Crypto Fooled Us Once. It Will Fool Us Again
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But he underestimated the get-rich-quick mentality. That's what made crypto big. Everyone wanted to be a part of it. And naturally, this type of mentality is filled with fraudsters.
I'm like 80% through the book and am enjoying it. Feel like I've definitely gained a better understanding of who SBF was with the pre-FTX context. But I 100% agree with the quote above and it almost reads like an autobiography.
When I was in Japan I saw this too, basically the nearest crypto grifter with the right unrelated pedigree convinces people that derive clout in this antiquated way. It makes me sad that “never crypto” gatekeepers eventually run into the nearest one who just happens to be shilling anything random. The whole point of crypto is that you don't need to gauge utility off of pedigree, you can gauge it on your own and reach an independent understanding that’s corroborated by all the other participants in the network, which includes walking away and being disinterested.
There needs to be broad education on this stuff and what a properly managed crypto servicing organization looks like. Primarily because these are concepts that don't go away with any regulatory change, its as simple as 2 computers or nodes communicating with each other so it never goes away.
Everything else is just a me-too derivative that can add nothing except the possibility of central control (like the "digital dollar").
The ability to instantly transmit the hardest asset known to man (harder than gold, in the sense of inflation resistance) does have utility, regardless of what critics say.
It has downsides too: the ability to be lost or stolen if custody is sloppy, energy use, and many others. But the balance between its utility and its limitations is something that enough holders recognize that it maintains a value above $26k for now.
The US debt recently increased by the entire market cap of bitcoin ($275 billion [1]) in a single day.
That doesn't guarantee anything, but in the old days when the global reserve currency started to become frankly inflationary, there was no easy recourse - you could only jump to the next best national fiat (which could have the same problems or worse), or gold (with all of its limitations). Now, due to bitcoin, an alternative exists.
People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why. I think it might be harder to recognize its value when it's part of your implicit cultural background: the dollar is money. We lack the perspective of our great grandparents, who lived through the great depression, and understand that the dollar has no intrinsic value, either. Once that epiphany is reached by the masses, the appreciation in bitcoin value could come quickly.
[1] https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fw...
"Hate" is a strong word, but I dislike Bitcoin because so much of its value doesn't come from utility, but from speculation. People rarely buy Bitcoin to actually use it, but instead because they hope/expect the price will go up. And that's what leads to cases like SBF.
> and understand that the dollar has no intrinsic value, either.
You need US dollars to pay US taxes and buy/sell into the world's largest consumer market. That's why there's a strong demand for dollars.
I am impressed by your powers of perception! You can probably read my mind, too, and tell me why I do the things I do, at least my major purchasing and investment decisions. It's a little scary knowing that there exists people as perceptive as you. It makes me feel naked almost.
If global oil output had to decrease due to, for example, peak oil, dollar value would collapse very quickly, because all of a sudden, monetary mass would be excessive compared with declining economic activity.
Or you just buy assets priced in dollars; bonds, real estate, equities, etc. Nobody with half a brain holds their wealth in currency. Currency is for transacting, not storing wealth.
> People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why.
See above and below.
It has 0 intrinsic value. It also has no cash flows. The only “value” it has is speculative.
Because if BTC is going to be my money for transactions, I actively do not want any of the speculation on its price. It’s not useful for normal transactions if the price can swing as much as 50-100% within a year — some quick searching says BTC started the year around $17k/BTC and is currently around $27k/BTC. BTC currently acts like both a currency and a speculative store of value, and only one of those is really useful if it’s supposed to be the future of money. Otherwise it’s just a more-volatile speculative bet than stocks or bonds or etc that people hope to eventually trade for USD.
In all seriousness, we do understand what you are saying, bitcoin's price relative to the things you want to buy does fluctuate pretty heavily right now because it is still very much in the early adoption phase. But eventually that will even out.
You do know the Internet got started in the 1960's, right? And didn't really take off until 30 years later?
When you start talking about scams and get rich quick schemes are unfairly grouping all of "crypto" with bitcoin. Bitcoin has been used in some of the schemes, but always with some other "coin" and false promises in conjunction with bitcoin. People that have stuck with plain vanilla bitcoin have not been scammed.
The supermarket doesn't let me use stocks or houses to buy milk and bread, and fortunately I live in a stable enough country that currency fluctuations are fairly minimal. Compared to Bitcoin it may as well not move at all!
Why not? If you're not using it for speculation then you wouldn't be holding it for that long. If you're using it as a currency then you might keep $50 worth in your wallet and if you ever receive more than that and not want to spend it immediately you'd exchange it for some traditional investment instead.
Because that $50 in my wallet might be $25 or $100 by the time I need it.
Why? You're out $45. That sucks, but since you're not a Bitcoin speculator who holds all their assets in Bitcoin, you only have to open your phone and exchange something for another $50 worth of Bitcoin so you can use it to buy groceries.
Maybe you could use the $50 you made that time your $50 in Bitcoin turned into $100 and then you used half of it to invest in something else because you're not a Bitcoin speculator who needs more than $50 worth of Bitcoin at any given time.
> That does not happen with the USD/Euro/whatever.
When you're measuring dollars in bread rather than Bitcoin in dollars, the consequence is that a loaf of bread costs more dollars. People are complaining about this happening right now.
You’ve just made speculation small scale and complicated.
And my bread costs 8% more dollars than it did a little while ago. My dollar didn’t lose 92% of its value. They’re entirely different issues. My fifty USD will still buy enough bread for the week. My fifty BTC might if I happen to want bread at the right time.
You use it as a currency because you can't email someone dollar bills and digital payment processors charge higher fees. Because you want to buy something that isn't tied to your name, or don't want everything you buy tied to your name. Because you want to write a piece of code that lets people buy and sell directly without relying on a mercurial third party that can steal anyone's money or close their account without recourse. And if you want to, to pay your phone bill.
> You’ve just made speculation small scale and complicated.
Actually buying investment securities with a $50 cryptocurrency gain was a joke. You could do it in theory but what you're really going to do is not buy anymore Bitcoin until you've spent the $100 worth instead of buying $50 more after you'd spent the original $50. The point is that the volatility generally evens out. It doesn't really matter if you replenish your Bitcoin wallet after 5 days one time and 10 days another if it averages out.
Moreover, the more people use it, the less volatile the price is. It's understandable that people don't immediately use this to buy groceries, but if they use it to buy digital subscriptions or build distributed systems or what have you, the more people use it for those things the less volatility there is. And then at some point people may start using it to buy groceries.
Proof of Work is probably the way to go, but please make it useful work.
Or a darker proof of work concept: Forget the big data centers, the NSA could hand out bitcoins to GPUs who help them brute force enemy encryption.
Plot twist - that was your own encryption you helped the NSA (presumably legally) break!
;)
The lightning network on top of Bitcoin gives you credit card speed transaction times, with settlement still happening on the Bitcoin layer in minutes not days.
How do you arrive at „3 days at best“?
LN transactions are usually not settled within minutes but when channels are closed. Anything else would negate their whole advantage. Are you thinking of rollups (which Bitcoin doesn’t have yet).
Credit cards are even worse. All you get instantly is whether the card info is valid and has that much credit. But it could be a stolen card or a customer who issues a fraudulent chargeback, and you may not find out about that for a month or more. Meanwhile you've long since delivered the goods.
Ah yes and bitcoin is better here because it doesn't even try to stop stolen money from being used.
> Traditional ACH transactions take days because they're not even transmitted to the other bank until the end of the day.
From what I hear in the US, their banking system is slow to innovate outside of fintech providers. Here in Europe, SEPA Instant Direct Transfer allows ACH transactions to be settled within at most 20 seconds.
Actually, the FedNow system, which will provide very fast transactions, is currently being deployed in the US:
https://www.frbservices.org/financial-services/fednow/about....
The real test of transaction settlement time is how quickly you can withdraw physical dollars from the bank
Everything else you mentioned is a transaction not an actual settlement of cash. When you pay with a credit card, for example, no dollars change hands. The credit card company promises to pay the merchant at some point in the future. I've heard it can take 2 weeks for actual dollars to show up in their bank account. Similar with all bank transfers, though usually more like 3 days.
And of course, in all those scenarios with banks involved, you don't actually have a physical pile of dollar bills in a vault at the bank. You just have a promise of dollars from the bank. And they have all promised more dollars like that then they actually have.
If I do a card payment the merchant knows they'll get the money inside a few seconds. Same if I use cash, or a bank transfer.
Things that are inflation resistant don’t rise AND fall wildly in relation to gently inflating assets like USD. They have a pricing curve which would be completely flat when priced in real (inflation adjusted == real) dollars. Bitcoin is not that
The dollar buys drugs, it buys guns, it buys terrible things. But it also buys bread and pays your rent.
The interface a large portion of us has had with bitcoin is speculation and cybercrime. "Your computer has been encrypted, please insert X bitcoin to continue" is not a great interface for making someone have a good feeling about a product.
>We lack the perspective of our great grandparents, who lived through the great depression, and understand that the dollar has no intrinsic value, either.
You also lack the perspective that if the economy collapses, particularly a large economy like the US economy your "unpinned" bitcoin is going to behave like it is very much pinned to that dollar.
I feel this is some kind of trick answer....
https://www.statista.com/statistics/299609/gold-demand-by-in...
Around 53% of mined gold is used in jewelry (46%) and technology (6%). 47% is in investment and markets.
But this doesn't really properly break down how much jewelry is purchased as a type of investment hedge in places where markets are not stable. Unfortunately there is no easy way to separate out jewelry purchases for enjoyment/fashion verses alternate wealth holding.
You can use Bitcoin to pay your phone bill with AT&T and buy electronics on Newegg. Many Americans might use US dollars to do this instead, but why would that impair their view of the Euro?
> The interface a large portion of us has had with bitcoin is speculation and cybercrime. "Your computer has been encrypted, please insert X bitcoin to continue" is not a great interface for making someone have a good feeling about a product.
This seems like putting the blame on the wrong party. If the criminals demand payment in gift cards, do people get mad at companies for offering gift cards?
> You also lack the perspective that if the economy collapses, particularly a large economy like the US economy your "unpinned" bitcoin is going to behave like it is very much pinned to that dollar.
If the world economy collapses, sure. If you're in some country in South America and that country's economy collapses, probably not.
US dollars are unique because -- ironically -- they're not just used as a currency. Enough large institutions and foreign governments hold them (or explicitly dollar-denominated assets like US treasuries) as an investment to significantly affect their value.
Satoshi doesn't even say anything and hasn't for a very long time.
That's not supposed to happen if everybody follows the supreme leader.
Ethereum is better than the other complete scam coins, it's not a total scam. But it's not really permissionless and decentralized like Bitcoin.
There are other cryptos which have most or all of the advantages of Ethereum with minimal downsides. I don't want to come across as shilling any particular bag, so I'll be vague and say there are chains with reasonable amounts of activity where transactions take seconds and fees are $0.00x or $0.000x. This actually is disruptive and interesting compared to fees for Stripe/Braintree or even Mastercard/Visa.
The reality is that if Ethereum released today with its capabilities, it would not see widespread adoption. Its position today is purely because it's the incumbent smart contract chain.
Other blockchains that advertise smaller fees and faster transaction times all sacrifice on decentralization and/or security, and would not retain those advantages if their usage was at the same scale as ethereum.
Except that Bitcoin is very expensive to actually use and isn't private by default.
That Bitcoin is the only one with value is only wishful thinking from the Bitcoin maximalists.
It is far more private by default than our current central bank and credit card system. Could it be better? Maybe. Does everyone want a fully anonymous system? I'm not sure
At the moment the average transaction fee is almost $4, but cases of more than $10 or $20 are not uncommon. It has been as high as $50 as well.
It's just too expensive and/or too slow to work for day to day payments.
Have you heard of the lightning network that is a fast transaction layer built on top of Bitcoin?
I have heard about this mystery thing that supposedly solves all of Bitcoins problems.
Except that it's been years and it's still not ready, you still have load it up via the expensive transactions and you have to use third party services to get a somewhat useable UX.
Lightning is even more of a joke than Bitcoin is.
Here's a good explanation:
The overall point I'm trying to make is it's hard to compare Bitcoin to our current banking system if you don't really even understand how Bitcoin works
My point was that for regular payments that regular people do Bitcoin is simply too expensive for. The average transaction amount is indeed very useful to backup that statement.
Yes, transaction fees are too high for everyday small purchases. The 10 minute transaction/confirmation time is too slow for that too. That's why (just like in our current banking system) layers are being built on top of bitcoin to solve those problems (the lightning network, for example). The trade off is that these fast and cheap transaction layers will have a little less security and longer final settlement times (similar to our current system but actually still way more secure, and also permissionless, free of central control, etc., etc.).
It's amazing the amount of mental gymnastics Bitcoin maximalists come up with.
Your argument is kinda like saying, "this 1 ton pickup uses too much gas."
My argument is kinda like saying, "this 1 ton pickup uses too much gas, if all you are doing is driving yourself around town. But if you really need to haul some cargo, it's a great vehicle."
Is that mental gymnastics? If so then I guess I'm guilty.
That it doesn’t have any known/recognizable founder has helped it quite a bit. Compare that to other coins with founders who have compromised on things (in some or many people’s views) and it makes the case stronger. Plus the fact that it didn’t have an ICO-like event — where the people launching it and their friends get a big stake for close to nothing — has also helped reinforce the idea that it’s less scammy.
> Everything else is just a me-too derivative that can add nothing except the possibility of central control (like the "digital dollar").
I’m not sure where you’re getting this from if you’re comparing all other cryptocurrencies. Would Monero and similar currencies be a “me too” derivative too? If yes, why? Monero is quite steady, AFAIK, in its valuation in fiat currency terms.
Are we saying bitcoin is this? Because it's stupid volatile and seems pretty correlated to inflation.
I'm not sure I buy the thesis of Patrick's article "Crypto Fooled Us Once" on the basis FTX collapsed when SBF stole the clients money. Crypto goes on fine, Kraken, Coinbase and a hundred other exchanges still do business. One crooked exchange less has not put crypto and fooling into the past.
Yes, it will fool you again. Only if you're a fool.
It's wooden nickels, the Brooklyn Bridge and Bernie Madoff all taken to their ultimate logical conclusion --- something with no intrinsic value whatsoever (electrons) is being exchanged for real functioning currency.
But what really sets the crypto scam apart is the fact that no is really lying about the fundamental nature of the transaction.
No one is hiding the fact that by buying crypto, you are exchanging your legal working currency for nothing more than an entry in a database with no real guarantees of any kind --- legal or otherwise. No one is hiding the fact that with only moderate technical skill, anyone can create a similar database and mint their own version of Bitcoin.
All crypto really does is provide a quasi-viable excuse to entice people to lie to themselves about economic reality and what we call "money".
Bitcoin devs can do whatever they want, except that there is no law putting them in charge so if they attempt to commit fraud they lose everyone's respect which was the only thing giving them any power, and they get replaced by someone else. Which they don't want, which keeps pressure on them to behave well.
We can argue about the game theory and what exactly would happen if this was attempted today, but the point remains that double spend is possible and the Bitcoin white paper does not address this issue because it assumes Bitcoin code is set in stone. As soon as you consider that the protocol evolves and is subject to human manipulation, the white paper's guarantees all go out the window. This includes the 21 million bitcoin "limit".
And I think we can both further agree that someone that isn't us modifies the code of the Bitcoin node we run on our devices. Unless you're still running Bitcoin 0.1, but then you're actually not on the "Bitcoin" network as we know it today. There are pressures outside of your control that make it so that you have to update your node, and you have to run new code you probably haven't reviewed or approved yourself.
The only way to make Bitcoin work as defined by Satoshi is to have the code be 100% perfect and then not touch it, and that ship sailed a long time ago.
They also won't refund you for fraudulent charges unless you report them quickly enough.
Prove me wrong by paying next month's rent with it. Let me know how it goes.
How about if you want/need to move and get a new landlord?
The point being that no landlord or merchant or individual has any legal obligation to accept crypto as "money" and can refuse any time they want.
For all intents and purposes, crypto is monopoly money backed by greed and delusional thinking.
I think the problems started when people started treating crypto currencies as investments instead of, well, currencies. I think the BTC jump from low 100s into 6 digits territory is probably what precipitated the craze, making a lot of people go berserk and spawned a whole cottage industry.
How is cryptocurrency any more of a scam than fiat currency, ie. digits in the computer of some private bank or central bank?
Just empty attacks and idiots.
Cryptocurrencies increase in value as more people use them, but they don't fall to zero as a result of becoming widespread, because their sole value isn't for speculation. They can also be used as a currency.
Now, some of these valuations have built into them the assumption that their use as a currency will ultimately become widespread, because otherwise they would be worth a lot less than they are. But less isn't the same as zero, and volatility doesn't matter if you are using it as a currency because then you're not holding enough of it for a long enough period of time to be exposed to a major change in value.
With a MLM scam the value doesn't just have volatility, when you run out of suckers the value crashes to zero forever. With cryptocurrency the speculators can lose their shirts and at the end of the day you can still buy Bitcoin with cash and then use it to pay for a VPN.
It's the suckers whose "investment" in one of these things goes to zero, which happens all the time.
There are cryptocurrencies that go to zero, but there are also government currencies that go to zero. They go to zero when people stop using them as a currency, not when they become so widespread that you've saturated the market for suckers.
That isn't a scam, it's a gamble. It's the same as going to a brokerage and selling short, or buying a piece of land sight unseen. They are not allowed to lie to you. You are allowed to be an idiot and lose all your money.
This is astonishing mental gymnastics. Take the average crypto investor and ask them how the blockchain works. Not marketing fluff: the actual steps in pseudo-code for literally any step of the process.
"The code is all there bro" is an astonishing amount of bad faith. Yeah, it is. Big deal. I've been a software developer for my entire adult life, but I don't work in cryptography, so I can't tell you a single damn thing about how blockchains work. The average investor in crypto, the influencers that peddle it, the whales that flooded the market with money? None of them understand it even slightly. I'd bet my life savings on it.
> How is cryptocurrency any more of a scam than fiat currency, ie. digits in the computer of some private bank or central bank?
A short, non-exhaustive list of differences:
- Crypto has basically zero consumer protections and makes the implementing of them extremely difficult by it's nature
- It is "anonymous" (actually pseudonymous) unless you are technically inclined enough to interact with the chain yourself, with your own software. "Normies" get to use platforms built by... somebody? Who maybe did it right? Probably. If they did it wrong though good luck getting your money back!
- Complete lack of any oversight of any regulatory body, which is a selling point, up until there actually are those, which are the large miners, stakeholders and exchanges
- Runaway deflation is not only a possibility, it is the goal of all of these projects, it's what "TO THE MOON!" means. They WANT that. After which and during their attempts to achieve it, the currency is useless as a currency because of the volatility in value.
- The system has demonstrated multiple times that all the "ownership is truly yours" rhetoric is thrown out the window when the real monied investors in the background have their assets taken from them, in a way that is not against the rules, but no worries we'll just rewrite history for them because they're rich, they can't lose or this whole scheme falls apart
People that first understand it eventually find Monero and BCH and start investing everything they can afford.
Of course idiots can be on both sides.
"If you can be exploited, you deserve to be exploited."
Not all of them. One [1] has an emission of one coin per second forever, taking a century to get yearly inflation down to 1%.
[1] https://john-tromp.medium.com/a-case-for-using-soft-total-su...
> The system has demonstrated multiple times that all the "ownership is truly yours" rhetoric is thrown out the window
In ethereum that only happened once back in 2016 when the DAO was hacked. In any case you're free to use Ethereum Classic.
Anyways you listed some legitimate concerns of cryptocurrencies, but none of them imply that crypto is a scam. Nobody is forced to use crypto, and anyone purchasing crypto should obviously do their own research and evaluate whether it makes sense for them. Crypto has legitimate use cases (eg. for people in countries with oppressive currency regimes) and many find it work the risks.
Literally the entire basis of free market ideology is the notion that buyers and sellers operate on an equal footing and a presumption of good faith can be assumed, or at least, that's how it's been sold historically. So, so much of crypto is just outright lies. The notion that every member of a project, for instance, can all walk away rich is at face value a lie: because crypto cannot create wealth, merely move it, the people who cash out big on top can only do that because so many others have bought in on the bottom. It's just a techy retooling of a bigger fool's scam: you can only make money on the asset you've bought by finding a buyer to buy it at a higher price later. The only way you can conceptualize these things as a store of value is to presume an infinite chain of bigger fools ready to buy it at an ever increasing price, ad infinitum. Or, if you prefer to operate in reality, there will eventually be a bag holder, someone who holds something that is now worthless and cannot sell it.
Like, for example, all the people who hold Ethereum Classic, which is probably why it's worth a tenth what Ethereum is: because the principles of this technology don't fucking matter, what matters is the traction the coin has with the investor class, and the people who are in this to make money (which is the vast, vast majority of them) are going to follow the chains that the big stakeholders go to.
> Again, a scam implies someone being "misled". If you buy some ecstasy and its laced with fentanyl, you were scammed (to say the least). If you buy ecstasy and you get ecstasy, you were not scammed as you got exactly what you asked for.
And this again is exactly the attitude I absolutely loathe in the tech space. This notion that if you aren't smart enough or knowledgeable enough to see the bad shit coming, if you, by your very basic human nature can be taken advantage of by someone who knows more, than you apparently deserve to be. Buyer beware.
That attitude sucks ass. If the crypto guys were really about changing the world for the better, they would be building a financial system that is, yes, detached from the current, highly biased and corrupting one that is rife with problems, and on-boarding people with education. With understanding of the underlying tech, imparting knowledge about the failings and foibles of the systems they're replacing, and showing a new, better version, decoupled from the corrupting influences of governments they claim render fiat unusable. That's NOT what they've done here. They have not built a replacement financial system, they built a near exact copy of the current one, minus all manner of consumer protections, any insurance of value, with a singular goal: to recreate the structural inequities of the old system, with them on top. That's fucking it. That is the entire difference between fiat and crypto.
This comment being repeated half a dozen times does not make it true or productive to conversation.
It's like the reverse of that famous HN post when Dropbox was announced and the top comment was that this probably won't work: https://news.ycombinator.com/item?id=8863
It's scam in that you're being enticed to mislead yourself.
You're ignoring the obvious difference between "legal tender" and electrons. Most children understand that "monopoly money" isn't real "legal tender" --- but you don't?
Those running the crypto "marketplace" don't suffer from these sort of delusions.
That doesn't even make sense.
> Most children understand that "monopoly money" isn't real "legal tender" --- but you don't?
No one is claiming that cryptocurrencies are legal tender (outside of countries like El Salvador that made it so)
Neither does surrendering "legal tender" for money that is not.
Many have tried stopping it for 15 years and unfortunately they are still wasting their time trying to do so.
In fifteen years Linux went from a hobbyist project in 1991 to a major infrastructure project underpinning the Internet; Golang started in 2009 and now is ubiquitous in the tech world. Plenty of analogous technologies exist that were created and flourished in fifteen years, and they did so by providing meaningful value without requiring universal adoption to become effective.
In contrast the Bitcoin paper was released in 2008 and blockchain still hasn't found the killer app that people outside of the crypto ecosystem rely on in some serious capacity. Fifteen years in blockchain tech is still slow, risky, and painful to use; scams abound and there's a distinct lack of boring, practical use cases that make blockchains a safe technology to use as foundational infrastructure.
What manifests as people trying to stop blockchains is typically regulatory bodies trying to stop money laundering or the sale of unregistered investments. This isn't some shadowy cabal trying to crush Bitcoin but institutions watching Celsius Network and FTX detonate and trying to catch up to keep people from getting burned.
So yes, the blockchain cat is out of the bag, but nobody cares. We are squarely in "put up or shut up" territory because enough time has passed for the tech to develop; if blockchains never catch on then it's because the tech just wasn't that useful to begin with.
There are more blockchains (not tokens) that exist beyond Bitcoin and are much faster and their use-case is worldwide, instant and extremely low-fee same-day payments.
> What manifests as people trying to stop blockchains is typically regulatory bodies trying to stop money laundering or the sale of unregistered investments. This isn't some shadowy cabal trying to crush Bitcoin but institutions watching Celsius Network and FTX detonate and trying to catch up to keep people from getting burned.
They already know they can't stop or ban it and these other blockchains, but they will go after the unregulated, non-conforming exchanges and have already introduced rules and regulations on the existing ones.
But I'm afraid it isn't going away like it or not.
> So yes, the blockchain cat is out of the bag, but nobody cares.
Except, you seem to care enough to complain about it here and until the next time it gets talked about again, which is why you replied in the first place.
> We are squarely in "put up or shut up" territory because enough time has passed for the tech to develop; if blockchains never catch on then it's because the tech just wasn't that useful to begin with.
Of course it is no wonder why companies like PayPal, VISA, Moneygram, TransferGo, Stripe, Checkout.com, etc still continue to use it in their products.
You just described the modern banking system. Yes, the government will give you guarantees for your stored funds to some extent, but when shit hits the fan, you are on your own (example 2008 financial crisis).
> All crypto really does is provide a quasi-viable excuse to entice people to lie to themselves about economic reality and what we call "money".
The same can be applied to the modern stock market. How many top players bring actual value, are sustainable, and can live more than 6 months without pumping stocks (and company valuation) through social media nonsense and other accounting tricks?
How much money did your savings account lose in 2008? Or your checking account?
https://www.investopedia.com/articles/economics/09/money-mar...
One money market fund, which was a tiny tiny percentage of overall money market funds, broke the buck by like 3%
Also money market funds aren't insured (typically)
Also, money market funds for sweep now have much stricter regulations to prevent even that from occurring again.
How much money did you lose in your SAVINGS account, or CHECKING account?
Don't move the goalposts on me. I know what you are trying to do rhetorically.
CPI was deflation for June 2008 to June 2009 yo.
Whatever cash you had that year gained value, not just from interest rates, but also from deflation.
--------
I dunno why you'd pick DXY when CPI or PCE are far more well regarded measures of price fluctuations.
There are plenty of companies that pay dividends. The logic behind stock buybacks is that it achieves a similar end for investors with favorable tax treatment.
In either case I am receiving some portion of the cash flows generated by a business. These cash flows are being generated independently of any stock market activity.
So tell me what claim on an underlying asset / cash flow does a cryptocurrency entitle me to?
Scams get built on the tech, but that’s always been the case with any new tech.
That said, crypto culture and the speculative energy it breeds definitely incentivized scams. The culture needs a massive overhaul
I find that people that are not smart enough to understand Bitcoin generally respond by getting mad about Bitcoin or ignoring it.
This is not to say that crypto isn't so infested with scams that they're now inseparable. I spread my trust around thinly across many countries, banks, and financial instruments with very little of it in crypto. My hopes is that crypto will mature and become boring but useful but do believe we're still a long way away from that.
After when I was corrected that they were talking about real currency my first thought was oh, this is a grift. Only scammers try to reverse the meaning of words like this.
Given a choice between the most stable government on the planet and the scam artists running crypto exchanges --- the choice is a no brainer.
Personally, I trust the government about the same amount as I trust big companies, not at all.
But you trust scam artists running crypto exchanges from undisclosed 3rd world locations?
You're lying to yourself.
Also, the US is not the country it used to be so past performance shouldn’t be as indicative of future performance. Particularly the Nixon depegging (Nixon shock) from gold substantially changed the character of the market and the US economy. It takes a long time for the effects to be felt in full and it’s my position that a lot of the current problems originate from that event.
From an outsider to the US the US does not look stable, quite the opposite. It’s not even an old government.
You're lying to yourself when you say you don't trust government.
Your wealth and business ventures are secured by the rule of law --- aka government.
It's a right wing mind virus that entices people to express distrust in government --- as they trust government with everything they do --- and vote for those actively trying to destroy the same trust.
> electrons
> entry in a database
The most fascinating phenomenon of crypto arguments is that they never change.
Fifteen years ago you could find these same unintentionally ironic statements, where the most cutting criticisms of cryptocurrency are equally true of dollars and euros.
The only thing missing from this thread (so far) is mysticism about the money supply and confident assertions that dollars are somehow "backed" by the military or tax payments.
They are backed by law --- they are "legal tender". As such, I'm fairly confident I can pay next month's rent with them.
Crypto is backed by --- absolutely nothing.
Pretending you can't see the difference here is lying to yourself.
And bitcoin is not backed by nothing. It's backed by a vast army of bitcoin promoters which you may not like but they are not nothing.
I'm not Venezuelan, are you? The fact that an unstable "legal tender" exists somewhere doesn't make all others the same and it doesn't make crypto a better or more stable alternative. The fact that some people are promoting it for person gain doesn't either.
Not to say that it's dumb or silly to align yourself with the current regime, even though we all know that it will, sooner or later, be replaced by something else. Maybe that's next year, or maybe it won't happen in my children's lifetimes.
But for me, I already have 95% of my life and wealth tightly coupled to the stability and durability of the current regime, and it doesn't seem completely mad to diversify a bit into something that might possibly have a chance of surviving a regime change, or could retain some value in the event the current regime decides to appropriate or restrict or sanction how I can spend or transfer wealth currently locked in their system.
Perhaps twenty years ago it was unimaginable that the current regime could end, or transmute into an totalitarian hellscape, or even just continue with the appearance of liberal democracy but be undermined by authoritarians.
If it's become easier to imagine scenarios like these in recent years, is it insane to want a 5% allocation to independent, uncorrelated, uncensorable assets to correspond to a 5% probability of previously unthinkable scenarios?
Yes --- when your "independent" assets have little to no history of success or stability beyond speculation, manipulation and promotion for questionable motives and arguably carries a much greater risk than the one you're looking to hedge against.
Crypto is one of the world's most volatile "assets". The only way it achieved any stability is through largely imaginary ties to fiat using "stable coins".
In other words, avoiding risk by adopting even more doesn't make much sense. "Smart money" doesn't buy into a startup with no real world product or assets in order to avoid risk.
Ask yourself this question --- why hasn't every profit driven bank and corporation offered their own crypto already? They have way more ability to promote it than bitcoin. The only reason they haven't is because they don't see any real advantage in the long run.
Key points to remember:
1. Crypto is not a currency, it's a trading vehicle similar to a stock, junk bond, debenture, options or futures contract.
2. Regulated security tokens/crypto that represent equity ownership in a company with real products and with real revenue generating capability is the future of crypto.
It's important to realize the advantage of a truly global capital marketplace represented by regulated security tokens connected to the equity of a company/startup which provide a company/startup the ability to raise funding, create jobs, get salaries paid, fund operations in science and techology in any indusrty which provide a return on investment capital (ROIC) to stakeholders and shareholders at the same time.