The more complex crypto seems, the higher the pyramid schemes can go
reallifemag.com
reallifemag.com
We have very little evidence to substantiate the actual quantity of real dollars in this system.
The NYAG settlement with Tether shows that it's backed by bailing wire, chewing gum and hope [1]. USDC has stopped publishing their attestations as of January (which, btw, - and I can't believe I'm going to cite Tether's Saul Goodman but - aren't audits [2]) and since then it's market cap has doubled. USDT and USDC both use similar weasel wording about the nature of what backs them.
An attempted ETF a couple of years ago admitted 95% of all trading volume in the crypto space was fake. [3]
The CFTC smacked Coinbase because literally 99% of all Litecoin trading volume in 2017 was one dude, Charlie Lee - the LTC founder, wash trading internally [4]. Lee then took advantage of the market cap he synthesized, dumped literally all his holdings at the peak and sailed off to an island.
This is just a couple of examples off the top of my head. It's all fraudulent.
[1] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen...
[2] https://twitter.com/bitcoinlawyer/status/1386146486359150597
[3] https://cointelegraph.com/news/bitwise-calls-out-to-sec-95-o...
This is especially true of NFTs. With each item unique, there's no meaningful market price. There are just occasional stories about sales.
This is important. With a commodity that has an active market, prices have some meaning. You can usually sell your asset at roughly the current market price. This is not true of unique items. You have to find a buyer who wants your specific thing.
This works just like collectables on eBay. Here's a current collectable.[1] "Rare Tag Error Retired Ty Beanie Baby Claude The Crab 1996 Collector - US $1,235.00 [ 0 bids ]" Note the "0 bids". Now keep scrolling down until something shows up with a bid.[2] "Princess diana beanie baby 1st edition 1997 w/o tag US $0.99 [ 1 bid ]" That's what a willing buyer is prepared to pay. You can scroll through page after page of Beanie Baby asking prices without seeing anything with a bid.
That's what an NFT market looks like when you want to sell.
The NFT market is useful only to those with a fan base they can monetize. If you're the fan, you're the sucker.
People often place an initial entry bid on items when the auction begins just to keep track of items of interest as an alternative to the watchlist, and typically there is a rush of activity in the last minute courtesy of robobids.
That Claude the Crab or Diana - depending on condition - might go for $10, $100 or $5,000+. We wouldn't know unless we check historical sales and keep in mind how condition drastically alters the value of collectibles.
Using eBay's filters you can switch to only showing sold items. Or you can use one of the numerous sites that make it easy to check historical prices.
There are 21 that actually sold over $5000. How many of those are wash sales is not clear.
[1] https://www.ebay.com/sch/i.html?_from=R40&_nkw=Beanie+Babies...
>>> We have very little evidence to substantiate the actual quantity of real dollars in this system.
>Toronto-based Purpose Investments Inc. launched the first Bitcoin-backed exchange-traded fund in North America last month. Rival Evolve Funds Group Inc. followed with a similar fund that’s 25% cheaper. The funds, which are listed in Toronto, pulled in a total of C$701 million ($555 million) during the month, according to National Bank Financial analyst Daniel Straus.
I don’t have any skin in this. But I found it interesting so read it and the timelines don’t seem to match your claim here about Charlie Lee.
“The order also finds that over a six-week period—August through September 2016...”
Note he sold in December 2017. Well over a year after this. So it sounds like maybe that could’ve been him when he was working there. But anything subsequent is on Coinbase. (Sadly not surprising that SV mindset would legitimize securities fraud as a means for growth hacking since they make up numbers everywhere else.)
I assume the SEC at least has some idea of how much has been deposited through SEC regulated exchanges. That might be the most useful place to get a rough low ball number.
But at the same time there's one thing that you can be sure of: when you own Bitcoin, you can go through the whole blockchain with a client even from many years ago, and have cryptographic proof that you own it, and that the blocks were created according to Bitcoin's rules.
If you behave anywhere near as absurdly as the traditional financial system then everyone calls you a scam.
Fractional reserve lending is one of the ways in which the money supply is actively managed. Adjusting the reserve rates adjusts how much banks can loan, which adjusts the circulating supply. It's not in and of itself intrinsically harmful.
Remember, that nobody has lost a single dollar to a bank failure since the backstop (the FDIC) was introduced in 1933 - following the Great Depression. Even in the Washington Mutual failure in 2008. The FDIC by the way is a funded through premiums paid into it by the member banks. They have an emergency credit facility with the Fed, of course.
This is completely different than issuing company scrip and buying up assets with it to enrich yourself with it.
That is exactly what the fractional reserve banking system does. The dollars in people's accounts don't actually exist, but the bank uses the money that people deposit to buy assets that enrich the CEO and shareholders.
>nobody has lost a single dollar to a bank failure since the backstop (the FDIC) was introduced in 1933
I find that difficult to believe. But people have been scammed indirectly in any case with bank bailouts that pass taxpayer money onto the banks, paying them for gambling with your money and not holding reserves. It's like saying Tether is safe backing only 10% of assets because the government can just bail them out if necessary.
Just look it up.
I find it extremely interesting that my comment is getting a lot of negative votes
I'm not sure how you go from a few examples to -> "it's all fraudulent". Does crypto attract gamblers, crooks and manipulators? Yes, 100%. Does the same kind of behavior also happen on the stock market? Yes, 100%[1][2]. Hedge funds on wall street are doing all kinds of manipulations as well, it doesn't make the whole stock market fraudulent.
1: https://www.wsj.com/articles/what-is-archegos-and-how-did-it...
2: https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80...
1: https://www.wsj.com/articles/credit-suisses-5-5-billion-arch...
If anything, this is an argument for more regulation of family offices though, and says nothing about the crypto space, which is like the wild west in comparison to this sort of family office (which at least has some reporting requirements and is governmed by the rules of a regulated market).
We can't even trust the pricing and transactions on cryptocurrencies as there have been multiple instances of massive frauds perpetrated on users and there is no oversight whatsoever on exchanges.
1: https://www.coindesk.com/cftc-sec-us-house-representatives
I have yet to meet someone that says this who has foreseen the implications of defi. In my mind, as an early bitcoiner, that was the original promise of bitcoin.
A list of coins by market cap is full of absolute junk: https://www.coingecko.com/en
A list of tokens by locked in value is full of systems that are revolutionizing finance: https://defipulse.com/ Defi protocols are providing useful services and are making money. I doubt I could overstate their enormity.
There's a huge difference between the two worlds. Don't confuse dogecoin's "I like the stonk" hype with Maker's muscle. The "blockchain" isn't the point. The systems made possible on top were always the point, and that's what makes "blockchain" so valuable.
There's a lot of snake oil speculative no knowledge spam from people that easily give off a bullshit vibe. So I get that a lot on HN that haven't closely looked at it would be turned off by that and just dismiss it entirely out of hand.
There's some real stuff going on here too and it's worth a deeper look - I think the knee-jerk dismissal is a mistake. At this point over ten years in, it's worth at least taking a deeper look at even if (I'd argue especially if) you're a skeptic.
I also suspect there's some pseudo-intellectual skepticism cynicism as signaling going on like there always is.
Specifically on BTC: https://www.matthuang.com/bitcoin_for_the_open_minded_skepti...
Some of the tech in the web3 space is so genuinely interesting [0]. And defi's evolution has been nothing short of rapid. It is kind of sad that crypto-currency related topics don't invite as much positive attention and technical discussion on HN.
[0] Especially, XaaS apps on top of Ethereum v2, Cosmos, and Polkadot.
Don't take me bad, I believe there are innovations happening there that we will see the results on the mainstream on the next 10 years, it's just too much of an effort for just a curiosity from my side. I keep up with articles shared here on HN as I believe it acts as a curation and filtering tool but I can't keep up with the rate of fads, new technologies, scams and dead technologies on the crypto-space, it's simply exhausting.
> A list of tokens by locked in value is full of systems that are revolutionizing finance: https://defipulse.com/ Defi protocols are providing useful services and are making money. I doubt I could overstate their enormity.
The top ones are all lending and exchanges.
Lending money to someone isn't revolutionary, it's been possible for centuries - and given how easy crypto is to steal and never return, I wouldn't WANT to lend it to anyone anyway!
And decentralized exchanges are cool for sure, but they are self-serving in terms of only needing to exist because cryptocurrencies exist. So they can't really be used as a pro-crypto argument like you're doing because then the solution you're arguing for would only need to exist to solve a problem which it has created itself.
So what is so revolutionary about these?
That's why all this "lending" is a joke anyway. They lend you less than your collateral. If you want to "borrow" 1 BTC, for example, you need to first have the value of x BTC (with x being something larger than 1) in the form of some other crypto as a collateral and lock that up somehow.
So if I want to borrow 1000$, I first need to provide 1000€ and then hope the $/€ rate doesn't come too close to 1:1, because at that point my borrowing position is liquidated and I end up having paid interest for borrowing money I already had in the first place.
If that sounds ridiculous, that's because it is. Lending needs trust and is thus inherently incompatible with trustless cryptocurrencies.
And no, it is not at all like borrowing against your house. You can live in a house, even if you secure a loan with it. If living in your house is your primary use case for your house, which is the case for a lot of people, that's totally fine. You cannot "live" inside of your BTC. They are a token of value that is effectively useless to you if you cannot do the only thing that you can possibly do with a token of value: spend it for something else you desire to have.
>>Lending money to someone isn't revolutionary, it's been possible for centuries - and given how easy crypto is to steal and never return, I wouldn't WANT to lend it to anyone anyway!
Loans issued via Ethereum lending protocols like Maker or Compound are fully collaterized, and default leads to automatic liquidation of the collateral to compensate the lender. It's impossible for the borrower to cheat, because an immutable smart contract enforces the terms of the loan.
>>And decentralized exchanges are cool for sure, but they are self-serving in terms of only needing to exist because cryptocurrencies exist.
No, any asset can be represented as an Ethereum token and traded on a DEX. Having assets worldwide use a common exchange that can never be shut down, hacked or made inaccessible, holds enormous potential for improving financial inclusivity and capital efficiency.
I'm sorry but you misread what I said, perhaps I was not clear enough:
I nowhere said or at least did not intend to say that DeFi per-se is bad.
I merely don't understand what's good about the DeFi projects which the person I replied to listed. So my intention was to ask what is good about those in particular.
> Loans issued via Ethereum lending protocols like Maker or Compound are fully collaterized, and default leads to automatic liquidation of the collateral to compensate the lender. It's impossible for the borrower to cheat, because an immutable smart contract enforces the terms of the loan.
So what is the point of borrowing money then if you have the money already, which "fully collaterized" implies?
> No, any asset can be represented as an Ethereum token and traded on a DEX. Having assets worldwide use a common exchange that can never be shut down, hacked or made inaccessible, holds enormous potential for improving financial inclusivity and capital efficiency.
That is a valid point!
I don't understand why a token is needed though, it's impossible to enforce its physical correlation to the asset anyway, so it would be enough to send naked ETH/BTC and use a regular decentralized forum system for setting up trades. I.e. if someone says on a forum "You send me N ETH and you get a car" that has the same validity as moving 1 car token, because nothing can enforce that the digital movement of a car token causes the physical handover of the keys. So "I owe you 1 car" only needs to be documented somewhere, e.g. as a bare textual message in an OP_RETURN or as a hash referencing a forum post, it doesn't have to be a token.
So to be completely honest, I feel like the only reason the developers cramp a token into this usecase is because that allows them to issue the token, which implies they can issue a lot of it to themselves "to fund development", and once it grows in value they're rich.
>>So what is the point of loaning money then if you have the money already, which "fully collaterized" implies?
It allows you to access a more liquid asset, like DAI, without selling the less liquid asset being used as collateral, like a CryptoPunk NFT. It's the same reason someone would get a line of credit on their house.
>>I don't understand why a token is needed though, it's impossible to enforce its physical correlation to the asset anyway,
The redeemability can be legally enforceable by the company making a contractual promise to redeem said token for the underlying asset.
>> use a regular decentralized forum system for setting up trades. I.e. if someone says on a forum "You send me N ETH and you get a car"
Forums are not decentralized. A DEX is fully decentralized, and sellers can play an automated role in DEXes by participating as liquidity providers to Automated Market Makers (AMMs) like Uniswap.
The liquidity provider in this case need not do anything, except provide the assets to the trading pool, to participate.
For the buyer, the purchase is seamless, as they are guaranteed to receive the asset once they click 'buy' and authorize the payment. This is a far more efficient means of trading than people could find on forums with manual asset purchase fulfillment.
Can you give a use case that isn’t intra crypto speculation? That seems to be what Defi consists of at present.
Ultimately finance serves to help with capital allocation and production in the real economy. So: is Defi helping the real economy do things it couldn’t do before? Or, is there a plausible use case for this in formation?
Please be specific. A lot of people seem enthused by this, but no one has been able to explain it in a way that shows the use.
The beauty of it is that it's all software, no middle, back office teams running reports and reconciliation processes.
This is where the concept of an oracle comes in. Chainlink is attempting to provide a decentralized, tamper-proof oracle network for smart contacts so if you want to know about the cutting edge look at what they’re publishing.
I believe crypto & blockchain technologies have a future. But we ain't there yet.
(1) and I suspect more than that, those are just those I'm familiar with.
I’d be interested to hear to pro-Crypto case.
Companies that could be replaced/rebuilt on the block chain include Visa, stock exchanges (NYSE, CBOE), Swift, Stripe, ...
The blockchain also feels like the natural progression of a process of digitalization and increased transparencies. For many proposed uses, you don't actually need a blockchain, but it turns out to be the easier choice anyway.
Let's make up an example: say we didn't have a way to track containers (the kind that travel on ships) - it would be much easier to set it up on the blockchain as an Ethereum NFT than spinning the required infrastructure. The blockchain also comes with governance cookie-cutter solutions. In the real world, you'd need to set up or contract a company to run the servers — who owns this company or who does it contracts to? The blockchain solution is easier to set up and probably easier to sell once the technology becomes more accepted.
Another way to look at this is that the blockchain makes it easier to set up real-world APIs which enables not only to track things (recorded on the blockchain, a secure ledger) but also to perform real world actions (e.g. orders) that involve real-world financial values. Central to that is the ability to represent physical assets on the blockchain (e.g. our containers for before - you trust that the blockchain is an accurate representation of reality because you trust the transactions signed by container companies).
Note that this vision is in a certain sense quite boring. Nothing really fundamental changes for the common man, though he may end up benefiting from the resulting innovations.
It's not as clear as you're making it out to be.
Why does a group of comparatively (to other public forums) competent engineers from different fields are skeptical about crypto"currencies"? Do they they have an ulterior motive? Maybe they are secretly shorting everything in crypto? And if not, then maybe they can be listened to? :)
This is the kind of thing that happens when the wealthiest people have so much more than everyone else: there are enough people with vast amounts of money that they have no idea what to do with that they can easily fund a bubble like this, especially when they are promised by smart-sounding geeks that this is The Next Big Thing that will a) let them get in on the ground floor of a whole new currency, and b) give them a way to leverage their wealth to retain and increase their power as we gradually move more and more toward a post-scarcity society.
Plenty of companies made it through but never recovered their dotcom market cap or prestige, a few prominent examples: Csco, hpq (only recently passed the 2000 price), yhoo, emc, vrsn, real networks. There were plenty of also-rans who limped through but didn’t justify the hype pricing years later, and the real revolution came to fruition years later with mobile computing and mass-market online stores, but there was definitely underneath it all an obvious and real information revolution which the dotcom bubble was merely irrational euphoria about - everyone knew sonething big was happening, even if they rejected the crazy prices.
I sincerely don’t think this crypto bubble is similar, because there is no there there amd because almost all assets are severely overpriced right now - crypto is full of scams and nobody is actually using it any more as a currency, this means all these joke coins worth 100s of millions are going to zero, no doubt just after joe public buys in. There’s a reason coin base insiders are frantically selling as soon as they can and more and more frauds are coming to light. Even the more legitimate companies in this space are full of fraud.
It's basically the dot-com bubble, the roaring 20s and 2008's CDO shell game rolled into one.
If you think the modern day SEC is doing anything about the current levels of market manipulation and wild speculation, I've got a bridge to sell you.
There is a hell of a lot of FOMO around.
There are also record low interest rates not just in the USA but globally, and that is inflating every asset at once.
If there is a crash I don’t think it will just be cryptocurrency. It will be broad and deep.
Always worth reiterating: the house always wins.
Why? It doesn’t solve any real problem that anyone has ever had.
It solved the problem of ransomware payments, before winlockers used to ask for gift cards which didn't scale well.
It solved the liberty reserve problem where the US government shuts down your sketchy no-KYC money transfer platform.
At a very general level cryptocurrency has solved the "anonymous online payments"-problem.
These are all very real problems solved by cryptocurrency.
Blockchains solve the problem of having a decentralized public database, currency is just a particular use
That's not a problem. A problem is something like this: "as a video editor/doctor/..., I need something that helps me...".
Yours is just a tech description.
As far as I can tell, over a decade in, blockchain is still hunting for one.
You could say the same thing about Walmart's money orders and check-cashing services, but that doesn't use an entire country's worth of electricity, suck up the world's supply of GPUs, or support the same number of scammers.
I‘ll leave the interpretation of this statement up to you ;)
It provides a mechanism that enables distant parties to be confident that they hold copies of the same document.
That’s all.
The users really hate the decentralized aspect of crypto, as shown by immediately giving away their wallet to some "trusted" third party if it reduces fees.
People hate manual IT management. We are nearing the point at which the idea of doing this will be compared to cranking a car engine by hand to start it. If decentralized systems can’t offer this kind of “it just works” experience then the future is 100% centralized.
Bank accounts also don’t shrink in value the way Bitcoin does sometimes.
Venezuela's problem isn't inflation - that's a symptom. Venezuela's problem is the Maduro government. Solve the latter and you solve the former.
There are very real challenges from inflationary monetary supplies in countries like Argentina, Turkey, Venezuela and notably Zimbabwe.
Seriously, in Venezuela there have been recently shortages of: milk, meat, coffee, rice, oil, precooked flour, butter, toilet paper, personal hygiene products and medicines. Some Venezuelans have resorted to eating wild fruit and garbage [1]. Somehow resolving inflation through a cryptocurrency with $50 transaction fees that loses 27% of its value in one week every few months doesn't change any of that. It's just a different set of problems.
However, overthrowing the government will resolve both issues.
Sometimes there are no easy answers.
[edit] And in fact it appears that Venezuela is moving in that direction. Domestic banks are already allowed to offer USD denominated accounts, and the government is making it easier to use [1].
It's not a surprise as of course, the dollar is a much better currency.
In fact as the article points out it is estimated 66% of transactions in Venezuela are now conducted using the US dollar. Once that gets to 100%, will you concede that "Venezuela" wasn't ever a great talking point? After all it's clear, the people have spoken: economic activity in USD is preferred over BTC in Venezuela by an absolute landslide. Is this not a scathing indictment of BTC and crypto in general? In a failed state with hyperinflation - a flagship use case - the population was given many options, including both BTC and USD. They picked USD.
[1] https://www.bloomberg.com/news/articles/2021-01-13/venezuela...
If you're rich, you can keep borrowing money at rock bottom rates to invest and get richer, if you're just an average person, everything around you is becoming more and more expensive, yet your compensation doesn't change.
Inflation is a function of both supply and velocity. Velocity is low because US savings are at an all-time high. The central bank has a number of tools to contract the supply once velocity increases. [1]
Your statement that an increase in supply leads to a commensurate reduction in the value of each unit is strictly false. And something you can measure by going to the grocery store and checking if your bill is 100% higher this year than last.
[1] https://www.stlouisfed.org/on-the-economy/2014/september/wha...
What I'm telling you is that supply is simply half the picture, and you're neglecting the other half of the picture. If you print a $10 trillion dollar coin, then give it to me and I throw it into a vault, has that increased the price of goods? No. Supply went up, velocity went down commensurately. This is what you're seeing in a macro scale.
Yes the central bank actively manages the money supply, and maintains a consistent 2% inflation rate. Inflation is good for debtors (i.e. most people) as debts are denominated in the currency of the year of issue and repaid with inflated money. So long as wages keep pace (they do [1]) it's generally a benefit.
Money isn't long-term savings. It's a short-term store of value that only needs to be fungible, cheap to transact, and retain the bulk of its value for as long as you hold it. Above all, it just needs to be predictable. Anything else is honestly a non-goal. Your job as a participant in the economy is to spend that money on basic needs or invest it productively.
[1] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
Maybe you live in a country with a independent central bank but many countries are far more corrupt and the goverments make their central bank print money for themselves and have huge inflation rates. Cryptocurrency gives them a way to protect their savings from that.
Correct, however US personal savings rates are at all-time highs. [1] So, you are correct, the banks aren't taking the money and locking it into vaults. However, people are taking their money and locking it up in savings accounts and investment accounts. This is reducing velocity. The "printing" was to offset this reduction in velocity and avoid a deflationary spiral. Through lending, so they can be used for productive things.
This also explains how asset prices spiked without actually causing inflation.
> Cryptocurrency gives them a way to protect their savings from that.
I don't want to get too far down this rabbit hole, but literally everything that isn't currency is inflation-proof. Inflation only affects currency. So, if you buy real estate, or stocks, or even un-productive assets like gold, silver or cryptocurrencies, you're equally protected from inflation. It may underperform, but now we're talking about rate of return in constant-dollar terms.
Cryptocurrencies do protect you from inflation, yes, but they have massive deficiencies that make them a poor choice relative to their peer investments, in my opinion. Such as the rampant fraud in the space. This hinders price discovery, and makes it impossible to determine a real value. It also causes massive swings of 27% week-to-date. That's an annualized inflation rate of 25,000,000% when measuring the value of a bitcoin against CPI.
I’m curious how an inflation free money might stop people starving in a country unable to provide even the most basic services?
Decoupled from government maybe - though to a degree all the major central banks are. But it’s the passive management by an unelected group who made completely arbitrary decisions accountable to nobody with no consideration for what makes a good currency.
On the other hand crypto apologists propose us currencies which are uncontrollably printed by some anonymous guys in the non extradition offshore. Just last year 75% of all Tethers were printed out of thin air, since USDT trading amount is 14 times bigger than USD (not even counting tricks like Bitfinex listing USD while actually trading tethers behind the scenes) we can assume that whole crypto community is propped up by a lot of hot air and cut paper.
tl;dr - Look, USD currency management looks bad (or suboptimal). - Let's replace it with even worse scheme! HODL!
But several projects have an actual P/E ratio now. You can't deny a P/E ratio. Value is being created here.
In 2013 bubble everything was bitcoin clone but "better". No cash flow. In 2017 it was unregulated securities - illegal, no cash flow. In 2021 with Defi you don't need to struggle to explain anything.
People get paid for providing capital at a higher rates than in traditional finance because smart contracts are removing friction. Stakeholders get paid dividends for governance, just like a normal company.
Oh yes, yes you can. You're talking about a currency exchange, not a commodity. I guess you weren't around for the last two bubbles.
There literally is no value being created. Coinbase earnings are based on people paying to use its service, and that service is trading imaginary currency with no intrinsic value. Unlike a semiconductor, oil, or even industrial labor.
The only examples I’ve seen tend to be services that make money off crypto investing, which is obviously circular: those revenues ultimately depend on there actually being value in crypto.
But perhaps there are cases I’ve missed.
Good in theory, but how much does this matter to anyone in a country with a functional financial system? I have access to many loan products
> not difference in rates depending on purpose
Isn’t this bad for borrowers with valuable purposes or good credit? They’d potentially expect higher rates.
> transparency enforced by a smart contract
For most people this is akin to saying “you can examine the code yourself!” Most people can’t do that. And it’s not especially difficult to read a loan contract, if you would have the ability to understand a smart contract.
How many people taking crypto loans have no idea about liquidation, or capital gains tax obligations in the event of liquidation?
> no hidden fees
See previous question: it seems like for many sudden liquidation or owing capital gains tax in such an event may be unexpected.
> upfront costs
Loans normally don’t have upfront costs.
The loans seem neat for bringing collateralized lending to crypto, but it doesn’t seem like you’d have much advantage in selling stock and moving to crypto for loans. Or am I missing something?
Further to that point, there are new DeFi products like Alchemix which allow for loans on collateral that cannot be liquidated, so not only do you get your money but you don’t run the risk of ever paying interest or gains tax via a liquidation.
Can you expand on the second point? If something can’t be liquidated/sold, how can it be collateral?
Which ones?
Yeah, stocks haven't had a good year in over a decade /s
What?!
Wow, this is a painfully misinformed statement. Like, so misinformed I want to hug you.
Index funds have consistently beaten inflation by double digits and have practically nil management fees. They are vastly more secure alternative to imaginary crypto exchanges.
You can call it gambling if you want but its actually cleverer and the chance of winning isn't like with gambling allays lower than 50% its simply unknown but you can manage it by how much you bet on high risk.
> It is understandable enough to want to participate in such collective delusions. It’s much more fun to be awed by not getting a movie than to realize that you do get it and it’s just boring. This same idea also helps explain speculative bubbles. It’s more fun to believe in magic than to recognize how much of financialized capitalism is just scams and pyramid schemes. Nonetheless, if the popular press is full of explainers “clarifying” what a “very complicated” investment phenomenon is all about, hide your wallet: You are being shilled into a game of Three-Card Monte.
Not only it's mostly useless since anyone can print the same address anywhere they want, but also it WILL become literally useless when that address changes.
The article's headline suggests the article is about "plausible deniability". This has indeed been improving over time as the schemes have become more sophisticated. With Bitcoin for example, articipants could say "it's not a pyramid scheme because you can buy a pizza with it", although that was about the extent of it in practical terms (excluding more nebulous claims like "it is going to change the world", "it is the internet of money" etc.). However, with more sophisticated schemes like Ethereum, participants used to say things like "it's not a pyramid scheme because you can run DApps on it", now say things like "it's not a pyramid scheme because you can do DeFi with it", and may in future have something else with which to deny it is a pyramid scheme.
However, the article itself talks specifically about NFTs. These aren't so much about "plausible deniability", but about "self-sustainability". People need to buy Ethereum to buy the NFTs. It is like the ICOs - people needed to buy Ethereum to participate in the ICOs. When the ICOs dried up and the ICO companies started cashing out their Ethereum the prices collapsed, but now we have NFTs to take their place. If NFT sales dry up and NFT sellers cash out the prices may collapse again, but by then there may be something else to take their place and keep the scheme self-sustaining.
They are perfect because:
1) an unlimited number of them can be created quickly and easily
2) "artwork" value is subjective and therefore the value and short term appreciation/depreciation can't be easily questioned
I feel that I am missing something key though.
However, if the address is revealed to belong to a person in the real word, they are no longer anonymous and you can see all of their transactions.
For example:
- "getting" Memento does not make it boring.
- Finding the art world being often vacuous does not mean you are an acculturated ignoramus.
- Electricity does not make blockchain valuable, it's both the social and proof-of-work, the electricity cost is incidental and unrelated. (Bitcoins and NFT works even if you are ignorant of its inner workings.)Nothing new so far. What's interesting however is that instead of the article, I didn't get the usual blank page. Instead, I could read the following quote:
> "Appropriate technology" was a movement beginning in the late 1960s that aimed to shift the emphasis from mass technology to smaller-scale, affordable technologies, informed and targeted to local needs and customs. Many of its ideas are as relevant today. So is one of its major shortcomings: why would we rely on technology to mitigate the harm technology does?
Turns out I got redirected to https://reallifemag.com/appropriate-measures/
How ironic. When trying to disable a technology that's quite useless as displaying text (and more often than not is more about tracking me than serving me), I got a lecture on appropriate technology. And a fairly good one at that, which should probably be reflected on by proponents of crypto currencies.
I still argue that JavaScript is no an appropriate technology to display static text (at least not if we care about screen readers).
Unless I'm trying to avoid high transaction fees when exchanging currency with an undeveloped banking system with dollars, what's the point? My dollars already work fine, and for large amounts, international wire transfers work well.
Only if you don't mind the deflation.
"USDC is issued by regulated financial institutions, backed by fully reserved assets, redeemable on a 1:1 basis for US dollars"
$11 billion dollars in reserved assets? Instantly redeemable? Why does this remind me of another scam with similarly "backed by assets" USDTs
And no, not even banks have that kind of money backed up by real assets (that's why there's usually a government-mandated minimum insurance on all deposits).
And you want me to believe that some scammers with no accountability have 11 billion dollars in assets backing up their claims? Just because they have the magical word "crypto"?
Yes, this is the author who wrote 'In Defense Of Looting'.
https://www.forbes.com/sites/jeffmcmahon/2019/04/05/the-worl...
In the past weeks I've seen a ton of ads (on Youtube, Twitter, etc.) that look an awful lot like elements of pump-and-dump schemes. Even to this financial idiot, the scam factor looks very high.
The weak correlation between ETHUSD and BTCUSD has many obvious explanations.
Most things crypto are suspicious. I don't think there is anything suspicious about the ETHBTC chart.
Edit - This may be informative:
Many exchanges deal only in crypto currencies, where exchange rates are relative to other coins. Price differences between both coins and exchanges create an ability for someone to make money while equalizing the market.
It also means that all coins are inevitably linked together in some way. And why obvious scam coins also follow same curves.
The real reason they're linked is for macro reasons. Hype for ETH is correlated with hype for BTC. Regulatory environment for ETH is correlated to that for BTC.
Statistical arbitraguers then front run the resulting macro flows, but the core reason they're linked is the macro flows, not the arbitrageurs.
The correlation exists because of non market makers.
> For example, delivery apps make it feel “easy” to order food, when in fact we are spending much more in buying the phone, keeping it charged, paying our data plan, paying our subscriptions, and so on, for every order — in other words, we are using more hours of our labor to do so. Before smartphones, we could call the restaurant with a landline, but we also had to have previous knowledge of the restaurant as well as potentially a menu or at least a phone book’s yellow pages. The app replaces the drawerful of menus with a commensurate amount of electricity, which we pay for when we buy and charge our phone and pay our phone bill, which the restaurant pays for on their end in keeping their computers up, and which the app skims a huge percentage of to pay back venture-capitalist investors and keep the servers running.
If you look at only a single transaction, the app is much more efficient: Instead of requiring the restaurant to hire a printer and someone to deliver menus to you, you just press a button. But with a paper menu, restaurants have to do that only once, whereas you need to marshal the same amount of energy each time you use the app. By the third or fourth time you order takeout from a particular place, suddenly the paper menu is looking like an ecological marvel.
The phone has a lot of waste on metals but in a less consumerist world - read don’t upgrade your phone every year - it has the property of reuse for every restaurant and durability compared to a restaurant menu.
Even better you can power your phone with the rays from the sun.