You ignored what I said: "Common sense. If you don't have that, quit reading, now, it's a requirement for this. "
DrMrLordX
Lifer
- Apr 27, 2000
- 20,834
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Good question! Usually this happens when BTC HODLers start looking for diversification.
I hope that is soon. i bought eth when it was at 940. been holding for almost 2 years. ive lost count
DrMrLordX
Lifer
- Apr 27, 2000
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Ouch. ETH actually went up during the recent BTC bull while a lot of alts did not. But you may want to keep your eye on when Binance opens their U.S. exchange and see what they have on offer when that happens. That will probably move the market at little . . . maybe a lot.
As far as ETH itself goes, watch for PoS to come online in the next few years (finally!). That will cause ETH movement.
The ultimate 'real' value of cyber currency, it seems to me, is zero. Its values comes only from people agreeing to say they value it. The only thing that can get away with that is actual national paper currency, and many of them struggle to do so.
So, that's the game - try to make money by getting a valueless thing - let's call it a tulip - hoping you got it before even more people choose to value it, increasing its price, so you take their money. But at some point, everyone who is holding the tulips who spent money on them, has their real value, zero.
What a zero sum game, not creating any real value. It's not even like you made, say, a painting that has highly variable value. It's entirely a 'market of suckers', even though some of them do come out ahead by taking money from even bigger suckers.
I don't mean this to provoke fans of the product as the purpose - but to try to at least say, hopefully, the product can be discussed for what it is, and people are approaching it this way, whether they choose to play that game or not?
That's not to say that some don't get 'fooled' into the product, and suffer from it (or sometimes benefit from it). And that they don't deserve sympathy if they do get harmed. But I think it's better for people to understand the product to decide whether they want to buy it.
A lot of the attraction, it seems to me, came from being able to get it 'free'. Hey, this is worth money? Why not 'mine' some? from there - hey, it's worth money, why not invest in better equipment to mine better? From there - hey, it's worth money, why not 'invest' in it? But all that value was simply from someone saying they would choose to spend 'real' money on it.
So, that's the game - try to make money by getting a valueless thing - let's call it a tulip - hoping you got it before even more people choose to value it, increasing its price, so you take their money. But at some point, everyone who is holding the tulips who spent money on them, has their real value, zero.
What a zero sum game, not creating any real value. It's not even like you made, say, a painting that has highly variable value. It's entirely a 'market of suckers', even though some of them do come out ahead by taking money from even bigger suckers.
I don't mean this to provoke fans of the product as the purpose - but to try to at least say, hopefully, the product can be discussed for what it is, and people are approaching it this way, whether they choose to play that game or not?
That's not to say that some don't get 'fooled' into the product, and suffer from it (or sometimes benefit from it). And that they don't deserve sympathy if they do get harmed. But I think it's better for people to understand the product to decide whether they want to buy it.
A lot of the attraction, it seems to me, came from being able to get it 'free'. Hey, this is worth money? Why not 'mine' some? from there - hey, it's worth money, why not invest in better equipment to mine better? From there - hey, it's worth money, why not 'invest' in it? But all that value was simply from someone saying they would choose to spend 'real' money on it.
VirtualLarry
No Lifer
- Aug 25, 2001
- 55,528
- 9,525
- 126
Craig, at least with current PoW schemes for mining, the tokens are not "value-less". Actual people ran actual computers that used actual electricity that cost actual money to pay for. So to state as you did that those token "had no real value", is being very disingenuous of you.
IronWing
No Lifer
- Jul 20, 2001
- 66,734
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Sunk costs don’t create value. The currency is only worth what people are willing to trade for it. The cost of producing a bitcoin simply doesn’t factor in the value of bitcoin. This can be easily demonstrated in that the earliest and cheapest bitcoins produced have exactly the same value as the latest, most expensively produced bitcoin.
Government currency has an advantage that the issuing government can demand that taxes be paid using only the government’s own currency. Strong governments can also make and enforce rules like, This note is legal tender for all debts public and private.” This creates a market for the currency. Privately issued currencies like bitcoin have no natural market.
The fact they had real cost doesn't mean they have real value. As for your last comment - welcome to ignore.
DrMrLordX
Lifer
- Apr 27, 2000
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The value of crypto as a currency (rather than a utility token) is in how much money nation-states, banks, and other parties (through secondary costs) can avoid spending by doing away with existing spending mechanisms. Hard cash has to be trucked around on a fairly regular basis. Money orders/money wires, credit card systems, etc. have associated costs.
As much as I dislike XRP, that simple token can be used as an alternative to at least SWIFT (which is upgrading itself) and other payment systems, assuming you trust XRP's corporate master to resolve transactions fairly. And there are better options than that coming down the pike. There's a reason why Facebook and Walmart are looking at crypto. They may just not be looking at the exact token you happen to favor. All these open-source crypto projects are going to allow individual companies to roll their own payment systems, within certain limitations. The question is, who will tie together all those payment systems?
As much as I dislike XRP, that simple token can be used as an alternative to at least SWIFT (which is upgrading itself) and other payment systems, assuming you trust XRP's corporate master to resolve transactions fairly. And there are better options than that coming down the pike. There's a reason why Facebook and Walmart are looking at crypto. They may just not be looking at the exact token you happen to favor. All these open-source crypto projects are going to allow individual companies to roll their own payment systems, within certain limitations. The question is, who will tie together all those payment systems?
Yes, the technology behind crypto is interesting and I can imagine it having a lot of uses. It's these speculative currency investments to date I was commenting on.
DrMrLordX
Lifer
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Which is fair. BTC itself is borderline useless as a payment mechanism. I don't care what anyone says about LN. Stablecoins are obviously necessary to make tokens like BTC more useful in payment systems. They may reduce tax exposure thanks to the bizarre IRS guideline for crypto from 2014 treating crypto as property for the purposes of all transactions.
And it will ultimately end up right back where it was before. There's nothing inherently better about cryptocurrency unless you're actively looking to bypass oversight, but that also inherently will cause problems of its own, such that its leading to oversight.
This is no different from when every company was trying to come up with its own payment system for online money transfers. Only now it requires a lot of resources with no guarantee you'll ever get anything out of it.
They're looking at crypto because its a buzz word and gives them some potential leverage. Same reason they created Wal-Mart Pay after Apple, Google, and everyone else started doing that and Facebook has been desperate to figure out a way to get people to start entering financial information on there (any which way they can).
DrMrLordX
Lifer
- Apr 27, 2000
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Not necesarily true. One of the selling points of the Ethereum blockchain (for example) was that a side-project called OmiseGO offered the prospect of payment resolutions at speeds 10-100x faster than Visa, Mastercard, or Federal Express. Costs would be less than a penny per transaction. The only issue was oracles, for which there are things like Chainlink (Facebook is already looking at Chainlink for their solution . . . I think). Right now the major payment processors want a small percentage. If the combination of ETH (underlying blockchain) + OMG (payment resolution via Plasma) + Chainlink (Oracles for converting between different currencies/tokens) offers you transactions at a real-world cost lower than that, at speeds at least as high (if not higher) than those offered by the major payment processors, then yes there's something inherently better.
The question is whether or not the payment processors will sit still and let that happen. The Ethereum Foundation has moved slowly enough that they've thrown away their first-actor advantage. Theoretically, Mastercard could implement the same things in their payment network and improve throughput. But they may not want a reduction in their fees.
Re: Craig234
You're correct. The only real value was in their ability to facilitate anonymous, online transactions. Silkroad, etc. And that anonymity no longer exists. The idea that crypto-currency was ever a viable investment vehicle is absurd, and laughable. It's been one big pump-and-dump looking for greater fools.
The technology behind it may have legitimate value for the banking industry, but the snake-oil sellers have already long-since lined up with their "block-chain" sales pitches and created so much empty hype that it's hard to know what's what.
Regardless, in the end the value of each and all of these individual coins will approach zero.
You're correct. The only real value was in their ability to facilitate anonymous, online transactions. Silkroad, etc. And that anonymity no longer exists. The idea that crypto-currency was ever a viable investment vehicle is absurd, and laughable. It's been one big pump-and-dump looking for greater fools.
The technology behind it may have legitimate value for the banking industry, but the snake-oil sellers have already long-since lined up with their "block-chain" sales pitches and created so much empty hype that it's hard to know what's what.
Regardless, in the end the value of each and all of these individual coins will approach zero.
njdevilsfan87
Platinum Member
- Apr 19, 2007
- 2,321
- 246
- 106
You must have forgotten how really valuable it is to have an asset class that offers wealth protection like physical bullion or cash under your bed, yet is far easier to store and transfer large amounts. No private key = no access. Seems that almost everyone misses this... Oh and the technology is meant to remove the need for banking. It's not there yet, but that's where it's trying to get between PoW, Smart Contracts, DEXes, etc.
Saw this on the San Francisco subway system: https://www.cryptoglobe.com/latest/2019/01/new-gemini-ad-campaign-calls-for-crypto-without-chaos/
DrMrLordX
Lifer
- Apr 27, 2000
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Not to mention you don't have to worry about the issuer of your currency suddenly deciding to devalue what you have by printing a bunch out of thin air.
VirtualLarry
No Lifer
- Aug 25, 2001
- 55,528
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VirtualLarry
No Lifer
- Aug 25, 2001
- 55,528
- 9,525
- 126
How Bitcoin Ends
Is the cryptocurrency just going to end up reenforcing the financial system it was supposed to disrupt?
Charmonium
Diamond Member
- May 15, 2015
- 7,486
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- 126
I've argued this for years. Although it's not true that they're aren't economic niches that cryptos might fill.
BTC first started to become valuable once the dark web started accepting it for settlement of illegal transactions.
So that was it's first use case - the natural market there was people who needed to obfuscate their identities.
But currently, I think that the vast amount of BTC trading clusters around 2 uses.
The first is for evading capital controls. Buy BTC in China with the money you need to move. Transfer each traunch to an entity like a bank in the target country. Once you cash out into the local currency, you're now free to use the money however you choose.
The other is to bypass a fiat currency that is either unstable or worthless - much the way the dollar has been used in such instances in the past.
Finally, some cryptos are optimized for cross boarder transfers. There is a vast need for a fast, secure and cheap method for executing such transfers.
DrMrLordX
Lifer
- Apr 27, 2000
- 20,834
- 9,947
- 136
Bitcoin futures just went live! Should be interesting to see how that works. So far it's a bloodbath!
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