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Why I’m Cryptophobic

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Re: Why I’m Cryptophobic

#291

Post by mjburgess »

douglaswlance wrote: post #284
mjburgess wrote: post #4

There needs to be some basic economics here.. Money has value because of the value of the economic transactions in which its conducted. Government-backed currencies are forced to have value in the sense they force people to use it for their taxes. The US, additionally, forces the world to use it for oil trades. Value is in those economic transactions. A currency is just a "liquifying" of that value, to make it easier…

Cryptocurrencies have inherent value. Would you say there is value in having the capability to transact with someone else? There is some value there, no matter how many alternatives and how little that value is. That value scales exponentially with the number of potential transactional partners because each additional partner gives all other partners a new potential transactional partner. So at scale, even if the val…

Well that's the total addressable market: all possible users of any currency.

Likewise, that's the same market for any currency proposal -- including all the coins currently trading at 0 USD.

Money's job is not to have inherent use-value, as then people would use it up. Its value is relational, it tracks the economic exchanges with actual inherent value. But not perfectly, since you can eg., have hyperinflation, etc. So money has a life of its own above the economic transactions, but this is unsustainable, hence inflation which is "money falling back to earth".

There is no earth for crypto to fall to, ie., no place of actual economic productivity.

Re: Why I’m Cryptophobic

#292

Post by bufferoverflow »

mjburgess wrote: post #153
bufferoverflow wrote: post #76

Earlier quoted context omitted.

Your comment sort of works against BTC, because it was intentionally crippled. But there are many other coins that will do just fine for day to day transactions. But also the premise of your argument (taxes and oil) is weak. The value of these transactions pales in comparison with the rest of the transactions. So government enforcement has little to do with the value of USD. It has value, because people believe it, t…

Why do they trust that? D'you think it might have something to do with the state willing to violently require you accept its currency?

Cryptocurrencies don't do that, and they are still worth more than zero.

Trust is the key.

Re: Why I’m Cryptophobic

#293

Post by benreesman »

FabHK wrote: post #286
benreesman wrote: post #205

Earlier quoted context omitted.

Anyone can invent quasi-financial terms to make grandiose claims. The beauty of the market is that loudmouths don’t participate in the market for long. I’ll sell an American-style options contract to someone who thinks BTC is going anywhere near there at Black-Scholes -75. And I’ll have no trouble financing it. You want the other side?

You're selling puts on BTC struck at 1000 at a discount? Yes, I'll take a few.

I said 75 bps off what Black Scholes kicks out, gets a little weird with the thin market, and the expiration has to make sense, but in general, fuck yes?

You think BTC is going to drop like 20x in a sane options duration?

I think a lot of people would sell you that.

Re: Why I’m Cryptophobic

#294

Post by jrumbut »

dont__panic wrote: post #210
ben_w wrote: post #202

Earlier quoted context omitted.

Just using BTC to replace all of McDonald's daily transactions in the Berlin metropolitan area alone would be enough to destroy the system. (Of course this is where people come along and talk about layers on top of BTC, but all those seem to me to just be extra ways to replace trivial transaction-level auditing with Turing-hard code auditing).

It also seems like those "layers on top of BTC" erode one of the only aspects of blockchain that has appeal for me -- the full transparency of the system, such that you can see every exchange of BTC on the network. The minute you offload any of that to other systems, you're essentially creating dark pools and money laundering opportunities because of differential oversight.

> one of the only aspects of blockchain that has appeal for me -- the full transparency of the system, such that you can see every exchange of BTC on the network.

Which is interesting for many applications but kind of kills BTC as something that could be an everyday currency.

I'm already uncomfortable with the amount of data my bank has about me. No matter what scheme has been used to obfuscate it, I'm not comfortable with that data being held by anyone with a hard drive and internet connection.

Re: Why I’m Cryptophobic

#295

Post by bendtheblock »

datadata wrote: post #288
bendtheblock wrote: post #267

Earlier quoted context omitted.

Flowers are used for decoration, dies, teas, scents. Sometimes they may be overvalued. Crypto doesn't have any underlying value. It's just greater fool investing, there is no underlying cashflow, asset or company. Future cash flow comes from greater fools buying in. When you say "the internet" I think you mean the wave of web1 companies? Same as flowers above, there are real uses and value creation, which can be pric…

In 1999, what web1 companies had cash flows or even a business model that could become profitable? In hindsight it is obvious because we know that things worked out, but at the time it was just speculation, and the crash was the market calling it worthless. Similar objections then around what underlying value is and how the tech was useless. The ways to monetize often were invented much later (eg search ads). If you…

it does imply that the value doesn't stick - in fact that's exactly what I'm saying. there is no value beyond the expectation that another greater fool will buy it from you in future.

Re: Why I’m Cryptophobic

#296

Post by FabHK »

silentsea90 wrote: post #282
FabHK wrote: post #278

Earlier quoted context omitted.

Nonsense. Inflation has been running at below 2% for decades, and everyone is free to invest their savings in shares, gold, other currencies, or even crypto. Comparing that to slavery is not only fundamentally wrong, but distasteful.

US debt is skyrocketing, expenses like war paid for by debt[1]. Inflation in the US has been 2% but only because it was in a position of strength with the world accepting USD as the global reserve. That's changing steadily both with excessive printing and the world rejecting US debt instruments as a savings asset. "Everyone being free to invest" is a bit of an elitist claim, as most in the US live paycheck to paychec…

> Inflation in the US has been 2% but only because it was in a position of strength with the world accepting USD as the global reserve.

Inflation has also been > most in the US live paycheck to paycheck and are hurt by inflation.

If you live pay check to pay check, you don't care about inflation. You care about real wages.

Re: Why I’m Cryptophobic

#297

Post by smoldesu »

stingraycharles wrote: post #226
smoldesu wrote: post #224

Earlier quoted context omitted.

If there's one thing that people should correctly point out as scams in the world of crypto, it should be L2 chains. Every single one of them is a ploy to enrich their creator, full-stop. I don't even know what kind of pipe dream they sell to their investors to get capital. It's particularly funny, because I remember Justin Sun trying to scam people like this years before cryptocurrency had really taken off. Back the…

I’m a relative crypto noob, but I did see certain “lightspeed” transactions which would allow for high-volume and “instant” transactions. Is this also considered an L2 chain, or not? If not, how does it circumvent the limitations of the bitcoin blockchain without sacrificing transparency?

> Is this also considered an L2 chain, or not?

I can't say for sure without actually seeing the tech, but if a company promises to scale cryptocurrency transactions then they're probably doing it on an L2 chain. The problems with this are obvious: trusting a single party to handle all of your transactions and not abuse that insider info is crazy. These people are going to use their power over the chain to eke out every cent they can, otherwise it doesn't make financial sense to operate in the first place. It looks attractive from a VC standpoint, but that's because it's a deliberate honeypot.

Re: Why I’m Cryptophobic

#298

Post by syzygyhack »

jjoonathan wrote: post #256
syzygyhack wrote: post #159

Earlier quoted context omitted.

Not at all. If a self-interested minority emerges, the majority can fork away anew (see: Steem & Hive).

lol. You forgot to weight by wealth. Regular economics uses the same dirty trick when it talks about value creation rather than wealth-weighted value creation. It stuffs all its dirty laundry in that one weight term and then "forgets" to talk about it. Oops!

Weight by wealth? You are failing to understand the basic concept of a hard fork. Social consensus doesn't care what your number on the blockchain says.

Case in point, the Hive hard fork.

One very prominent and widely unliked individual purchased majority ownership of the STEEM token. Weighted by wealth, they could now control the chain, its governance, and most notably unlock tokens (20% of the supply) that were (per social consensus between Steem and its community) not supposed to be unlocked.

So, what did the Steem community do in response? They hard forked the platform, launching Hive. All STEEM holders could migrate their assets to Hive, except the individual in question who attempted to takeover Steem via wealth. The malicious elite was cut off entirely. Today, two years on, Hive is still gaining in activity and has more than twice the market cap of STEEM. Comparatively, Steem has become a ghost town.

Re: Why I’m Cryptophobic

#299

Post by ipaddr »

Night_Thastus wrote: post #279
jrm4 wrote: post #274

Earlier quoted context omitted.

But this feels like "Just using Model T's to transport all of the corn in the early 1900's would destroy the Model T system." Doesn't really say anything meaningful about "the impact of cars and trucks." I don't get why this is a useful argument; BTC and/or Crypto is definitely going to evolve. The question is how.

[deleted]

Most people did not have a car in the early 1900s. Not everyone can go into space today, it doesn't scale. BTC may have a maximum number of transactions today but many are using bitcoin and the big advantage is it doesn't matter how much you move you pay the same transaction fee. It is not ready for micro payments but works great for larger payments.

Re: Why I’m Cryptophobic

#300

Post by germandiago »

dont__panic wrote: post #210
ben_w wrote: post #202

Earlier quoted context omitted.

Just using BTC to replace all of McDonald's daily transactions in the Berlin metropolitan area alone would be enough to destroy the system. (Of course this is where people come along and talk about layers on top of BTC, but all those seem to me to just be extra ways to replace trivial transaction-level auditing with Turing-hard code auditing).

It also seems like those "layers on top of BTC" erode one of the only aspects of blockchain that has appeal for me -- the full transparency of the system, such that you can see every exchange of BTC on the network. The minute you offload any of that to other systems, you're essentially creating dark pools and money laundering opportunities because of differential oversight.

Money not stolen by who do not earn it. I love the idea.
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