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The ASR Cryptocurrency thread

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digicidal

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Thought Experiment:
Think about famous, traditional ponzi schemes and also pyramid membership/sales enterprises. Why do they fail? And very predictably too? Because they are, intrinsically and by definition, doomed by rather simple constraints. As they become successful the need for more contributors accelerates exactly as the availability rapidly diminishes. It's comical as well as tragic. But they always have appeal. And the instigators and early players do indeed get rich. But the instigators and promoters also risk serious criminal liability, imprisonment & loss of all assets. The big problem: when you need exponential growth you run out of people very fast, or too soon anyway. Most people have a clue & might spot one of these schemes and avoid it.
Here is the true genius of crypto currency: It extends the tail almost indefinitely. As it requires more contributors the algorithms exponentially ratchet down the ability to contribute, while making the possibility of gain seem more and more attractive and lucrative and while making the end point ever more difficult to predict, so continually postponing the day of reckoning. It's a cosmic joke. Maybe the best yet, after Eve & the Serpent. If Bernie Madoff knew how to code and considered the possibility of being able to exponentially postpone doomsday he never would have been caught.
What do you see as the fundamental difference between a stock certificate for a company like Facebook or Twitter and a cryptocurrency like Bitcoin? How about a painting? Collectable cards?

Sure you can argue for some level of intrinsic value... but in the case of the last two it's such a minimal amount in comparison to the "demand premium" as to effectively be zero. Now how about credit default swaps? Or even better, what about uncovered "naked" calls? While the underlying instrument might have some value - the contract itself is literally just a bet with no actual collateral other than a promise.

While you can argue fiscal policy and macroeconomic theory to justify almost anything these days... I think it would be hard (if not impossible) to divorce the ~$15T in consumer debt and ~$22T in federal debt held by the public by various means from our "dominance" and "security". I would argue that our entire economy is a literal ponzi scheme... i.e. that if we don't expand our population and/or number and value of financial instruments at nearly an exponential rate.... then there is nothing but IOU's for the bagholders at the end (which is to say almost all of us). ;)
 

Chromatischism

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The FT says the Bitcoin flash crash was because 1 or 2 whales sold off. It wasn't a market reaction. 80% of Bitcoin owners have never sold so the market is illiquid. This makes it susceptible to manipulation.
Large sellers triggered liquidations of heavily over-leveraged positions, which further drew down the whole market. See the chart here:

1639302276441.png


They play these kinds of games on a regular basis, but this went too far. Look at that giant red wick down on the 4th.

Bitcoin is normally remarkably stable when things like this aren't happening.

They really need to reduce the amount of leverage people can use. It's ridiculous.

The market seems to have calmed down so hopefully we can shake this off and continue on.
 

Chromatischism

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No. It's endlessly volatile because it has absolutely zero relationship with human commercial activity.
Wake up call: blockchain technology employs thousands of specialized software developers.

I'm sure Parity employs a "few" people working on Web 3.0 blockchain Polkadot, as does the Solana Foundation. The recent Solana Ignition Hackathon drew nearly 6,000 participants. But I'm sure none of this has any relationship to economic activity.
 

Chromatischism

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Think about famous, traditional ponzi schemes and also pyramid membership/sales enterprises. Why do they fail? And very predictably too? Because they are, intrinsically and by definition, doomed by rather simple constraints. As they become successful the need for more contributors accelerates exactly as the availability rapidly diminishes. It's comical as well as tragic. But they always have appeal. And the instigators and early players do indeed get rich. But the instigators and promoters also risk serious criminal liability, imprisonment & loss of all assets. The big problem: when you need exponential growth you run out of people very fast, or too soon anyway. Most people have a clue & might spot one of these schemes and avoid it.
Just admit that you don't understand how cryptocurrency works. It would save a lot of typing.

For Bitcoin in particular, since that's what you seem to be speaking of – here is where the value is:

Traits of Money-1.png
 

snowsurfer

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I am not interested in high risk/high rewards type of speculations that requires lots of time to track.

I hope you can learn from history a little further back. Look at all those years of up trends before 2000 tech burst and 2008 housing burst.

I know of one coworker who told me he lost all his money during tech burst and he couldn't recover more than 10 years later.

I have a neighbor who got into flipping houses near the 2008 burst and tie up his family member"s money for a long time. His family member ended up had to borrow money to support day to day living for many months.

Even for bitcoin, just look at 2017 to 2019.

So yeah, indeed, look at history and learn from it.
I have taken out multiple times what I invested over the years. A literal crash to absolute zero right now would not be a catostrophe for me at all. I have already multiplied by a considerable factor. Watching charts at this stage is popcorn and diet soda time for me. I would have not made this in three lifetimes without crypto, but to each his own. I have many around me who have been telling me the same thing over the years and are now pulling their hair out.
By the way, just to put your examples of your neighbors and coworkers into perspective: I have never, ever invested in crypto what I couldn't afford to lose. I have never taken a loan of any kind to invest. I have never put myself or my family in danger with my investments. Your neighbors and coworkers lack common sense, I'm afraid.
 

Pdxwayne

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I have taken out multiple times what I invested over the years. A literal crash to absolute zero right now would not be a catostrophe for me at all. I have already multiplied by a considerable factor. Watching charts at this stage is popcorn and diet soda time for me. I would have not made this in three lifetimes without crypto, but to each his own. I have many around me who have been telling me the same thing over the years and are now pulling their hair out.
By the way, just to put your examples of your neighbors and coworkers into perspective: I have never, ever invested in crypto what I couldn't afford to lose. I have never taken a loan of any kind to invest. I have never put myself or my family in danger with my investments. Your neighbors and coworkers lack common sense, I'm afraid.
Good for you.

I do wonder.

How many % of people who are in crypto now are like you?

How many % of people who get into crypto are like my neighbor and coworkers?
 

snowsurfer

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Good for you.

I do wonder.

How many % of people who are in crypto now are like you?

How many % of people who get into crypto are like my neighbor and coworkers?

I do not have answers to these questions, but I can say that no one who followed the old adage of "DO NOT INVEST WHAT YOU CANNOT LOSE" is suffering their predicament now.

I see where you're coming from but these questions and the related answers are completely irrelevant. The answer is what, that the majority of people cannot be trusted with walking and breathing at the same time, let alone investing into anything? Well hello, what a discovery. How is this even related to crypto?

A quick edit to clarify that I am not holding anyone at gunpoint making them invest into crypto, I even stopped talking about it at all in my everyday life, I've grown tired of hearing the same old day in day out. Everyone needs to do whatever they please with their money.
 

Pdxwayne

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I do not have answers to these questions, but I can say that no one who followed the old adage of "DO NOT INVEST WHAT YOU CANNOT LOSE" is suffering their predicament now.

I see where you're coming from but these questions and the related answers are completely irrelevant. The answer is what, that the majority of people cannot be trusted with walking and breathing at the same time, let alone investing into anything? Well hello, what a discovery. How is this even related to crypto?

A quick edit to clarify that I am not holding anyone at gunpoint making them invest into crypto, I even stopped talking about it at all in my everyday life, I've grown tired of hearing the same old day in day out. Everyone needs to do whatever they please with their money.
It is relevant in a sense that it is another way for those people to "get rich quick".

Sure, there are people who win lotteries. But how many % of those who played lotteries could consistently win?

My older brother and many other he knew who invested into "mining club" scam back in 2017 are experience business people. What chances do you think the neibors and coworkers have, getting into crypto, hoping to get rich fast?
 

snowsurfer

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It is relevant in a sense that it is another way for those people to "get rich quick".

Sure, there are people who win lotteries. But how many % of those who played lotteries could consistently win?

My older brother and many other he knew who invested into "mining club" scam back in 2017 are experience business people. What chances do you think the neibors and coworkers have, getting into crypto, hoping to get rich fast?
Chances of getting rich fast are almost zero at this point. But getting solid returns and improving their future is well within reach. That is exactly the problem with so many people who get into this, that they expect to "get rich fast". You see, investing in crypto has also taught me many other things. As an example, before crypto I would just relentlessly buy whatever I could. No loans but still throwing away money left and right. I have now learnt to put my purchases into perspective. So when I wanted a set of Kii Threes to replace my cheap JBL LSR305s, I instead bought Ethereum with the 8K€. That 8K is now 24K€. This was seven months ago. I have dozens of similar anecdotes. It adds up. I will eventually have the Kiis too. In due time.
 

Pdxwayne

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Chances of getting rich fast are almost zero at this point. But getting solid returns and improving their future is well within reach. That is exactly the problem with so many people who get into this, that they expect to "get rich fast". You see, investing in crypto has also taught me many other things. As an example, before crypto I would just relentlessly buy whatever I could. No loans but still throwing away money left and right. I have now learnt to put my purchases into perspective. So when I wanted a set of Kii Threes to replace my cheap JBL LSR305s, I instead bought Ethereum with the 8K€. That 8K is now 24K€. This was seven months ago. I have dozens of similar anecdotes. It adds up. I will eventually have the Kiis too. In due time.
Since you seems to know what you are doing and not get in over your head, I really wish you would do well.
 

Chromatischism

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Chances of getting rich fast are almost zero at this point. But getting solid returns and improving their future is well within reach. That is exactly the problem with so many people who get into this, that they expect to "get rich fast". You see, investing in crypto has also taught me many other things. As an example, before crypto I would just relentlessly buy whatever I could. No loans but still throwing away money left and right. I have now learnt to put my purchases into perspective. So when I wanted a set of Kii Threes to replace my cheap JBL LSR305s, I instead bought Ethereum with the 8K€. That 8K is now 24K€. This was seven months ago. I have dozens of similar anecdotes. It adds up. I will eventually have the Kiis too. In due time.
Delayed gratification is one of the hardest concepts for humans.
 

julian_hughes

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All transactions on the blockchain are transparent and viewable by the public.
You know that's not what was meant. You reply is disingenuous. My point was very obviously the attraction of cryptocurrency to people who believe it is the vital element which facilitates their illegal financial activity.
 

julian_hughes

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Wake up call: blockchain technology employs thousands of specialized software developers.

I'm sure Parity employs a "few" people working on Web 3.0 blockchain Polkadot, as does the Solana Foundation. The recent Solana Ignition Hackathon drew nearly 6,000 participants. But I'm sure none of this has any relationship to economic activity.
Arguing that crypto is tied to real production because it requires its own maintenance is laughably desperate. Fiat currencies *are* related to real world economic activity beyond the printing presses and mints! Because they totally depend on governments collecting tax revenue. Cryptocurrency depends on a) people hoping to get rich without producing anything, and without even investing in real world economic activity. b) requiring a tool to hide/anonymize transactions because the funds were derived from illegal activity/are going to fund illegal activity/are being hidden from authorities who would tax them.
 

julian_hughes

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Just admit that you don't understand how cryptocurrency works. It would save a lot of typing.

For Bitcoin in particular, since that's what you seem to be speaking of – here is where the value is:

View attachment 171994
Oooh! A chart! Proves everything. Funniest and lamest thing so far, thank you for that and, of course, for the insult. That always seal the argument doesn't it?
 

mansr

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Wake up call: blockchain technology employs thousands of specialized software developers.

I'm sure Parity employs a "few" people working on Web 3.0 blockchain Polkadot, as does the Solana Foundation. The recent Solana Ignition Hackathon drew nearly 6,000 participants. But I'm sure none of this has any relationship to economic activity.
I'm sure Bernie Madoff had employees too.
 

Chromatischism

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You know that's not what was meant. You reply is disingenuous. My point was very obviously the attraction of cryptocurrency to people who believe it is the vital element which facilitates their illegal financial activity.
My reply was not disingenuous. You said people were conducting secret transactions. If that's not what you meant, you should be more clear. What are we supposed to do, read your thoughts?

By and large, most illicit activity is done with cash since it can not be tracked. Should we stop using cash?
 

Chromatischism

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Arguing that crypto is tied to real production because it requires its own maintenance is laughably desperate. Fiat currencies *are* related to real world economic activity beyond the printing presses and mints! Because they totally depend on governments collecting tax revenue. Cryptocurrency depends on a) people hoping to get rich without producing anything, and without even investing in real world economic activity. b) requiring a tool to hide/anonymize transactions because the funds were derived from illegal activity/are going to fund illegal activity/are being hidden from authorities who would tax them.
Crypto is a store of value and a medium of exchange. It's financial technology. I guess we better stop thinking the tech companies aren't producing anything of value because the software that runs our world needs to be built and maintained.
 
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