In history we have moved from single entry accounting to double entry accounting (the current traditional financial system despite the interconnectedness based on an ancient accounting system) requiring a 3rd party to maintain integrity a system open to and actively abused. Bitcoin is triple entry accounting an immutable trust-less based system.
That's a huge huge innovation. The bitcoin token has been valued by the open market and is the fastest appreciating asset in history.
Fiats actually a flawed manipulated system, look over time at how much value the dollar loses in a generation and to countries that have been destroyed by inflation.
Fiats actually a flawed manipulated system, look over time at how much value the dollar loses in a generation and to countries that have been destroyed by inflation.
This has a high "Jesse, What the Fuck Are You Talking About" energy. The reason Terra fell is because most of the transactions that were supposed to assure its value were kept in a secret double accounting system. And that brought BTC down ~50% which shouldn't happen if it's not held up by magical behind the scenes accounting. There's no 3rd party integrity here and it's not been appreciating for weeks now.
Bitcoin's network has worked perfectly as designed so I'm not sure I understand where your coming from. The coin price will always fluctuate and be over speculated or over sold at times, its what markets do. Terra was described as an attack, I'd describe it as architectural failure and crap for anyone who had money in it.
I mean that it turns out the value of BTC is at least half backed by the original system, just skipping over the standard guarantees. And every other drop in stablecoins affects BTC further. That means for all the tech behind it, the value actually relies on good old fat funds that we hope are legit (but have no way to check)
Most transfers still happen off-network, so it's back to the double entry. Not that BTC is triple entry in any way - there's still two parties on each spend entry.
Most transfers still happen off-network, so it's back to the double entry. Not that BTC is triple entry in any way - there's still two parties on each spend entry.
> Fiats actually a flawed manipulated system, look over time at how much value the dollar loses in a generation and to countries that have been destroyed by inflation.
Inflation would be a nice problem to have for Bitcoin: it would mean that it is de facto money, anchored to the real world by meaningful prices and conversions, and following the trends of actual economy and finance.
Inflation would be a nice problem to have for Bitcoin: it would mean that it is de facto money, anchored to the real world by meaningful prices and conversions, and following the trends of actual economy and finance.
Well I guess you have that option with others that came after it. But to me what stands with Bitcoin is it can't be manipulated by inflation and its ledger cannot be tampered with that makes it technically superior to anything before it.
Technically superior for what use cases though?
What? :D
Celsius freezes at zero ;-)
If you hold any significant crypto assets, it is time to sell. The scheme is over.
Yes, selling at the bottom. Great plan. And then FOMO buy in again at the next peak.
Not saying I believe in cryptocurrencies, at all, but I've been active in the space for 9 years now and after every bubble it was the same again: it just went back up to new record highs for absolutely no rational reason at all.
Not saying I believe in cryptocurrencies, at all, but I've been active in the space for 9 years now and after every bubble it was the same again: it just went back up to new record highs for absolutely no rational reason at all.
The only reason I'm upset is that I typically fatten my stacks within the first week of the month, when my budget resets. It feels like it takes a few days for shit to hit the fan.
I disagree this is the bottom. It may hover at 20k a bit but I think it's going down to 10k or so.
You think this is the bottom?
You do not believe but are active for 9 years in it? How does this go hand in hand?
At this point I'm just holding for speculative reasons. Not because of any fundamental believe in the technology (like I used to, in the first years).
You can make money if everyone else believes?
The bottom is zero. There is no intrinsic value.
I assume you are short on crypto given how sure you are?
Crypto has had multiple crashes, dropping even harder that now. Every time people claiming the bubble popped, it's over, etc.
It's silly claiming with such certainty the future of crypto.
Crypto has had multiple crashes, dropping even harder that now. Every time people claiming the bubble popped, it's over, etc.
It's silly claiming with such certainty the future of crypto.
I chuckle a little when I see things like that. Time to sell was about a year ago at their heights. At this point, you may as well hold and see what happens.
The only thing to see is your balance dwindle all the way to zero.
The game is over. Dump your crypto and buy real assets. Anything – stocks, real estate, lambos, is better than holding worthless digital coins.
The game is over. Dump your crypto and buy real assets. Anything – stocks, real estate, lambos, is better than holding worthless digital coins.
Let's say I bought $1000 worth of Bitcoins before, thinking "it can go up, or it can go down, I can lose this money without an large impact on my day-to-day financials", why would I sell it now when it has gone down a bit?
It's not until you sell it, that you actually lose anything. Let it go down to $0, you shouldn't care, because you're only playing with money you know you could lose.
What do you stand to gain by others selling their cryptocurrencies by the way? Seems to be an odd position to hold.
It's not until you sell it, that you actually lose anything. Let it go down to $0, you shouldn't care, because you're only playing with money you know you could lose.
What do you stand to gain by others selling their cryptocurrencies by the way? Seems to be an odd position to hold.
Sunk cost fallacy. A better way to look at it is “given I have $700 cash would I buy $700 worth of Bitcoin today?”. If no, cut the losses on your $1000 and at least walk away with $700.
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Yup treat it like a non expiring option.
They are worth what the market decides they are worth. Plenty of stocks are doing terribly this year Atlassian, Lucid, PayPal, Okta all down over 50%, Netflix down 69%, AMD, eBay, Cisco, Tesla, Zoom, NVidia are all down 30%-40% as a few examples.
Some are rubbish and will end up worthless, others won't be.
Some are rubbish and will end up worthless, others won't be.
Indeed. Sell now, buy later, profits always.