581–590 of 684 posts
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This year Ethereum has so far settled over $6 trillion in value on chain. And the system has revenues. Ethereum did around $35 million daily in fees this last week. Uniswap did around $3 million. https://cryptofees.info/ No doubt there's something to it.
That’s like saying that because people are actually selling shovels and pickaxes there is something to the gold rush.
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> They do not pretend making your money work for you by some magical scheme. No. They instead take your money, buy coal, and burn it. Nothing is left. As you say, Ponzi schemers take money for themselves and keep it. Most of what Madoff stole was recovered, for instance. Whereas virtually 100% of all money invested into crypto has been burned by miners. This is pretty easy to model. So there’s nothing left to recover…
> Whereas virtually 100% of all money invested into crypto has been burned by miners. This is pretty easy to model. People like Bitcoin's provable global ledger and this is where the value lies. The value is not burned, it's embedded into this ledger.
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Gold doesn't have a source of revenue.
The argument is that as a commodity that is consumed to produce jewelry (52%) and industrial (12%) that there is baseline demand for it, and thus it does have intrinsic value. I don't consider it a worthwhile investment, however.
So as long as its value is > 0, it has intrinsic value.
The type of scheme operated my Mr Ponzi was characterised by fraud and the money going to Mr Ponzi and so was different.
In a Ponzi scheme, a fraudulent perpetrator takes your money (and the money of many others), gives some of that to early dropouts but takes the rest for himself . Ponzi schemers profit from lying to you where your money goes. With a decentralized digital asset there is no sole person or company that profits from just lying to you about where your Dollar goes in exchange for digitals. Sure, miners and exchanges make p…
> They do not pretend making your money work for you by some magical scheme. No. They instead take your money, buy coal, and burn it. Nothing is left. As you say, Ponzi schemers take money for themselves and keep it. Most of what Madoff stole was recovered, for instance. Whereas virtually 100% of all money invested into crypto has been burned by miners. This is pretty easy to model. So there’s nothing left to recover…
Yes, miners “take your money” but only a portion of every transaction as a service fee for processing your transaction. This is a payment for a service, the value of which is predicated on a service immediately provided rather than a promise for future value.
Also “nothing is left” is also a false statement as most of the bitcoin/money processed by miner’s isn’t going to them.
Also, every time a miner processes a block of transactions they receive newly minted bitcoin from something called a Coinbase transaction. This transaction will not keep getting doled out since the protocol enforces that there can only be 21 milllion bitcoin minted, but it provides extra incentive for the money poured in for the time being.
In other words, money is not “burned” it’s being exchanged into a different commodity. If this commodity fails to hold value over the long run then sure there’s nothing left in terms of value but I’d say the same risks exist and have been realized by government issued currencies. Look at countries like Venezuela for example.
I have a lot more reasons on why it’s improbable Bitcoin will ever plunge to 0 in value but in the spirit of clearing up some misconceptions I’ll leave that for another comment.
While I agree that crypto[speculation] generally seems to have the structure of a Ponzi scheme, I don't see any problem with that, as I assume everyone participating has the same idea. It's just a matter of who has the guts to stay on for long enough to cash out big, who gives up too early, and who does not get off before the train crashes into the mountain.
You describe a gambling game.
A first definition of gambling, is games of pure chance.
The second definition is taking a risk in hope of a future reward.
No investment has ever been made that was not a gamble. Sure, some are better than others, and the mechanism for providing wealth differs, but they are all gambles in either the first or second sense.
Crypto speculation is not a first-example gamble, it is not pure chance what happens, there is not an explicit randomness component. The market may be hard or impossible to understand, it may be undeterministic (I don't claim to know either way), but so is all other markets, every other stock.. Sure, it is probably more risky to speculate crypto than EUR, it may be more risky to buy bitcoin than Microsoft stock, but in the end, you're doing the same thing, you're making some more or less informed gamble that the market do whatever you need it to do.
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Indeed, and I don't keep a lot of money for that reason. It's designed to be a relatively temporary store of value. There's no such thing as a guaranteed permanent store of value, because value is driven by markets.
Bitcoin is a guaranteed permanent store of value. It’s value comes from its scarcity, that isn’t going to change no matter what the markets do.
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America, India, and China? Those are fully functioning, massive economies that power the entire world and have people commuting, working, eating, farming, manufacturing, and doing all the normal processes that life entails. Are you saying we should compare a digital coin with very niche usage to the collective impact of all of those actions taking place in the most massively populated and economically significant nat…
Before addressing this comment I want to pick up a point from your previous post. >But say you want to flip a switch and turn off a single cryptocurrency in order to do it, and you'll have floods of people trivializing it, saying "well, let me tell you why 110 million people's CO2 emissions aren't that big of a deal..." Well, with Bitcoin, you can't "flip a switch" to turn it off. There's literally no one on the plan…
Bitcoin is anything but efficient. It takes massive amounts of energy to make a simple transaction. Far more than any current currency transfer network. If it continues to grow, and if it would horrifically become mainstream, energy usage would be several magnitudes higher than it is now.
Right now its primary uses are for bringing more people into the scheme to eventually dump for cash, and to exchange for illicit materials online. It's a very niche case used by a tiny, tiny fraction of the total population, and it already consumes more energy than many entire countries. Extrapolate that energy usage to 1000x the current population and 1000x the current usage to assume everyone is in on it and using it regularly for normal transactions--at a minimum, we're hitting 1000x energy usage rates.
That's energy usage exceeding China and America's total energy usage combined. Just to send bits on a network. You'd be more efficient carting blocks of gold manually across the world for every transaction.
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The argument is that as a commodity that is consumed to produce jewelry (52%) and industrial (12%) that there is baseline demand for it, and thus it does have intrinsic value. I don't consider it a worthwhile investment, however.
Bitcoin seems to bootstrap its own value: you can store and transfer value, because bitcoin has value. So as long as its value is > 0, it has intrinsic value.
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> Whereas virtually 100% of all money invested into crypto has been burned by miners. This is pretty easy to model. People like Bitcoin's provable global ledger and this is where the value lies. The value is not burned, it's embedded into this ledger.
The value is not embedded in the ledger. Miners need to keep mining for all of eternity to maintain the security of the ledger. The featured article explains this point quite well. Ask yourself what would happen if miners stop mining?