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Is this the end of crypto?

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Re: Is this the end of crypto?

#321

Post by golergka »

compsciphd wrote: post #221
P5fRxh5kUvp2th wrote: post #106

Earlier quoted context omitted.

When bitcoin first came onto the scene I personally knew a guy who was running a website to act as an exchange. It was small because bitcoin itself at that time was very small. Then bitcoin had its very first dip and it became unprofitable to mine bitcoins. When that happened he shuttered the website and kept everyone's bitcoins. I knew of bitcoin early on due to this guy, but even then I had no interest and consider…

I'd go a step further with the comparison to gold. If everyone would stop mining gold today, gold would retain value (or perhaps even go up in value). On the flipside, if we turned off all bitcoin miners today, bitcoin would go to zero instantly (as its worthless without continuous resources being pumped into it). This is why I'm sympathetic to those who say its ponzi scheme, it only has value because of new resource…

> If everyone would stop mining gold today, gold would retain value (or perhaps even go up in value). On the flipside, if we turned off all bitcoin miners today, bitcoin would go to zero instantly (as its worthless without continuous resources being pumped into it).

"Mining" in bitcoin means two different things, creating new coins AND adding transactions to the ledger. If mining reward went to 0 (which will actually happen someday), and new coins stopped being created, miners would still be able get a profit from transaction fees, although it wouldn't be "mining" in the same sense as gold.

Re: Is this the end of crypto?

#322

Post by feet »

Taniwha wrote: post #310
feet wrote: post #241

Earlier quoted context omitted.

Turning mining back on is entirely changing the parent's statement. "Well yea you could do that change to tank the value, but imagine if you just undid it huh???" The point was without mining entirely, there is no value

But there's only ever going to be a fixed number of bitcoin - does it all just stop working when it's all mined out?

Iirc miners get the gas fees

Re: Is this the end of crypto?

#323

Post by dahfizz »

randomdata wrote: post #245
P5fRxh5kUvp2th wrote: post #106

Earlier quoted context omitted.

When bitcoin first came onto the scene I personally knew a guy who was running a website to act as an exchange. It was small because bitcoin itself at that time was very small. Then bitcoin had its very first dip and it became unprofitable to mine bitcoins. When that happened he shuttered the website and kept everyone's bitcoins. I knew of bitcoin early on due to this guy, but even then I had no interest and consider…

> It's not possible for the value of gold to go to zero The price might go to zero, though. The price of oil, which is arguably more useful than gold, went negative a couple of years back. Having intrinsic value doesn't necessarily mean it is exchangeable, especially if it needs to be exchanged at a given moment in time.

The price of oil futures went negative. The spot price of oil has never and will never hit zero or negative.

You can't use your regular intuition about commodity prices when talking about futures contracts. The negative price was a one-day event, and all it really represents is a higher-than-normal premium on the calendar spread.

Re: Is this the end of crypto?

#324

Post by P5fRxh5kUvp2th »

gizajob wrote: post #269
randomdata wrote: post #245

Earlier quoted context omitted.

> It's not possible for the value of gold to go to zero The price might go to zero, though. The price of oil, which is arguably more useful than gold, went negative a couple of years back. Having intrinsic value doesn't necessarily mean it is exchangeable, especially if it needs to be exchanged at a given moment in time.

The exchange value might fluctuate but the use value remains, in the case of oil and gold. Bitcoin has no use value. Could say that about other financial instruments and derivatives, but they serve a purpose to those who use them. There's a big difference to exchange value and use value though, Marx made a career out of defining it.

This happens entirely too often on this website.

I used the phrase 'inherent value' to describe what you're referring to as 'use value'. But of course someone decided they had to argue against it by arguing that the trade value between countries went negative at one point (which isn't all that surprising but has nothing to do with the original point).

arguably 'use value' is a better phrase, but given the surrounding explanations, the poster engaged in a clear strawman.

Re: Is this the end of crypto?

#325

Post by audunw »

meehow wrote: post #300

Fractional reserve is a scam, not crypto. Every institution which doesn't have money which they promised to keep safe, should collapse. Proof of reserves and audits are extremely easy in crypto and it doesn't require any regulations. Self custody of crypto is also pretty simple. Market is young, people greedy and as a result we got this domino of falling companies. Even after Mt. Gox collapse people didn't learn much…

> Fractional reserve is a scam, not crypto.

Why? Because you say so? Fractional reserve banking is generally heavily regulated such that most of the value created from new loans are tied to actual physical value in the real world. Fraction reserve banking is genius in my opinion, because if you want to take out a loan to build say a mine, or an oil well, that you know is going to generate millions in value, you're not fully dependent on finding smoe kind benefactors to loan you their own money to open that mine. If you can prove to the bank that you are likely to be able to create value greater than what you're borrowing, they'll create that money for you. And that's how it should be. If you're adding say $10 million to the economy, it's not a problem at all that $5 million was created out of thin air to enable that. In fact, that's exactly what you want. Ideally nobody who is able to create significant value should be stopped just by the lack of capital.

There are cases where lending isn't tied to value creation, like loans for consumption or stock gambling. Those should be regulated out of existence, but that's not fundamentally a problem with fractional reserve banking.

Loans for purchasing land is also iffy.. I think Georgism may be a solution to that.

Crypto is the exact opposite of a well regulation fractional reserve banking system. The creation of cryptocurrencies, espcially with PoW, is tied to the destruction of value (wasted electricity and silicon), not creation of value. IMO, that makes it fundamentally unsustainable.

> Proof of reserves and audits are extremely easy in crypto and it doesn't require any regulations.

You say that, but everything we've seen so far indicates the exact opposite. Perhaps it's easy in theory, but nobody seems to be interested in doing it.

I suspect with all the regulations, external systems and oracles necessary to make sure it's all correctly audited, you'll find that you could just as easily do without a PoW/PoS blockchain and have a far more efficient system. Maybe a proof-of-authority blockchains can make sense, just so you have some explicit cryptographically signed trace of who you're trusting in a transaction. Trustless systems are a lie. You'll always find you need to trust some humans/organization in the end.

Re: Is this the end of crypto?

#326

Post by majewsky »

Taniwha wrote: post #310
feet wrote: post #241

Earlier quoted context omitted.

Turning mining back on is entirely changing the parent's statement. "Well yea you could do that change to tank the value, but imagine if you just undid it huh???" The point was without mining entirely, there is no value

But there's only ever going to be a fixed number of bitcoin - does it all just stop working when it's all mined out?

Once all bitcoins are mined, miners are supposed to fund themselves solely through transaction fees, as they partially already do today.

Re: Is this the end of crypto?

#327

Post by Spivak »

ignoramous wrote: post #259
1970-01-01 wrote: post #88

Here's how I see it: Crypto as an investment - Not your keys, not your coin. Crypto as a currency - I can't directly buy food, water, shelter, transportation, energy, or anything fundamental with it. I know acceptance is growing, but 10+ years later, crypto still has extremely limited acceptance for daily goods and services. It is almost exclusively held as an investment.

> Crypto as a currency - I can't directly buy food, water, shelter, transportation, energy, or anything fundamental with it. Cryptocurrency payments is a flourishing market, btw.

Where? I don't mean this as snark. Are there any household brands that actually accept crpyto?

Re: Is this the end of crypto?

#328

Post by LawTalkingGuy »

cooljacob204 wrote: post #11

When Crypto was young it was this cool new technology that mostly interesting because of the underlying tech. But even back then it was mostly valuable for buying drugs online and other illegal stuff. Now it's that and a way to scam people of their life savings. I do hope it dies out, it should have been heavily regulated from the get go. Way too many people saw these high production commercials with their favorite c…

> It never had a real use outside of scamming people and buying illegal shit

HashCash was invented to make spam expensive and save email.

> Everyone was yelling at people to hold. Don't spend it, it will go to the moon!

No, most of us "in the community" were having fun buying pizzas with it. The vast majority of the people involved early started for the features it unlocked, we didn't foresee being able to ride it to riches like this because nobody could picture our families using it or putting money into it. We thought it would remain a protocol-level thing.

> And sure it keeps your money away from the spooky scary government.

Horses for courses. I like having some "untraceable" internet money for buying things overseas, like servers, etc. If I wanted to have posters put up in Moscow I could find and pay someone in BTC but not from USD.

> But I prefer my government insured bank account using a government managed currency and recourse for any scams/hacks that might happen to me.

Generally, yes. Modulo inflation, "haircuts", forced confiscation, looking suspicious because you have too much money, etc.

Re: Is this the end of crypto?

#329

Post by Loughla »

paiute wrote: post #316
P5fRxh5kUvp2th wrote: post #106

Earlier quoted context omitted.

When bitcoin first came onto the scene I personally knew a guy who was running a website to act as an exchange. It was small because bitcoin itself at that time was very small. Then bitcoin had its very first dip and it became unprofitable to mine bitcoins. When that happened he shuttered the website and kept everyone's bitcoins. I knew of bitcoin early on due to this guy, but even then I had no interest and consider…

it honestly sounds a lot like banking. We just have some rules now to prevent this sort of thing. It's not bitcoin that's the problem... It's the money changers.

If an item only works well in theory, then the item itself is the problem.

A firearm is absolutely, 100% safe as long as no one ever interacts with it.

Because we are humans, in a society, and everything we do relies on human interactions, if Bitcoin (and crypto in general) cannot operate positively and effectively, except in theory, then it is the problem, regardless of the underlying reason.

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