Author Topic: Crypto Skeptics Thread  (Read 19325 times)

L.A.S.

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Crypto Skeptics Thread
« on: December 28, 2017, 08:51:09 AM »
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« Last Edit: June 27, 2018, 10:58:35 AM by L.A.S. »

Nate79

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Re: Crypto Skeptics Thread
« Reply #1 on: December 28, 2017, 11:48:29 AM »
Supports criminal enterprises, terrorists, and regimes such as North Korea. I'm surprised the govt hasn't cracked down hard on cryptos due to the North Korea angle due to the sanctions.

Rules can change at anytime. The limited number of bitcoin is a sham.
Any kid and their dog can start a new crypto currency again meaning the supply is limitless.

Use case is greatly greatly exaggerated.

Misunderstanding/confusion equating crypto currency and blockchain technology.

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powskier

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Re: Crypto Skeptics Thread
« Reply #2 on: December 28, 2017, 12:13:15 PM »
Re 5) yes , so are OTCBB, so?
Re 9) yes, cash can also be lost forever.
Re 10) hacking exists for cc and bank transactions also
Re 11)  and 12) true for BTC, not so for Ripple
Re 13) check out Monero

Many ways to view crypto, skepticism is good.

Blockchain tech will impact the future and it is tough for most to distinguish between the utility and the tokens. It seems likely true that most coins/ICO's are silly shams, if someone wants to make a quick money off of someone else's silliness they can, indeed Wall St/churches/other orgs do it everyday.

Of course there a crypto bubble, this does not mean that all crypto or all blockchain tech should be tossed, it just means eyes should be wide open and money "invested" should have no strings attached. It can be like a long productive weekend in Vegas where you have more $ to dump into Vanguard on the Monday morning.....or not.

Disclaimer: put 10 k in cryptos last summer, pulled out 13k this fall ( original investment plus profit back) . Still have value of 22 k of coins in. Play money to just watch and speculate with. I view this as "not my hard earned money". It's fun to watch it grow so quickly.

libertarian4321

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Re: Crypto Skeptics Thread
« Reply #3 on: December 28, 2017, 12:34:59 PM »
We have enough threads touting the supposed, real and/or imagined benefits of cryptos.

I want to start a thread devoted to debunking them.

I intend for this thread to be devoted to crypto-skepticism.  I'd like to gather up all of the arguments against cryptos so that they are all in one place. 

Although fact-based refutations of raised skeptical points based on actual evidence are welcome, I don't want to hear unsubstantiated prognostications, opinions, predictions, wild fantasy about the future of cryptos.  Those sorts of posts will be welcome in other threads.

Here are a list, in no particular order, of things discussed in other threads that I think count against cryptos:

1. No government backing, cannot require tax authority or judgment creditors to accept cryptos
2. Not widely accepted as currency by merchants
3. Deflationary, money supply cannot easily be expanded when determined necessary by central banks
4. Treated as a capital asset for IRS purposes (transactions require basis recording and reporting, so cannot be easily used as cash)
5. Wildly volatile
6. Cannot effectively loan most cryptos
7. Not subject to seizure based on court order, so cannot easily be used as collateral and loaned against
8. Can be forked at any point in time, leading to confusion of contracts based on pre-fork crypto
9. Lost private keys means units of cryptos can be lost forever
10. Hacked exchanges happen all the time, and hodlers at exchanges are not fully insured against loss
11. Incredible, growing energy consumption needed to mine
12. High transactional costs needed to get miners to process transactions
13. Not truly anonymous


Feel free to add any that I missed or to bring up new ones.

All that, plus what happens if you have your "wallet" on your phone/computer (because clearly the exchanges can't be trusted to protect your "money") and the hard drive fails? 

Aside from the above, Bitcoin, to me, looks like a major PITA. 

I guess if you like the adrenaline rush you get from speculating/gambling, it's fine.

But at this point, it's not a currency.  And it's not an investment.

I'll pass on this, just like I passed on the real estate bubble and the .com bubble.

FINate

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Re: Crypto Skeptics Thread
« Reply #4 on: December 28, 2017, 01:40:53 PM »
People don't fully appreciate the implications of items (1) and (13) on your list. It's not only that they don't carry the faith and backing of government, but also that governments are likely not keen on a black market currency competing with their state sanctioned currency.

I would be shocked if the NSA isn't already mapping out bitcoin addresses, transactions, likely owners and physical locations (https://www.forbes.com/sites/andygreenberg/2013/09/05/follow-the-bitcoins-how-we-got-busted-buying-drugs-on-silk-roads-black-market/#7f4df9bfadf7). Let's not forget that in the '30s the feds disallowed possession of gold, so there is precedent for such things. Governments could decide to prohibit origination of crypto transactions within their borders. Yes, some people will be able to work around this with proxies (assuming you actually trust these things) and such, but for the vast majority of citizens the legal risk would not be worthwhile (more on this later). People could be left with currency that is effectively unusable.

There is also risk in the underlying encryption being compromised. Encryption is never 100% secure...just needs to be secure enough to make it too expensive to crack relative to the award. Crypto currency is a huge target...this isn't like hacking into a bank where transactions are totally traceable with other security controls. This is cash equivalent just sitting out there on the ether. As computing power increases, say quantum computing (5-10 years off??), then things like the Bitcoin ledger are increasingly vulnerable to forged transactions. At present attacking any given address isn't worth it (too much computing power/energy required), but that cost will decrease and I would be surprised if botnets were/are not harnessed for this purpose. A well funded government that would like nothing more than to see cryptocurrencies go away could even fund efforts to crack select addresses in order to sow doubt in the system.

Which brings me to my final point: Currencies are only as good as the faith people have in them. If governments decide to crackdown, or the encryption risk becomes real, or a determined attacker starts forging transactions and emptying addresses, then people will lose faith in the currency and value will plummet.

toganet

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Re: Crypto Skeptics Thread
« Reply #5 on: December 28, 2017, 01:42:50 PM »

frozen

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Re: Crypto Skeptics Thread
« Reply #6 on: December 28, 2017, 02:43:25 PM »
There is also a lost opportunity to invest in things that really matter, and for the greater good—
Like investing in a company that is working on bringing a new cancer drug to market.
Or investing in a clean energy company.

When investing in crypto, are you really helping the world become a better place?

Notch

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Re: Crypto Skeptics Thread
« Reply #7 on: December 28, 2017, 03:53:36 PM »

gp_

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Re: Crypto Skeptics Thread
« Reply #8 on: December 28, 2017, 10:10:16 PM »
Supports criminal enterprises, terrorists, and regimes such as North Korea. I'm surprised the govt hasn't cracked down hard on cryptos due to the North Korea angle due to the sanctions.

Rules can change at anytime. The limited number of bitcoin is a sham.
Any kid and their dog can start a new crypto currency again meaning the supply is limitless.

Use case is greatly greatly exaggerated.

Misunderstanding/confusion equating crypto currency and blockchain technology.

Sent from my SAMSUNG-SM-G930A using Tapatalk

how does it support criminal activity exactly? bitcoin leaves a trail that anyone can see (its anonymity is by far the biggest misconception) - cash is by far more "anonymous" than bitcoin. by sham, do you mean it's scarcity = perceived value??? otherwise, there's a finite #...

steveo

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Re: Crypto Skeptics Thread
« Reply #9 on: December 29, 2017, 01:12:34 AM »
I have a great reason to think that bitcoin is not going to work long term. I had something like $200 worth of bitcoin in my account stored on my computer. I tried to transfer that money recently to a wallet that I also owned. The transfer fee was something like $40-$50. That is a lot more expensive than a bank transfer and I couldn't justify that. I bought some bitcoin as a trial some years ago and it was fantastic. It simply hasn't scaled. At the moment I don't think bitcoin is going to be a long term viable cryptocurrency.

I think other crypto's might work but any crypto is going to have to function firstly as a medium of exchange and that means that transfer fees have to be exceptionally low.

So for a crypto to work well for me I require the following points:-

1. Secure for the individual holding a crypto - I don't think exchanges have to be secure but I need to be able to store a crypto on my computer or safe (via a paper wallet or whatever) securely.
2. Secure across the network. It needs to be a peer to peer currency that is secure across the network so that no miner or group of miners can hijack the currency.
3. It needs to have extremely low transfer fees. I should be able to transfer a dollar a pay a maximum of say 1 cent.
4. It needs to be private and free from the government. I don't want any government tracking my spending.
5. This is related to security but it needs to be immutable. Basically transactions need to be set in stone. There cannot be any reversing of a transaction.
6. I need to be able to see my transactions on a ledger but I need to be able to secure my transactions. I figure I should have a private key that I can use for transactions and I can set-up a bunch of different addresses to send or recieve money but only I get to view those transactions.

I think it's going to be hard to set-up a currency that can handle the above requirements and that is just off the top of my head. I'm not skeptical per se but I've gone from a believer in the concept to now being skeptical.


steveo

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Re: Crypto Skeptics Thread
« Reply #10 on: December 29, 2017, 01:16:34 AM »
But at this point, it's not a currency.  And it's not an investment.

I'll pass on this, just like I passed on the real estate bubble and the .com bubble.

Yep. I wasn't even considering it as an investment because to last long term it has to be more than an investment. If something is just an investment it has to be speculation. Stocks pay dividends and bonds pay interest. Gold just sits there. It might be a hedge but even that is pushing it. Crypto's are meant to be a viable currency.

On the investment front so many people at my job are now speculating on cryptocurrencies and that means it's a bubble.

Heckler

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Re: Crypto Skeptics Thread
« Reply #11 on: December 29, 2017, 04:43:13 AM »
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When investing in crypto, are you really helping the world become a better place?

In fact, no.  The power consumption alone is making the world a worse place.  Where does the giant server farm get its power from?   The internet and our need to store huge amounts of data is a similar problem no one seems to bat an eye at.

FireLane

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Re: Crypto Skeptics Thread
« Reply #12 on: December 31, 2017, 11:51:03 AM »
The way I see it, cryptocurrencies don't solve any problem that any real person has, except maybe criminals. We want more, not less, ability to protect our assets against fraud and theft. And the learning curve is so steep that it'd be a miracle if they ever find broad adoption as a currency. Hell, I work in tech and even I find them forbiddingly hard to understand or use.

As investments, they're even worse. Unlike stocks and bonds, they neither have a revenue stream nor any tie to real assets. Their value is based solely on bigger-fool thinking.

With that said, though I'm a hardcore crypto skeptic, even I feel a tinge of regret seeing how the price of bitcoin has skyrocketed this year. If I'd bought or mined a few hundred early on, I'd be able to retire by now at a WR beyond my wildest dreams.

But when I ask myself when was a good moment to buy into bitcoin, I come to the conclusion that there never was one. They were always incredibly complicated, wildly volatile, besieged by all manner of hacking and scams. Knowing that hindsight is 20/20 and no one can see the future, I'm confident I did the right thing by staying out.
« Last Edit: December 31, 2017, 11:53:46 AM by FireLane »

seattlecyclone

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Re: Crypto Skeptics Thread
« Reply #13 on: December 31, 2017, 12:16:23 PM »
I'll just point to this post. I've been sitting on some XRP since they ran a promotion giving them away a few years ago. Its value has since gone up 100-fold, making it worthwhile to look into how to convert it into real usable money. I asked how to make this conversion.

Apparently Coinbase is the only exchange that reliably pays out USD balances, but they don't deal in XRP directly, so the best way to convert XRP to USD is to use a separate exchange to first convert the XRP into LTC (not Bitcoin because the transaction fees are ridiculous), and then send the LTC to Coinbase. That recommendation didn't really instill me with a bunch of confidence in the cryptocurrency ecosystem.

Kalergie

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Re: Crypto Skeptics Thread
« Reply #14 on: January 03, 2018, 07:01:36 AM »
My gym has a lovely lady at the front desk greeting members and passing towels. She can't stop talking to me about bitcoin. She just showed me that she was trading bitcoin AT THE FRONT DESK COMPUTER IN THE GYM!

I'm done! This is stupid! No way I will ever get involved in this crap.

I go now and watch The Big Short!

Car Jack

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Re: Crypto Skeptics Thread
« Reply #15 on: January 03, 2018, 08:31:52 AM »
My gym has a lovely lady at the front desk greeting members and passing towels. She can't stop talking to me about bitcoin. She just showed me that she was trading bitcoin AT THE FRONT DESK COMPUTER IN THE GYM!

I'm done! This is stupid! No way I will ever get involved in this crap.

I go now and watch The Big Short!

This sounds like how Joe Kennedy kept all his money right before the crash of 1929.  When the shoe shine boy is giving out stock tips, you know it's time go get out.


To me, crypto is completely un-necessary for anything legitimate.  Besides putting up something to bet on, what use is it?  If I want to speculate on currencies, I'll speculate on Mexican Pesos, Japanese Yen and Russian Rubles. 

PDXTabs

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Re: Crypto Skeptics Thread
« Reply #16 on: January 03, 2018, 09:32:41 AM »
Here are a list, in no particular order, of things discussed in other threads that I think count against cryptos:

1. No government backing, cannot require tax authority or judgment creditors to accept cryptos
2. Not widely accepted as currency by merchants
3. Deflationary, money supply cannot easily be expanded when determined necessary by central banks
4. Treated as a capital asset for IRS purposes (transactions require basis recording and reporting, so cannot be easily used as cash)
5. Wildly volatile
6. Cannot effectively loan most cryptos
7. Not subject to seizure based on court order, so cannot easily be used as collateral and loaned against
8. Can be forked at any point in time, leading to confusion of contracts based on pre-fork crypto
9. Lost private keys means units of cryptos can be lost forever
10. Hacked exchanges happen all the time, and hodlers at exchanges are not fully insured against loss
11. Incredible, growing energy consumption needed to mine
12. High transactional costs needed to get miners to process transactions
13. Not truly anonymous

Full disclosure, I mine ETH and XMR, but I'm mostly a cryptocurrency skeptic. In specific I have never purchased any as an investment (I own a little BTC that I purchased to buy goods online). A couple responses:

1. I can't pay my US taxes with Euros either, but people have been trading currencies for centuries.
3. I think that you are completely correct, cryptocurrency is more like digital gold than a good stable currency.
4. Yes, just like any foreign currency.
5. Sure, see #3.
7. I think that you are wrong on this one. If it needs to be used as collateral, why not transfer it into an escrow wallet? Just because no one is doing it doesn't mean that it can't be done.
8. This is a very good point
9. Sure, print that shit out and store it in a safe deposit box. What happens if you lose your physical gold?
10. This point is pretty solid, I think it is one of the large problems with major adoption.
11. Ethereum is trying to solve this.
12. ETH is ~$0.80 right now, to transfer an arbitrary amount of money to an arbitrary location on the planet that seems pretty good?
13. I am not an expert at this, but Monero and ZCash are trying to solve that. ZCash in particular is using cutting edge "zero knowledge proofs."

I would like to echo a couple of your points above: there is a security/accessibility problem with cryptocurrencies at this point. You can keep everything in an offline wallet, but then it is hard to spend. You can keep everything in an online wallet, but then it is easier to hack.

I would also like to add my own:

14. As a retail investor, it is easy to buy a broadly diversified equities portfolio through any number of mutual fund companies (95% of my net worth is in VTWSX). The same can not be said for cryptocurrencies. Even if we accept that cryptocurrencies have utility and/or value, that doesn't make them a practical/good investment for the average retail investor.
« Last Edit: January 03, 2018, 09:56:19 AM by PDXTabs »

PDXTabs

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Re: Crypto Skeptics Thread
« Reply #17 on: January 03, 2018, 09:39:50 AM »
The way I see it, cryptocurrencies don't solve any problem that any real person has, except maybe criminals. We want more, not less, ability to protect our assets against fraud and theft. And the learning curve is so steep that it'd be a miracle if they ever find broad adoption as a currency. Hell, I work in tech and even I find them forbiddingly hard to understand or use.

How would you suggest that I send money to my brother in Singapore within the hour who is not a US citizen or resident and as such does not have a US bank account? Note: I'm not a Singaporean citizen or resident, and as such I do not have a Singaporean bank account. Because with ETH the fee is $0.80.
« Last Edit: January 03, 2018, 09:51:45 AM by PDXTabs »

Travis

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Re: Crypto Skeptics Thread
« Reply #18 on: January 03, 2018, 10:08:56 AM »
The way I see it, cryptocurrencies don't solve any problem that any real person has, except maybe criminals. We want more, not less, ability to protect our assets against fraud and theft. And the learning curve is so steep that it'd be a miracle if they ever find broad adoption as a currency. Hell, I work in tech and even I find them forbiddingly hard to understand or use.

How would you suggest that I send money to my brother in Singapore within the hour who is not a US citizen or resident and as such does not have a US bank account? Note: I'm not a Singaporean citizen or resident, and as such I do not have a Singaporean bank account. Because with ETH the fee is $0.80.

We added red tape to moving money after 9/11 to combat trafficking, terrorism financing, and some other concerns.  If cryptocurrency is a solution to this bureaucracy problem, you can count on the government finding a way to put it under the same laws which will likely take away some of that advantage.

shadow

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Re: Crypto Skeptics Thread
« Reply #19 on: January 03, 2018, 10:17:16 AM »
I would like to echo a couple of your points above: there is a security/accessibility problem with cryptocurrencies at this point. You can keep everything in an offline wallet, but then it is hard to spend. You can keep everything in an online wallet, but then it is easier to hack.

As a non-skeptic, I try to keep from responding. I disagree with at least 70% of statements in this thread, however, I just want to briefly point out: nano ledger mitigates the security/accessibility problem (just double check the copy-paste addresses on the device you're plugged into). If you don't have a nano, for addresses you control, that you print or store in usb, just use offline signing; not hard to spend. I do agree, in other areas, there are end user issues with security and usability, as well as issues of exchange susceptibility to hacks. There is no recovery for stolen or lost crypto.

seattlecyclone

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Re: Crypto Skeptics Thread
« Reply #20 on: January 03, 2018, 10:20:36 AM »
The way I see it, cryptocurrencies don't solve any problem that any real person has, except maybe criminals. We want more, not less, ability to protect our assets against fraud and theft. And the learning curve is so steep that it'd be a miracle if they ever find broad adoption as a currency. Hell, I work in tech and even I find them forbiddingly hard to understand or use.

How would you suggest that I send money to my brother in Singapore within the hour who is not a US citizen or resident and as such does not have a US bank account? Note: I'm not a Singaporean citizen or resident, and as such I do not have a Singaporean bank account. Because with ETH the fee is $0.80.

Cryptocurrencies can work great for this use case.

The price of any particular cryptocurrency token is pretty irrelevant when used as a short-term intermediate step for a conversion between two other currencies.

If I'm transferring $1,000 to another country, I'll buy $1,000 worth of that cryptocurrency, send it to my relative there, and she can sell that cryptocurrency for its current value in local currency. Whether $1,000 buys one unit of cryptocurrency or one million doesn't make a difference here.

For that reason I think it's important to distinguish between cryptocurrency as a payment technology and cryptocurrency as an investment. For most of the major use cases that cryptocurrency can enable, the actual price of a token is immaterial. You're not going to be holding onto large quantities of these tokens for months or years in order to do an international transfer or a drug transaction or whatever. Just like with traditional currencies, it's generally to your advantage not to hold on to a lot of raw currency, and instead put most of your wealth into income-producing assets.

But back to your international transfer example, the volatility of cryptocurrencies is a major problem for this use case. You're not paying 80˘ for the transfer, you're paying 80˘ plus or minus several percent of the total balance due to cryptocurrency volatility in between when you bought your ETH and when your brother was able to redeem it for local currency. Using more traditional methods of money transfer might involve a higher fixed fee, but your brother knows that he'll get essentially the whole balance you sent, minus predictable fees.

If you really support cryptocurrency as a technology more than cryptocurrency as an investment, you should hope for prices to stabilize so that people know that their bitcoin will be able to buy about the same tomorrow as it can buy today.

GuitarStv

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Re: Crypto Skeptics Thread
« Reply #21 on: January 03, 2018, 10:29:06 AM »
1. No government backing, cannot require tax authority or judgment creditors to accept cryptos

1. I can't pay my US taxes with Euros either, but people have been trading currencies for centuries.

Not sure if this is a vaild argument.  You can't pay your taxes or creditors in Euros, but anyone living in europe can . . . so there's a valid and widespread use case for the Euro which provides significant value to the currency.  That's quite different from crypto currencies.






The way I see it, cryptocurrencies don't solve any problem that any real person has, except maybe criminals. We want more, not less, ability to protect our assets against fraud and theft. And the learning curve is so steep that it'd be a miracle if they ever find broad adoption as a currency. Hell, I work in tech and even I find them forbiddingly hard to understand or use.

How would you suggest that I send money to my brother in Singapore within the hour who is not a US citizen or resident and as such does not have a US bank account? Note: I'm not a Singaporean citizen or resident, and as such I do not have a Singaporean bank account. Because with ETH the fee is $0.80.

What is your brother in Singapore (who doesn't have a bank account) hoping to spend the money on in the next hour?  Because there is very little stuff that can be purchased with Bitcoin and even less with Ethereum.  (It has to be local of course, because otherwise you could just order it online and send it to him . . . no need to send him the money.)  A useless store of "value" isn't of value if you can't actually buy anything with it.

But even assuming that sending virtual money has to be done . . . how is using crypto significantly better than using Paypal for this purpose?
« Last Edit: January 03, 2018, 10:58:26 AM by GuitarStv »

sailinlight

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Re: Crypto Skeptics Thread
« Reply #22 on: January 03, 2018, 10:29:49 AM »
The way I see it, cryptocurrencies don't solve any problem that any real person has, except maybe criminals. We want more, not less, ability to protect our assets against fraud and theft. And the learning curve is so steep that it'd be a miracle if they ever find broad adoption as a currency. Hell, I work in tech and even I find them forbiddingly hard to understand or use.

How would you suggest that I send money to my brother in Singapore within the hour who is not a US citizen or resident and as such does not have a US bank account? Note: I'm not a Singaporean citizen or resident, and as such I do not have a Singaporean bank account. Because with ETH the fee is $0.80.
Wire transfer. Sure the fee is more than $.80 but I would gladly pay that for the security of dealing with reputable banks who can track the transaction and ensure the money ends up where it should.

moof

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Re: Crypto Skeptics Thread
« Reply #23 on: January 03, 2018, 10:46:17 AM »
I just bought a soda from the office machine for $0.25.  It was a trivial transaction.

I didn't have to get a digital wallet off of an offline secure hard drive.  No internet connectivity was required.  Hell, if the power went out I would have had the secretary unlock the machine or grabbed a warm one plus ice from the freezer.  There were no transaction fees, it breaks a dollar with no crypto tax on top.

I see a long way for crypto currencies to go before I can casually grab a soda with them.  With transaction fees of $20 for bitcoin and $0.80 for etherium they only make sense when dealing with roughly kilo-dollar magnitude or more.  I don't make a lot of those.  And of those I have yet to see a "Bitcoin accepted here" sign at any of them (my mortgage company comes to mind).  So I see no point in figuring out digital wallets, secure offline storage for my life savings, even adding more crappy apps onto my phone.

Meh.  I counter all the over caffeinated exuberance from all these crypto fan boys with "Meh."  I hear every word and just can't work up more than a shoulder shrug for all the supposed use cases and value propositions.  Someday I predict that peoples coins will end up in a pile in the corner with those old AOL CD's of precisely the same intrinsic value.

Kalergie

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Re: Crypto Skeptics Thread
« Reply #24 on: January 03, 2018, 12:59:47 PM »
My gym has a lovely lady at the front desk greeting members and passing towels. She can't stop talking to me about bitcoin. She just showed me that she was trading bitcoin AT THE FRONT DESK COMPUTER IN THE GYM!

I'm done! This is stupid! No way I will ever get involved in this crap.

I go now and watch The Big Short!
This sounds like how Joe Kennedy kept all his money right before the crash of 1929.  When the shoe shine boy is giving out stock tips, you know it's time go get out.


This is precisely what I was thinking of. That and the scene in the movie Big Short when the stripper talks about her real estate investments right before the bubble bust.

PDXTabs

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Re: Crypto Skeptics Thread
« Reply #25 on: January 03, 2018, 03:58:26 PM »
What is your brother in Singapore (who doesn't have a bank account) hoping to spend the money on in the next hour?  Because there is very little stuff that can be purchased with Bitcoin and even less with Ethereum.  (It has to be local of course, because otherwise you could just order it online and send it to him . . . no need to send him the money.)  A useless store of "value" isn't of value if you can't actually buy anything with it.

But even assuming that sending virtual money has to be done . . . how is using crypto significantly better than using Paypal for this purpose?

He has a bank account, but he is not legally allowed to open a US bank account, so getting money from the US to Singapore is complicated. PayPal does work with Singapore, so that is an option. However, there are countries where PayPal won't send money (Myanmar, Iran, etc). Before you tell me that I'm probably not allowed to send money to Iran (or at least I wasn't until very recently), I know. However, neither my brother, nor his wife, nor his mother, nor his children, nor his in-laws are US citizens. This "just use some standard everyday service and currency" is a very western-centric view of the world.


Notch

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Re: Crypto Skeptics Thread
« Reply #26 on: January 03, 2018, 04:11:07 PM »
What is your brother in Singapore (who doesn't have a bank account) hoping to spend the money on in the next hour?  Because there is very little stuff that can be purchased with Bitcoin and even less with Ethereum.  (It has to be local of course, because otherwise you could just order it online and send it to him . . . no need to send him the money.)  A useless store of "value" isn't of value if you can't actually buy anything with it.

But even assuming that sending virtual money has to be done . . . how is using crypto significantly better than using Paypal for this purpose?

He has a bank account, but he is not legally allowed to open a US bank account, so getting money from the US to Singapore is complicated. PayPal does work with Singapore, so that is an option. However, there are countries where PayPal won't send money (Myanmar, Iran, etc). Before you tell me that I'm probably not allowed to send money to Iran (or at least I wasn't until very recently), I know. However, neither my brother, nor his wife, nor his mother, nor his children, nor his in-laws are US citizens. This "just use some standard everyday service and currency" is a very western-centric view of the world.

Open a Citibank bank account.  They have instant global transfers between international Citibank accounts in 20 countries, including Singapore & US.

PDXTabs

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Re: Crypto Skeptics Thread
« Reply #27 on: January 03, 2018, 05:54:22 PM »
Open a Citibank bank account.  They have instant global transfers between international Citibank accounts in 20 countries, including Singapore & US.

So, what do the people in the other 175 countries do?

3, 5, 9.  Gold is not a currency.  Comparing cryptos to gold actually cuts against their legitimacy as a currency since gold suffers from volatility, storage/transaction costs, inability to expand supply when needed.

We can agree that cryptocurrencies do not behave like good modern fiat currencies. How about this: just read "digital golds." But remember, this digital gold can be converted from your local currency, to digital gold, transferred overseas, and then converted out of digital gold into the local currency in a matter of hours. Or, at least that is the promise that people are willing to bet money on.

7.  Placing cryptos in an  escrow wallet is not the same as using an asset as collateral.  Ordinarily a debtor will be allowed to retain possession and use of an asset pledged as collateral.  Think: mortgage, car loan, securities in a margin account.  Further, assuming placing in escrow is the same as using as collateral, who holds the keys? And is this secure?  Probably not, and it is probably part of the reason no one does it. 
No, the escrow wallet would be like a CD loan. How many banks will loan me money based on the gold in my house?

11 and 13.  Trying to solve something means its still a problem.

I may have misrepresented the state of the art. 13 is solved.*

* - Until it isn't, because that's how cryptography and security research works.

Notch

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Re: Crypto Skeptics Thread
« Reply #28 on: January 03, 2018, 06:14:01 PM »
Open a Citibank bank account.  They have instant global transfers between international Citibank accounts in 20 countries, including Singapore & US.

So, what do the people in the other 175 countries do?


You asked a specific question about transferring money to Singapore, so I gave you a specific answer.  The people in the other 175 countries can work out which option suits them best, whether that be a international bank transfer, money transfer service or forex site.  Unless both parties hold and use a particular crypto for regular transactions, I highly doubt using a crypto transfer would be the cheapest or quickest, as you still need to convert to fiat at one or both ends.

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Re: Crypto Skeptics Thread
« Reply #29 on: January 03, 2018, 07:07:23 PM »
Lots of good reasoning in this thread, but really we don't need it. This stuff doesn't pass the sniff test. Up 1,250% in one year? Nothing honest does that.

Padonak

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Re: Crypto Skeptics Thread
« Reply #30 on: January 03, 2018, 07:43:51 PM »
Open a Citibank bank account.  They have instant global transfers between international Citibank accounts in 20 countries, including Singapore & US.

So, what do the people in the other 175 countries do?


You asked a specific question about transferring money to Singapore, so I gave you a specific answer.  The people in the other 175 countries can work out which option suits them best, whether that be a international bank transfer, money transfer service or forex site.  Unless both parties hold and use a particular crypto for regular transactions, I highly doubt using a crypto transfer would be the cheapest or quickest, as you still need to convert to fiat at one or both ends.

I am not a crypto shill, but I happen to have Citibank accounts in two different countries (SG is not one of them).

Citibank transfers between accounts in different countries are convenient but pretty expensive. They don't charge transaction fees but screw you on exchange rates. It was cheaper for me to use a third party FX broker (I think I used XE.com a few years ago) than to transfer between two Citibank accounts.

If I had to make regular transfers from the US to a person overseas, I would try to add them as an authorized user to a Charles Schwab checking account or similar (no transaction fees and you get reimbursed for ATM fees worldwide) and send them a debit card.

Notch

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Re: Crypto Skeptics Thread
« Reply #31 on: January 03, 2018, 08:09:50 PM »
Open a Citibank bank account.  They have instant global transfers between international Citibank accounts in 20 countries, including Singapore & US.

So, what do the people in the other 175 countries do?


You asked a specific question about transferring money to Singapore, so I gave you a specific answer.  The people in the other 175 countries can work out which option suits them best, whether that be a international bank transfer, money transfer service or forex site.  Unless both parties hold and use a particular crypto for regular transactions, I highly doubt using a crypto transfer would be the cheapest or quickest, as you still need to convert to fiat at one or both ends.

I am not a crypto shill, but I happen to have Citibank accounts in two different countries (SG is not one of them).

Citibank transfers between accounts in different countries are convenient but pretty expensive. They don't charge transaction fees but screw you on exchange rates. It was cheaper for me to use a third party FX broker (I think I used XE.com a few years ago) than to transfer between two Citibank accounts.

If I had to make regular transfers from the US to a person overseas, I would try to add them as an authorized user to a Charles Schwab checking account or similar (no transaction fees and you get reimbursed for ATM fees worldwide) and send them a debit card.

Actually that’s a really good idea. I have a Citibank debit card that I use solely for foreign cash withdrawals when traveling. It’s free (save for the local ATM fee if applicable) and the currency conversion is at Visa rates, which are fantastic.

daverobev

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Re: Crypto Skeptics Thread
« Reply #32 on: January 03, 2018, 08:33:37 PM »
He has a bank account, but he is not legally allowed to open a US bank account...

Why not? I can open a US bank account, and I'm not American or US resident. Something specific here?

Sending money between different currencies is difficult/expensive between different people. Sending from one account to another account in your name via a forex house is less expensive.

It all depends on what is trying to be achieved. Just get 'money' there? Buy the whatever to be delivered in the foreign country using your home address/credit card as the billing address (eg from Amazon). Regular payments? Then some kind of joint bank/forex house transfer.

PDXTabs

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Re: Crypto Skeptics Thread
« Reply #33 on: January 03, 2018, 09:06:58 PM »
He has a bank account, but he is not legally allowed to open a US bank account...

Why not? I can open a US bank account, and I'm not American or US resident. Something specific here?

Do you have a taxpayer ID number? I'm pretty sure that if you go to open an account post 9/11 they will demand one for "terrorism" purposes. In fact, I just opened bank accounts for my two kids last week and they told me that they couldn't do it without their SSNs (which are taxpayer ID numbers).

For people that have never been legally authorized to work in the US, and can not legally live in the US, do you expect them to be able to get taxpayer IDs? I'm curious if you know something that I don't.

EDIT - Also, this is why cryptocurrencies aren't going anywhere. Because we are having this conversation. Because two sophisticated intelligent people who routinely use banks can't even agree on what the US government banking regulations are to open an account, and the US Government is only one of the 195 world governments.

PS - I am a UK citizen and none of the UK banks that I can find will let me open an account overseas. They insist that I be a UK resident to open an account. If you know of one without this requirement, please let me know.
« Last Edit: January 03, 2018, 09:12:26 PM by PDXTabs »


daverobev

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Re: Crypto Skeptics Thread
« Reply #35 on: January 04, 2018, 08:54:58 AM »
He has a bank account, but he is not legally allowed to open a US bank account...

Why not? I can open a US bank account, and I'm not American or US resident. Something specific here?

Do you have a taxpayer ID number? I'm pretty sure that if you go to open an account post 9/11 they will demand one for "terrorism" purposes. In fact, I just opened bank accounts for my two kids last week and they told me that they couldn't do it without their SSNs (which are taxpayer ID numbers).

For people that have never been legally authorized to work in the US, and can not legally live in the US, do you expect them to be able to get taxpayer IDs? I'm curious if you know something that I don't.

EDIT - Also, this is why cryptocurrencies aren't going anywhere. Because we are having this conversation. Because two sophisticated intelligent people who routinely use banks can't even agree on what the US government banking regulations are to open an account, and the US Government is only one of the 195 world governments.

PS - I am a UK citizen and none of the UK banks that I can find will let me open an account overseas. They insist that I be a UK resident to open an account. If you know of one without this requirement, please let me know.

I do, but as far as I know that is incidental. US banks will accept foreign TINs. Again, as far as I know. This *may* be a peculiarity with Canadian residents, as lots of Canadians own US property and hence need a true US bank account.

Try Alliant Credit Union - you can mail in an application with a foreign address, no problem.

The UK is different, it's always been impossible to open a normal high street bank account without a UK address. There are, however, offshore GBP accounts with Barclays, Lloyds and so on. Nationwide used to do it, but thet stopped. So yes you can get a UK/GBP current account, but not through the normal sites, you have to go to the special ones. These are domiciled on the Isle of Man or Jersey IIRC.

mathlete

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Re: Crypto Skeptics Thread
« Reply #36 on: January 04, 2018, 11:30:38 AM »
The MMM article came along at just the right time!

I've just had to groan silently over the past few weeks while watching my hundredaire friends become thousandaires through crypto. Even as I type this, the group text is blowing up with two of my friends trying to get a hold of another friend who is now apparently the crypto guru. To his credit, he tipped us all off about two cryptos that went up by 3x or 4x over the past month, but all he's doing is picking the in vogue stuff with high momentum.

Furthermore, our crypto guru posted a manic Facebook status yesterday bemoaning that he is basically flat broke.

He badgered me a few weeks ago about why I don't just throw a thousand dollars into the latest crypto because I had more money to burn than any of us. I explained to him, and to everyone, about value investing and speculation and bubbles. That didn't work, so then I asked them what they thought the chances are that they, and all the other soccer moms and barbers out there, were out-thinking the room on this. Still nothing.

I kept my strongest argument in my pocket though because it's too uncouth to say. That is, that my net worth is probably greater than all of theirs combined, and I didn't get there by losing my head over to-the-moon investments that no one can really explain the underlying value of.  So I just wished them the best.

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Re: Crypto Skeptics Thread
« Reply #37 on: January 04, 2018, 11:57:54 AM »
I own some BTC, ETH, and LTC just so in the event that it skyrockets, I am not the only friend who is left "coinless"

That being said, I wonder how many "me-too" buys exist like mine and are propping up prices. I fully expect to lose my entire sum.

mathlete

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Re: Crypto Skeptics Thread
« Reply #38 on: January 04, 2018, 12:11:44 PM »
I own some BTC, ETH, and LTC just so in the event that it skyrockets, I am not the only friend who is left "coinless"

That being said, I wonder how many "me-too" buys exist like mine and are propping up prices. I fully expect to lose my entire sum.

I'd be less worried (well... doesn't sound like you're worried either way) about the folks like you who throw a few bucks in and will ride it to the top or the bottom.

I'm concerned with the people who put in money they can't afford to put it. It's all good now, when we're at 4% unemployment in the US. A recession hits and takes that to 6% though, and you're going to have a lot of people trying to cash out to buy shit while they find a new job.

PDXTabs

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Re: Crypto Skeptics Thread
« Reply #39 on: January 05, 2018, 11:53:07 AM »
L.A.S. and mathlete,

I agree 100% that this is real problem for real people. That is, the SEC usually protects every day folks from risky bets and reserves them for "sophisticated investors." This is good and bad, but I definitely tell all my friends that I wouldn't "invest" in cryptocurrency before maxing out their 401(k).
« Last Edit: January 05, 2018, 02:16:58 PM by PDXTabs »

dandarc

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Re: Crypto Skeptics Thread
« Reply #40 on: January 05, 2018, 12:03:53 PM »
Couple of guys at work are apparently jumping in to davor coin tonight.  Reading what little information they have on their website, it sounds like MLM meets crypto, so it must be great!

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forgerator

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Re: Crypto Skeptics Thread
« Reply #42 on: January 06, 2018, 10:31:35 PM »
I just bought a soda from the office machine for $0.25.  It was a trivial transaction.

I didn't have to get a digital wallet off of an offline secure hard drive.  No internet connectivity was required.  Hell, if the power went out I would have had the secretary unlock the machine or grabbed a warm one plus ice from the freezer.  There were no transaction fees, it breaks a dollar with no crypto tax on top.

I see a long way for crypto currencies to go before I can casually grab a soda with them.  With transaction fees of $20 for bitcoin and $0.80 for etherium they only make sense when dealing with roughly kilo-dollar magnitude or more.  I don't make a lot of those.  And of those I have yet to see a "Bitcoin accepted here" sign at any of them (my mortgage company comes to mind).  So I see no point in figuring out digital wallets, secure offline storage for my life savings, even adding more crappy apps onto my phone.

Meh.  I counter all the over caffeinated exuberance from all these crypto fan boys with "Meh."  I hear every word and just can't work up more than a shoulder shrug for all the supposed use cases and value propositions.  Someday I predict that peoples coins will end up in a pile in the corner with those old AOL CD's of precisely the same intrinsic value.

Ever heard of Raiblocks? It allows for instant transfer and $0 transaction fee. Someone on reddit showed a screenshot of sending / receiving around a million USD using XRB (Raiblocks) at no cost. Now that is powerful...

The point is that Bitcoin,  Ethereum etc. are just the start , like 1st gen of crypto. As newer ones like Raiblock and others come out with newer advanced features it will only seek to further adoption of digital currencies and assets.

sherr

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Re: Crypto Skeptics Thread
« Reply #43 on: January 07, 2018, 07:50:07 AM »
I just bought a soda from the office machine for $0.25.  It was a trivial transaction.

I didn't have to get a digital wallet off of an offline secure hard drive.  No internet connectivity was required.  Hell, if the power went out I would have had the secretary unlock the machine or grabbed a warm one plus ice from the freezer.  There were no transaction fees, it breaks a dollar with no crypto tax on top.

I see a long way for crypto currencies to go before I can casually grab a soda with them.  With transaction fees of $20 for bitcoin and $0.80 for etherium they only make sense when dealing with roughly kilo-dollar magnitude or more.  I don't make a lot of those.  And of those I have yet to see a "Bitcoin accepted here" sign at any of them (my mortgage company comes to mind).  So I see no point in figuring out digital wallets, secure offline storage for my life savings, even adding more crappy apps onto my phone.

Meh.  I counter all the over caffeinated exuberance from all these crypto fan boys with "Meh."  I hear every word and just can't work up more than a shoulder shrug for all the supposed use cases and value propositions.  Someday I predict that peoples coins will end up in a pile in the corner with those old AOL CD's of precisely the same intrinsic value.

Ever heard of Raiblocks? It allows for instant transfer and $0 transaction fee. Someone on reddit showed a screenshot of sending / receiving around a million USD using XRB (Raiblocks) at no cost. Now that is powerful...

The point is that Bitcoin,  Ethereum etc. are just the start , like 1st gen of crypto. As newer ones like Raiblock and others come out with newer advanced features it will only seek to further adoption of digital currencies and assets.


Oooookaayyy.....

Are you going to come back and give us all a heads up before you plan to dump, too?

I think his actual point is valid and relevant to this thread. Even if there are actual use-cases for cryptocurrencies or blockchain that will cause one or the other to stick around, the long-term value of any particular cryptocurrency is zero. There will always be a newer, better iteration that is easier or faster or cheaper or whatever. And eventually everyone will jump ship from $currentThing to $newerBetterThing.

That to me is the biggest and most obvious reason why one should be skeptical about "investing" in a cryptocurrency. It's not investing, it's 100% buy-low-sell-high market timing.

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Re: Crypto Skeptics Thread
« Reply #44 on: January 07, 2018, 09:59:48 AM »
I just bought a soda from the office machine for $0.25.  It was a trivial transaction.

I didn't have to get a digital wallet off of an offline secure hard drive.  No internet connectivity was required.  Hell, if the power went out I would have had the secretary unlock the machine or grabbed a warm one plus ice from the freezer.  There were no transaction fees, it breaks a dollar with no crypto tax on top.

I see a long way for crypto currencies to go before I can casually grab a soda with them.  With transaction fees of $20 for bitcoin and $0.80 for etherium they only make sense when dealing with roughly kilo-dollar magnitude or more.  I don't make a lot of those.  And of those I have yet to see a "Bitcoin accepted here" sign at any of them (my mortgage company comes to mind).  So I see no point in figuring out digital wallets, secure offline storage for my life savings, even adding more crappy apps onto my phone.

Meh.  I counter all the over caffeinated exuberance from all these crypto fan boys with "Meh."  I hear every word and just can't work up more than a shoulder shrug for all the supposed use cases and value propositions.  Someday I predict that peoples coins will end up in a pile in the corner with those old AOL CD's of precisely the same intrinsic value.

Ever heard of Raiblocks? It allows for instant transfer and $0 transaction fee. Someone on reddit showed a screenshot of sending / receiving around a million USD using XRB (Raiblocks) at no cost. Now that is powerful...

The point is that Bitcoin,  Ethereum etc. are just the start , like 1st gen of crypto. As newer ones like Raiblock and others come out with newer advanced features it will only seek to further adoption of digital currencies and assets.


Oooookaayyy.....

Are you going to come back and give us all a heads up before you plan to dump, too?

I think his actual point is valid and relevant to this thread. Even if there are actual use-cases for cryptocurrencies or blockchain that will cause one or the other to stick around, the long-term value of any particular cryptocurrency is zero. There will always be a newer, better iteration that is easier or faster or cheaper or whatever. And eventually everyone will jump ship from $currentThing to $newerBetterThing.

That to me is the biggest and most obvious reason why one should be skeptical about "investing" in a cryptocurrency. It's not investing, it's 100% buy-low-sell-high market timing.

We all know today that social media as a technology and culture is worth billions of dollars.  Imagine if 10 years ago we were bidding up the stock on Twitter or Myspace to the tune of 1000% in a single year.  Look at where we are now.  Blockchain may be revolutionary. Bitcoin may not.  For all we know it will be the Pets.com of the internet boom.  There's a fair bet that of these handful of cryptocurrencies on the market, only one will survive to the endgame.  Best of luck picking it.

Padonak

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Re: Crypto Skeptics Thread
« Reply #45 on: January 07, 2018, 12:02:49 PM »
Here's a little cautionary tale about crypto.

In mid December last year, a friend of mine mentioned that he had talked to a "crypto guru" who had made a fuck ton of money on cryto (or so he said). That guy offered my friend "investment" advice a fee of around $13K. Minimum investment was something like $130K (Red flag right there, can't you "invest" as little as you want in crypto? It's not like you're buying a house ffs), potentially doubling or tripling in value within a month or two.

My friend didn't have any details at the time but asked me for advice. I had been following the crypto space closely but had zero "investments" at the time (and still zero as of now), so I said to him that I wouldn't do if I were him it because my risk tolerance is too low for that, but who am I to stop him. I said, tongue in cheek, that maybe it was his chance to make a ton of money and get out of the rat race and I would still be riding the fucking subway to work shoulder to shoulder with other poor bastards with similarly low risk tolerance.

I talked to my friend again today. He paid the "guru" and "invested" either in some stupid crypto currency or a scam ICO. He still didn't tell me the details, but he said that he already lost most of the money he had put in. In December, he wanted to "invest" in Ripple, but the "guru" said it was stupid and talked him out of it. Instead he offered another "investment" idea which apparently didn't work out. My friend wants to get the "advisory fee" back, but good luck with that.

Luckily this story is not based on my own experience. Like the saying goes, smart people learn from others' mistakes, average people learn from their own, stupid people don't learn.

As for me, I'm sitting this one out. I don't care if I'm missing out on a once in a lifetime opportunity to get rich quick. I just hope that the crypto bubble bursts before it becomes big enough to drag the entire economy down with it into another recession.
« Last Edit: January 07, 2018, 12:22:31 PM by Padonak »

PDXTabs

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Re: Crypto Skeptics Thread
« Reply #46 on: January 07, 2018, 12:50:52 PM »
Padonak,

This is the sort of stuff that I am afraid of (more for the individuals, less for the market as a whole).

Since I am mining ETH and XMR people at my work come to ask me about cryptocurrencies. They are always super excited and think that they can only go up? I always explain to them that I've invested ~$3K in hardware in the last year (hardware that I will still have if cryptocurrency goes to zero) and ~$23K in stocks. That usually doesn't calm them down, but it at least eases my conscience.

Maenad

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Re: Crypto Skeptics Thread
« Reply #47 on: January 08, 2018, 10:05:16 AM »
One of MMM's links in his blog post was particularly good: https://blog.chain.com/a-letter-to-jamie-dimon-de89d417cb80

The scariest quote:
"The basic model is to pre-sell some percentage of the crypto assets the proposed network will generate as a way to fund the development of the decentralized application before it launches. The project founders tend to hold on to some percentage of these assets. Which means that raising money for a project this way is a) non-dilutive as it is not equity and b) not debt, so you never have to pay anyone back. This is basically free money. It’s never been this good for entrepreneurs, even in the 90s dot-com boom. Which makes it incredibly tempting to try and shoe-horn every project that could perhaps justify an “initial coin offering” to go for it, even if they aren’t actually building a decentralized application. After all, an ICO lets you exit before you even launch."

This really looks like it means any yahoo can say, "Hey! I've got this great Killer App! Buy some of the crypto I'm selling to finance it!" But they're lying - there's nothing. No decentralized application, nothing. They just walk away with speculators' actual, real, money, and leave them with worthless crypto. It's fraud, and it's almost impossible, if not completely impossible, to prosecute.

The mind boggles. I just hope it only takes down the speculators, and doesn't kick off an actual recession.

Mr. Green

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Re: Crypto Skeptics Thread
« Reply #48 on: January 08, 2018, 11:18:59 AM »
Just saw this. Prices being driven by speculation is clear, that's for sure! I got a giggle out of it.

https://arstechnica.com/tech-policy/2018/01/remember-dogecoin-the-joke-currency-soared-to-2-billion-this-weekend/?amp=1

sol

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Re: Crypto Skeptics Thread
« Reply #49 on: January 08, 2018, 11:40:22 AM »
One recent report suggests bitcoin currently consumes 0.1%  of all electricity produced on the planet.  More than some entire nations.

Does anyone believe bitcoin represents 0.1% of the work done, or the value created, or the GDP of the planet?  Because that seems like a colossal waste of (mostly carbon-burning) electricity for something that has approximately zero adoption rate or utility to the global economy.