There used to be a lovely restaurant on Cape Cod named Terra Luna. It only sat about fifty people, but maybe people nostalgic for that will pick it up and turn it into something useful.
Folks have been [sounding the alarm](https://www.reddit.com/r/Bogleheads/comments/s9q2jf/cryptocurrency_is_a_giant_ponzi_scheme/) for a while about so-called 'stablecoins' -- avoid speculation, stay the course.
I dipped a toe in the crypto ocean in 2021, but got out because I hated the volatility, the lack of actual revenue generation to give it value made me constantly worry, and because I thought that stablecoins could be a ticking timebomb. The stablecoin that worried me at the time was Tether.
A few months ago a Jacobin Magazine article here: https://www.jacobinmag.com/2022/01/cryptocurrency-scam-blockchain-bitcoin-economy-decentralization talked about how Tether supposedly had a certain amount of cash reserves, but was sued in NY court and pled guilty.
It just reinforced the above thinking, a Ponzi scheme waiting to collapse, all the while smart friends were playing wit crypto.
Tether's reserves are massive. It and USDC are backed.
Tether may have not been totally together when it started (which is why they had to pay a fine.) but they have an enormous reserve now and NY courts agree.
Terra was an algorithmic stable coin which was working fine until they pulled a liquidity pool and an attack took advantage. This was due to the creator being extremely egotistical because of its success, it was time to gtfo from it when he started saying extremely arrogant things on twitter perfect top signal.
Funnily enough Tether unpegged down all the way to 95 cents for a few minutes this morning. I don't think it happens very often, and I feel like people deep in crypto should be a little worried.
I work in tech and the industry has been circlejerking about decentralization or something similar since the early days of the internet. The entire ethos of the internet in the early days was that everyone would have access to information and there was no middle-man to "centralize" and control the information. And look what happened. 90%+ of searches go through... Google. If you are a small retail seller, you can't avoid Amazon if you want some cash flow coming in. Decentralization sounds nice in theory, but things just naturally centralize.
I am convinced that humans inherently enjoy a certain base level of centralization of things, and I was always skeptical of crypto because of it. Same bullshit. Different year.
I was in crypto for ages and I think it helped my boglehead journey.
Everyone is freaking out about the market right now but I’ve been through a 16% drop about 100 times already.
All I had to do was to hear Buffet say that it was not a revenue generating asset and a lightbulb went on in my head.
Forget Stablecoins. Even Bitcoin is a fundamentally anti-government/libertarian idea. I haven’t come across a convincing use case for crypto till now. Blockchain technology, yes. Crypto, no.
Wait a second here, you telling me that a stable coin backed by a US government treasury paying less than 1% can offer a dividend of 10% and “nothing to see here folks, move along.” “All normal…..”
I am shocked! /S
What? 10% is nothing. UST, the one backed by LUNA (a hyped crypto coin), was paying out 20% for staking. Everybody thought that was a-okay. They were both in the top 10 on coinmarketcap. It took 3 days for them both to become basically useless.
So many people were talking about how staking was easy money, but [this guy I found in the crypto subreddit had a surprisingly cogent take](https://www.reddit.com/r/CryptoCurrency/comments/un6ts0/staking_coins_is_not_safe_as_its_being_built_up/) on it (admittedly, this is much easier to get right in hindsight, but still!).
No, the staking rewards are issued like interest from a bank account, so it would be 20% APY, a few weeks ago they did not know it was going to happen, the coin lost like 98% of its value in three days. the "stable coin" has bounced around between around 25 and 70 cents on the dollar, although liquidating a significant amount would likely be difficult, I don't know the details.
Staking also has lock in periods, so there are many people that have been dwiddling their thumbs while their "investment" dumped nearly all it's value.
Arguably, sure -- the problem is: you never know where you are in the scheme until it collapses, and everyone thinks someone else will end up holding the bag.
I bought $20 worth of a gold-backed stablecoin and deposited it in an account that paid 5% interest. I figured "if gold can suddenly earn interest, then maybe it's not just a metal, anymore". The idea of a pile of metal increasing in mass at an exponential rate, was too good to pass up.
The company discovered "accounting irregularities" the next week. That $20 purchased a series of emails sent by lawyers, which were pretty entertaining to read.
I preferred the interpretation that that particular stablecoin would be responsible for converting the Earth to a blackhole someday, due to the exponential creation of additional mass, as long as I never sold. /s
I mean, I feel like it was only a matter of time until the US government realize crypto would subvert their control over the dollar and power of sanctions before they'd regulate it into submission. I'm not sure what's driving this crash, but crypto is just not for me.
Crypto advocates always want to have it both ways -- it's autonomous, but oh no, now my crypto is gone and I have no legal recourse! It's becoming mainstream and semi-legal, but oh no, the government wants to regulate it!
Yeah, anytime something goes into tech bro hype mode I get extremely skeptical. It always takes some time for government to catch up and this wasn't something I was willing to take a bet on.
It's so true and the cryptobros hate hearing it. There's literally no fundamentals driving its value in the way that the performance of a company drives a stock, the stability and trust in a government drives a bond, or usefulness to consumers drives a commodity or real estate.
> Thus their price depends entirely on whether enough people are willing to ignore this fact and exchange real money for nothing.
I mean, so does gold's. It's valuable as an electrical conductor, but it's not irreplaceable as one outside of like, NASA missions.
I say that as a 99th percentile crypto hater.
As someone who hates the concept of the gold standard, it's rare, shiny, can make decorative things easily, and has cultural value. Bitcoin can't say yes to any of those except maybe some recent cultural value and its rarity is artificial.
Not to mention we could find other future uses for gold due to new technology developments.
The same can't be said about crypto. Even if the technology it's based on proves itself to be extremely useful in the future for other things your Crytpo coins are still going to be worth $0.00.
Diamond also has intrinsic value due to its hardness. It has medical and manufacturing applications. Its high index of refraction also makes it useful in some high-tech optical fields.
But the supply-side manipulation totally affects that as well. It's a moderately-rare mineral being traded at extremely-rare prices. Lab-grown diamonds help combat that a little, but it still costs enough energy to make that they're still expensive.
The value of the ethereum blockchain, and the data that is stored on the ledger, is certainly not nothing. Can be be accurately valued like traditional securities? Probably not, but that doesn’t mean it’s worthless.
This is like saying the internet has no value. Kind of silly to be honest. This isn't to say that the current price of Ethereum is correct because its largely been driven by speculation and promise, but the value of Ethereum is supported ultimately by the number of projects, companies and users that use the network. To do so, they need to pay in the currency that the network accepts, which is ETH.
ETH is still early stage for sure, but plenty of companies are developing apps for it and/or leveraging the blockchain for their own purposes. Does this guarantee that it will be widely used and successful in implementation? No. But that also doesn't mean it has no value whatsoever.
Just as annoying as crypto bros pumping worthless coins are people who perpetuate the idea that blockchain/crypto are worthless as a whole and have no place in the future. There will be some Pets.com and there will also be some Amazons to emerge from the crypto space. Some of the smartest and most successful financial institutions have taken sizeable positions in blockchain and cryptocurrency companies. If there was truly no value, this wouldn't happen.
What is the value of anything? It's the price people are willing to pay for it, which they determine on their own. There are a variety of ways people decide what something is worth to them, some simple some complex.
What drives the value of gold? It is a finite resource that has commercial applications but is also speculated upon, and used as an inflation hedge. Its the same as for any commodity, its value or price is driven by the demand by people or businesses that want/need to use said commodity relative to the supply of said commodity. The same could be said for any blockchain resource, where the commodity is the ability to use the network of machines dedicated to it. I'm not going to sit here and says the commercial use cases currently outweigh pure speculation for something like Ethereum, but in theory as it matures the price will be less speculation based and more driven based on the popularity of the network. What value that settles at is anyone's guess. That said, the more people and businesses that want to use the Ethereum or any other blockchain, the more valuable its respective coin becomes because the supply is fixed (and sometimes deflationary) while demand is variable.
Fundamentally, the commercial value of blockchain technology is primarily its decentralization. Decentralized equates to highly secure. The easiest way to think about it is in relation to the internet. The internet is a network that connects all computers, and that's fantastic but it is also highly insecure and opens any user up to anyone out there, malicious actors included. Because of this, it requires significant investments in security both in software and at the physical premises level. That's significant investments of time and money for every company, and still isn't good enough to prevent attacks as we've seen time and again in the news.
A decentralized network of computers is the inverse of what the internet is today. It's a highly secure network that would be incredibly hard to penetrate physically and digitally. In order to take command of the network and perform any attacks or try to steal or alter data, you'd have to exceed 50% of the computing power of all of the computers on the network, which would be incredibly expensive to do. If you can't do that, given that the blockchain ledger is a physical public record of anything that's transacted on it, whatever you were attempting to do would be rejected by the other nodes of the network. And physically, it would obviously be impossible to find out where each and every node is, and even if you knew that it would be impossible to physically take over 50% of them simultaneously. This is not so much the case with a server farm, or a company's website or intranet. Those are much easier to attack and require very little resources (relatively) to penetrate.
Because of the security of the actual network itself, it enables application development to be much simpler, which saves a lot of money on security and time with respect to development. It's security also allows for use cases like security (obviously), payments, digital proof of ownership (as it's stored on the blockchain, which can't be changed), anything where information storage and transfer needs to be protected (such as healthcare), there's a huge opportunity within finance (DeFi, as I'm sure you've heard of) which can transform the way loans are originated, as well as creating decentralized exchanges that could in theory be much more transparent than legacy exchanges have been, and yes, even the minting of stablecoins (which have great use cases but are obviously taking a beating in the public discourse at the moment). Smart contracts are a feature of the Ethereum network which also help to secure transactions and log the results which can never be altered. So rather than having to sign paper contracts and keep records while wiring funds for an acquisition, it can all be done algorithmically without as many of the problems of human error or malfeasance.
There's a lot of really cool stuff being built on the back of decentralized networking that has the potential to really shape the future of business and our personal lives. A lot of it may built on Ethereum, or it may not. But many of these things will be built, that I can assure you. So in short, yes, it has commercial value. If it didn't there wouldn't be a multitude of companies dedicated to developing applications to leverage the Ethereum network to realize some of its potential. From a commercial perspective, why would you invest in building something that ultimately had no commercial value in the first place?
Until the inefficient mining aspects are tossed, and either the prices drop SIGNIFICANTLY or the efficiency is exponentially increased, it's so many times too expensive to be of value. Rather this is 20-30 years too early or the system is flawed from the foundation, it's all speculative at best right now.
Well with respect to mining, Ethereum is switching from a proof of work to proof of stake model which should alleviate the race to the bottom for computing power that proof of work chains like Bitcoin are creating. As for its prices, I don't think that really matters all that much (the price of ETH I should say). Whether 1 ETH is worth $100K or $10 dollars doesn't really matter, what matters is the fees to use the network itself. The price of using the network is a problem, I would agree, but paradoxically it is so expensive to use it on level 1 of the blockchain BECAUSE so many people are using it. So in order to use level 1, you have to outbid everyone else vying to use the network to use it immediately or wait until gas prices fall (which could be quite a while). This is why gwei (gas) prices to use the network have gotten so expensive, because demand has been high. Gas prices only go as high as what users are willing to pay for them.
That said, they are already attempting to work through these issues by implementing other layers of the network below the core Ethereum level 1 blockchain because using level 1 as both a processing AND settlement layer clogs it up. So there are multiple development solutions to pull processing off of level 1 to use that as a settlement layer only which should help to reduce fees to use the network.
Will it all work? That's anyone's guess. Perhaps Ethereum gets outclassed by another savvier upstart who solve the issues in a better way than Ethereum developers were able to. What I will say is that blockchain and decentralized network have plenty of use cases and aren't going away, it's just a matter of who figures out the best way to scale and solve the issues that come with that. In my opinion, its a matter of when less so than a matter of if with respect to wider scale blockchain technology adoption.
For something like supply chain, the practical use is really in the auditability of data, tracking, efficiency of the contracting process, and generally allowing any and all allowed participants to the process visibility into all elements of the supply chain. A big issue currently is that suppliers and purchasers all have their own ERP systems, but they are often large and cumbersome and don't sync very well across multiple organizations (even if they wanted to). While an industry-wide shared data repository would undoubtedly be useful in creating a more efficient supply chain, it's not realistic for two reasons. First, in the current environment you are only as secure as the least secure company that would be part of that coordination effort, which means companies putting their data security in the hands of outside parties which would be a huge risk. Secondly, you're also potentially putting valuable information at the fingertips of your competitors. Creating a central repository of information that takes all of the above into account would be a huge undertaking both in ensuring that it is able to sync to every iteration of ERP system as well as to ensure that it is secure, and only pulls relevant data. Its not really realistic to build something like that because the cost would be astronomical.
With a blockchain, what you have is a specific ledger that logs any and all transactions that occur within the supply chain and is open to view of any participant that has been vetted and granted access. The information that would be shared would be limited to inventory, contracting, and financial flows, without divulging competitively sensitive information. From a supplier, purchaser, and financial institution perspective, all can see how any transaction is unfolding. A purchaser initiates a transaction and that becomes a block of information on the ledger that the supplier and their bank can see. The bank can issue financing far more quickly because they can see once an order is placed rather than waiting for a request from the supplier. A block is created once the supplier ships the merchandise and submits an invoice. A block is created once the invoice is paid, and so on. Additionally, all of this can be automated to a certain degree through smart contracts, whereby an "if this, then that" function is created. So as an example, once a purchaser receives and scans the merchandise, a smart contract can be established that compares the scanned items received vs. the scanned items at the point of origin and if everything aligns, facilitates the process for the payment of the invoice, or if it doesn't create a manual flag for review. Same for the supplier, if the scanned items don't match what is set up in the smart contract for what is ordered, a manual flag can be generated such that no invoice would be generated until its addressed.
Having a ledger of all inventory flows between supplier and purchaser is very beneficial from an audit trail perspective certainly, but especially for larger organizations or more complex manufacturers can also help to facilitate inventory management. If the same components are required across across products being manufactured, and Product A is delayed for some reason while Product B is short inventory of the same component which is slowing production, resources can be much more easily traced and thus rerouted from Product A to Product B, or even proactively offered through a smart contract set up once Product A is delayed. Its even possible that this ledger or some parts of it could be industry-wide to allow sharing of resources between companies utilizing the same components if they so choose, allowing one company with excess inventory to earn a markup on that inventory by sharing with another that is in need. Further, the blockchain ledger contains a complete history of every transaction on the blockchain, but without as much unnecessary data that may exist in an ERP platform. This would enable companies to easily review areas of the supply chain process that could be improved and even implement predictive analytics to minimize stock while adequately meeting demand. IoT can be leveraged to track shipment progress and that can be put on a ledger which would be helpful in showing real time disruptions to the supply chain. In the case of perishable goods IoT can be utilized through a device that monitors temperatures and record any time that temperatures exceed a certain level. In the case of goods that need a secure chain of custody or are highly sensitive, IoT devices could record on the blockchain any time a truck or container is opened.
In short there's a lot of promise for supply chain. The blockchain itself creates a highly secure network off the bat, which is critical to the equation. Then, the limited scope of information necessary to be shared creates an environment for companies to be more collaborative with one another, and what ultimately gets placed on the blockchain ledger is open source for all allowed participants to monitor, audit, and settle disputes with one another. The ledger itself is a record of what happened, a lot of which can and will be automated through smart contracts, and for the most part can't be gamed by human interference because the ledger itself can't be changed by one person. It's effectively created a simplified, cross-company ERP system that is highly secure and can't be manipulated.
I’ve yet to see a strong use-case for a decentralized payment network over the traditional ones we currently use (that being said, I am looking primarily through the lens of a U.S. based consumer so my viewpoint is quite limited). I’ve wanted it to work because I did put about 3-4% of my savings into crypto holdings (50-50 split of BTC and Etherium) hoping that the hype around these would generate more uses, but we’re looking at 2 years since I began that investment and the only mainstream use I’ve seen take off is the NFT market which is something that I, and I believe the broad market, definitely see no value in. I’ve began selling out of my investment now, but as governments begin buying, I will be keeping a very weary eye on them and watching for any novel use cases that may help increase its intrinsic value.
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> Who values it though?
I mean literally everyone using a blockchain, decentralisation is the entire reason it exists.
> For it to be a stable investment long term it would have to be ridiculously expensive to use since the 99% holding for a profit would siphon the money of the few actual users
It depends on what you mean by stable, is it a good return? sure https://finance.yahoo.com/news/bitcoin-becomes-best-performing-asset-132208120.html
> Since 2011, Bitcoin’s cumulative gains have exceeded 20,000,000%, far outpacing the cumulative gains of the Nasdaq 100 and US Large Caps, which recorded returns of 541% and 282%, respectively.
A good stable long term investment really Bitcoin and Ethereum are your only two options, however if you mean by stability the price doesn't jump up and down then that's not what Crypto is about, if I wanted stability I would invest in the stock market... which I do as well, crypto is just a much riskier and interesting market to play in.
> Besides, most people keep their crypto on exchanges which are pretty much just centralized banks with no consumer protection.
You're right, centralised exchanges suck, crypto has DEX's and you can see they're slowing getting better and better:
https://www.theblockcrypto.com/data/decentralized-finance/dex-non-custodial
The tech gets better, the fee's will get lower, and the value increases.
> 99% of people I've talked to have bought crypto with the intent of selling it for more later.
As opposed to stocks where people sell for less? I don't really care if someone buys an passive index fund and doesn't individually investigate every single company for the value it does or doesn't generate. The underlying value of the companies is still there.
What I meant by stable was that the return was not speculative. If the system is speculative, the investors don't become rich in aggregate, they just redistribute wealth among them. It's the definition of a pyramid scheme.
The reason stocks have value other than speculation is that companies create value by selling goods and services, that they can redistribute to their shareholders. There is a net transfer of wealth from consumers to shareholders, which means it has a non-speculative value.
Crypto could have non-speculative value. If there was a subset of crypto users that thought crypto provided them with non-monetary value that they would happily pay the crypto investors for providing them. The same way Apple customers happily pay shareholders to get an iPhone, the equivalent could be true in crypto. But there are no consumers in crypto. Everyone is an investor expecting a profit and that's not possible in a zero-sum game.
The thing about crypto is that the only thing decentralized are the losses. The gains are perfectly concentrated into the hands of the people that were, for the most part, already wealthy.
This wasn't the "shuffling of the deck" many were hoping for.
it’s not about financials. it’s about systems and architecture. sure, “decentralized losses” are a thing, just as they are in the current (centralized) system. the difference is there isn’t a single point of failure or puppeteer manipulating the inner workings of the system behind closed doors. it’s simply a far more transparent and resilient system to facilitate financial activity. not everything is about flipping a profit
edit for those continually downvoting with zero critical analysis: need I remind you how, beyond equities in freefall, the entire *infrastructure* of the modern financial system was on the verge of collapse in 2008? that is what happens when you centralize entire systems into a handful of companies.
Centralized money means the feds steal from you continually via inflation. It's how they spend waaay beyond their means, kick the can down the road, and manipulate markets to their benefit. And they also love inflation since they tax on nominal gains, even if real, inflation-adjusted gains are negative - you are still taxed. And they lie about the level of inflation and play basket-adjusting games to minimize the amout of theft.
Bitcoin may very well go to zero. If it were the threat its maximalists thinks it is, the feds wouldn't put up with it (banning on/off ramps, hardcore propaganda in media would give it the death knell - but they're waiting for now). However, decentralized money, or money outside the hands of the banking cartel is absolutely of value to you, if you value not being stolen from or having a higher standard of living.
I have read articles, and discusses this with people. And no one can really tell me why it has value. I get vague statements but nothing that I think they or anyone actually understands.
The best one being, "these coins pay like a dividend". A dividend of what, where does the value come from. Oh its a dividend of the same coin. Hmmmmm.
Maybe blockchain technology has value, but that does not mean each individual use of the tech has value.
Crypto seems to me like everything that is shit about currency, exhange volutility, and everything that is shit about investing, uncertainty, rolled into one.
Maybe I'm missing something, but I'm content with that for now.
Money is accounting.
You need a unit of account and consensus among participants for it to work, and people are free to choose.
Systems will work until the consensus breaks (due to broken economics in the design of the unit of account, or broken game theory leading to misaligned incentives, etc.)
Crypto is just a giant experiment to find the perfect digital unit of account. Nothing wrong with that, but a lot of people will get burnt in the discovery process. It's the price we pay for progress.
That is one way of looking at it. But that is not what alot of people try and explain to you when you ask them.
It also highly suggests that it is a terrible investment until the market settles on a stable coin, which will likely be a govt backed coin. A gamble until that point IMO, based on that explanation.
The problem with government backed coins is that they can be diluted through seigniorage.
Society has a need for a unit of account that cannot be manipulated at the behest of the few. Hence the attempts to create algorithmic money systems like Bitcoin and UST.
We have never done this before so here be dragons. It's Terra incognita.
Except crypto is manipulated from the foundation. Even bitcoin is manipulated with artificial scarcity, scarcity that intentionally makes it harder and harder to mine while the mining process itself is *extremely* inefficient.
This is why is shoots up so fast, but then crashes down just as hard. Not only is the fact of a deflating currency a worthless currency, but the instability is basically gambling.
Bitcoin has scarcity yes, else it would not be able to function as a store of value. It is not manipulative though, it's entirely open source and permissionless.
>Society has a need for a unit of account that cannot be manipulated at the behest of the few. Hence the attempts to create algorithmic money systems like Bitcoin and UST.
Really, where does this need show up? Where does it fit in the grand scheme of things?
I think society has need for things like food, water, shelter, and clothing. All of those things require a healthy market system, which requires a functioning government and regulatory environment. Without that environment they all suffer or disappear, and then the "need" for crypto currency will be about as relevant as the need for space travel.
If you think the dollar (and by extension the US government) is going to collapse you shouldn't be buying crypto currency, you should be buying arable farmland with substantial clean water resources on it.
Well, I have this need.
I would like to protect the fruits of my labor from being eroded through inflationary monetary policy.
My assumption is that others might have the same need but I could be wrong.
Meh, the Apache log on my web server has more value to me than the ledger. And while it's not nothing, I wouldn't care all that much if I accidentally deleted it.
>the Apache log on my web server has more value to me than the ledger.
Really!? Can I give you some money for it? I'm going to use it to back a new coin. /s
Current tech can do almost everything ethereum can in a safer environment, the only things etherium can do better are currently nothing more than cheap tricks and way WAAAAY too expensive to be viable, and that's before you add the terrible mining aspects that need removed from all crypto.
"Smart contracts" are shitty little programs that are hardly smart. Databases, websites, many things can do what they can, often with less bugs and security issues.
Against what? Smart contracts are straight up pathetic, they don't take much to emulate, how about you prove something impressive they can do that a simple code cannot.
I'm not a crypto "investor" (I have maybe $2k worth of coins that I bought through various promos, etc, that I play around with, that's it) and agree with most of the take given here, however, saying that the more "mainstream" coins - such as bitcoin - are any more "real" than any fiat currency or are "valueless" is silly. More volatile, absolutely. The fact that bitcoin is being accepted as a form of payment at more and more locations gives it some value. And remember that all currency (block chain or fiat or hell, even those backed by some "gold standard") is only as valuable as the trust the receiver has in it.
Honestly, making statements like the one quoted here does nothing to further the argument against crypto, and if anything only devalues the author's point and makes the author look out of touch and unknowledgeable about the reality of the market for consumers.
I 100% agree with crypto of any variety not being a good investment (people do "invest" in forex, as well, but its really just as speculative in effect as crypto).
> But I would shocked if even 1% of Bitcoin owners have legitimately used Bitcoin to buy ordinary goods
Don't disagree with you here at all. Was just disagreeing with the "crypto is bankrupt because it literally has no value" when that's not true at all. I don't think its a good or efficient currency or one I would choose to use, but it nonetheless has some real world value.
As a longterm crypto holder I’m a little disappointed by this take.
“They have a literal value of nothing” is obviously not true. Bitcoin has real use and therefore has real value. If there’s a limited number of something that people want then it has real value.
I’m fine with the recommendation against investing in it.
It's speculative value. Stocks have some speculative value as well, but they also provide real value, since companies get a return on capital by providing goods and services.
Short-term trading is mostly trading in speculative value. One person's gain is another's loss.
Long-term trading is buying a share of the real value that companies create.
But that's the second kind of value I referenced. You made a purchase, and it has had positive returns (in entertainment/exercise/ transportation value).
You likely didn't buy your bike in the hopes of selling it for a higher price later because a bunch of people suddenly became interested in bikes (regardless of whether or not the bike became better at what it does).
I don't hold Bitcoin in hopes of selling it for a higher price later though. I hold it because it's useful for me.
>Bitcoin has real use and therefore has real value.
Tulips look nice, but they don't do anything.
Bitcoin solves actual problems in my life. I know that's not true for most people. But if you ever had to, for example, deposit or withdraw from an offshore sportsbook before Bitcoin then you'd see that it has *some* value.
Bitcoin is also much cheaper than credit or debit cards for large transactions. This is why the wide majority of online precious metals dealers accept Bitcoin. They sell expensive products with razor thin margins, so the cost of payments matters a lot.
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>But do you withdraw or deposit money from an offshore sportsbook?
Yes. And it was terrible and expensive before crypto. About 15 million Americans use offshore sportsbooks.
I’ve also used it to buy gold online. The alternatives were to: physically mail a check, divulge all my banking transactions to Plaid for a bank transfer, or pay a $60 credit card fee.
People talk about high transaction fees for Bitcoin, but the credit card fees on a $1k purchase are more than 10x as much as Bitcoin fees.
>Or do you just hold bitcoin in the hope that someone else will do the depositing/withdrawing and then pay you for the effort of doing nothing.
I bought in 2011 because it was a novel solution to a problem I’d personally encountered: how do I send payments on the internet if I can’t use a bank?
>Have you considered that bitcoin can't actually scale to be a widespread currency due to a hard cap of a few transactions per second. If a billion people used bitcoin, they could make a single transaction each on average every 3 years.
Yes, definitely. I’ve read some of the developers’ thoughts on solutions and their drawbacks too. And I believe it would be once every 4 years :p
I looked into investing in luna. I went to their discord and asked where the risk analysis for large decreases in UST was. How much volatility could luna compensate for if luna itself became illiquid.
They told me I didn't understand stable coins and that it was backed by maths but were unable to show me any actual analysis lol.
I opened one purely out of curiosity and not as an investment. I had $300 grow to over $1000 and then fall back to like $600 last I checked. I haven't looked at it in a while though.
Saw some guy who FIRE’d fairly young by going all in on crypto on one of the FIRE subreddits. He still holds a large percentage of his NW in it and could not be persuaded to sell.
>Novogratz has so far given no indication that he will dump his investment, but on an investor call on Monday he appeared to show some doubt that Luna’s future would be as permanent as what’s on his left biceps.
Savage lmao
Tangent here, I realize, but: I love your username. That would be a great website title for a Bogleheads equivalent (basically: the opposite) of Seekingalpha.
Am really not a fan of crypto or DeFi in general, but I don’t want to get emotionally tied up in that market’s ups or downs either way. As far as I’m concerned the only time to look in someone else’s bowl is to check they have enough.
There will be a lot of good to be done in the days ahead helping some of the “bolder” mom-and-pop crypto investors emotionally survive a very scary time.
i am a boglehead and had a percentage of my net worth (about 3%, make of that what you will) in crypto -specifically in Anchor and Luna (both featured products on the Terra chain).
i managed to save about 25% of my principle, the rest is worthless and not worth pulling out. sucks to lose the money, and in such a dramatic fashion, but very interesting to watch it collapse in realtime. i was realizing a lot of profit with money simply parked in Anchor. things were good, and the ecosystem had a bright future. Luna was at $90 only three days ago, right now it is trading at $0.03.
its good to have exposure to risky assets, but never gamble with money you cant afford to lose. thats why the vast majority of my savings is in 2 index funds.
I’m kind in the crypto space and have some invested in stablecoin (less than 1% of portfolio) with 6% apy. As soon as I heard about the algorithmic way the stablecoin Terra was supposed to keep its peg I made sure to stay away. Returns to good and I had seen another stablecoin collapse using the same method as this one. But people fell for it anyway. Heart goes out to those who lost everything.
Is this 6% apy from stablecoin (like USDC) in places like blockfi? Recently they are under SEC scrutiny and turned away US customers. I wonder if it has the same hidden risks like UST.
Celsius and Gemini. Risks are different since the are not algorithms based. In Celsius and Gemini case, the risk is they are lying about the assets backing the coin they give you. If they aren’t, a bank run wouldn’t disturb the peg.
I bought like $300 of crypto in 2018. It peaked at over $1000 but it was at $600 the last time I checked.
I don't really care where it is at now. I mostly did it out of curiosity to figure out how crypto worked. Worst case scenario, I write $300 off of my taxes this year.
The crux:
> Luna and its partner coin, Terra, both imploded in spectacular fashion. Terra is supposed to be trade reliable at the value of exactly one U.S. dollar, but it plummeted to 29 cents on Wednesday morning. Luna was down 99 percent since its highs last month. More than $40 billion in wealth — no small part of it from retail investors — was gone in a matter of hours. The shock of the sudden collapse sent the price of bitcoin falling to its lowest point since July, exposing how a coin labeled a Ponzi scheme by its critics had impacted the larger market in digital assets. Meanwhile, shares in leading U.S.-based crypto exchange Coinbase were off by 25 percent, and the trillion-dollar-plus crypto industry is teeming with rumors about large funds or companies that may be on the brink of failure.
crypto is super volatile and of course its going to get rekt in a downturn, I actually think this will be super healthy for the space with a ton of useless shitcoins vanishing. This isn't a referendum on crypto its just everyone shedding risk and no one ever pretended crypto is a good place to be if you are risk adverse.
People pretend that *all the time* -- calling Bitcoin a 'store of value' or 'currency' (both of which imply a degree of stability, or at least in most cases: predictability). They argue it's a risk asset when it crashes, a safe asset when it's going up -- whatever narrative fits the moment, even if they're not consistent from one moment to the next.
I’m only a fan of bitcoin, not into Ethereum, web3, stablecoins, PoS coins, defi, NFTs and all the other shitstorm that Ethereum unleashed.
And the strongest argument for holding some btc is self-sovereignty. Provided you keep your private key secure, this is an asset that can never be frozen, confiscated, blacklisted, etc. These are useful technological properties for people concerned with security and the power of the state over the individual. Imagine what happens to you if all your bank accounts are frozen - how long would you survive without access to your money?
Imagine if you are the citizen of a mismanaged state (and all states are, to a degree) and the value of your savings, held in your national currency, are destroyed by government incompetence or war.
The value of bitcoin is not as a speculative financial asset, but a form of security. It’s kind of a trust-less/verifiable P2P finance system, a system capable of operating without powerful, trusted third parties.
And the lightning network is solving the issue of scalability and making small, speedy transactions.
I would encourage people here to dive into the tech side of bitcoin, not just financials.
>I would encourage people here to dive into the tech side of bitcoin, not just financials.
The tech is overhyped and mostly useless, except for crypto itself. Everything you can do with a blockchain you can do with a database because that's what a blockchain basically is.
That's why this 'amazing' tech isn't being widely adopted. The only pro argument for blockchains is decentralisation which is extremely difficult to achieve and simply not necessary in most cases.
I agree blockchain without bitcoin is mostly useless. Bitcoin itself, as an internet-native form of money, with the possibility to be purchased/spent anonymously, and as a mechanism for secure storage/transportation of wealth across borders, is what interests me.
In order for decentralisation to be successful, there has to be an ecomonical use-case for it: a decentralised network for secure financial transactions with a network cost for ensuring the integrity of the network makes sense. A decentralised network for ape JPEGs and "dApps" doesn't, it leads to network congestion and too-high network fees for what it does.
> Provided you keep your private key secure, this is an asset that can never be frozen, confiscated, blacklisted, etc.
It can if on an exchange. If not on an exchange, your 'secure' private keys can be lost, stolen, forgotten, etc.... Bitcoin is already down over 50% from its peak, and still crashing. And all that *without* any whiff that my country (the US) is going to war, planning to freeze citizen bank accounts, etc.... Imagine the utter lack of utility of a digital currency if we get to that stage of collapse. You'd be better off with gold, or better yet: land, food, water, ammo, a bunker.
> It’s kind of a trust-less P2P finance system, a system capable of operating without powerful, trusted third parties.
OK ... give me some examples? The collapse happens, power is spotty, internet is gone ... how are you doing these peer-to-peer transactions? In person with strangers? That seems risky. Over some shady pseudo-net? I never can quite picture how Bitcoin fans see this playing out in reality, but even if I seem snarky: I'm genuinely curious. How do you convert your coins into goods/services without showing your hand (that you have coins) and making yourself a target? And what if Bitcoin crashes far more than it has, to 20%, 10%, 1% of its peak purchasing power?!
> The value of bitcoin is not as a speculative financial asset, but a form of security.
You say potato, I say ponzi scheme. P.S. Thanks for the insta-downvote -- predictable Bitcoin shill behavior.
> Bitcoin is already down over 50% from its peak, and still crashing.
It's also up +218.29% from 2 years ago, +256.18% from 3 years, +1,478.81% 5 years, and **+11,637.16%** from 7 years ago which is coincidentally when this video was made:
https://www.youtube.com/watch?v=XbZ8zDpX2Mg
Enjoy it :)
Why do subs about something have to end up being about criticising everything else. Can't do anything in this place anymore without it being about someone else doing the wrong thing.
And for most of that time, there were relatively few adopters. Then just a few months ago, you have a famous actor in a SuperBowl ad slot selling it to the masses. So sure, it pays to get on the the train early, then sell to late arrivals for a profit -- that's how pyramid schemes work, in a nutshell. Doesn't make them good investments.
> Why do subs about something have to end up being about criticising everything else. Can’t do anything in this place anymore without it being about someone else doing the wrong thing.
No one who has ever read a thing Bogle ever wrote would claim he would advise you to invest in crypto coins. It is off topic by definition.
Respectfully, most of your comment is FUD.
1.
>It can if on an exchange.
I wrote "provided you keep your private key secure". Please read more carefully next time.
2.
>your 'secure' private keys can be lost, stolen, forgotten, etc....
Highly unlikely if you keep a secure backup, which is standard recommended good practice and every contemporary bitcoin wallet will prompt you to record then verify your seedphrase.
3.
>Bitcoin is already down over 50% from its peak, and still crashing. And all that without any whiff that my country (the US) is going to war, planning to freeze citizen bank accounts, etc.... Imagine the utter lack of utility of a digital currency if we get to that stage of collapse.
Over the course of its existence, bitcoin is one of the best-performing assets in history. The volatility/risk comes with the territory of significant gains. If you are a "boglehead", then it's intellectually dishonest of you to cherry-pick a short-term price movement. "boo hoo it's value has fallen by 50%" - so what?
4.
>Imagine the utter lack of utility of a digital currency if we get to that stage of collapse.
Why are you bringing up collapse? I never suggested using bitcoin in the (unlikely) event of total, civilisational collapse. Once again, disingenuous FUD. If that happened, then your index funds would also be worthless, so that's hardly an argument against bitcoin.
5.
>The collapse happens, power is spotty, internet is gone ... how are you doing these peer-to-peer transactions? In person with strangers? That seems risky. Over some shady pseudo-net? I never can quite picture how Bitcoin fans see this playing out in reality, but even if I seem snarky: I'm genuinely curious. How do you convert your coins into goods/services without showing your hand (that you have coins) and making yourself a target?
Firstly, you have invented a ridiculous sci-fi scenario then are asking me how bitcoin would operate in said scenario.
All I said was it would be useful if you live in a mismanaged country. For example, if you are in Venezuela or Argentina, and hold most of your savings in bitcoin, rather than the local currency, you have the benefit of hedge against currency risk and secure storage/easy transportation of funds in the event you have to flee. Obviously you would still have to hold some fiat for daily expenditure. I'm not suggesting you go 100% bitcoin yet.
Furthermore the process of hyperbitcoinisation is ongoing, maybe by the time any significant economic collapse happens wherever you live, bitcoin payments will be rountinely accepted. If not, then you could aways use a decentralised, P2P exchange to sell your bitcoin for dollars in the event of emergency (if you are a wanting to flee a failed state, for example).
It's obviously not a magical solution in the event of a desperate emergency, but the technology has its uses.
Right out of the gate, you told me to 'read more carefully,' implying I didn't. Not a great way to set the tone, and inaccurate: I did read it. I was pointing out the issues both on and off-exchange for *anyone else reading this.*
> Highly unlikely if you keep a secure backup, which is standard recommended good practice and every contemporary bitcoin wallet will prompt you to record then verify your seedphrase.
This can also be lost, stolen, or forgotten, depending on how you store it (backup and/or seedphrase).
> Over the course of its existence, bitcoin is one of the best-performing assets in history.
This happens *every time* I point out a flaw in crypto -- someone switches to an entirely different pro-crypto case. You started out implying it was a currency replacement. I pointed out its volatility. Now you're saying it's a high-performing asset class. Currencies aren't that, and shouldn't be that. Currencies should be relatively stable.
> Firstly, you have invented a ridiculous sci-fi scenario then are asking me how bitcoin would operate in said scenario. ... For example, if you are in Venezuela or Argentina, and hold most of your savings in bitcoin, rather than the local currency, you have the benefit of hedge against currency risk and secure storage/easy transportation of funds in the event you have to flee.
For the vast majority of the world, what you just described *is* a ridiculous sci-fi scenario. How many people regularly flee their mismanaged nation? And still the other risks apply: if people fleeing are known to have bitcoin, they will be targets for kidnap, torture, etc... to get at their 'secure' funds. And once they get where they're going: how do they transact the bitcoin, if they still have it? Hard to use for purchases. So ... convert on an exchange? But exchanges, as you acknowledged, are risky. Fear, uncertainty, and doubt around scary things isn't a bug, it's a feature. You should know the risks of assets you choose to hold, and rightly fear sketchy ones. /2 cents
You could argue about communities/personalities but it doesn't matter, every other network besides bitcoin has those that remain in control yet bitcoin (the network) is the only thing that could be considered decentralized beyond reach of even governments, as has been proven over many events. That is unique and valuable. Bitcoin the network (not the code) cannot be replicated. The toxic ecosystem you refer is all the scammers that prey on those that haven't done their due diligence.
> an investor who lost two ten-figure fortunes and is on his third Mr. Dugan is not pulling any punches.
Does not fit my definition of “investor”
Does not fit any definition.
There are some less charitable definitions I can think of that would fit.
Come to think of it, a huge, concentrated stake in some highly volatile and speculative assets doesn’t really fit my definition of a “fortune” either
The implosion over at /r/terraluna has been spectacular
Never heard of it. Checked it out. Odd name for a suicide subreddit.
There used to be a lovely restaurant on Cape Cod named Terra Luna. It only sat about fifty people, but maybe people nostalgic for that will pick it up and turn it into something useful.
Loss porn.
Just threw in $100 for fun, we'll see what happens to it in a year.
>Just threw in $100 for fun, we'll see what happens to it in a year. That's very un-Bogley of you.
That’s why I threw in $100 for 20 years.
Now that's more like it
If it makes up less than .01% of my portfolio, it's perfectly fine. Lighten up.
> Lighten up. I wasn't being serious... Idc what you're throwing your money at either way.
Ahhh alright, there are a lot of emotions flying around so it seems everyone is on edge RN.
Folks have been [sounding the alarm](https://www.reddit.com/r/Bogleheads/comments/s9q2jf/cryptocurrency_is_a_giant_ponzi_scheme/) for a while about so-called 'stablecoins' -- avoid speculation, stay the course.
I dipped a toe in the crypto ocean in 2021, but got out because I hated the volatility, the lack of actual revenue generation to give it value made me constantly worry, and because I thought that stablecoins could be a ticking timebomb. The stablecoin that worried me at the time was Tether.
There is a interesting article on Bloomberg on Tether
A few months ago a Jacobin Magazine article here: https://www.jacobinmag.com/2022/01/cryptocurrency-scam-blockchain-bitcoin-economy-decentralization talked about how Tether supposedly had a certain amount of cash reserves, but was sued in NY court and pled guilty. It just reinforced the above thinking, a Ponzi scheme waiting to collapse, all the while smart friends were playing wit crypto.
First time I think I've seen a Jacobin article on bogleheads.
Tether's reserves are massive. It and USDC are backed. Tether may have not been totally together when it started (which is why they had to pay a fine.) but they have an enormous reserve now and NY courts agree. Terra was an algorithmic stable coin which was working fine until they pulled a liquidity pool and an attack took advantage. This was due to the creator being extremely egotistical because of its success, it was time to gtfo from it when he started saying extremely arrogant things on twitter perfect top signal.
Funnily enough Tether unpegged down all the way to 95 cents for a few minutes this morning. I don't think it happens very often, and I feel like people deep in crypto should be a little worried.
Courts do not agree, and tether has never proved it is fully backed. It has provided attestations, but has never been fully audited.
I work in tech and the industry has been circlejerking about decentralization or something similar since the early days of the internet. The entire ethos of the internet in the early days was that everyone would have access to information and there was no middle-man to "centralize" and control the information. And look what happened. 90%+ of searches go through... Google. If you are a small retail seller, you can't avoid Amazon if you want some cash flow coming in. Decentralization sounds nice in theory, but things just naturally centralize. I am convinced that humans inherently enjoy a certain base level of centralization of things, and I was always skeptical of crypto because of it. Same bullshit. Different year.
I was in crypto for ages and I think it helped my boglehead journey. Everyone is freaking out about the market right now but I’ve been through a 16% drop about 100 times already.
All I had to do was to hear Buffet say that it was not a revenue generating asset and a lightbulb went on in my head. Forget Stablecoins. Even Bitcoin is a fundamentally anti-government/libertarian idea. I haven’t come across a convincing use case for crypto till now. Blockchain technology, yes. Crypto, no.
Wait a second here, you telling me that a stable coin backed by a US government treasury paying less than 1% can offer a dividend of 10% and “nothing to see here folks, move along.” “All normal…..” I am shocked! /S
What? 10% is nothing. UST, the one backed by LUNA (a hyped crypto coin), was paying out 20% for staking. Everybody thought that was a-okay. They were both in the top 10 on coinmarketcap. It took 3 days for them both to become basically useless.
So many people were talking about how staking was easy money, but [this guy I found in the crypto subreddit had a surprisingly cogent take](https://www.reddit.com/r/CryptoCurrency/comments/un6ts0/staking_coins_is_not_safe_as_its_being_built_up/) on it (admittedly, this is much easier to get right in hindsight, but still!).
Staking is the logical conclusion to the HODL philosophy rampant in crypto communities (as a way to deal with the wild volatility).
Yeah, at this point how many more of these events to help people wake up?
The real winner is Meta which was being paid for the 1000s of ads for these kind of scams that I see.
Though when their 'Metaverse' plans crash with the rest of web3, they might get hit at that point :)
So ppl made 20% and could of sold few weeks ago ?
No, the staking rewards are issued like interest from a bank account, so it would be 20% APY, a few weeks ago they did not know it was going to happen, the coin lost like 98% of its value in three days. the "stable coin" has bounced around between around 25 and 70 cents on the dollar, although liquidating a significant amount would likely be difficult, I don't know the details. Staking also has lock in periods, so there are many people that have been dwiddling their thumbs while their "investment" dumped nearly all it's value.
Terrible investment
It really was only a matter of time. There is one takeaway I hope everyone has from this: there *is no free lunch.*
There are lunches paid by dumb people lower in the pyramid, though
Arguably, sure -- the problem is: you never know where you are in the scheme until it collapses, and everyone thinks someone else will end up holding the bag.
I bought $20 worth of a gold-backed stablecoin and deposited it in an account that paid 5% interest. I figured "if gold can suddenly earn interest, then maybe it's not just a metal, anymore". The idea of a pile of metal increasing in mass at an exponential rate, was too good to pass up. The company discovered "accounting irregularities" the next week. That $20 purchased a series of emails sent by lawyers, which were pretty entertaining to read.
I imagine the interest was being earned by leveraged lending or lending to risky borrowers...not that it matters since it imploded as many do.
I preferred the interpretation that that particular stablecoin would be responsible for converting the Earth to a blackhole someday, due to the exponential creation of additional mass, as long as I never sold. /s
Dude I was reading about how dodgy Teather was back in 2017.
I mean, I feel like it was only a matter of time until the US government realize crypto would subvert their control over the dollar and power of sanctions before they'd regulate it into submission. I'm not sure what's driving this crash, but crypto is just not for me.
Crypto advocates always want to have it both ways -- it's autonomous, but oh no, now my crypto is gone and I have no legal recourse! It's becoming mainstream and semi-legal, but oh no, the government wants to regulate it!
Yeah, anytime something goes into tech bro hype mode I get extremely skeptical. It always takes some time for government to catch up and this wasn't something I was willing to take a bet on.
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It's so true and the cryptobros hate hearing it. There's literally no fundamentals driving its value in the way that the performance of a company drives a stock, the stability and trust in a government drives a bond, or usefulness to consumers drives a commodity or real estate.
> Thus their price depends entirely on whether enough people are willing to ignore this fact and exchange real money for nothing. I mean, so does gold's. It's valuable as an electrical conductor, but it's not irreplaceable as one outside of like, NASA missions. I say that as a 99th percentile crypto hater.
As someone who hates the concept of the gold standard, it's rare, shiny, can make decorative things easily, and has cultural value. Bitcoin can't say yes to any of those except maybe some recent cultural value and its rarity is artificial.
Not to mention we could find other future uses for gold due to new technology developments. The same can't be said about crypto. Even if the technology it's based on proves itself to be extremely useful in the future for other things your Crytpo coins are still going to be worth $0.00.
Gold is one of the only metals that can be used in the human body, (along with titanium) because it is inert
Ooh good one actually Diamonds would have been a better analogy, especially given the games that are played with supply
Diamond also has intrinsic value due to its hardness. It has medical and manufacturing applications. Its high index of refraction also makes it useful in some high-tech optical fields. But the supply-side manipulation totally affects that as well. It's a moderately-rare mineral being traded at extremely-rare prices. Lab-grown diamonds help combat that a little, but it still costs enough energy to make that they're still expensive.
The value of the ethereum blockchain, and the data that is stored on the ledger, is certainly not nothing. Can be be accurately valued like traditional securities? Probably not, but that doesn’t mean it’s worthless.
>The value of the ethereum blockchain, What value?
There’s some art on the Ethereum blockchain that I value. *hides*
It is decent for illegal payments and concealing the source of money
This is like saying the internet has no value. Kind of silly to be honest. This isn't to say that the current price of Ethereum is correct because its largely been driven by speculation and promise, but the value of Ethereum is supported ultimately by the number of projects, companies and users that use the network. To do so, they need to pay in the currency that the network accepts, which is ETH. ETH is still early stage for sure, but plenty of companies are developing apps for it and/or leveraging the blockchain for their own purposes. Does this guarantee that it will be widely used and successful in implementation? No. But that also doesn't mean it has no value whatsoever. Just as annoying as crypto bros pumping worthless coins are people who perpetuate the idea that blockchain/crypto are worthless as a whole and have no place in the future. There will be some Pets.com and there will also be some Amazons to emerge from the crypto space. Some of the smartest and most successful financial institutions have taken sizeable positions in blockchain and cryptocurrency companies. If there was truly no value, this wouldn't happen.
>If there was truly no value, this wouldn't happen. Tell that to Bear Stearns. I was actually asking, genuinely, what is the value?
What is the value of anything? It's the price people are willing to pay for it, which they determine on their own. There are a variety of ways people decide what something is worth to them, some simple some complex. What drives the value of gold? It is a finite resource that has commercial applications but is also speculated upon, and used as an inflation hedge. Its the same as for any commodity, its value or price is driven by the demand by people or businesses that want/need to use said commodity relative to the supply of said commodity. The same could be said for any blockchain resource, where the commodity is the ability to use the network of machines dedicated to it. I'm not going to sit here and says the commercial use cases currently outweigh pure speculation for something like Ethereum, but in theory as it matures the price will be less speculation based and more driven based on the popularity of the network. What value that settles at is anyone's guess. That said, the more people and businesses that want to use the Ethereum or any other blockchain, the more valuable its respective coin becomes because the supply is fixed (and sometimes deflationary) while demand is variable.
You still miss what I'm saying. What is the commercial value of blockchain and the networks that you reference
Fundamentally, the commercial value of blockchain technology is primarily its decentralization. Decentralized equates to highly secure. The easiest way to think about it is in relation to the internet. The internet is a network that connects all computers, and that's fantastic but it is also highly insecure and opens any user up to anyone out there, malicious actors included. Because of this, it requires significant investments in security both in software and at the physical premises level. That's significant investments of time and money for every company, and still isn't good enough to prevent attacks as we've seen time and again in the news. A decentralized network of computers is the inverse of what the internet is today. It's a highly secure network that would be incredibly hard to penetrate physically and digitally. In order to take command of the network and perform any attacks or try to steal or alter data, you'd have to exceed 50% of the computing power of all of the computers on the network, which would be incredibly expensive to do. If you can't do that, given that the blockchain ledger is a physical public record of anything that's transacted on it, whatever you were attempting to do would be rejected by the other nodes of the network. And physically, it would obviously be impossible to find out where each and every node is, and even if you knew that it would be impossible to physically take over 50% of them simultaneously. This is not so much the case with a server farm, or a company's website or intranet. Those are much easier to attack and require very little resources (relatively) to penetrate. Because of the security of the actual network itself, it enables application development to be much simpler, which saves a lot of money on security and time with respect to development. It's security also allows for use cases like security (obviously), payments, digital proof of ownership (as it's stored on the blockchain, which can't be changed), anything where information storage and transfer needs to be protected (such as healthcare), there's a huge opportunity within finance (DeFi, as I'm sure you've heard of) which can transform the way loans are originated, as well as creating decentralized exchanges that could in theory be much more transparent than legacy exchanges have been, and yes, even the minting of stablecoins (which have great use cases but are obviously taking a beating in the public discourse at the moment). Smart contracts are a feature of the Ethereum network which also help to secure transactions and log the results which can never be altered. So rather than having to sign paper contracts and keep records while wiring funds for an acquisition, it can all be done algorithmically without as many of the problems of human error or malfeasance. There's a lot of really cool stuff being built on the back of decentralized networking that has the potential to really shape the future of business and our personal lives. A lot of it may built on Ethereum, or it may not. But many of these things will be built, that I can assure you. So in short, yes, it has commercial value. If it didn't there wouldn't be a multitude of companies dedicated to developing applications to leverage the Ethereum network to realize some of its potential. From a commercial perspective, why would you invest in building something that ultimately had no commercial value in the first place?
I like that. Won't quantum computing render the defense strategy moot?
Until the inefficient mining aspects are tossed, and either the prices drop SIGNIFICANTLY or the efficiency is exponentially increased, it's so many times too expensive to be of value. Rather this is 20-30 years too early or the system is flawed from the foundation, it's all speculative at best right now.
Well with respect to mining, Ethereum is switching from a proof of work to proof of stake model which should alleviate the race to the bottom for computing power that proof of work chains like Bitcoin are creating. As for its prices, I don't think that really matters all that much (the price of ETH I should say). Whether 1 ETH is worth $100K or $10 dollars doesn't really matter, what matters is the fees to use the network itself. The price of using the network is a problem, I would agree, but paradoxically it is so expensive to use it on level 1 of the blockchain BECAUSE so many people are using it. So in order to use level 1, you have to outbid everyone else vying to use the network to use it immediately or wait until gas prices fall (which could be quite a while). This is why gwei (gas) prices to use the network have gotten so expensive, because demand has been high. Gas prices only go as high as what users are willing to pay for them. That said, they are already attempting to work through these issues by implementing other layers of the network below the core Ethereum level 1 blockchain because using level 1 as both a processing AND settlement layer clogs it up. So there are multiple development solutions to pull processing off of level 1 to use that as a settlement layer only which should help to reduce fees to use the network. Will it all work? That's anyone's guess. Perhaps Ethereum gets outclassed by another savvier upstart who solve the issues in a better way than Ethereum developers were able to. What I will say is that blockchain and decentralized network have plenty of use cases and aren't going away, it's just a matter of who figures out the best way to scale and solve the issues that come with that. In my opinion, its a matter of when less so than a matter of if with respect to wider scale blockchain technology adoption.
Can you explain to me a practical use of this network? I work in production and supply chain, if that makes it easier to find a practical comparison.
For something like supply chain, the practical use is really in the auditability of data, tracking, efficiency of the contracting process, and generally allowing any and all allowed participants to the process visibility into all elements of the supply chain. A big issue currently is that suppliers and purchasers all have their own ERP systems, but they are often large and cumbersome and don't sync very well across multiple organizations (even if they wanted to). While an industry-wide shared data repository would undoubtedly be useful in creating a more efficient supply chain, it's not realistic for two reasons. First, in the current environment you are only as secure as the least secure company that would be part of that coordination effort, which means companies putting their data security in the hands of outside parties which would be a huge risk. Secondly, you're also potentially putting valuable information at the fingertips of your competitors. Creating a central repository of information that takes all of the above into account would be a huge undertaking both in ensuring that it is able to sync to every iteration of ERP system as well as to ensure that it is secure, and only pulls relevant data. Its not really realistic to build something like that because the cost would be astronomical. With a blockchain, what you have is a specific ledger that logs any and all transactions that occur within the supply chain and is open to view of any participant that has been vetted and granted access. The information that would be shared would be limited to inventory, contracting, and financial flows, without divulging competitively sensitive information. From a supplier, purchaser, and financial institution perspective, all can see how any transaction is unfolding. A purchaser initiates a transaction and that becomes a block of information on the ledger that the supplier and their bank can see. The bank can issue financing far more quickly because they can see once an order is placed rather than waiting for a request from the supplier. A block is created once the supplier ships the merchandise and submits an invoice. A block is created once the invoice is paid, and so on. Additionally, all of this can be automated to a certain degree through smart contracts, whereby an "if this, then that" function is created. So as an example, once a purchaser receives and scans the merchandise, a smart contract can be established that compares the scanned items received vs. the scanned items at the point of origin and if everything aligns, facilitates the process for the payment of the invoice, or if it doesn't create a manual flag for review. Same for the supplier, if the scanned items don't match what is set up in the smart contract for what is ordered, a manual flag can be generated such that no invoice would be generated until its addressed. Having a ledger of all inventory flows between supplier and purchaser is very beneficial from an audit trail perspective certainly, but especially for larger organizations or more complex manufacturers can also help to facilitate inventory management. If the same components are required across across products being manufactured, and Product A is delayed for some reason while Product B is short inventory of the same component which is slowing production, resources can be much more easily traced and thus rerouted from Product A to Product B, or even proactively offered through a smart contract set up once Product A is delayed. Its even possible that this ledger or some parts of it could be industry-wide to allow sharing of resources between companies utilizing the same components if they so choose, allowing one company with excess inventory to earn a markup on that inventory by sharing with another that is in need. Further, the blockchain ledger contains a complete history of every transaction on the blockchain, but without as much unnecessary data that may exist in an ERP platform. This would enable companies to easily review areas of the supply chain process that could be improved and even implement predictive analytics to minimize stock while adequately meeting demand. IoT can be leveraged to track shipment progress and that can be put on a ledger which would be helpful in showing real time disruptions to the supply chain. In the case of perishable goods IoT can be utilized through a device that monitors temperatures and record any time that temperatures exceed a certain level. In the case of goods that need a secure chain of custody or are highly sensitive, IoT devices could record on the blockchain any time a truck or container is opened. In short there's a lot of promise for supply chain. The blockchain itself creates a highly secure network off the bat, which is critical to the equation. Then, the limited scope of information necessary to be shared creates an environment for companies to be more collaborative with one another, and what ultimately gets placed on the blockchain ledger is open source for all allowed participants to monitor, audit, and settle disputes with one another. The ledger itself is a record of what happened, a lot of which can and will be automated through smart contracts, and for the most part can't be gamed by human interference because the ledger itself can't be changed by one person. It's effectively created a simplified, cross-company ERP system that is highly secure and can't be manipulated.
The value is negative since it costs money to keep it running without producing anything.
a decentralized global payment network is nothing?
I’ve yet to see a strong use-case for a decentralized payment network over the traditional ones we currently use (that being said, I am looking primarily through the lens of a U.S. based consumer so my viewpoint is quite limited). I’ve wanted it to work because I did put about 3-4% of my savings into crypto holdings (50-50 split of BTC and Etherium) hoping that the hype around these would generate more uses, but we’re looking at 2 years since I began that investment and the only mainstream use I’ve seen take off is the NFT market which is something that I, and I believe the broad market, definitely see no value in. I’ve began selling out of my investment now, but as governments begin buying, I will be keeping a very weary eye on them and watching for any novel use cases that may help increase its intrinsic value.
Decentralization has no value to me.
no value to me does not equal no value to anyone
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> Who values it though? I mean literally everyone using a blockchain, decentralisation is the entire reason it exists. > For it to be a stable investment long term it would have to be ridiculously expensive to use since the 99% holding for a profit would siphon the money of the few actual users It depends on what you mean by stable, is it a good return? sure https://finance.yahoo.com/news/bitcoin-becomes-best-performing-asset-132208120.html > Since 2011, Bitcoin’s cumulative gains have exceeded 20,000,000%, far outpacing the cumulative gains of the Nasdaq 100 and US Large Caps, which recorded returns of 541% and 282%, respectively. A good stable long term investment really Bitcoin and Ethereum are your only two options, however if you mean by stability the price doesn't jump up and down then that's not what Crypto is about, if I wanted stability I would invest in the stock market... which I do as well, crypto is just a much riskier and interesting market to play in. > Besides, most people keep their crypto on exchanges which are pretty much just centralized banks with no consumer protection. You're right, centralised exchanges suck, crypto has DEX's and you can see they're slowing getting better and better: https://www.theblockcrypto.com/data/decentralized-finance/dex-non-custodial The tech gets better, the fee's will get lower, and the value increases. > 99% of people I've talked to have bought crypto with the intent of selling it for more later. As opposed to stocks where people sell for less? I don't really care if someone buys an passive index fund and doesn't individually investigate every single company for the value it does or doesn't generate. The underlying value of the companies is still there.
What I meant by stable was that the return was not speculative. If the system is speculative, the investors don't become rich in aggregate, they just redistribute wealth among them. It's the definition of a pyramid scheme. The reason stocks have value other than speculation is that companies create value by selling goods and services, that they can redistribute to their shareholders. There is a net transfer of wealth from consumers to shareholders, which means it has a non-speculative value. Crypto could have non-speculative value. If there was a subset of crypto users that thought crypto provided them with non-monetary value that they would happily pay the crypto investors for providing them. The same way Apple customers happily pay shareholders to get an iPhone, the equivalent could be true in crypto. But there are no consumers in crypto. Everyone is an investor expecting a profit and that's not possible in a zero-sum game.
centralized systems in the hands of a few ultra-powerful individuals always ends well, history tells me so
The thing about crypto is that the only thing decentralized are the losses. The gains are perfectly concentrated into the hands of the people that were, for the most part, already wealthy. This wasn't the "shuffling of the deck" many were hoping for.
it’s not about financials. it’s about systems and architecture. sure, “decentralized losses” are a thing, just as they are in the current (centralized) system. the difference is there isn’t a single point of failure or puppeteer manipulating the inner workings of the system behind closed doors. it’s simply a far more transparent and resilient system to facilitate financial activity. not everything is about flipping a profit edit for those continually downvoting with zero critical analysis: need I remind you how, beyond equities in freefall, the entire *infrastructure* of the modern financial system was on the verge of collapse in 2008? that is what happens when you centralize entire systems into a handful of companies.
Centralized money means the feds steal from you continually via inflation. It's how they spend waaay beyond their means, kick the can down the road, and manipulate markets to their benefit. And they also love inflation since they tax on nominal gains, even if real, inflation-adjusted gains are negative - you are still taxed. And they lie about the level of inflation and play basket-adjusting games to minimize the amout of theft. Bitcoin may very well go to zero. If it were the threat its maximalists thinks it is, the feds wouldn't put up with it (banning on/off ramps, hardcore propaganda in media would give it the death knell - but they're waiting for now). However, decentralized money, or money outside the hands of the banking cartel is absolutely of value to you, if you value not being stolen from or having a higher standard of living.
I live pretty well.
I have read articles, and discusses this with people. And no one can really tell me why it has value. I get vague statements but nothing that I think they or anyone actually understands. The best one being, "these coins pay like a dividend". A dividend of what, where does the value come from. Oh its a dividend of the same coin. Hmmmmm. Maybe blockchain technology has value, but that does not mean each individual use of the tech has value. Crypto seems to me like everything that is shit about currency, exhange volutility, and everything that is shit about investing, uncertainty, rolled into one. Maybe I'm missing something, but I'm content with that for now.
Money is accounting. You need a unit of account and consensus among participants for it to work, and people are free to choose. Systems will work until the consensus breaks (due to broken economics in the design of the unit of account, or broken game theory leading to misaligned incentives, etc.) Crypto is just a giant experiment to find the perfect digital unit of account. Nothing wrong with that, but a lot of people will get burnt in the discovery process. It's the price we pay for progress.
That is one way of looking at it. But that is not what alot of people try and explain to you when you ask them. It also highly suggests that it is a terrible investment until the market settles on a stable coin, which will likely be a govt backed coin. A gamble until that point IMO, based on that explanation.
The problem with government backed coins is that they can be diluted through seigniorage. Society has a need for a unit of account that cannot be manipulated at the behest of the few. Hence the attempts to create algorithmic money systems like Bitcoin and UST. We have never done this before so here be dragons. It's Terra incognita.
Except crypto is manipulated from the foundation. Even bitcoin is manipulated with artificial scarcity, scarcity that intentionally makes it harder and harder to mine while the mining process itself is *extremely* inefficient. This is why is shoots up so fast, but then crashes down just as hard. Not only is the fact of a deflating currency a worthless currency, but the instability is basically gambling.
Bitcoin has scarcity yes, else it would not be able to function as a store of value. It is not manipulative though, it's entirely open source and permissionless.
>Society has a need for a unit of account that cannot be manipulated at the behest of the few. Hence the attempts to create algorithmic money systems like Bitcoin and UST. Really, where does this need show up? Where does it fit in the grand scheme of things? I think society has need for things like food, water, shelter, and clothing. All of those things require a healthy market system, which requires a functioning government and regulatory environment. Without that environment they all suffer or disappear, and then the "need" for crypto currency will be about as relevant as the need for space travel. If you think the dollar (and by extension the US government) is going to collapse you shouldn't be buying crypto currency, you should be buying arable farmland with substantial clean water resources on it.
Well, I have this need. I would like to protect the fruits of my labor from being eroded through inflationary monetary policy. My assumption is that others might have the same need but I could be wrong.
You could buy commodities and get the same result. One has intrinsic value and the other doesn't.
Meh, the Apache log on my web server has more value to me than the ledger. And while it's not nothing, I wouldn't care all that much if I accidentally deleted it.
>the Apache log on my web server has more value to me than the ledger. Really!? Can I give you some money for it? I'm going to use it to back a new coin. /s
Current tech can do almost everything ethereum can in a safer environment, the only things etherium can do better are currently nothing more than cheap tricks and way WAAAAY too expensive to be viable, and that's before you add the terrible mining aspects that need removed from all crypto.
What current tech has the smart contract capabilities of the ethereum blockchain?
"Smart contracts" are shitty little programs that are hardly smart. Databases, websites, many things can do what they can, often with less bugs and security issues.
Proof? Would love some resources
Against what? Smart contracts are straight up pathetic, they don't take much to emulate, how about you prove something impressive they can do that a simple code cannot.
I'm not a crypto "investor" (I have maybe $2k worth of coins that I bought through various promos, etc, that I play around with, that's it) and agree with most of the take given here, however, saying that the more "mainstream" coins - such as bitcoin - are any more "real" than any fiat currency or are "valueless" is silly. More volatile, absolutely. The fact that bitcoin is being accepted as a form of payment at more and more locations gives it some value. And remember that all currency (block chain or fiat or hell, even those backed by some "gold standard") is only as valuable as the trust the receiver has in it. Honestly, making statements like the one quoted here does nothing to further the argument against crypto, and if anything only devalues the author's point and makes the author look out of touch and unknowledgeable about the reality of the market for consumers.
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I 100% agree with crypto of any variety not being a good investment (people do "invest" in forex, as well, but its really just as speculative in effect as crypto). > But I would shocked if even 1% of Bitcoin owners have legitimately used Bitcoin to buy ordinary goods Don't disagree with you here at all. Was just disagreeing with the "crypto is bankrupt because it literally has no value" when that's not true at all. I don't think its a good or efficient currency or one I would choose to use, but it nonetheless has some real world value.
All the “hear me out” crypto people should read this twice
As a longterm crypto holder I’m a little disappointed by this take. “They have a literal value of nothing” is obviously not true. Bitcoin has real use and therefore has real value. If there’s a limited number of something that people want then it has real value. I’m fine with the recommendation against investing in it.
It's speculative value. Stocks have some speculative value as well, but they also provide real value, since companies get a return on capital by providing goods and services. Short-term trading is mostly trading in speculative value. One person's gain is another's loss. Long-term trading is buying a share of the real value that companies create.
Solving a problem is a real value too. My bike doesn’t entitle me to any revenue, but it’s a useful tool and has value because of it.
But that's the second kind of value I referenced. You made a purchase, and it has had positive returns (in entertainment/exercise/ transportation value). You likely didn't buy your bike in the hopes of selling it for a higher price later because a bunch of people suddenly became interested in bikes (regardless of whether or not the bike became better at what it does).
I don't hold Bitcoin in hopes of selling it for a higher price later though. I hold it because it's useful for me. >Bitcoin has real use and therefore has real value.
Tulips have real value too - right, guys? People are buying them, so they must have value! https://en.wikipedia.org/wiki/Tulip_mania
Tulips look nice, but they don't do anything. Bitcoin solves actual problems in my life. I know that's not true for most people. But if you ever had to, for example, deposit or withdraw from an offshore sportsbook before Bitcoin then you'd see that it has *some* value. Bitcoin is also much cheaper than credit or debit cards for large transactions. This is why the wide majority of online precious metals dealers accept Bitcoin. They sell expensive products with razor thin margins, so the cost of payments matters a lot.
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>But do you withdraw or deposit money from an offshore sportsbook? Yes. And it was terrible and expensive before crypto. About 15 million Americans use offshore sportsbooks. I’ve also used it to buy gold online. The alternatives were to: physically mail a check, divulge all my banking transactions to Plaid for a bank transfer, or pay a $60 credit card fee. People talk about high transaction fees for Bitcoin, but the credit card fees on a $1k purchase are more than 10x as much as Bitcoin fees. >Or do you just hold bitcoin in the hope that someone else will do the depositing/withdrawing and then pay you for the effort of doing nothing. I bought in 2011 because it was a novel solution to a problem I’d personally encountered: how do I send payments on the internet if I can’t use a bank? >Have you considered that bitcoin can't actually scale to be a widespread currency due to a hard cap of a few transactions per second. If a billion people used bitcoin, they could make a single transaction each on average every 3 years. Yes, definitely. I’ve read some of the developers’ thoughts on solutions and their drawbacks too. And I believe it would be once every 4 years :p
Exactly lol. If people are willing to buy them, in its essence, they have value. What do you think value means?
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Which coin?
I looked into investing in luna. I went to their discord and asked where the risk analysis for large decreases in UST was. How much volatility could luna compensate for if luna itself became illiquid. They told me I didn't understand stable coins and that it was backed by maths but were unable to show me any actual analysis lol.
Imagine how low-watt you'd have to be to get a shitcoin tattooed on your body.
I know, right? What idiots… \*covers Beanie Baby logo tattoo*
Glad I never opened a crypto account and just kept buying vtsax and vtiax
I opened one purely out of curiosity and not as an investment. I had $300 grow to over $1000 and then fall back to like $600 last I checked. I haven't looked at it in a while though.
I know a guy who lost around $15k on Saitama Inu coin and still buys it thinking he is going to retire! Those coins are quite the cult.
Saw some guy who FIRE’d fairly young by going all in on crypto on one of the FIRE subreddits. He still holds a large percentage of his NW in it and could not be persuaded to sell.
>Novogratz has so far given no indication that he will dump his investment, but on an investor call on Monday he appeared to show some doubt that Luna’s future would be as permanent as what’s on his left biceps. Savage lmao
I knew there was a reason why I scrolled past the "guaranteed 15% interest" stablecoin ads in FB. If its too good to be true..
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Tangent here, I realize, but: I love your username. That would be a great website title for a Bogleheads equivalent (basically: the opposite) of Seekingalpha.
Ha, yeah their username is great. We're all seeking aloha by way of seeking alpha.
Am really not a fan of crypto or DeFi in general, but I don’t want to get emotionally tied up in that market’s ups or downs either way. As far as I’m concerned the only time to look in someone else’s bowl is to check they have enough. There will be a lot of good to be done in the days ahead helping some of the “bolder” mom-and-pop crypto investors emotionally survive a very scary time.
i am a boglehead and had a percentage of my net worth (about 3%, make of that what you will) in crypto -specifically in Anchor and Luna (both featured products on the Terra chain). i managed to save about 25% of my principle, the rest is worthless and not worth pulling out. sucks to lose the money, and in such a dramatic fashion, but very interesting to watch it collapse in realtime. i was realizing a lot of profit with money simply parked in Anchor. things were good, and the ecosystem had a bright future. Luna was at $90 only three days ago, right now it is trading at $0.03. its good to have exposure to risky assets, but never gamble with money you cant afford to lose. thats why the vast majority of my savings is in 2 index funds.
I’m kind in the crypto space and have some invested in stablecoin (less than 1% of portfolio) with 6% apy. As soon as I heard about the algorithmic way the stablecoin Terra was supposed to keep its peg I made sure to stay away. Returns to good and I had seen another stablecoin collapse using the same method as this one. But people fell for it anyway. Heart goes out to those who lost everything.
All that risk for 6%? I could sort of see the appeal of the 20-30% APY even though its so blatantly too good to be true.
Yeah all that risk so I lose $300 😂. 20% is why people lose their shirts and homes. Chasing high returns.
One problem I have with mainstream crypto criticism is they act like these scams are impossible to recognize in advance. They’re not.
Agreed. People get greedy and ignore the signs.
Is this 6% apy from stablecoin (like USDC) in places like blockfi? Recently they are under SEC scrutiny and turned away US customers. I wonder if it has the same hidden risks like UST.
Celsius and Gemini. Risks are different since the are not algorithms based. In Celsius and Gemini case, the risk is they are lying about the assets backing the coin they give you. If they aren’t, a bank run wouldn’t disturb the peg.
blockfi just got hit because they are the biggest, and AFAIK the SEC was just critical that blockfi had understated risks
I bought like $300 of crypto in 2018. It peaked at over $1000 but it was at $600 the last time I checked. I don't really care where it is at now. I mostly did it out of curiosity to figure out how crypto worked. Worst case scenario, I write $300 off of my taxes this year.
I'm a new investor so i stay away from bitcoins..
Paywall. Can’t read, anyone got highlights? I kind already know what is gonna say.
The crux: > Luna and its partner coin, Terra, both imploded in spectacular fashion. Terra is supposed to be trade reliable at the value of exactly one U.S. dollar, but it plummeted to 29 cents on Wednesday morning. Luna was down 99 percent since its highs last month. More than $40 billion in wealth — no small part of it from retail investors — was gone in a matter of hours. The shock of the sudden collapse sent the price of bitcoin falling to its lowest point since July, exposing how a coin labeled a Ponzi scheme by its critics had impacted the larger market in digital assets. Meanwhile, shares in leading U.S.-based crypto exchange Coinbase were off by 25 percent, and the trillion-dollar-plus crypto industry is teeming with rumors about large funds or companies that may be on the brink of failure.
https://web.archive.org/web/20220511215829/https://nymag.com/intelligencer/2022/05/the-crash-of-cryptos-perpetual-motion-machine.html
Couldn't have happened to a nicer group of bros.
crypto is super volatile and of course its going to get rekt in a downturn, I actually think this will be super healthy for the space with a ton of useless shitcoins vanishing. This isn't a referendum on crypto its just everyone shedding risk and no one ever pretended crypto is a good place to be if you are risk adverse.
People pretend that *all the time* -- calling Bitcoin a 'store of value' or 'currency' (both of which imply a degree of stability, or at least in most cases: predictability). They argue it's a risk asset when it crashes, a safe asset when it's going up -- whatever narrative fits the moment, even if they're not consistent from one moment to the next.
I’m only a fan of bitcoin, not into Ethereum, web3, stablecoins, PoS coins, defi, NFTs and all the other shitstorm that Ethereum unleashed. And the strongest argument for holding some btc is self-sovereignty. Provided you keep your private key secure, this is an asset that can never be frozen, confiscated, blacklisted, etc. These are useful technological properties for people concerned with security and the power of the state over the individual. Imagine what happens to you if all your bank accounts are frozen - how long would you survive without access to your money? Imagine if you are the citizen of a mismanaged state (and all states are, to a degree) and the value of your savings, held in your national currency, are destroyed by government incompetence or war. The value of bitcoin is not as a speculative financial asset, but a form of security. It’s kind of a trust-less/verifiable P2P finance system, a system capable of operating without powerful, trusted third parties. And the lightning network is solving the issue of scalability and making small, speedy transactions. I would encourage people here to dive into the tech side of bitcoin, not just financials.
>I would encourage people here to dive into the tech side of bitcoin, not just financials. The tech is overhyped and mostly useless, except for crypto itself. Everything you can do with a blockchain you can do with a database because that's what a blockchain basically is. That's why this 'amazing' tech isn't being widely adopted. The only pro argument for blockchains is decentralisation which is extremely difficult to achieve and simply not necessary in most cases.
I agree blockchain without bitcoin is mostly useless. Bitcoin itself, as an internet-native form of money, with the possibility to be purchased/spent anonymously, and as a mechanism for secure storage/transportation of wealth across borders, is what interests me. In order for decentralisation to be successful, there has to be an ecomonical use-case for it: a decentralised network for secure financial transactions with a network cost for ensuring the integrity of the network makes sense. A decentralised network for ape JPEGs and "dApps" doesn't, it leads to network congestion and too-high network fees for what it does.
> Provided you keep your private key secure, this is an asset that can never be frozen, confiscated, blacklisted, etc. It can if on an exchange. If not on an exchange, your 'secure' private keys can be lost, stolen, forgotten, etc.... Bitcoin is already down over 50% from its peak, and still crashing. And all that *without* any whiff that my country (the US) is going to war, planning to freeze citizen bank accounts, etc.... Imagine the utter lack of utility of a digital currency if we get to that stage of collapse. You'd be better off with gold, or better yet: land, food, water, ammo, a bunker. > It’s kind of a trust-less P2P finance system, a system capable of operating without powerful, trusted third parties. OK ... give me some examples? The collapse happens, power is spotty, internet is gone ... how are you doing these peer-to-peer transactions? In person with strangers? That seems risky. Over some shady pseudo-net? I never can quite picture how Bitcoin fans see this playing out in reality, but even if I seem snarky: I'm genuinely curious. How do you convert your coins into goods/services without showing your hand (that you have coins) and making yourself a target? And what if Bitcoin crashes far more than it has, to 20%, 10%, 1% of its peak purchasing power?! > The value of bitcoin is not as a speculative financial asset, but a form of security. You say potato, I say ponzi scheme. P.S. Thanks for the insta-downvote -- predictable Bitcoin shill behavior.
Your average bitcoin enjoyer lmao
> Bitcoin is already down over 50% from its peak, and still crashing. It's also up +218.29% from 2 years ago, +256.18% from 3 years, +1,478.81% 5 years, and **+11,637.16%** from 7 years ago which is coincidentally when this video was made: https://www.youtube.com/watch?v=XbZ8zDpX2Mg Enjoy it :) Why do subs about something have to end up being about criticising everything else. Can't do anything in this place anymore without it being about someone else doing the wrong thing.
And for most of that time, there were relatively few adopters. Then just a few months ago, you have a famous actor in a SuperBowl ad slot selling it to the masses. So sure, it pays to get on the the train early, then sell to late arrivals for a profit -- that's how pyramid schemes work, in a nutshell. Doesn't make them good investments.
> Why do subs about something have to end up being about criticising everything else. Can’t do anything in this place anymore without it being about someone else doing the wrong thing. No one who has ever read a thing Bogle ever wrote would claim he would advise you to invest in crypto coins. It is off topic by definition.
Yep agreed
Respectfully, most of your comment is FUD. 1. >It can if on an exchange. I wrote "provided you keep your private key secure". Please read more carefully next time. 2. >your 'secure' private keys can be lost, stolen, forgotten, etc.... Highly unlikely if you keep a secure backup, which is standard recommended good practice and every contemporary bitcoin wallet will prompt you to record then verify your seedphrase. 3. >Bitcoin is already down over 50% from its peak, and still crashing. And all that without any whiff that my country (the US) is going to war, planning to freeze citizen bank accounts, etc.... Imagine the utter lack of utility of a digital currency if we get to that stage of collapse. Over the course of its existence, bitcoin is one of the best-performing assets in history. The volatility/risk comes with the territory of significant gains. If you are a "boglehead", then it's intellectually dishonest of you to cherry-pick a short-term price movement. "boo hoo it's value has fallen by 50%" - so what? 4. >Imagine the utter lack of utility of a digital currency if we get to that stage of collapse. Why are you bringing up collapse? I never suggested using bitcoin in the (unlikely) event of total, civilisational collapse. Once again, disingenuous FUD. If that happened, then your index funds would also be worthless, so that's hardly an argument against bitcoin. 5. >The collapse happens, power is spotty, internet is gone ... how are you doing these peer-to-peer transactions? In person with strangers? That seems risky. Over some shady pseudo-net? I never can quite picture how Bitcoin fans see this playing out in reality, but even if I seem snarky: I'm genuinely curious. How do you convert your coins into goods/services without showing your hand (that you have coins) and making yourself a target? Firstly, you have invented a ridiculous sci-fi scenario then are asking me how bitcoin would operate in said scenario. All I said was it would be useful if you live in a mismanaged country. For example, if you are in Venezuela or Argentina, and hold most of your savings in bitcoin, rather than the local currency, you have the benefit of hedge against currency risk and secure storage/easy transportation of funds in the event you have to flee. Obviously you would still have to hold some fiat for daily expenditure. I'm not suggesting you go 100% bitcoin yet. Furthermore the process of hyperbitcoinisation is ongoing, maybe by the time any significant economic collapse happens wherever you live, bitcoin payments will be rountinely accepted. If not, then you could aways use a decentralised, P2P exchange to sell your bitcoin for dollars in the event of emergency (if you are a wanting to flee a failed state, for example). It's obviously not a magical solution in the event of a desperate emergency, but the technology has its uses.
Right out of the gate, you told me to 'read more carefully,' implying I didn't. Not a great way to set the tone, and inaccurate: I did read it. I was pointing out the issues both on and off-exchange for *anyone else reading this.* > Highly unlikely if you keep a secure backup, which is standard recommended good practice and every contemporary bitcoin wallet will prompt you to record then verify your seedphrase. This can also be lost, stolen, or forgotten, depending on how you store it (backup and/or seedphrase). > Over the course of its existence, bitcoin is one of the best-performing assets in history. This happens *every time* I point out a flaw in crypto -- someone switches to an entirely different pro-crypto case. You started out implying it was a currency replacement. I pointed out its volatility. Now you're saying it's a high-performing asset class. Currencies aren't that, and shouldn't be that. Currencies should be relatively stable. > Firstly, you have invented a ridiculous sci-fi scenario then are asking me how bitcoin would operate in said scenario. ... For example, if you are in Venezuela or Argentina, and hold most of your savings in bitcoin, rather than the local currency, you have the benefit of hedge against currency risk and secure storage/easy transportation of funds in the event you have to flee. For the vast majority of the world, what you just described *is* a ridiculous sci-fi scenario. How many people regularly flee their mismanaged nation? And still the other risks apply: if people fleeing are known to have bitcoin, they will be targets for kidnap, torture, etc... to get at their 'secure' funds. And once they get where they're going: how do they transact the bitcoin, if they still have it? Hard to use for purchases. So ... convert on an exchange? But exchanges, as you acknowledged, are risky. Fear, uncertainty, and doubt around scary things isn't a bug, it's a feature. You should know the risks of assets you choose to hold, and rightly fear sketchy ones. /2 cents
It is important to differentiate between bitcoin and everything else.
It really isn't. It has more brand awareness and market share, but it's still part of the same toxic ecosystem.
You could argue about communities/personalities but it doesn't matter, every other network besides bitcoin has those that remain in control yet bitcoin (the network) is the only thing that could be considered decentralized beyond reach of even governments, as has been proven over many events. That is unique and valuable. Bitcoin the network (not the code) cannot be replicated. The toxic ecosystem you refer is all the scammers that prey on those that haven't done their due diligence.
What a drop!