The ASR Cryptocurrency thread

[julian_hughes]

Exactly. NOW you finally get it. Maybe. It still seems like you aren't reading all of my posts before responding.

What are you trying to say? What are you even responding to? Just spell it out in plain English.

And why are you suddenly introducing Tesla stock into this???? They make real products that people buy and use. Like any other tradable company we can look at their assets, their productivity, their proven profitability (or otherwise), their proposals. Then make an informed (or not) decision. I don't get why you respond to criticism of the very nature of cryptocurrency with "what about, what about". In this case Tesla makes real things that people buy. People who buy Tesla stocks own part of that. They are enabling actual business! Manufacturing. Products. Customers. Sales. Costs. Profits. Reputations. Management which can be assessed. Not just speculations. It's such a clear and well defined difference that how can anybody *sincerely* be trying to conflate these utterly different things?

 

[Berwhale]

Interesting read...

“That being so, and absent some intervention by the disparate group of developers and miners that preside over the Bitcoin codebase, simple game theory tells us that a process of backward induction should, really, at some point, induce the smart money to get out. And were that to happen, investors really should be prepared to lose everything. Eventually.”

What is a Bitcoin worth?

Thomas Belsham The price of Bitcoin is currently around $57,000 (see Chart 1). But what is the price of Bitcoin based on? It’s just a bunch of code that exists only in cyberspace. It’s not backed b…

bankunderground.co.uk

 

[Chromatischism]

I don't believe it's going to be this easy to displace BTC due to its massive network effect, but it will be fascinating to see how this space evolves.

Solana’s Kyle Samani Predicts ‘Game Over’ Bitcoin Flippening

Kyle Samani has predicted that once bitcoin is flipped, which he predicts will occur in the medium term, that it’s ‘pretty much game over for BTC.’

beincrypto.com

 

[mansr]

I had the (mis)fortune of coming across this: https://www.drorpoleg.com/in-praise-of-ponzis/

"This is, essentially, a pyramid scheme. A Ponzi. But it makes sense."
"Join a pyramid. It's not a bubble unless it bursts."

You can't make this up. But you can laugh at it.

 

[eddantes]

Anyone seen Thether's billions?

So...

• create "coins" out of thin air
• claim they are 1:1USD because you hold matching USD reserves
• loan the reserves (you do have) out and collect interest
• PROFIT!

In the mean time

• others use the fake money to
• buy other fake money creating artificial demand
• which drives the value of the other fake money up
• PROFIT!

The Tether Scandal: The Biggest Threat To The Crypto-Ecosystem

Over the past several years, the crypto markets have grown significantly. Most of the world has attributed this rise in price as a…

cryptowhale.medium.com

I mean look at the characters in this story, they all seem to be as upstanding as a midwestern choir boy....

 

[digicidal]

Anyone seen Thether's billions?

So...

• create "coins" out of thin air
• claim they are 1:1USD because you hold matching USD reserves
• loan the reserves (you do have) out and collect interest
• PROFIT!

In the mean time

• others use the fake money to
• buy other fake money creating artificial demand
• which drives the value of the other fake money up
• PROFIT!

The Tether Scandal: The Biggest Threat To The Crypto-Ecosystem

Over the past several years, the crypto markets have grown significantly. Most of the world has attributed this rise in price as a…

cryptowhale.medium.com

I mean look at the characters in this story, they all seem to be as upstanding as a midwestern choir boy....

Good thing banks don't do that or we'd really be screwed!

Not that I'm defending Tether or for that matter any of the other "stable coins" - they are antithetical to the very notion of an open-source monetary system and barely better than CBDC's.

I completely agree with the detractors in their speculation that >90% of the people involved in crypto are crooks and frauds... where I strongly disagree is that this apparently makes them fundamentally different than the IMF, the Fed, investment banks and hedge funds, insurance companies, etc.

 

[julian_hughes]

Good thing banks don't do that or we'd really be screwed!

Not that I'm defending Tether or for that matter any of the other "stable coins" - they are antithetical to the very notion of an open-source monetary system and barely better than CBDC's.

I completely agree with the detractors in their speculation that >90% of the people involved in crypto are crooks and frauds... where I strongly disagree is that this apparently makes them fundamentally different than the IMF, the Fed, investment banks and hedge funds, insurance companies, etc.

They are not that different to an unregulated high risk hedge fund run by crooks but that doesn't mean it makes any sense to try to conflate this with "...the IMF, the Fed, investment banks....insurance companies" who all exist in highly regulated environments, are actually audited(!), are backed by real world economic and military powers and so on. It's not at all accurate, interesting or insightful to suggest that because banks operate on a reserve requirement that they are just like a big scam and therefore OMG cryptocurrency is no worse!

 

[Tks]

Anyone have any studies done on crypto user demographic? Which are in it for the profit ride, and which are invested due to primarily ideological inclinations about some sort of virtue behind unregulated currencies?

 

[eddantes]

Melania Trump launches NFT venture, promising ‘an amulet to inspire’

The former first lady’s promotional materials note that ‘a portion’ of the proceeds will help children aging out for foster care

www.theguardian.com

Well... now I'm convinced! NFTs definitely not a scam.

 

[digicidal]

Anyone have any studies done on crypto user demographic? Which are in it for the profit ride, and which are invested due to primarily ideological inclinations about some sort of virtue behind unregulated currencies?

I haven't seen many with that specific direction of inquiry - although there are starting to be some papers in that vein: Distrust or Speculation (2021 PDF avail free). One of the biggest issues would be that this is likely to be fairly polarized by regional and cultural issues more than other aspects... as this Money article covering Turkish adoption and interest points out.

I would say that those of us who have been involved (at least academically, since there wasn't an actual market at that time) since 2010 or so are mostly the latter group. I began mining BTC simply because the math, concept, etc. were interesting to me. I'd also guess that most getting involved after 2017 or so are primarily in the former group... although now with more institutional involvement - there's probably a more balanced distribution on the "main street investor" side of things. Several simply use them as a secondary "bank account" as well with $1B in just Visa debit card purchases in the first half of 2021.

Some of the more general ones:
Pew Research Center (2021)
ING Bank Study (2018 - Out of date possibly, but interesting and nicely formatted)
Gemini State of Crypto Report (2021 - heavily biased though due to source)
FCA Study (2021 - UK centric but very thorough)
Fidelity Study of Crypto Philanthropy (2021)

 

[eddantes]

Why it's too early to get excited about Web3

www.oreilly.com

Tim O'reilly (you may say his time has passed, I won't) has some clear thinking about Crypto/Web3. Worth your time to read.

 

[digicidal]

Why it's too early to get excited about Web3

www.oreilly.com

Tim O'reilly (you may say his time has passed, I won't) has some clear thinking about Crypto/Web3. Worth your time to read.

I wouldn't say Tim's time has passed... but I would definitely say that about Charlie Munger. I think the problem with the concept is that there is no single definition (or two equal opposing ones, if you prefer). There are those that seem to worship the past and the established with a zealotry rivaled only by cultists... and there are fanatical zealots on the side of innovation and disruption as well. However there are also hundreds of thousands which fall somewhere between the two extremes.

I would criticize one aspect Tim and many others seem to miss in the analysis - there is no "company" per se behind the vast majority of early coins/chains. They are (almost without exception) independently developed, open-source software/networks. I guess it all comes down to a matter of "affiliated responsibility" for lack of a better term. In every case (again only regarding early, unique chains - not shitcoin forks) there was a period of time where much thought, programming, and discussion occurred for zero compensation, investment, etc. by volunteers simply committed to the idea itself. Everything after that was people adding value to that invention for a variety of reasons... and sadly "to scam others out of their money" is definitely one of those. Unlike many, I do not believe that is the majority - which is possibly naive of me, I'll admit.

I think a better way of looking at the "value" of a particular chain or service is by user commitment... which unfortunately now that the prices are so high, is only really visible when it loses all the other guys a ton of money. I often wonder what the people I tipped a few dollars (at the time) in BTC and ETH did with it... could be worth several thousand now at the very least. Regardless I will always be interested in any alternatives that kick stones at the edifices of tradition... despite knowing the odds that it will knock any of them down in my lifetime are effectively zero.

 

[eddantes]

I wouldn't say Tim's time has passed... but I would definitely say that about Charlie Munger. I think the problem with the concept is that there is no single definition (or two equal opposing ones, if you prefer). There are those that seem to worship the past and the established with a zealotry rivaled only by cultists... and there are fanatical zealots on the side of innovation and disruption as well. However there are also hundreds of thousands which fall somewhere between the two extremes.

I would criticize one aspect Tim and many others seem to miss in the analysis - there is no "company" per se behind the vast majority of early coins/chains. They are (almost without exception) independently developed, open-source software/networks. I guess it all comes down to a matter of "affiliated responsibility" for lack of a better term. In every case (again only regarding early, unique chains - not shitcoin forks) there was a period of time where much thought, programming, and discussion occurred for zero compensation, investment, etc. by volunteers simply committed to the idea itself. Everything after that was people adding value to that invention for a variety of reasons... and sadly "to scam others out of their money" is definitely one of those. Unlike many, I do not believe that is the majority - which is possibly naive of me, I'll admit.

I think a better way of looking at the "value" of a particular chain or service is by user commitment... which unfortunately now that the prices are so high, is only really visible when it loses all the other guys a ton of money. I often wonder what the people I tipped a few dollars (at the time) in BTC and ETH did with it... could be worth several thousand now at the very least. Regardless I will always be interested in any alternatives that kick stones at the edifices of tradition... despite knowing the odds that it will knock any of them down in my lifetime are effectively zero.

I'm not here to defend the satus-quo, be it the "platform web" the Internet has evolved into, or the hegemony of the USD and the systems that enable it... but... It's clear to me that motivation of the web3 fanatics is little to do with egalitarianism, but rather with the FIFO system that web3 is based on. I believe if you remove the greed (or FOMO) incentive and all this web3 furor dies down back into academia and the limited use cases that it may hold an answer to.

Every few months, for a decade now, I return to crypto and always walk away with the same impression -- this is not the "fuck around" culture of web1 or the the FOSS culture the preceded web2... This is greed that wraps itself in the flag of egalitarianism and obscures criticism with technobabble.

I will probably drop this current inquiry again shortly and if web3 hype doesn't die down, I'll return to it once again trying to keep an open mind in some future time, maybe some use case matures. It was fun to learn about Moonbeam, Polkadot, Optimism, Kraken, Bitclout, and DeSo this time around... but ultimatly I remain with a bad taste in my mouth.

 

[digicidal]

I'm not here to defend the satus-quo, be it the "platform web" the Internet has evolved into, or the hegemony of the USD and the systems that enable it... but... It's clear to me that motivation of the web3 fanatics is little to do with egalitarianism, but rather with the FIFO system that web3 is based on. I believe if you remove the greed (or FOMO) incentive and all this web3 furor dies down back into academia and the limited use cases that it may hold an answer to.

Every few months, for a decade now, I return to crypto and always walk away with the same impression -- this is not the "fuck around" culture of web1 or the the FOSS culture the preceded web2... This is greed that wraps itself in the flag of egalitarianism and obscures criticism with technobabble.

I will probably drop this current inquiry again shortly and if web3 hype doesn't die down, I'll return to it once again trying to keep an open mind in some future time, maybe some use case matures. It was fun to learn about Moonbeam, Polkadot, Optimism, Kraken, Bitclout, and DeSo this time around... but ultimatly I remain with a bad taste in my mouth.

On that I concur completely... even within the early days there was a dearth of truly innovative developers working on projects which were solely designed to increase the velocity, fungibility, and accessibility of financial transactions outside the current status quo... but there were definitely more than you see today outside of the very early chains.

Not unlike what's become of social media (or regular media for that matter) now. Entering the tech field in the early 90's, I remember with sadness the dreams many of us held concerning what we thought (wrongly it seems) the "information age" heralded. What could go wrong with giving everyone, regardless of status, access to virtually all the knowledge in human history? Apparently nearly everything can and will go wrong...

Now we live in a world of near constant hyperbole - where everything is "breaking news", every market either an expanding bubble or collapsing one, and everything that's an "existential threat to democracy" can be solved by tyranny, restriction, and oppression. Open access to what was once prohibitively expensive creative content publication channels... has become endless memes and people getting rich being "influencers" for their corporate overlords by worshipping inane consumerism - often while proclaiming their communist street-cred.

I guess it could be worse... I often think about what things might be like when my niece and nephew are my age - never actually knowing a world with privacy and relative autonomy. Some place where a careless joke you told when you were 16 wasn't going to get you fired when you were 40.

 

[raif71]

A story about Bitcoin and monkeys | Chatfield

chatfieldprivateclient.com

 

[eddantes]

I don't mean to keep threadcrapping here... but I can't engage elsewhere, as all that will happen is that I get blocked and will then fail to get any insights on the thinking inside the crypto ghetto.

One thread that I read recently was about developer motivation moving from working on web2 to web3... Where as in platform internet the motivation was to generate more and remove impediments from user engagement; in web3 the motivation is to increase impediments by forcing investment (or as the crypto bro's put it - "enabling ownership") into the project.

So the idea is - as a user you are also an owner and hence have a voice. Sounds great...

Except...

The actual process is this:

• As project starts you generate (zero cost; low effort) the crypto asset
• You give the (costless) asset away in return for promotion and participating to early adopters
  • You KEEP a substantial reserve for yourself
• The motivation of the holders is now to drive the hype to create DEMAND, so that others exchange fiat for your (costless) asset
  • Methods for driving DEMAND
    • FASHION - it's what the cool kids are doing
    • POLITICS - it's what the woke kids are doing (ownership is freedom, right?)
    • ASPIRATION - it's what the really smart kids are doing (you don't quite get this crypto stuff; thats cool - we got the smartes people working on it; your investmnet means at least your with the smarter people)
    • GREED - look at all the lambos... why aren't you driving one?
    • FOMO - the world is moving on you luddite; you will be left behind in the meta-wilderness

Crypto winners follow a simple plan:

• generate cryptoasset from nothing
• generate hype
• exchange cryptoasset into fiat asap (but using averaging so you can keep reaping rewards as long as possible)
• exchange fiat for actual assets as soon as possible because - inflation

 

[digicidal]

@eddantes - While I can't argue against your "actual process" in the sense that this is what has ultimately developed (grassroots fraud?) - I think it would be equally accurate to describe platform internet as being the process of monetizing all user data and crafting ideological ghettos to trap people like livestock. The momentum has long since shifted from removing impediments to access to increasing/improving impediments to egress. Usually this is done through the psychology of addiction (stickiness), micro-transactions to obfuscate actual costs, or ever expanding ownership and control via EULA revisions

Greed motivates both, of course - as well as nearly everything humans do at some point. Whether something as simple as email or social media, or more complex ones like genomics... the goal is to intake as much data (for free) as possible, and either covertly or overtly monetize everything while removing as much awareness and discretion from the data providers (original owners) as possible.

Like virtually anything within the academic bubble - if you conveniently forget the endemic problems with humanity - there are simple solutions to everything. Communist dictatorships seem not only feasible but desirable... as long as the dictator is a benevolent, selfless "parent" of the masses. History, on the other hand, has repeatedly shown what the natural result of absolute power looks like.

So it essentially comes down to whether you prefer to work toward a world (or in this case, internet) ruled by a few psychopaths with absolute control... or a wild west where there's a new psychopath around every corner, but limited to partial control of a singular area. The one thing that remains constant is us - one of the few animals that kills for sport, hoards compulsively, and constantly trades known present values for uncertain and uncontrollable future ones.

 

[digicidal]

Which coin is best nowadays for investment? I'm a newbie in crypto.

This is the problem - there isn't any answer to that question. And I seem to be one of the very few on here that doesn't think the baby (and the entire bathroom) should be thrown out with the bathwater.

To attempt an answer would require more information than you should give random people on the Internet... but I'll start with:
1) What is your expected exit timeframe?
2) Are you OK with losing potentially 100% of the investment? (Not would you be happy... no one would)
3) Do you believe the value in crypto to be security, anonymity, or advanced features?

Unless you are really looking to gamble... I'd immediately forget about 99% of them and focus on either BTC or ETH and perhaps their "ideological offspring" (BCH/ETC). Almost everything else is simply a fork of or based upon those two. If you think regulation based on environmental impact is more likely... then tend more toward ETH as it's moving to a PoS model. If you want the relative safety provided by the largest user base and greatest number of vendors accepting it for exchange then BTC is the obvious choice. If privacy and anonymity are paramount (with the understanding that this also increases risk of regulation and ultimately supports crime to some extent) then check out Monero (XMR).

If you want or expect to quadruple your money in a few months with a significant chance of loss... then probably better to just go to a casino. The only places you're likely to find that now are shitcoins which are meme'd by a celebrity or something (ala Doge/Musk pump).

Unlike many here, I'd still say go for it if you're aware of the risks and truly support the core concepts of the chain/network/coin you're supporting - but think of it more like a donation which has a very remote chance of returning significant gains if given enough time. However, what you personally support and believe is ideologically superior to present financial systems... that I can't answer for you.

If you want a more regulated investment with far less chance of significant gains but with similarly reduced risk of loss - I would look to mining hardware providers, blockchain companies, etc. Consider NVDA, RIOT, COIN, SQ, PYPL, etc. Also there are a few ETF's now more directly tied to specific chains, but I've not investigated them so I couldn't comment.

Sorry if that's not the answer you were looking for.

 

[Blumlein 88]

This is the problem - there isn't any answer to that question. And I seem to be one of the very few on here that doesn't think the baby (and the entire bathroom) should be thrown out with the bathwater.

To attempt an answer would require more information than you should give random people on the Internet... but I'll start with:
1) What is your expected exit timeframe?
2) Are you OK with losing potentially 100% of the investment? (Not would you be happy... no one would)
3) Do you believe the value in crypto to be security, anonymity, or advanced features?

Unless you are really looking to gamble... I'd immediately forget about 99% of them and focus on either BTC or ETH and perhaps their "ideological offspring" (BCH/ETC). Almost everything else is simply a fork of or based upon those two. If you think regulation based on environmental impact is more likely... then tend more toward ETH as it's moving to a PoS model. If you want the relative safety provided by the largest user base and greatest number of vendors accepting it for exchange then BTC is the obvious choice. If privacy and anonymity are paramount (with the understanding that this also increases risk of regulation and ultimately supports crime to some extent) then check out Monero (XMR).

If you want or expect to quadruple your money in a few months with a significant chance of loss... then probably better to just go to a casino. The only places you're likely to find that now are shitcoins which are meme'd by a celebrity or something (ala Doge/Musk pump).

Unlike many here, I'd still say go for it if you're aware of the risks and truly support the core concepts of the chain/network/coin you're supporting - but think of it more like a donation which has a very remote chance of returning significant gains if given enough time. However, what you personally support and believe is ideologically superior to present financial systems... that I can't answer for you.

If you want a more regulated investment with far less chance of significant gains but with similarly reduced risk of loss - I would look to mining hardware providers, blockchain companies, etc. Consider NVDA, RIOT, COIN, SQ, PYPL, etc. Also there are a few ETF's now more directly tied to specific chains, but I've not investigated them so I couldn't comment.

Sorry if that's not the answer you were looking for.

I don't like your answer even if sensible and well considered and probably as good as could be.

The reason is the philosophical baggage you included. If you can't think like a greedy morally bankrupt financial executive you have no basis to make a rational choice actually. Such people want money and as quickly as possible. The morals, philosophy, poke in the eye to conventional finance, etc etc have no bearing to such people as long as it is nearly or barely legal. They'll make decisions based upon pure greed. They aren't going to give one bit of care if those other issues don't impact whether coin A makes more return than coin B.

Your answer is only one for pure speculators or gamblers who need to pick which version they will feel a little bit better about if they make a bad choice and lose it all.

 

[digicidal]

I don't like your answer even if sensible and well considered and probably as good as could be.

The reason is the philosophical baggage you included. If you can't think like a greedy morally bankrupt financial executive you have no basis to make a rational choice actually. Such people want money and as quickly as possible. The morals, philosophy, poke in the eye to conventional finance, etc etc have no bearing to such people as long as it is nearly or barely legal. They'll make decisions based upon pure greed. They aren't going to give one bit of care if those other issues don't impact whether coin A makes more return than coin B.

Your answer is only one for pure speculators or gamblers who need to pick which version they will feel a little bit better about if they make a bad choice and lose it all.

Well you certainly don't have to like my answer, no one does (except myself to some extent). I would argue that your (implied at least) answer is for those who don't care if they have gains at all in the first place. Whether legal or not is a bit of a dodge - and to some extent the philosophical baggage applies even in the most highly regulated markets. However, the truth is that any investment in crypto is pure speculation and gambling... as betting on the continued dominance of the USD in the global market in 10 years would be.

If security is paramount (and you trust the government to insure it) then you put your money in the bank and pay them to keep it safe (both through fees and inflationary losses of value). If durability is paramount, then you put it in real property, metals, etc. and benefit slightly from bubbles and manipulation but also shoulder minimal risk of loss as well. Hopefully remembering that even banks can fail and metals/land can be confiscated at the very least.

If you aren't going to research enough about a cryptocurrency to at least understand it's codebase, origin whitepapers, developers, mission, distribution and history.... then you are just a gambler regardless. I would argue no more a gambler than merely picking a stock by whatever gained the most in the past 90D without consideration of market conditions, ownership, P/E ratios, debt level, etc.

Honestly if greed is the primary driver then none of these is as good as simply acting stupid on tiktok - that's where the really easy millions are being made today. All completely legal, and requiring only the investment of some inexpensive camera equipment (or a newer phone and tripod/gimbal) and some time... I guess a lack of shame might be a secondary requirement for some.