The Bitcoin/Crypto Thread
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I think it was a liquidity issue. Bitcoin is fascinating (much moreso than the other coins, imo).
I think there is a real chance it replaces the role of gold in the economy. I've always been a gold-skeptic (just don't see the point long-term, I get the historical use) - so I've been disposed to being anti-Bitcoin.
Gold still has a $10T market cap though - so it doesn't matter what I think.
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DON’T let them eat cake.
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@jon-nyc said in The Bitcoin/Crypto Thread:
Heard someone call crypto “Mary Kay for young men”.
I don't see the similarity. There's no "pyramid scheme" in crypto.
Crypto has value if we decide that it has value. We will decide that it has value if it's useful, or at least more useful than alternatives. The final jury is still out on that.
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Education is extremely important.
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@horace said in The Bitcoin/Crypto Thread:
They're having a sale on bitcoin. Marked down from 67k to 47k. The perfect stocking stuffer for the TNCR posters in your life!
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So, it seems to me that bitcoin, and all alt coins only have value based on folks buying them with hard currency. So the crypto companies are just selling their exchange tokens for cash -- fiat currencies. The only reason they have value is that people trade cash for them, and the only way you extract value from them is to pay for goods and services which you can simply do with cash, or you sell them for cash. And the prices bounce around volatilely as people move hard money in and out of the crypto markets.
In short, the people with massive amounts of money have put out a product that they are selling for cash to get people to give them more cash under by advertising that cryptos are better than cash and the future for transactions. But the total market capitalization of any crypto is only achievable if people buy it to that amount with cash.
Is this accurate?
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@ivorythumper said in The Bitcoin/Crypto Thread:
Is this accurate?
Yes, basically it's digital gold. Worthless as a paperweight, but valuable to sell.
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@ivorythumper said in The Bitcoin/Crypto Thread:
So the crypto companies are just selling their exchange tokens for cash -- fiat currencies.
That's not quite accurate. For Bitcoin, for instance, there is no "company". It is the nature of a decentralized system that there is no "center" (duh). It is not the case that a company creates a bunch of coins and then sells them. The initial coin distribution is rather controlled by things like mining. That is, initially nobody has any money. As time goes by, more and more crypto money is created and it the money goes to those who contribute to the system (in the Bitcoin case, the miners).
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@klaus said in The Bitcoin/Crypto Thread:
@ivorythumper said in The Bitcoin/Crypto Thread:
So the crypto companies are just selling their exchange tokens for cash -- fiat currencies.
That's not quite accurate. For Bitcoin, for instance, there is no "company". It is the nature of a decentralized system that there is no "center" (duh). It is not the case that a company creates a bunch of coins and then sells them. The initial coin distribution is rather controlled by things like mining. That is, initially nobody has any money. As time goes by, more and more crypto money is created and it the money goes to those who contribute to the system (in the Bitcoin case, the miners).
Well, then any mining operation is basically the business that sells them for fiat currencies, correct? It's still an exchange in hard currency on some level that is considered "value", no? Even if I buy one crypto with another, the only wealth is based on its foundation in dollars or euros or such... right?
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@ivorythumper no, you could have a Crypto currency and never exchange anything for Fiat money. Mining creates new crypto money. The process does not involve Fiat money.
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@klaus said in The Bitcoin/Crypto Thread:
@ivorythumper no, you could have a Crypto currency and never exchange anything for Fiat money. Mining creates new crypto money. The process does not involve Fiat money.
Unless I mine it, how do I get it? I have to buy it, either with cash or crypto, right? And if I use crypto, then that's crypto someone else either mined or bought for cash, right? And the expense of that mining -- computers and energy and labor -- is all basically paid for with cash, no? How can it not involve fiat money?
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at some point the conversation becomes fundamentals of economics involving humans exchanging things they find to be of value. Fiat currency is a good placeholder for that basic idea. Ultimately fiat currency is backed by the threat of violence employed by governments, who have a monopoly on legal violence.
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@ivorythumper said in The Bitcoin/Crypto Thread:
How can it not involve fiat money?
In theory, the computation to “mine” for cryptocurrency can also be done mentally or by hand (using, say, a stick and a patch of sand). Depending on the algorithm and some other parameters used to define the cryptocurrency, such computation may take you a very, very long time. But in theory it can be done.
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@ivorythumper said in The Bitcoin/Crypto Thread:
@klaus said in The Bitcoin/Crypto Thread:
@ivorythumper no, you could have a Crypto currency and never exchange anything for Fiat money. Mining creates new crypto money. The process does not involve Fiat money.
Unless I mine it, how do I get it? I have to buy it, either with cash or crypto, right? And if I use crypto, then that's crypto someone else either mined or bought for cash, right? And the expense of that mining -- computers and energy and labor -- is all basically paid for with cash, no? How can it not involve fiat money?
Are you “buying” Euros when traveling or are you converting?
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@ivorythumper said in The Bitcoin/Crypto Thread:
@klaus said in The Bitcoin/Crypto Thread:
@ivorythumper no, you could have a Crypto currency and never exchange anything for Fiat money. Mining creates new crypto money. The process does not involve Fiat money.
Unless I mine it, how do I get it? I have to buy it, either with cash or crypto, right? And if I use crypto, then that's crypto someone else either mined or bought for cash, right? And the expense of that mining -- computers and energy and labor -- is all basically paid for with cash, no? How can it not involve fiat money?
Well, you have to give the person who owns Bitcoin something. It's a medium of exchange. The most common and convenient item of value would be to use fiat currency, but it could just as well be a bread or a sexual service (Aqua's sister does accept Bitcoin these days).
The computers and energy have to be paid, of course. This usually involves fiat money. But if you'd be a citizen of El Salvador, you could pay those with Bitcoin, too.
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@horace said in The Bitcoin/Crypto Thread:
at some point the conversation becomes fundamentals of economics involving humans exchanging things they find to be of value. Fiat currency is a good placeholder for that basic idea. Ultimately fiat currency is backed by the threat of violence employed by governments, who have a monopoly on legal violence.
I agree with all that. Money is a medium of exchange for time, which is really all we have and all we ultimately value. I think on a deep, and deeply human level, all wealth and all exchange is reducible to time. This is a necessary condition of human existence as living in time, space, and relationship. IOW, all other exchanges of value (goods and services) can be understood principally as related to time : quality of time, duration of time, efficiencies of time -- and all wealth is accrued on a time related basis.
Fiat currencies provide stability and justice in these transactions, which is why the government is properly entrusted with force in order to secure the common good necessary for human flourishing. A government that cannot or will not secure the common good is not a legitimate government.
I'm still working out how this applies to the question of crypto currency.
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@axtremus said in The Bitcoin/Crypto Thread:
@ivorythumper said in The Bitcoin/Crypto Thread:
How can it not involve fiat money?
In theory, the computation to “mine” for cryptocurrency can also be done mentally or by hand (using, say, a stick and a patch of sand). Depending on the algorithm and some other parameters used to define the cryptocurrency, such computation may take you a very, very long time. But in theory it can be done.
But the product of the computation has to be somehow published and communicated with others to establish value. So I don't see how your creates any sort of a transmittable, exchangeable value even theoretically (and I appreciate that you're not concerned with the practicality here). Does that make sense?
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@mark said in The Bitcoin/Crypto Thread:
What exactly are those machines doing? Try to match algorithms to produce a crypto coin?
What's the formula or the script they are running?Do different cryptos have different scripts?
Why can't they be reverse engineered if everyone knows the end product?
I'm stupid about coding, so please use small words.
