Bitcoin is funny money

[rmorris50]

Just read this pretty excellent rebuttal to many of the common crypto-enthusiast claims on the Current Affairs website. Check it out: https://www.currentaffairs.org/2021/04/why-cryptocurrency-is-a-giant-fraud

PayPal now let’s you buy and sell crypto cia their app, and are betting and working to make crypto an accepted currency. PayPal actually predicts in 5 to 10 years crypto will be stable, mainstream currency.

I was completely thinking crypto was lunacy put PayPal’s stance is making me do a double take. I’m actually debating buying some (5k perhaps?)and just hold it and see what happens.


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[JLee]

Just read this pretty excellent rebuttal to many of the common crypto-enthusiast claims on the Current Affairs website. Check it out: https://www.currentaffairs.org/2021/04/why-cryptocurrency-is-a-giant-fraud

PayPal now let’s you buy and sell crypto cia their app, and are betting and working to make crypto an accepted currency. PayPal actually predicts in 5 to 10 years crypto will be stable, mainstream currency.

I was completely thinking crypto was lunacy put PayPal’s stance is making me do a double take. I’m actually debating buying some (5k perhaps?)and just hold it and see what happens.


Sent from my iPhone using Tapatalk

If it becomes a stable mainstream currency, the prospects for rapid growth will have to settle, otherwise nobody would ever want to spend it.

[DaKini]

I think it’s harvest time for the time being. There are huge selloffs, following a period where buyers and sellers had a fight on who is pushing me.

[talltexan]

So I logged into paypal, and it looks like--for now--you can only buy crypto from them or sell it to them. It almost feels like this is a way for them to get some crypto and then sell it at high prices to cover a spread.

[rmorris50]

So I logged into paypal, and it looks like--for now--you can only buy crypto from them or sell it to them. It almost feels like this is a way for them to get some crypto and then sell it at high prices to cover a spread.

Good point. I think crypto is here to stay though, and this is an easy way in. Probably worth taking 0.17% of my NW and buying some to hold and see the value in 5-10 years.


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[the_gastropod]

Just read this pretty excellent rebuttal to many of the common crypto-enthusiast claims on the Current Affairs website. Check it out: https://www.currentaffairs.org/2021/04/why-cryptocurrency-is-a-giant-fraud

PayPal now let’s you buy and sell crypto cia their app, and are betting and working to make crypto an accepted currency. PayPal actually predicts in 5 to 10 years crypto will be stable, mainstream currency.

I was completely thinking crypto was lunacy put PayPal’s stance is making me do a double take. I’m actually debating buying some (5k perhaps?)and just hold it and see what happens.


Sent from my iPhone using Tapatalk

But like... did you read the article? There is a 0% chance bitcoin becomes a stable accepted currency. It's just not technically feasible—not by a long shot. Paypal collecting USD for trading cryptocurrencies reads to me as a classic "sell shovels in a gold rush" strategy—nothing more.

[StashingAway]

So I logged into paypal, and it looks like--for now--you can only buy crypto from them or sell it to them. It almost feels like this is a way for them to get some crypto and then sell it at high prices to cover a spread.

Good point. I think crypto is here to stay though, and this is an easy way in. Probably worth taking 0.17% of my NW and buying some to hold and see the value in 5-10 years.

This is what that article above linked by the_gastropod mentions, though. People are just buying and holding it. It's relatively difficult to actually use as currency, and most processes that ease that remove the touted libertarian benefits of the whole project (they aren't anonymous and use third parties to process).

The only reason people in the mainstream buy bitcoin is as a speculative measure or as some idealistic belief. Very, very few people are actually using it for it's intended utility. Every single person that I have encountered in real life buys bitcoin through a platform like Coinbase or Robinhood. Most of them don't even realize that those purchases can/should be transferred to a personal wallet. It takes a lot of research and work to use bitcoin outside of the fiat financial system.

Tesla has some very unfavorable clauses in their contract for purchasing a vehicle through bitcoin. I don't blame them- it's a CYA for the volatility. You can buy a vehicle with bitcoin, but if you return the vehicle, they can pay you back in USD or BTC at their discretion- whichever is lower. You don't need those clauses with stable money.

[rmorris50]

Just read this pretty excellent rebuttal to many of the common crypto-enthusiast claims on the Current Affairs website. Check it out: https://www.currentaffairs.org/2021/04/why-cryptocurrency-is-a-giant-fraud

PayPal now let’s you buy and sell crypto cia their app, and are betting and working to make crypto an accepted currency. PayPal actually predicts in 5 to 10 years crypto will be stable, mainstream currency.

I was completely thinking crypto was lunacy put PayPal’s stance is making me do a double take. I’m actually debating buying some (5k perhaps?)and just hold it and see what happens.


Sent from my iPhone using Tapatalk

But like... did you read the article? There is a 0% chance bitcoin becomes a stable accepted currency. It's just not technically feasible—not by a long shot. Paypal collecting USD for trading cryptocurrencies reads to me as a classic "sell shovels in a gold rush" strategy—nothing more.

While the article is one big bash against libertarianism and the perceived benefits of crypto, it never claimed there is a zero percent chance of it becoming a stable currency.

Still might buy and hold some, we shall see. I am buy no means a crypto enthusiast, but it’s here to stay.


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[onecoolcat]

https://www.youtube.com/watch?v=k001JX-D-dA

[effigy98]

What if it isn't bitcoin that's the funny money.  What if the funny money is actually US$?  No wonder actual assets like property, stocks and bitcoin keep going up in value, we are valuing them in a rapidly devaluing currency that is being printed into oblivion. 

Yes, US dollars are inflationary by design. That's why holding large quantities of them generally isn't considered a smart long-term decision. What's your point? It's not as though US dollars and Bitcoin are the only possible stores of value, and we need to pick one. "Neither" is a perfectly valid option.

Personally I feel that a monetary system that forces people to take unnecessary risk in order to prevent their hard earned work from being devalued away is a pretty crappy system that especially hurts the poorest population that can't afford to take that risk and/or have no opportunities to.

That's kinda the purpose that a minimum wage serves though, isn't it?  It's a great equalizer.  As inflation eats away at the profits of the rich, the minimum wage is supposed to rise.  This should reduce the income inequality between the richest and the poorest.

Unless the richest band together to rail against the thought of increasing minimum wage.

Two solutions to higher wages I am seeing...
- Outsources more remote work to India
- Automate more jobs that cannot be outsourced.

Companies have been trained how to work remote now, it is a very easy transition to move those jobs offshore. Automation was cost prohibited, but as wages rise, it starts to make much more sense.

[JLee]

What if it isn't bitcoin that's the funny money.  What if the funny money is actually US$?  No wonder actual assets like property, stocks and bitcoin keep going up in value, we are valuing them in a rapidly devaluing currency that is being printed into oblivion. 

Yes, US dollars are inflationary by design. That's why holding large quantities of them generally isn't considered a smart long-term decision. What's your point? It's not as though US dollars and Bitcoin are the only possible stores of value, and we need to pick one. "Neither" is a perfectly valid option.

Personally I feel that a monetary system that forces people to take unnecessary risk in order to prevent their hard earned work from being devalued away is a pretty crappy system that especially hurts the poorest population that can't afford to take that risk and/or have no opportunities to.

That's kinda the purpose that a minimum wage serves though, isn't it?  It's a great equalizer.  As inflation eats away at the profits of the rich, the minimum wage is supposed to rise.  This should reduce the income inequality between the richest and the poorest.

Unless the richest band together to rail against the thought of increasing minimum wage.

Two solutions to higher wages I am seeing...
- Outsources more remote work to India
- Automate more jobs that cannot be outsourced.

Companies have been trained how to work remote now, it is a very easy transition to move those jobs offshore. Automation was cost prohibited, but as wages rise, it starts to make much more sense.

The venn diagram of "people who are able to work remotely" and "people who are earning minimum wage" probably looks like two separate circles.

[StashingAway]

The venn diagram of "people who are able to work remotely" and "people who are earning minimum wage" probably looks like two separate circles.

What about the venn diagram of "people who are earning minimum wage" and "people who's jobs can be automated"?

[GuitarStv]

The venn diagram of "people who are able to work remotely" and "people who are earning minimum wage" probably looks like two separate circles.

What about the venn diagram of "people who are earning minimum wage" and "people who's jobs can be automated"?

Minimum wage doesn't impact these people.  Advances in automation have been happening very quickly for years.  If you're working a minimum wage job that can be automated, then your job will be automated.  If it happens today, or in ten years . . . meh.  It's still going to happen regardless.

[jeromedawg]

The venn diagram of "people who are able to work remotely" and "people who are earning minimum wage" probably looks like two separate circles.

What about the venn diagram of "people who are earning minimum wage" and "people who's jobs can be automated"?

Minimum wage doesn't impact these people.  Advances in automation have been happening very quickly for years.  If you're working a minimum wage job that can be automated, then your job will be automated.  If it happens today, or in ten years . . . meh.  It's still going to happen regardless.

And what's awesome is that you get paid better on unemployment if you were previously a minimum wage employee, so retirement beckons lol:


I'm sure we'll be hearing this rhetoric soon in many places: "Why wash someone else's dishes or change their sheets when I get paid more to wash my own dishes and change my own sheets?"

[StashingAway]

The venn diagram of "people who are able to work remotely" and "people who are earning minimum wage" probably looks like two separate circles.

What about the venn diagram of "people who are earning minimum wage" and "people who's jobs can be automated"?

Minimum wage doesn't impact these people.  Advances in automation have been happening very quickly for years.  If you're working a minimum wage job that can be automated, then your job will be automated.  If it happens today, or in ten years . . . meh.  It's still going to happen regardless.

Minimum wage has a very real effect on how quickly the economics of automation push out their jobs. But I agree that it will happen regardless. More importantly, it also has an impact for people who can perform smaller tasks but aren't adequate to employ at a "living wage". High schoolers and mentally disabled, for instance. Or part time workers looking for a side gig (stay at home parent wants a few hours while the kids are in school, but doesn't have the skills or career path to want employ). All of those people are only hurt by a minimum wage, because it means they have no job options (being that they become to expensive to employ). Throwing those people under the bus because workers in NYC are trying to live on McDonald's wages seems like we're just trading problems.

The issue is that we are veering toward trying to solve this:

People deserve a basic standard of living.

Which I can agree on. But I don't agree that that basic premise should be tied to minimum wage because I don't think it will survive where 21st century economics are taking us.

[ChpBstrd]

The venn diagram of "people who are able to work remotely" and "people who are earning minimum wage" probably looks like two separate circles.

What about the venn diagram of "people who are earning minimum wage" and "people who's jobs can be automated"?

Minimum wage doesn't impact these people.  Advances in automation have been happening very quickly for years.  If you're working a minimum wage job that can be automated, then your job will be automated.  If it happens today, or in ten years . . . meh.  It's still going to happen regardless.

Minimum wage has a very real effect on how quickly the economics of automation push out their jobs. But I agree that it will happen regardless. More importantly, it also has an impact for people who can perform smaller tasks but aren't adequate to employ at a "living wage". High schoolers and mentally disabled, for instance. Or part time workers looking for a side gig (stay at home parent wants a few hours while the kids are in school, but doesn't have the skills or career path to want employ). All of those people are only hurt by a minimum wage, because it means they have no job options (being that they become to expensive to employ). Throwing those people under the bus because workers in NYC are trying to live on McDonald's wages seems like we're just trading problems.

The issue is that we are veering toward trying to solve this:

People deserve a basic standard of living.

Which I can agree on. But I don't agree that that basic premise should be tied to minimum wage because I don't think it will survive where 21st century economics are taking us.

Funny thing about the internet and the 21st century: The internet is great for bringing together people with very narrow shared interests. If the internet was around in the 1920s, it would have been used to organize unions everywhere - Facebook would be filled with memes about solidarity and outrage about the lavish lifestyles of the robber barons. However, in the 2020s, nobody is using the internet to get higher wages other than by job-hopping or self-training.

21st century economics are taking us into tens of thousands of specializations, compared to the farmer, miner, factory worker, teamster roles of the early 20th century, so there are fewer large pools of people doing the same things for the same money in communication with one another at work. The internet solves their communication problem, but they are spread across lots of job sites and employers. It seems the solution would be to organize workers by company rather than by job role, and advocating for across-the-board raises, but people aren't doing that either.

Interestingly, the things preventing decent living standards are government mandated markets. Specifically, government-subsidized mortgages prop up housing prices to unaffordable levels, government zoning restrictions limit supply to benefit incumbent owner/voters, government-subsidized loans have allowed colleges to bloat services and raise prices to insane levels, the patent system keeps prescription drug prices high, and cobwebs of government restrictions create bureaucratic duopolies in healthcare and insurance companies. The interesting development over the next 20 years is whether Democrats or Republicans embrace populistic deregulation of these out-of-control industries. Both coalitions have constituents who benefit from the status quo (homeowners, insurance companies, pharma companies, etc.) and histories of worsening the affordability problems, so a wide-ranging Reagan-esque deregulation agenda would probably be a losing proposition. Democrats might succeed in setting up a public option for health insurance, but I doubt they touch real estate until they are forced to.

[jeromedawg]

Welp, I just bought my first crypto ever. $25 purchase for 0.006~ ETH via Paypal, but mostly because you get $25 from Paypal for spending at least $25 or more on your first crypto purchase with them. 58 cent transaction fee. I'll cross my fingers and hope it goes up to $25.58 before selling. LOL

[BicycleB]

Big money, big money!

[onecoolcat]

Big money, big money!

Quoted for posterity.  Bitcoin is at $47,500 (down 17%) following a tweet by Elon Musk re environmental impacts of Bitcoin mining; Tesla no longer to accept Bitcoin as payment for vehicles.

[talltexan]

That statement by Musk is so transparently cynical because he's not citing anything he shouldn't have known before Tesla committed more than $1 billion of cash to Bitcoin earlier in the year.

I'm sorry that it's down, but I do not think anyone with familiarity with the currency can complain about a 20% drop that happens in six hours.

[Telecaster]

That statement by Musk is so transparently cynical because he's not citing anything he shouldn't have known before Tesla committed more than $1 billion of cash to Bitcoin earlier in the year.

It is obviously bullshit.  He is just now becoming aware of the environmental costs?  That's "puppy ate my homework" level of BS.   

The real reasons are far more likely that it was a big pain to accept Bitcoin and no one was doing it anyway. 

[ChpBstrd]

That statement by Musk is so transparently cynical because he's not citing anything he shouldn't have known before Tesla committed more than $1 billion of cash to Bitcoin earlier in the year.

I'm sorry that it's down, but I do not think anyone with familiarity with the currency can complain about a 20% drop that happens in six hours.

It's not a pump and dump scam by a Twitter influencer if they have a good reason.

[onecoolcat]

It was a publicity stunt.  Elon is planning something but I don’t know what it is.  I just hope it’s something helpful, like to push his solar agenda, as opposed to pumping Dogecoin again.  He is a double-edged blade, that is for sure.  In the end, I suspect that this is not the end of the bull run.  Things in crypto have just been absolutely nuts this cycle so another cooling off period is not a bad thing (especially for Ethereum which was $200 last year and is sitting at $3800 now).

[the_gastropod]

The real reasons are far more likely that it was a big pain to accept Bitcoin and no one was doing it anyway.

While that's also probably true, I suspect he was facing having Tesla stock dropped from ESG funds. Elon does not care one iota about the environment, but he sure does care about money. He did the math, and assessed the loss of being dropped from ESG to be greater than what his pump-and-dump money printing machine could produce.

[Telecaster]

Here's a good reason to own Bitcoin.  If you are victim of a ransomeware attack, you can use it to pay off the attack.

https://finance.yahoo.com/news/colonial-pipeline-paid-hackers-nearly-141548661.html

[SuperSecretName]

Here's a good reason to own Bitcoin.  If you are victim of a ransomeware attack, you can use it to pay off the attack.

https://finance.yahoo.com/news/colonial-pipeline-paid-hackers-nearly-141548661.html

Wasn't bitcoin.  Bitcoin is not "difficult-to-trace" - that's a common misconception.  You may not know who has it, but it can still be tracked and often is.

[JLee]

Here's a good reason to own Bitcoin.  If you are victim of a ransomeware attack, you can use it to pay off the attack.

https://finance.yahoo.com/news/colonial-pipeline-paid-hackers-nearly-141548661.html

Wasn't bitcoin.  Bitcoin is not "difficult-to-trace" - that's a common misconception.  You may not know who has it, but it can still be tracked and often is.

https://www.nytimes.com/2021/05/13/technology/colonial-pipeline-ransom.html

"Colonial Pipeline paid 75 Bitcoin, or roughly $5 million, to hackers."

[talltexan]

Colonial pipeline could have reported the transaction in Bitcoin, but what they actually did was use their Bitcoin to buy an alternative currency--such as monero--to carry out the transfer.

[JLee]

Colonial pipeline could have reported the transaction in Bitcoin, but what they actually did was use their Bitcoin to buy an alternative currency--such as monero--to carry out the transfer.

Do you work there or something..? I have seen no news reports of this.

[the_gastropod]

Seems relevant... https://krebsonsecurity.com/2021/05/darkside-ransomware-gang-quits-after-servers-bitcoin-stash-seized/

[talltexan]

Colonial pipeline could have reported the transaction in Bitcoin, but what they actually did was use their Bitcoin to buy an alternative currency--such as monero--to carry out the transfer.

Do you work there or something..? I have seen no news reports of this.

I don't have inside information, simply putting forward a theory because the Bitcoin ledger is fully transparent, and I can't see how a bad actor would accept a payment there and have any ability to use it.

[crimp]

Colonial pipeline could have reported the transaction in Bitcoin, but what they actually did was use their Bitcoin to buy an alternative currency--such as monero--to carry out the transfer.

Do you work there or something..? I have seen no news reports of this.

I don't have inside information, simply putting forward a theory because the Bitcoin ledger is fully transparent, and I can't see how a bad actor would accept a payment there and have any ability to use it.

More likely: they accept Bitcoin at a public address. They then send this Bitcoin through a mixing service (read: money launderer) hosted in a favorable jurisdiction. The transactions are still in the ledger, but it takes significantly more work (i.e. cooperation from the mixing service) to determine the mappings of input transactions to output transactions with confidence.

Why not just use ZCash/Monero? My guess is customer service. The decision makers responsible for making payments are much more likely to be able to follow the (simpler) instructions to buy Bitcoin than to be able to obtain your favorite privacy alt-coin.

[DaKini]

Time for popcorn!
-20%, compared to yesterday. Coinbase website not reachable from here.

[Northman]

Wow a touch at 30k today. Over -50% from ATH. The chart looks now exactly like this (we are just at the fear stage):

https://transportgeography.org/contents/chapter3/transportation-and-economic-development/bubble-stages/

[simonsez]

Elon does not care one iota about the environment

He tried to sit down with the Biden administration to initiate talks about a carbon tax but was turned away due to the idea being too politically difficult right now.  He talked about this on Rogan admitting it would hurt his bottom line on SpaceX.

[DaKini]

Cryptos still on the decline. Is this the avalanche?

[GuitarStv]

Cryptos still on the decline. Is this the avalanche?

As long as they're above zero people are massively overpaying.

[JLee]

https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3


This is well worth the read.

[Telecaster]

https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3


This is well worth the read.

That was a great read. 

[GuitarStv]

https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3


This is well worth the read.

That was a great read.

Agreed!

[boarder42]

https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3


This is well worth the read.

That was a great read.

Agreed!

Been telling my good friends for years it's more like the tulip bubble.  When you own companies adding value I don't have to place bets on what currency may supplant the dollar bc the value of what i own will just pivot to a different currency and still have similar buying power.

This is a great article I have no idea what's true in it but if it is it makes alot of sense.

[onecoolcat]

https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3


This is well worth the read.

That was a great read.

Agreed!

Been telling my good friends for years it's more like the tulip bubble.  When you own companies adding value I don't have to place bets on what currency may supplant the dollar bc the value of what i own will just pivot to a different currency and still have similar buying power.

This is a great article I have no idea what's true in it but if it is it makes alot of sense.

I never understood the comparison to tulip mania.  I think its more akin to the Dot Com Bubble but in the future it will have its own name because nothing is really a good comparable.  I mean, what other asset blows up every 3 years and then crashes to a higher low?  When more regulation comes it might look more a Dot Com bubble and knock out all the scam coins (the majority of coins).  Prices will suffer initially but regulations ultimately bring confidence so it the long-run its a win.

[DaKini]

What is the current state of matters re tether?

[talltexan]

So is the smarter play to design a long strategy for benefiting from the tether-originating high and low cycles (variation means profitability)? Or to design a short strategy to aggressively attack this transparently bogus peg to the USD that tether is claiming?

[BicycleB]

What is the current state of matters re tether?

I wondered that too!

After scanning a few results from Googling "tether may 2021 cryto":
-Tether made a settlement "recently" with New York State Attorney General's office
-Settlement included some increased disclosure
-Tether admitted it's not backed by 100% reserves
-Tether stated it's got 74% of its coins backed (at the time of the settlement, I guess)
-Tether stated that most of its reserves are in commercial paper, not cash (which in theory might explain the variance between the Bahamas cash amount and the amount needed to fulfill the 74% claim)
-Actual cash (not the claimed commercial paper) apparently constituted only 2.9% of Tether stablecoins' notional value

Thoughts:
-As commenters on Twitter point out, obviously this means Tether is at best operating as an unregulated bank using fractional reserves, thus vulnerable to bank runs
-If the theory that it's a scam is true, implying that there's not really any any commercial paper, the Ponzi scheme is pretty thin!
-If NY AG verified that the commercial paper is real, the reserves are much better and it might not be a pure scam; but unregulated and vulnerable to runs on the "bank" is still not, well, a very "stable" coin :)

See section "Tether is exposed":
https://www.fool.com/investing/2021/05/20/crypto-crash-bitcoin-ethereum-and-dogecoin-are-plu/
(article links to a Financial Times underlying article, but I think underlying is paywalled)

[scottish]

So is the smarter play to design a long strategy for benefiting from the tether-originating high and low cycles (variation means profitability)? Or to design a short strategy to aggressively attack this transparently bogus peg to the USD that tether is claiming?

Better play is to stay the f**k away from the whole mess.    Tether is probably just one of several running scams around cryptocurrencies.

When things finally collapse, they're going to collapse very quickly.   So unless you're doing it for entertainment...

[Telecaster]

-Tether stated that most of its reserves are in commercial paper, not cash (which in theory might explain the variance between the Bahamas cash amount and the amount needed to fulfill the 74% claim)
-Actual cash (not the claimed commercial paper) apparently constituted only 2.9% of Tether stablecoins' notional value

Google tells me Tether's market cap is $58 billion.  I'm skeptical they are holding anything close to the amount of commercial paper they claim.  That's a whopping amount of money.   

[SuperSecretName]

This scam stuff is just old an uninformed.  But, I'm sure y'all know better than NYAG or the millions of people who are actually putting their money into Tether.

Congrats MMM, you cracked the case.

[JLee]

This scam stuff is just old an uninformed.  But, I'm sure y'all know better than NYAG or the millions of people who are actually putting their money into Tether.

Congrats MMM, you cracked the case.

Well, millions of people are idiots. Do you have any proof or evidence of your assertions to share with the class?

[SuperSecretName]

I think NYAG covered all of that.  BicycleB gave a nice summary.

Saying it's a scam is not a logical conclusion of you not understanding it or seeing the value