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Is this the end of crypto?

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Re: Is this the end of crypto?

#331

Post by notpushkin »

miohtama wrote: post #163
notpushkin wrote: post #122

Earlier quoted context omitted.

It is hard to shut off the Internet (or at least should be, if it is properly decentralized). Point in case: Russia. Government has been trying to block everything they don't like for some ten years now I think. Controlling all the uplinks from the country is just not feasible (although they're working on buying everything out I believe), so it was in fact easier for them to make all the ISPs install some blocking eq…

If you shut down Internet, your economy suffers. Even China cannot block Github, because it would harm their economy too much. Chinese developers need to access Github (PyPi, NPM), or they are not productive. The global software industry is built on the top of Western science that relies of on freedom of information. Thus, they need to let free information to flow against the authorianship will. https://en.wikipedia.…

That's interesting! I thought China developers had npm / PyPI etc. mirrored so that they don't have to deal with the slowed worldwide versions.

UPD: that said, I agree that the Chinese Firewall is about as far as you can shut off the Internet in a modern country (at least without turning into another North Korea).

Re: Is this the end of crypto?

#332

Post by P5fRxh5kUvp2th »

randomdata wrote: post #276
gizajob wrote: post #269

Earlier quoted context omitted.

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.

Its value is all well and good if you personally have a use for it, but if you are merely stockpiling it in hopes of selling it later then that doesn't help much if the price has fallen to zero. You might be left with something pretty to look at and little more as you hold out for a recovery, if you don't take the bath and end up with nothing. Which could also be said about Bitcoin. I'm sure someone out there would f…

In fiction there's an idea known as 'plot armor'. In essence, it's the idea that causality and realism are suspended for some reasons related to the plot.

Your scenario here is plot armor.

Sure, if we pretend that gold stops having ANY use outside of being pretty, then when it stops being considered pretty it's value will go to 0.

But the fact is, gold has a myriad of uses besides being pretty and those uses give it an inherent value.

And when you go to sell it, others' use of it is what sets the sell value, not your personal use of it. It doesn't matter that I'm not personally using it for conductivity if the person I'm selling it to is (or someone downstream of them is).

IOW, stop posting fiction.

Re: Is this the end of crypto?

#333

Post by rhino369 »

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…

I think Bitcoin has no value. But I don't think mining issue you raise is a reason why. The difficulty of mining is pegged to size of the mining pool so you don't actually need that many miners to operate the whole network.

Mining is bad for other reasons--it's a huge waste of resources when bitcoin is worth a lot of money.

Re: Is this the end of crypto?

#334

Post by karaterobot »

Animats wrote: post #133

China has shut down every crypto asset activity in China that they can find.[1] The hammer came down in 2021. Mining farms had their power cut, and several hundred people were arrested. (There's a "digital yuan", but that's a payment system run by the People's Bank of China.) So a big part of the world has already ended crypto as an asset class. [1] https://coinpedia.org/cryptocurrency-regulation/cryptocurren...

I'm not convinced by this without some additional context.

China has banned a lot of things that continue to exist outside China. For example, gambling is officially banned in China. Yet we wouldn't predict the end of gambling worldwide as a result, since we don't think of gambling as being dependent on China. Is there reason to believe cryptocurrency is?

Re: Is this the end of crypto?

#335

Post by Kranar »

stephc_int13 wrote: post #304
shawabawa3 wrote: post #290

Earlier quoted context omitted.

The protocol self adjusts so that it's always profitable to mine bitcoins As it becomes unprofitable miners stop, and the difficulty drops so that it becomes cheaper to mine, until it reaches an equilibrium

Is the difficulty dropping because miners are then racing against less miners, or is it a different mechanism?

Different mechanism, Bitcoin's difficulty adjusts based on how quickly blocks are mined so that on average 1 block is mined every 10 minutes.

The protocol adjusts every 2016 blocks, if it takes longer than two weeks (20160 minutes) to mine the 2016 blocks then the difficulty decreases, if it takes less than two weeks to mine 2016 blocks then the difficulty increases.

Re: Is this the end of crypto?

#336

Post by WrtCdEvrydy »

hellotomyrars wrote: post #181
WrtCdEvrydy wrote: post #113

Earlier quoted context omitted.

> A deflationary currency that lost 75% in value in a year I don't know, my BTC is still worth one BTC.

And what are you going to do with it that isn’t based on it’s value relative to fiat currency?

Stare at it on my phone.

Re: Is this the end of crypto?

#337

Post by WrtCdEvrydy »

reducesuffering wrote: post #167
WrtCdEvrydy wrote: post #113

Earlier quoted context omitted.

> A deflationary currency that lost 75% in value in a year I don't know, my BTC is still worth one BTC.

That is sure to comfort you if it buys the equivalent of a candy bar.

At $15/each, by the time we get back down to $15/BTC maybe it will buy me a candy bar.

Re: Is this the end of crypto?

#338

Post by AlexandrB »

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…

> Market is young, people greedy and as a result we got this domino of falling companies.

People are always going to be greedy. I'm not sure what you think will change in the future that will make large actors in the cryptocurrency space behave any more ethically.

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

A. So why is no one doing them regularly?

B. Is "proof of liabilities" similarly easy? What stops a company from taking out a massive loan "off blockchain" using their blockchain assets as collateral?

Re: Is this the end of crypto?

#339

Post by colineartheta »

latchkey wrote: post #86
dragontamer wrote: post #32

Fundamental issues of cryptocurrency economy: 1. Biggest pushers are seemingly tech-bros from FANG companies. These companies are laying off staff in record numbers. The biggest cryptocoin believers therefore, will have less income than ever before (in ~3 months or so, after their severance is paid, they'll have to start drawing on savings if they didn't get a job yet... and getting a job in this economy is going to…

ETH validators are around 8% right now, not 5%. The 'risk' is that the developers don't successfully implement withdrawal or that the whole network goes down. Two, imho, huge risks and part of the reason I don't personally stake at this time. That said, eip-1559 and 'the merge' did happen, without much of a hitch at all, which are pretty major accomplishments. Confidence in the developers is a bit higher now as a res…

Care to comment on the Ethereum Foundation now removing all reference to a date in which “staked” ETH can be withdrawn? Or perhaps commenting on the fact that to become a validator requires 23 ETH, or approximately $28,000 of upfront investment that cannot be withdrawn in order to achieve your stated yield?

Re: Is this the end of crypto?

#340

Post by Lerc »

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 we turned off all bitcoin miners today, bitcoin would go to zero instantly

You talk about this like this is an easy action with profound consequences. It's like saying If everyone killed themselves, there would be no people. This is trivially true, but it's not going to happen.

>(as its worthless without continuous resources being pumped into it).

All forms of transaction has some form of resources put into it. The quantity of resources is what is at issue here. Bitcoin does not need the massive quantity of resources it currently uses to operate. That is an artifact of the high value of Bitcoin coupled with the subsidy of the mining reward.

I'm not sure if the creator(s) of Bitcoin evaluated what kind of value a Bitcoin should have over time, The mining reward halving rate suggests that they were not expecting it to have a continual average rise above 20% per year (which makes sense because that would be insane). To date, however, it _has_ been averaging more than that, resulting in an increase in value of the mining reward relative to other currencies. Should the value drop or simply not increase for a extended period, the mining subsidy becomes less. Then only the most efficient miners can make money mining and the difficulty drops to a new equilibrium as the ones who can no longer make money drop out.

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