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The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

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Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#141

Post by lawn »

decentralised wrote: post #16

In general, if you pick the all time high as a starting point for your "research" it's all the way down from there. Bitcoin's daily transaction volume is moving to second layer so the metric used is not very useful. More importantly, and I can't stress this enough, the FX value of a cryptocurrency is not directly related to the project's status (developer activity or security track record, etc) but it is correlated t…

> Bitcoin's daily transaction volume is moving to second layer so the metric used is not very useful.

No it hasn't.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#142

Post by lawn »

fullshark wrote: post #7
slammm wrote: post #3

I feel like its another case of the tech bubble. The projects with real causes and uses will come back from any implosion in the long run.

So illegal transactions and money laundering it is.

And...

* Porn

* Donations to wikileaks

* Pot

* Sending money to Venezuela

* Leaving Venezuela with your wealth intact

* Payments without giving all transaction info to the credit card companies

* Digital payments for the unbanked

All legal usage that makes sense.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#143

Post by atombender »

jayalpha wrote: post #108
kjullien wrote: post #59

Earlier quoted context omitted.

Tether isn't what cryptocurrencies was/is supposed to be. It's as if you took Herbalife as a valuable/honest/model player in the dietary supplement market...

" It's as if you took Herbalife as a valuable/honest/model player in the dietary supplement market..." Are they not? Shakes can be a decent way to lose weight. Seems to be that people are willing to pay a premium for the "community". But IMHO saying their stuff is overpriced is like saying beer in a bar is overpriced because you can buy a beer for one dollar in the supermarket. Yes, it is correct. In some way.

There's nothing wrong, at least conceptually, with Herbalife's products, protein shakes.

However, Herbalife's success comes from their incredibly shady and destructive pyramid scheme that preys on individuals and tricks them into acquiring debt in exchange for becoming "distributors" of Herbalife products. According to the FTC [1], "it's virtually impossible to make money selling Herbalife products".

I recommend the documentary Betting on Zero [2] for more insight into Herbalife, as well as the fascinating story of Bill Ackman's failed attempt at shorting their stock at a huge scale.

[1] https://www.ftc.gov/news-events/blogs/business-blog/2016/07/...

[2] https://en.wikipedia.org/wiki/Betting_on_Zero

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#144

Post by ramblerouser »

__Joker wrote: post #109
ramblerouser wrote: post #35

>Echoing sentiments of mainstream economists Yea, Paul Krugman has been saying "Bitcoin is doomed" since 2012. He'll always be wrong because this is all politically motivated. The banking and political establishment are scared shitless by alternative currencies, crypto or otherwise. Google the "Liberty Dollar". Mouth pieces for the financial industry like Bloomberg will attack alternatives to the petrodollar no matte…

I am not sure Paul Krugman is scared or politically motivated. One of the strongest argument Paul Krugman makes against bitcoin is about trust. Like, he says dollar has value because US government backs it and you can pay taxes with it. Basically, he is questioning can bitcoin gain that level of trust among its users to be successful. Not the current level of some transaction around dark markets. Personally, I don't…

>US government backs it

Yes, by putting people in jail who put forward viable alternatives to USD, like Liberty Dollar. And making Bitcoin impossible to use legally as a currency by applying strict capital gains tax reporting requirements.

>Can Bitcoin gain that level of trust amoung its users to be successful.

The massive public and institutional buy-in over the past 5 years suggests that trust in its cryptographic security is not what is holding it back.

Bitcoin, from its inception, is part of a political battle, not a technological or economic one. Read the Satoshi white paper. Paul Krugman is saying that it wont be successful because the banks and government will fight it, and his social status is dependant on him being part of that fight. Do you think Krugman would keep all his exposure and prestige if he went off the reservation and criticized the banks and the petrodollar? No way.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#145

Post by CyberDildonics »

Here is Bitfenix's cold wallet address:

https://bitinfocharts.com/bitcoin/address/3D2oetdNuZUqQHPJmc...

They have about 934 Million in BTC, having had as little as 869 Million USD recently. Their tether liabilities are between 2.5 and 3 Billion USD:

https://coinmarketcap.com/currencies/tether/

It has long been asked how a token can be pegged to 1 USD without any actual USD.

The reality is that it can work if your balance in other currencies doesn't go below the average price you bought them at. The more the price of btc goes down, the more btc they have to give back when people exchange their tethers for btc (you can't exchange them for USD).

Two dynamics work in their favor:

First, exchanging tethers for btc means buying btc, which makes the price of btc go up. If people buy the btc so that they can exchange it at real exchanges for USD, then this effect would be temporary and you would see a disconnect between the price of btc at Bitfinex and real exchanges like coinbase. Two days ago the premium on Bitfinex was about $100, now it is about $400 higher than coinbase and bitstamp.

Second, what many think originally happened due to the stark correlation between tether creation and btc price jumps on bitfinex, was that the creation of tethers and subsequent transfer in bulk to bitfinex's exchange caused the btc price to rise. Now not only do they benefit from creating tethers out of nothing, they get the exchange commission on top AND get to create the illusion of demand. This illusion of demand was seen to work extremely well on unsophisticated investors during the run up to 20,000 USD per btc, helping to create articles, fear of missing out and general hysteria that brought in more unsophisticated investors buying in to something they did not understand.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#146

Post by ceejayoz »

lawn wrote: post #142
fullshark wrote: post #7

Earlier quoted context omitted.

So illegal transactions and money laundering it is.

And... * Porn * Donations to wikileaks * Pot * Sending money to Venezuela * Leaving Venezuela with your wealth intact * Payments without giving all transaction info to the credit card companies * Digital payments for the unbanked All legal usage that makes sense.

All of those items can be done pretty trivially without cryptocurrency (with the sort-of exception of Venezuela, but taking money out of the country is not a legal usage in either case).

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#147

Post by s73v3r_ »

OedipusRex wrote: post #79
s73v3r_ wrote: post #62

Earlier quoted context omitted.

Ok, cool. How does that secure the rest of us?

It doesn't, Bitcoin is as safe as the security of the person who holds it. And as someone who had Bitcoin on Mt Gox, this is a moot point to argue.

The point is that the military that the person claimed should be counted in the energy expenditures related to the USD does far, far, far more than "protect the dollar", and even if we all moved to Bitcoin, we'd still have to have the military.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#148

Post by ceejayoz »

lozaning wrote: post #132
Scoundreller wrote: post #11

Earlier quoted context omitted.

Iunno, if i were a billionaire, the idea of having $50m under nobody’s control but my own that I can take anywhere, anytime, doesn’t exist anywhere else. I can’t do that with gold. Bank deposits are always available until they aren’t. But Coinbase can’t do this either.

I smirk whenever I walk past the poster in the international jetways at SFO regarding it being a no no to leave the country with more than $10K.

You misread those posters. It's fine to come in/out with more than $10k. You're required to declare it.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#149

Post by hal9000xp »

decentralised wrote: post #23
pavlov wrote: post #10

An important harbinger of trouble to come is that the Tether (USDT) coin, which is supposed to be pegged 1:1 to USD, is now trading substantially below $1: https://www.bloomberg.com/news/articles/2018-10-15/dollar-pe... Billions of Tethers were printed seemingly out of thin air and used to purchase Bitcoin. It's part of the foundation of the house of cards that keeps Bitcoin at its current price: "Despite their modes…

I saw a couple of comments today about the price of USDT so I think it's worth while explaining how it works just in case anyone is interested in knowing more. USDT is a pegged-currency. It's often described as a stablecoin but that's not correct because it doesn't have an inbuilt stabilisation mechanism unlike Maker's DAI for instance. The way it works is purely based on well known legal mechanisms that have no cryp…

Thanks for mentioning DAI.

I mentioned DAI today in comment and essentially got banned for doing it.

In comment I provided link to interview with Olaf on blog.ycombinator.com where MakerDAO was mentioned.

So I got banned as spammer in HN for providing link to blog on YC.

It tells a lot about the level of average HN reader.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#150

Post by lawn »

ceejayoz wrote: post #146
lawn wrote: post #142

Earlier quoted context omitted.

And... * Porn * Donations to wikileaks * Pot * Sending money to Venezuela * Leaving Venezuela with your wealth intact * Payments without giving all transaction info to the credit card companies * Digital payments for the unbanked All legal usage that makes sense.

All of those items can be done pretty trivially without cryptocurrency (with the sort-of exception of Venezuela, but taking money out of the country is not a legal usage in either case).

Except credit card companies don't want to touch porn sites (they have to pay a huge markup and go through other middlemen) or pot companies (who accept cash but it's not digital).

PayPal froze the donations to wikileaks. That's not possible if you donate using Bitcoin.

The corrupt government in Venezuela may deem it illegal but it's not immoral to want to flee the country with your wealth. This is much easier with Bitcoin as you can just remember or write down your seed.

The point is cryptocurrencies does this all better. And your definition of "pretty trivial" is for the most part ignorant.

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