Cryptocurrencies

O-Trap Chief Shenanigans Officer
18,909 posts 140 reps Joined Nov 2009
Tue, May 5, 2020 2:29 AM
posted by gut

Typo - Bitcoin is not a monopoly.  I thought that would have been pretty clear - it's a pretty simple definition.

But, actually, sovereign currencies ARE a local monopoly, REAL demand for which is created by requiring taxes to be paid in that local currency.  And there's also the fact that, if they are ever so inclined, governments can completely squash crypto.  If you punish investment gains in crypto, or even make holding it illegal, then that chases out the speculators propping up the price.  When it's worth less than $200, that chases out most of the rest of the HOLDR and retail crowd.

Sovereign currency is indeed a monopoly, thereby undercutting any competition that allows those using it to determine which is most ideal.

However, while governments might make crypto illegal, but that would be functionally unenforceable.  Frankly, they'd be better off creating a competing one.  Banning crypto would be akin to banning saving '.gif' files, which could be stored locally or remotely and for which there isn't an identity linked to any trail (or, rather, it's fairly easy to prevent one).

It would probably dissuade the HODLers, and it would certainly ward off the pumpers, but if anything, I think that would be better for its long-term sustainability anyway.  Actually, I'd even argue that driving it underground would prompt more long-term tenability, because it would essentially force crypto to be use as intended.  Investment gains in crypto that are subsequently spent as crypto would be harder to punish, because there'd be no official paper trail linking them to a person.  Just a transaction number and a couple anonymous wallets.

Holding would be even harder to punish.
 

posted by gut

No, I meant it's literally a commodity, one that would have value if it were rare or limited or had some physical quality (like art) or productive value that might give it value.  Every company in the world could come out with their own crypto if they wanted to.  And, in a way, many already have (it's called credit).

Dirt - actual dirt - has more intrinsic value than crypto.  Blockchain has value, but your holding of Bitcoin confers absolutely no claim on that technology,  The problem is you don't need to buy or own Bitcoin to get that technology.  That's what it means to have no intrinsic value.  The brand theoretically has value, but that assumes it could be sold or bought out, which isn't remotely practical.

Credit isn't remotely the same thing.  It's advances of USD with an agreement to pay back (usually with interest).

You'd be closer by comparing it to on-site or in-game tokens, which often do have an exchange rate, though the difference is that they're typically not able to be transferred or used off-site/out-of-game.

As for whether or not every company in the world could come out with their own crypto ... well, yeah.  They could.  And?

Your description of the requirements for something to have value seem to be that it either has to have mass (like dirt), or it has to be privately owned (and thus can be sold or bought out).  Are those indeed the exclusive parameters of value to which you adhere?  Do you not believe anything digital and decentralized can have value, whether intrinsic or perceived?
 

posted by gut

Anyway, explain to me why crypto pegged to gold or, ideally, backed by gold isn't vastly superior to Bitcoin?

It would probably have to be pegged, otherwise as it gets more popular that nominal gold backing becomes relatively worthless.  Ones that charge a transaction fee to invest in additional gold are probably the solution to most of the inherent issues with crypto.  But that would be a difficult thing to execute and be transparent about.

Well, Bitcoin backed by gold would be redundant.  A fixed quantity backed by another nearly fixed quantity seems silly.  The value of a backed currency is to link the theoretically unlimited centralized quantity to a commodity with a limited quantity, limiting inflation.  Cryptocurrencies like BTC (and like most of the more popular ones) are finite in volume from the outset, so it becomes unnecessary for it to be backed.

For cryptocurrency in any form to work, two things ultimately have to happen:
(a) People have to have a reason to want to use it as a currency, and
(b) people have to trust that they can spend it.

(b) isn't going to happen without (a), and there's still a bottleneck at (a).  Despite the added anonymity along the same lines as cash, not being charged interest for using it, and the near-immediate updates to accounts/wallets, people continue to view them as investments.

If your issue with them having value is in regard to them being used as a substantial investment strategy, I agree with you more than you might expect.  I don't think crypto makes for a sound, predictable investment strategy at all.  Not that it might not turn out to be good if you get in and out at the right times (like tulips or Beanie Babies), but that the behavior that seeks a predictable profit off it is the very behavior that keeps it so volatile.  Cryptocurrencies lack the mass of physical commodities, like water, corn, and oil.  Meanwhile, they also lack the historical precedent of the sovereign currencies on the ForEx market.

But as an actual currency, I think the decentralized, largely anonymous nature of them, without needing to sacrifice ease, gives them a certain utility as a currency, provided enough people actually decide to use them that way, which then prompts more places to accept them.

queencitybuckeye Senior Member
8,068 posts 111 reps Joined Nov 2009
Tue, May 5, 2020 6:51 AM

The one thing crypto does for me is to make a discussion of money somewhat interesting. Otherwise, an economic discussion of money is similar to getting to sit down with Carroll Shelby and wanting to talk about lug nuts. It's just not that important a topic as compared to many other things in the field.

Automatik Senior Member
15,737 posts 94 reps Joined Nov 2009
Fri, Feb 19, 2021 4:32 PM

Sooo who's rich?!


I'm not. After just starting with BTC to fuck around. I've cashed out my initial investment and still up 2k.

I really want to just sell it all and toss it at this upcoming car down payment. Or does it continue to soar? 

justincredible Honorable Admin
37,969 posts 197 reps Joined Nov 2009
Fri, Feb 19, 2021 4:37 PM

Don't sell unless you absolutely have to.

justincredible Honorable Admin
37,969 posts 197 reps Joined Nov 2009
Fri, Feb 19, 2021 4:41 PM

There will be dips, but I think the days of 80% corrections are gone. I think we'll see ~$100k before the next "big" correction (30% or so), and I don't think it's too far off.

justincredible Honorable Admin
37,969 posts 197 reps Joined Nov 2009
Fri, Feb 19, 2021 4:41 PM

THIS IS NOT FINANCIAL ADVICE.

iclfan2 Reppin' the 330/216/843
9,465 posts 81 reps Joined Nov 2009
Fri, Feb 19, 2021 4:42 PM

Never got into it, fail on my part. Has anyone seen these new blockchain NFT assets gaining in popularity? TopShots with the NBA are selling digitally owned highlights of plays. Some plays have been bought for $100k. They are also using NFT's with digital art, where you own the artwork but it is only online. Way over my head but an interesting concept. Article about it:

https://luckymaverick.substack.com/p/nft

justincredible Honorable Admin
37,969 posts 197 reps Joined Nov 2009
Fri, Feb 19, 2021 4:42 PM

It only took bitcoin 12 years to become a trillion dollar asset. The first trillion was the hardest, the next 99 will be a breeze. :)

justincredible Honorable Admin
37,969 posts 197 reps Joined Nov 2009
Fri, Feb 19, 2021 4:43 PM
posted by iclfan2

Never got into it, fail on my part. Has anyone seen these new blockchain NFT assets gaining in popularity? TopShots with the NBA are selling digitally owned highlights of plays. Some plays have been bought for $100k. They are also using NFT's with digital art, where you own the artwork but it is only online. Way over my head but an interesting concept. Article about it:

https://luckymaverick.substack.com/p/nft

NFTs are so fucking stupid, imo.

justincredible Honorable Admin
37,969 posts 197 reps Joined Nov 2009
Mon, Feb 22, 2021 9:19 AM
posted by justincredible

There will be dips, but I think the days of 80% corrections are gone. I think we'll see ~$100k before the next "big" correction (30% or so), and I don't think it's too far off.

Down about 15% this morning from a high of $58k to $48k. Time to buy the dip.

justincredible Honorable Admin
37,969 posts 197 reps Joined Nov 2009
Mon, Feb 22, 2021 10:05 AM

Big correction back to $54k. 

majorspark Senior Member
5,459 posts 29 reps Joined Nov 2009
Wed, Feb 24, 2021 3:12 PM

Has your wife filed yet?

justincredible Honorable Admin
37,969 posts 197 reps Joined Nov 2009
Wed, Feb 24, 2021 3:38 PM

lol, she gives me shit for not buying a lot more when it was under $20k.

justincredible Honorable Admin
37,969 posts 197 reps Joined Nov 2009
Wed, Feb 24, 2021 3:42 PM

That said, I think she is annoyed that I'm unwilling to take any profits, basically, ever. But at least she understands why.

Verbal Kint Senior Member
1,062 posts 15 reps Joined Jul 2017
Fri, Feb 26, 2021 8:37 AM

Fun idea.  All currency is fiat except commodities. It is all about trust.

justincredible Honorable Admin
37,969 posts 197 reps Joined Nov 2009
Fri, Feb 26, 2021 9:03 AM

Bitcoin is trustless. 

Fiat is issued by a central authority on whatever their whims desire. Bitcoin is issued by competitive "mining", on a programmed and transparent schedule, with no single entity in control. 

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