The ASR Cryptocurrency thread

[Pdxwayne]

What you are describing is getting in over your head, and that will always lead to issues, regardless of the investment type.

I won't rule out trading crypto when I retire. The key is trading with "play" money.
; )

 

[Elkios]

What you are describing is getting in over your head, and that will always lead to issues, regardless of the investment type.

Never gamble what you are not prepared to loose it's that simple .

 

[julian_hughes]

I have created a new cryptocurrency. DesperatelySmallDickCoin. Buy Now! The way that DSDC acquires genuine, not at all fanciful, totally convertible, permanent, stable, value is if the people who promote it do so loudly everywhere and that they never admit that it is the only means of exchange ever invented which is intrinsically less valuable than the Weimar Papiermark, the fart in a jar, or the Russian Ruble circa 1989. You just have to believe. Believe! Belieeeeeeve. Beeeelieeve. Beeeliiiieeeveee. Don't worry about it not being backed by actual real world governments with actual real world tax revenue from actual real world entities who make actual products or provide actual services. Also don't think about actual real world enforcement capability of the states (OK not states, just some neckbeard whoopass nutjobs) backing the currency. That's all nonsense for idiots! What you need, desperately and immediately, is a new currency that has absolutely no relationship to goods manufactured, services offered, territory controlled, taxable revenue, military capability or any ability to underwrite debt. You know it makes sense. Buy DSDC now and watch your Desperately Small Dick Coin get entirely dickless!

 

[JuliaCoder]

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.

 

[julian_hughes]

No. It's endlessly volatile because it has absolutely zero relationship with human commercial activity. It's a *purely* speculative instrument. It's completely impossible as a cash replacement while also being so volatile as to render it useless as a store of value or as an investment. But it is perfect for gambling and not so bad as to be impossible for moving or converting illicit gains.

 

[Elkios]

I have created a new cryptocurrency. DesperatelySmallDickCoin. Buy Now! The way that DSDC acquires genuine, not at all fanciful, totally convertible, permanent, stable, value is if the people who promote it do so loudly everywhere and that they never admit that it is the only means of exchange ever invented which is intrinsically less valuable than the Weimar Papiermark, the fart in a jar, or the Russian Ruble circa 1989. You just have to believe. Believe! Belieeeeeeve. Beeeelieeve. Beeeliiiieeeveee. Don't worry about it not being backed by actual real world governments with actual real world tax revenue from actual real world entities who make actual products or provide actual services. Also don't think about actual real world enforcement capability of the states (OK not states, just some neckbeard whoopass nutjobs) backing the currency. That's all nonsense for idiots! What you need, desperately and immediately, is a new currency that has absolutely no relationship to goods manufactured, services offered, territory controlled, taxable revenue, military capability or any ability to underwrite debt. You know it makes sense. Buy DSDC now and watch your Desperately Small Dick Coin get entirely dickless!

lol . Brilliant.

 

[Blumlein 88]

No. It's endlessly volatile because it has absolutely zero relationship with human commercial activity. It's a *purely* speculative instrument. It's completely impossible as a cash replacement while also being so volatile as to render it useless as a store of value or as an investment. But it is perfect for gambling and not so bad as to be impossible for moving or converting illicit gains.

Oh the truly bothersome thing is our regular old Dollars, being a fiat currency are barely better than this at all. The main reason it is better is our faith that those who control the currency will do a good job of matching supply with liquidity needs. The current administration apparently thinks the money in the economy has no bearing on anything looking at their wishes to spend trillions upon trillions. My faith certainly hasn't been enhanced by them anyway.

 

[julian_hughes]

Thank you. But if I was that funny & brilliant for real I'd have invented it 15 years earlier and become a privacy obsessed genius with vast but non-convertible pseudo assets. And a funny name.

I've been trying to work out the difference(s) between classic Ponzi schemes & cryptocurrency. So far as I can tell there are only two.
1: by tying the value of a crypto coin to an exponentially increasingly expensive task/workload, the moment of collapse/exposure/total failure is postponed in ways hardly imagined possible by old school grifters & sharks.
2: that extraordinarily long tail is so long that it can give a plausible impression of permanence, despite extreme volatility, so actually offers some utility as a means of exchange for those who value the mere ability to exchange over real world value i e. people trying to convert assets secretly, where the secrecy is the enabling factor.

 

[julian_hughes]

Oh the truly bothersome thing is our regular old Dollars, being a fiat currency are barely better than this at all. The main reason it is better is our faith that those who control the currency will do a good job of matching supply with liquidity needs. The current administration apparently thinks the money in the economy has no bearing on anything looking at their wishes to spend trillions upon trillions. My faith certainly hasn't been enhanced by them anyway.

Dollars can be spent anywhere. They are also convertible and relatively (very!) stable. Same for £Sterling & €.

 

[digicidal]

So weird to consistently read the same arguments a decade later... I have done nothing but purchasing and selling real goods for BTC since 2012. I wonder why no one is as "passionate" in criticism of derivatives, default spreads, options, etc. as they are with cryptocurrencies? I hope at the very least they employ a fiduciary who is a non-commission, directly compensated financial analyst? It seems to me that religious thinking isn't a monopoly for "coiners" or whatever you want to call them.

Granted I never bought a pizza for nine figures... but I've got some furniture and other things that would have been six figures at current prices if I never used it. In a market where a search engine and online sales site are worth close to $2T each - mostly due to globalization of information and commerce demand - is it that hard to see value in a means of securely and nearly instantly exchanging monetary units without the fees and obstacles of traditional currency/banking services? Sure the rise seems fast... but in the same time a single auto manufacturer (who was initially called a scam and a disaster of an investment) is up a bit over 10K%.

Are there inherent problems with the crypto market? Yep. Tons of them. Does Visa/MC/Amex have something tangibly unique as a value-add beyond adoption and standardization? Not as far as I can tell. Data itself is the single greatest commodity in our world - worth far more than anything else at least as far as market capitalization is concerned.

Never going to solve all the world's problems, not likely (in current form at least) to replace traditional value exchange mechanisms... but if we never consider alternatives to "already solved" issues we'd still be conducting trade in shells or beads.

However, I certainly hope that those that believe that the USD is the safest way of holding wealth and conducting trade don't ever change their minds. Honestly, if central banking and the politics of debt slavery and fiat debasement provide security to you... then you don't need to investigate alternatives. I however, do not share your faith or enthusiasm for the "traditional models" (despite being forced to participate in them) and I will happily research, consider, and cautiously adopt any reasonable options I can find outside them.

 

[mansr]

Who remembers https://ponzicoin.co/?

 

[Elkios]

Thank you. But if I was that funny & brilliant for real I'd have invented it 15 years earlier and become a privacy obsessed genius with vast but non-convertible pseudo assets. And a funny name.

I've been trying to work out the difference(s) between classic Ponzi schemes & cryptocurrency. So far as I can tell there are only two.
1: by tying the value of a crypto coin to an exponentially increasingly expensive task/workload, the moment of collapse/exposure/total failure is postponed in ways hardly imagined possible by old school grifters & sharks.
2: that extraordinarily long tail is so long that it can give a plausible impression of permanence, despite extreme volatility, so actually offers some utility as a means of exchange for those who value the mere ability to exchange over real world value i e. people trying to convert assets secretly, where the secrecy is the enabling factor.

The world uses us so maybe we are quietly laughing. If it makes money just do it . Heck I have lost out but I don't care . I have made more than lost so far . I surf and some rides are great other's end with a wipeout some more hideous than others. So far the good is still in front on both count's by a wide margin. We are all currently printing $ on this lovely disorientated Planet.

 

[Blumlein 88]

Dollars can be spent anywhere. They are also convertible and relatively (very!) stable. Same for £Sterling & €.

Ever tried to spend a dollar (as in a paper dollar) in Costa Rica. They are paranoid about counterfeiting. If it doesn't look pristine, they aren't taking it.

 

[julian_hughes]

The difference between crytpo and instruments based in fiat currencies is that the fiat currencies are backed by entities (typically sovereign states or unions of same) who are credible. They control their money supply. People and entities who make stuff and who offer services that others value trust and accept these fiat currencies.
Because a person gets in early on a Ponzi scheme and derives real profit from it does not mean it's a wonderful thing!

 

[julian_hughes]

Ever tried to spend a dollar (as in a paper dollar) in Costa Rica. They are paranoid about counterfeiting. If it doesn't look pristine, they aren't taking it.

Lots of countries insist on pristine bank notes, no marks, no tears. It's quite normal outside the EU and Anglosphere.

 

[digicidal]

Dollars can be spent anywhere. They are also convertible and relatively (very!) stable. Same for £Sterling & €.

Yes they are stable... the problem with USD is both the direction they are stable in... as well as the fact that much of that stability & ubiquity could also be considered to be based upon a ponzi scheme of sorts.

 

[digicidal]

Because a person gets in early on a Ponzi scheme and derives real profit from it does not mean it's a wonderful thing!

That's what I tell my parents every time they bring up Medicare and Social Security.

 

[julian_hughes]

Yes they are stable... the problem with USD is both the direction they are stable in... as well as the fact that much of that stability & ubiquity could also be considered to be based upon a ponzi scheme of sorts.

Economic power and resulting/concomitant diplomatic and military power have no relationship to Ponzi schemes. Manufacturing products and offering services people will spend hard earned money on are absolutely not similar to offering some provably bogus promises.

 

[digicidal]

Economic power and resulting/concomitant diplomatic and military power have no relationship to Ponzi schemes. Manufacturing products and offering services people will spend hard earned money on are absolutely not similar to offering some provably bogus promises.

Agreed... in a sense at least. Some of the largest "products" and "services" today are virtual commodities which rely on either transient popularity or on delicate multi-faceted global agreements (which are even more transient... at least as far as the specifics). To believe that there is something inherently more "real" about a vast number of financial instruments upon which our current economic prominence relies should require no more reason for skepticism than the events of 2008.

No matter what the mechanism itself is - even seemingly dominant and permanent institutions have all historically failed at some point. The only thing which has true persistence is the human pursuit of progress, dominance, and security - the vessels have changed consistently however.

As long as you don't put all of your value and trust in a single entity or instrument, then you are at least reasonably insured against losing everything at once... but then again I never lived through a world war or true global financial collapse (hyperbole related to GFC notwithstanding). I certainly don't claim to have all the answers, but I try to avoid blanket disregard of any option available to me.

Of course, in general I also have found that anything that claims to "just work" is usually crap... I blame working in IT for that bit of cognitive dissonance.

 

[julian_hughes]

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.