Author Topic: crypto is the new MLM  (Read 14061 times)

LonerMatt

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Re: crypto is the new MLM
« Reply #100 on: February 05, 2022, 01:27:08 PM »
It's a good one though!

partgypsy

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Re: crypto is the new MLM
« Reply #101 on: February 09, 2022, 09:34:37 AM »
I feel like we hit the "shoeshine boys with stock tips" moment yesterday when I got an email letting me know that there is now a new promotion available:  spend $5 or more ordering food on the Burger King app and, courtesy of BK and Robin Hood, you'll get an (unspecified amount of) crypto.

I am not making this up.
Every coin is 100% backed by onion rings!

lolol

and thank you folks for sharing the Remy videos, spot on.
« Last Edit: February 09, 2022, 10:06:17 AM by partgypsy »

ExShredder89

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Re: crypto is the new MLM
« Reply #102 on: February 20, 2022, 12:14:50 PM »
So, funny story. I usually tell people I'm a mathematician, not a programmer, because I got tired of getting hit up by old high school buddies with stuff like "can you make my app idea? It's Facebook, but better? Why not? Okay, really, why not? It's just nights and weekends, dude, we could be the next Zuckerbergs!" :)

Nowadays people think that means I'm a day trader or do something in crypto. That I show up to the gym at like 2PM doesn't hurt. So people ask me if they should buy Dogecoin or Shibe, haha. I'll give them a "I don't do crypto, I'm not a financial manager type, it's high risk and you have to be okay with the high risk part" spiel, then next week find out they basically lost four figures since they asked me whether they should buy Dogecoin or Shibe.

I know that a lot of people have made a lot of wealth off of cryptocurrency and the technological concepts behind the current cryptos will be refined into something even better and easier to use. But right now it's in an early phase and if you're serious about it, you have to be okay with a ton of risk and doing a ton of research. I'm content with my index strategy; I spend enough time looking at code and numbers for my day job.

And it is culty in a way; someone in my company's Slack asked if we can start taking payment in Bitcoin. A guy in my department who literally makes open source contributions to one of the major non-Bitcoin blockchain/crypto projects as a hobby rejected it, because our sustainability goals mean that the company don't want to be responsible for more emissions from consensus or hashing or something like that. He literally got half a dozen "fake news!" "FUD!" "This is wrong! Don't ask me for my sources, because I have none! #Bitcoin!" replies and thumbs down reactions within five minutes.

DadJokes

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Re: crypto is the new MLM
« Reply #103 on: February 20, 2022, 12:41:56 PM »
So, I'm doing a friend's taxes as a favor. He started investing in crypto this year, investing $24k into it and has $2k in losses. That $2k is less than he and his wife put in their 401k plans.

I don't want to offer unsolicited advice, but that's just painful to watch.

solon

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Re: crypto is the new MLM
« Reply #104 on: February 20, 2022, 01:45:17 PM »

eyesonthehorizon

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Re: crypto is the new MLM
« Reply #105 on: February 25, 2022, 08:52:12 PM »
The idea that crypto=mlm is going mainstream.

https://www.wsj.com/articles/nfts-cryptocurrencies-and-web3-are-multilevel-marketing-schemes-for-a-new-generation-11645246824
I'm not sure whether to be aggravated that it took so long, or very modestly pleased that many critics at least seemed to reserve judgement until there was enough data to back up the intuitive truth of this.

The climate/ ecological impact, on the other hand, was never in doubt. As of September 2021, Bitcoin alone was projected to be surpassing the energy consumption of Sweden.
https://news.climate.columbia.edu/2021/09/20/bitcoins-impacts-on-climate-and-the-environment/

MustacheAndaHalf

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Re: crypto is the new MLM
« Reply #106 on: February 26, 2022, 07:12:46 AM »
Sarcasm is not an argument, and logic is not the same as data.
I wish I knew how to encourage more investors to decide based on data. 


Ok, so data... The correlation in the major equity markets and crypto markets has been positive in the last handful of years, as one would expect, as both have largely seen positive growth.

Correlation with DJIA: 0.75
Russell 200: 0.83
I used Portfolio Visualizer to try to replicate those results, but I didn't get numbers anywhere near theirs.  I used Grayscale Bitcoin Trust (GBTC) and iShares Russell 2000 Index (IWM), and "rolling 20 trading days" as the way to calculate correlation.  Using their time window (a), I get 0.21 correlation from every method.  I think 12 month rolling correlations make the most since for investors who rebalance annually.

If I drop the start date, I get 0.08 correlation between Bitcoin and the Russell 2000 (small cap) starting from Jun 2015.  Allow the end date to become Jan 2022, and that rises to 0.11 correlation.  (It's 0.18 for the rolling 20 trading day approach).  The S&P 500 was 0.17 to 0.18 correlated, which is very low.

I rarely see portfolios mentioned with even a few percent allocated to commodities.  I view Bitcoin as commodities squared, so I suspect most people won't want any in their portfolio - just as they allocate 0% commodities now.  Seeing Bitcoin fall -60% or more when the market drops -35% might also not be for everyone, which is what happened in Mar 2020.

(a)
"Cryptocurrencies market indicators (CoinMarketCap data for the period from 07-2017 to 03-2021"

MustacheAndaHalf

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Re: crypto is the new MLM
« Reply #107 on: February 26, 2022, 07:22:07 AM »
Each Tether token is supposedly worth $1 US. It claims that it is backed up by $1 of fiat per token, which is not the case: in fact, it's mathematically impossible.
While I agree with the criticism of Tether ("USDT"), can you say more about the "$1 of fiat per token" being "mathematically impossible"?  While I don't expect there's a mathematical proof, I am interested in evidence of a scam for USDT or that the company lacks the assets to back the full value of USDT in US dollars.

I've read a bit about the Hong Kong company behind Tether.  Based on that I suspect (but can't prove) 2 things: (1) they lack the assets to cash out every USDT for US dollars.  (2) it's unlikely enough USDT will be cashed out to "break the bank" for some time.

MustacheAndaHalf

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Re: crypto is the new MLM
« Reply #108 on: February 26, 2022, 07:47:32 AM »
The idea that crypto=mlm is going mainstream.

https://www.wsj.com/articles/nfts-cryptocurrencies-and-web3-are-multilevel-marketing-schemes-for-a-new-generation-11645246824
A technology columnist (Christopher Mims) is not the mainstream.

I lack a WSJ subscription to read the full article, so I have to rely on the first paragraph that I can read.  It refers to Tom Brady in an ad for crypto, and that he has an equity stake in FTX (a crypto exchange).  Maybe the article is actually about paid spokespeople and conflicts of interest?

Investopedia's definition includes the following key properties of an MLM:
"Participants are paid a percentage of their recruits' sales."
"Members at all levels receive some form of commission, which means the more layers there are, the more money people can earn."
https://www.investopedia.com/terms/m/multi-level-marketing.asp

If I encourage someone to buy Bitcoin, I'm paid nothing for their trades.  The aggregate demand raises the price of Bitcoin for everyone - but that's just how supply and demand works.  There's no percentage of recruit's sales in Bitcoin, so that element of MLM is lacking.

Most Bitcoin is sold on exchanges like FTX, which are not run as MLM.  If two people buy 1 Bitcoin for the same price, but several years apart, they earn the same amount from a price gain.  It doesn't matter when they started, or who they encouraged to join.  In an MLM, the highest "level" (L) gets paid the most, but that doesn't happen with Bitcoin.

scottish

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Re: crypto is the new MLM
« Reply #109 on: February 26, 2022, 10:11:58 AM »
Isn't that why MLM's are legal and pyramid schemes are not?     In MLMs all the 'workers' get an ongoing piece of the action, i.e. a commission, while this doesn't happen in a pyramid scheme?

In other words, "cryptocurrencies" are closer to pyramid schemes than they are to MLMs.

Glenstache

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Re: crypto is the new MLM
« Reply #110 on: February 26, 2022, 11:46:35 AM »
Isn't that why MLM's are legal and pyramid schemes are not?     In MLMs all the 'workers' get an ongoing piece of the action, i.e. a commission, while this doesn't happen in a pyramid scheme?

In other words, "cryptocurrencies" are closer to pyramid schemes than they are to MLMs.
Everyone gets rich as long as everyone finds new people to keep buying in. Classic speculative bubble. Where can I buy some Danish tulips?

MustacheAndaHalf

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Re: crypto is the new MLM
« Reply #111 on: February 27, 2022, 09:30:48 AM »

Isn't that why MLM's are legal and pyramid schemes are not?     In MLMs all the 'workers' get an ongoing piece of the action, i.e. a commission, while this doesn't happen in a pyramid scheme?

In other words, "cryptocurrencies" are closer to pyramid schemes than they are to MLMs.
If you watch "American Greed" you'll see numerous pyramid schemes.  A small number of people promise great returns quickly.  The early investors who cash out take their great returns out, which requires new investor money to pay them off.  If the new money ever falls below the money needed for withdrawals, the scheme can't pay up and it collapses.

Bitcoin has collapsed... repeatedly.  Multiple times the USD price per Bitcoin has crashed by over 80%... and then recovered.  That doesn't happen in a pyramid scheme.  So Bitcoin can't be a pyramid scheme for that reason alone.  But here's a second mark against it: transparency.  You can view the contents of your wallet and see Bitcoin transferred.  You can see every transaction, and the code which runs it.  No pyramid scheme will reveal what's really going on - that would collapse it.  So another reason it isn't a pyramid scheme.


Everyone gets rich as long as everyone finds new people to keep buying in. Classic speculative bubble. Where can I buy some Danish tulips?
That's possible!  I can't believe I've found partial agreement here, but yes buying Bitcoin is a highly speculative purchase that could fall to zero.  If you do time travel back to the 1600s, do not leave your ultra valuable tulip bulb out where servants can mistake it for an onion and eat it!

Unlike most frenzies around collectibles, two people who agree that Bitcoin is valuable can transfer it between their accounts - ignoring distance and for low fees.  There's been some really large Bitcoin transfers for low fees, but in general it's inferior to Visa as a payment system (even ignoring the price volatility).  Bitcoin or other crypto might improve to the point they compete with other payment systems.

I prefer comparing it to the "dot com" era, with valuations pushed to great heights, and then everything came crashing down - even Amazon and Apple lost 96% or more of their value.  So when buying Bitcoin... is that Apple or Pets.com?  I view it as speculation that could equally triple or drop to zero.

Reynold

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Re: crypto is the new MLM
« Reply #112 on: February 28, 2022, 05:00:14 PM »
I prefer comparing it to the "dot com" era, with valuations pushed to great heights, and then everything came crashing down - even Amazon and Apple lost 96% or more of their value.  So when buying Bitcoin... is that Apple or Pets.com?  I view it as speculation that could equally triple or drop to zero.

The difference is that both Apple and Pets.com were trying to make companies that would produce and sell something (products, services, etc.) to people who would find those products and services valuable enough to pay for them and keep those companies alive and growing, so that they could pass profits back to you.  Some succeeded, some failed. 

No cryptocurrency has ever attempted to produce anything other than, arguably, more cryptocurrency.  The only way to make money on it is to find someone willing to pay more for that intrinsically unproductive asset. 

zolotiyeruki

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Re: crypto is the new MLM
« Reply #113 on: February 28, 2022, 07:29:01 PM »
I prefer comparing it to the "dot com" era, with valuations pushed to great heights, and then everything came crashing down - even Amazon and Apple lost 96% or more of their value.  So when buying Bitcoin... is that Apple or Pets.com?  I view it as speculation that could equally triple or drop to zero.
No cryptocurrency has ever attempted to produce anything other than, arguably, more cryptocurrency.  The only way to make money on it is to find someone willing to pay more for that intrinsically unproductive asset.
And in that sense, it's functionally the same as art, or classic cars, or beanie babies.  Except that you can drive a car, look at the artwork, and play with the beanie babies.

SwordGuy

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Re: crypto is the new MLM
« Reply #114 on: February 28, 2022, 10:13:54 PM »
Saw a reference to crypto-currency as "Dunning-Kruegerrands".    Whomever came up with that term really coined a great phrase@

Made my day!

YttriumNitrate

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Re: crypto is the new MLM
« Reply #115 on: March 01, 2022, 08:29:02 AM »
No cryptocurrency has ever attempted to produce anything other than, arguably, more cryptocurrency.  The only way to make money on it is to find someone willing to pay more for that intrinsically unproductive asset.
It could be argued that cypto has produced some trade that otherwise would not have taken place. Of course, trade that can tolerate slow transactions, high transaction costs, wild value fluctuations, and virtually no protections/oversight is kind of a niche area.

LateStarter

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Re: crypto is the new MLM
« Reply #116 on: March 01, 2022, 09:45:38 AM »
The idea that crypto=mlm is going mainstream.

https://www.wsj.com/articles/nfts-cryptocurrencies-and-web3-are-multilevel-marketing-schemes-for-a-new-generation-11645246824
I'm not sure whether to be aggravated that it took so long, or very modestly pleased that many critics at least seemed to reserve judgement until there was enough data to back up the intuitive truth of this.

The climate/ ecological impact, on the other hand, was never in doubt. As of September 2021, Bitcoin alone was projected to be surpassing the energy consumption of Sweden.
https://news.climate.columbia.edu/2021/09/20/bitcoins-impacts-on-climate-and-the-environment/

Never in doubt ? Yet confusion / misrepresentation is rife - your conclusion is incorrect.

As of September 2021, Bitcoin alone was projected to be surpassing the energy electricity consumption of Sweden.

Sweden's energy consumption = 623TWh in 2019. That's nearly 5x the 131TWh electricity consumption quoted in your linked article.
https://ourworldindata.org/energy/country/sweden

GuitarStv

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Re: crypto is the new MLM
« Reply #117 on: March 01, 2022, 10:40:14 AM »
The idea that crypto=mlm is going mainstream.

https://www.wsj.com/articles/nfts-cryptocurrencies-and-web3-are-multilevel-marketing-schemes-for-a-new-generation-11645246824
I'm not sure whether to be aggravated that it took so long, or very modestly pleased that many critics at least seemed to reserve judgement until there was enough data to back up the intuitive truth of this.

The climate/ ecological impact, on the other hand, was never in doubt. As of September 2021, Bitcoin alone was projected to be surpassing the energy consumption of Sweden.
https://news.climate.columbia.edu/2021/09/20/bitcoins-impacts-on-climate-and-the-environment/

Never in doubt ? Yet confusion / misrepresentation is rife - your conclusion is incorrect.

As of September 2021, Bitcoin alone was projected to be surpassing the energy electricity consumption of Sweden.

Sweden's energy consumption = 623TWh in 2019. That's nearly 5x the 131TWh electricity consumption quoted in your linked article.
https://ourworldindata.org/energy/country/sweden

I've seen you get really upset about this before, but don't really understand why.

People have been comparing the electricity consumption of bitcoin with the electricity consumption of various countries.  Sometimes they use the term 'energy' in the comparison . . . and then you jump all over it, pointing out that the apples to oranges comparison of electricity consumption of bitcoin isn't comparable to energy consumption of a nation.

This is true, but it seems like a bit of a red herring, no?  Bitcoin wastes a shit-ton of energy every year for no real benefit to anyone who isn't collecting.  That's the point.  The articles are doing an apples to apples comparison.  This outrage seems almost like pedantry masquerading as concern in order to draw attention away from that fact.

YttriumNitrate

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Re: crypto is the new MLM
« Reply #118 on: March 01, 2022, 11:03:00 AM »
Never in doubt ? Yet confusion / misrepresentation is rife - your conclusion is incorrect.
As of September 2021, Bitcoin alone was projected to be surpassing the energy electricity consumption of Sweden.
Sweden's energy consumption = 623TWh in 2019. That's nearly 5x the 131TWh electricity consumption quoted in your linked article.https://ourworldindata.org/energy/country/sweden
If you are not limiting Sweden to just electricity usage, you should similarly also not limit BitCoin to just electricity usage.
https://www.lowtechmagazine.com/2009/06/embodied-energy-of-digital-technology.html
https://www.networkworld.com/article/2229029/computer-factories-eat-way-more-energy-than-running-the-devices-they-build.html

LateStarter

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Re: crypto is the new MLM
« Reply #119 on: March 01, 2022, 11:25:49 AM »
Never in doubt ? Yet confusion / misrepresentation is rife - your conclusion is incorrect.
As of September 2021, Bitcoin alone was projected to be surpassing the energy electricity consumption of Sweden.
Sweden's energy consumption = 623TWh in 2019. That's nearly 5x the 131TWh electricity consumption quoted in your linked article.https://ourworldindata.org/energy/country/sweden
If you are not limiting Sweden to just electricity usage, you should similarly also not limit BitCoin to just electricity usage.
https://www.lowtechmagazine.com/2009/06/embodied-energy-of-digital-technology.html
https://www.networkworld.com/article/2229029/computer-factories-eat-way-more-energy-than-running-the-devices-they-build.html

I think you have misunderstood my point. I'm not trying to conduct my own analysis.

I was merely pointing out that the posted conclusion did not accurately represent the quoted article.

LateStarter

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Re: crypto is the new MLM
« Reply #120 on: March 01, 2022, 11:37:55 AM »
The idea that crypto=mlm is going mainstream.

https://www.wsj.com/articles/nfts-cryptocurrencies-and-web3-are-multilevel-marketing-schemes-for-a-new-generation-11645246824
I'm not sure whether to be aggravated that it took so long, or very modestly pleased that many critics at least seemed to reserve judgement until there was enough data to back up the intuitive truth of this.

The climate/ ecological impact, on the other hand, was never in doubt. As of September 2021, Bitcoin alone was projected to be surpassing the energy consumption of Sweden.
https://news.climate.columbia.edu/2021/09/20/bitcoins-impacts-on-climate-and-the-environment/

Never in doubt ? Yet confusion / misrepresentation is rife - your conclusion is incorrect.

As of September 2021, Bitcoin alone was projected to be surpassing the energy electricity consumption of Sweden.

Sweden's energy consumption = 623TWh in 2019. That's nearly 5x the 131TWh electricity consumption quoted in your linked article.
https://ourworldindata.org/energy/country/sweden

I've seen you get really upset about this before, but don't really understand why.

People have been comparing the electricity consumption of bitcoin with the electricity consumption of various countries.  Sometimes they use the term 'energy' in the comparison . . . and then you jump all over it, pointing out that the apples to oranges comparison of electricity consumption of bitcoin isn't comparable to energy consumption of a nation.

This is true, but it seems like a bit of a red herring, no?  Bitcoin wastes a shit-ton of energy every year for no real benefit to anyone who isn't collecting.  That's the point.  The articles are doing an apples to apples comparison.  This outrage seems almost like pedantry masquerading as concern in order to draw attention away from that fact.

Why do you imagine I'm upset/outraged over anything ? There's no emotional language in my posts.

What's your point ? If a claim has some substance of truth then accuracy doesn't matter ?

If highlighting misquotes of directly referenced articles = pedantry, then yes, by that definition, I am a pedant.
If believing that the difference between a shit-ton and 4.7 shit-tons is significant = pedantry, then yes I am a pedant.

Werthless

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Re: crypto is the new MLM
« Reply #121 on: March 04, 2022, 08:50:56 AM »
No cryptocurrency has ever attempted to produce anything other than, arguably, more cryptocurrency.  The only way to make money on it is to find someone willing to pay more for that intrinsically unproductive asset.
You are both right and wrong about something... currency can be unproductive. What good does it do to stick money under a mattress? But currency is incredibly valuable to society, because it facilitates exchange, trades, and economic activity. When it's easy, and cheap, it's easier to do business, and easier to be a consumer. It's easier to trade your time for food, to convert a used car into a tuition payment, etc. The cool thing with some cryptos is that they are being used to facilitate other kinds of activity.


The helium network pays individuals to set up a decentralized wireless network. It's now the largest long range network in the US.

Self executing smart contracts built on block chain networks are facilitated by the exchange of crypto. Reduces transaction costs on some transactions that require 3rd parties to oversee it.

Being able to hold your networth in your head (via a seed phrase), without having to carry confiscatable currency or cash, is very valuable to a people fleeing a war torn area (Ukraine), or somewhere with strict currency controls (Russia, Argentina).

Being able to send remittances to family abroad, for pennies in transaction fees, is a service that costs much more money today.

Ironically, the permanency of the transaction record could reduce money laundering in ways that a cash economy makes difficult. See the NYC couple busted in the last month.

The next path I see happening is on cyber security applications, including in the sharing of healthcare information.

I'm not very excited about NFT markets for art, but some people are.

There are many applications if you look around. This comment reminds me of someone snarking about amazon back in the mid 90s... "Why would I buy a book on the INTERNET when I can just go down to the bookstore and talk to someone about what books are good?" We don't know all of the different paths that this class of technologies will take us, in the same way that we didn't know where all of the paths that the internet would lead us. We didn't know we'd be walking around with handheld supercomputers that can send and receive live video around the world... it's changing how wars are conducted, how businesses find customers, and how employers find employees.
« Last Edit: March 04, 2022, 09:04:30 AM by Werthless »

TheGrimSqueaker

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Re: crypto is the new MLM
« Reply #122 on: March 24, 2022, 11:36:53 AM »
Each Tether token is supposedly worth $1 US. It claims that it is backed up by $1 of fiat per token, which is not the case: in fact, it's mathematically impossible.
While I agree with the criticism of Tether ("USDT"), can you say more about the "$1 of fiat per token" being "mathematically impossible"?  While I don't expect there's a mathematical proof, I am interested in evidence of a scam for USDT or that the company lacks the assets to back the full value of USDT in US dollars.

I've read a bit about the Hong Kong company behind Tether.  Based on that I suspect (but can't prove) 2 things: (1) they lack the assets to cash out every USDT for US dollars.  (2) it's unlikely enough USDT will be cashed out to "break the bank" for some time.

CoffeeZilla has collected some pretty interesting information about Tether, and it appears that Tether's fine print has changed. They're using a pretty vague definition of dollar-denominated assets. Part of the assets backing the tokens is unsecured corporate debt. Also their relationship with Coinbase back in 2010 wasn't what I call healthy. I'm not going to FOD out and call it a scam, however the closeness of the business relationship wouldn't have been tolerated in stocks or commodities.

MustacheAndaHalf

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Re: crypto is the new MLM
« Reply #123 on: April 01, 2022, 11:22:46 PM »
No cryptocurrency has ever attempted to produce anything other than, arguably, more cryptocurrency.  The only way to make money on it is to find someone willing to pay more for that intrinsically unproductive asset.
It could be argued that cypto has produced some trade that otherwise would not have taken place. Of course, trade that can tolerate slow transactions, high transaction costs, wild value fluctuations, and virtually no protections/oversight is kind of a niche area.

High transaction costs like moving billions of dollars for $0.78?

"Block data from Blockchain.com reveals that a colossal Bitcoin (BTC) transaction worth $2 billion was processed on Monday night. Despite the enormous financial value, the unknown wallet holder only paid 0.00001713 BTC fees equivalent to $0.78."
https://cointelegraph.com/news/bitcoin-worth-2-billion-moves-for-just-78-cents

GuitarStv

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Re: crypto is the new MLM
« Reply #124 on: April 02, 2022, 11:22:20 AM »
No cryptocurrency has ever attempted to produce anything other than, arguably, more cryptocurrency.  The only way to make money on it is to find someone willing to pay more for that intrinsically unproductive asset.
It could be argued that cypto has produced some trade that otherwise would not have taken place. Of course, trade that can tolerate slow transactions, high transaction costs, wild value fluctuations, and virtually no protections/oversight is kind of a niche area.

High transaction costs like moving billions of dollars for $0.78?

"Block data from Blockchain.com reveals that a colossal Bitcoin (BTC) transaction worth $2 billion was processed on Monday night. Despite the enormous financial value, the unknown wallet holder only paid 0.00001713 BTC fees equivalent to $0.78."
https://cointelegraph.com/news/bitcoin-worth-2-billion-moves-for-just-78-cents

So that's how Putin is getting around the international sanctions . . .

Weathering

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Re: crypto is the new MLM
« Reply #125 on: April 02, 2022, 12:47:48 PM »
I received $50 USD worth of crypto two years ago (for watching some videos about crypto). When I tried to transfer it from a wallet to an account for conversion to USD there was a mistake in my entry (I left a field blank) and the crypto went poof forever. That was the best introduction I ever could have had in regards to crypto. Have never touched it since.

MustacheAndaHalf

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Re: crypto is the new MLM
« Reply #126 on: April 02, 2022, 01:07:56 PM »
+1 to this:
Saw a reference to crypto-currency as "Dunning-Kruegerrands".    Whomever came up with that term really coined a great phrase@

<just a joke>
I don't know what that means, but I know everything and that has something to do with smart people.  But the joke is on you!  I scored a perfect 100 on the IQ test!
</just a joke>

Glenstache

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Re: crypto is the new MLM
« Reply #127 on: May 12, 2022, 10:39:32 PM »
Looks like crypto is doing pretty well....

sixwings

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Re: crypto is the new MLM
« Reply #128 on: May 13, 2022, 10:28:52 AM »
yeah this seems totally fine...

Quote
Coinbase said in its earnings report Tuesday that it holds $256 billion in both fiat currencies and cryptocurrencies on behalf of its customers. Yet the exchange noted that in the event it ever declared bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings. Coinbase users would become general unsecured creditors, meaning they have no right to claim any specific property from the exchange in proceedings. Their funds would become inaccessible.

https://fortune.com/2022/05/11/coinbase-bankruptcy-crypto-assets-safe-private-key-earnings-stock/

GuitarStv

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Re: crypto is the new MLM
« Reply #129 on: May 13, 2022, 11:30:10 AM »
PAY NO ATTENTION TO THE MAN BEHIND THE CURTAIN.  HODL HODL HODL

ChpBstrd

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Re: crypto is the new MLM
« Reply #130 on: May 13, 2022, 12:11:36 PM »
Im getting the distinct feeling that every bro who could have bought into the MLM has bought into the MLM, and we just ran out of bros. In hindsight, the Super Bowl ads were the signal, just like when pets.com and others bought ads in 2000, burning capital obtained from stock holders.


Goatee Joe

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Re: crypto is the new MLM
« Reply #131 on: May 14, 2022, 04:21:12 AM »
Im getting the distinct feeling that every bro who could have bought into the MLM has bought into the MLM, and we just ran out of bros. In hindsight, the Super Bowl ads were the signal, just like when pets.com and others bought ads in 2000, burning capital obtained from stock holders.

There's probably an extremely small subset of crypto bros who actually know how to manipulate this game and are making big bucks on it.  The rest of the Faux Bros just lost their shirts.  Funny how I haven't seen much Facebook crypto bragging from random friends in my feed lately....

MustacheAndaHalf

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Re: crypto is the new MLM
« Reply #132 on: May 14, 2022, 09:12:34 AM »
Im getting the distinct feeling that every bro who could have bought into the MLM has bought into the MLM, and we just ran out of bros. In hindsight, the Super Bowl ads were the signal, just like when pets.com and others bought ads in 2000, burning capital obtained from stock holders.
I had an interesting experience on Jan 5 2022, when I had decided to sell every risky asset - including crypto.  Partway through selling ETHE (Grayscale Ethereum) it felt like the market had started moving - and my trades aren't that big.  Where ETHE fell 1% while I sold, it fell another 8% later that same day.

I looked up what had happened: FOMC meeting minutes had come out.  The Fed talked about tightening financial conditions at that meeting, which came as a shock when investors read about it.  Crypto and aggressive growth stocks both fell on the news.

More recently, I've seen financial TV compare Bitcoin to the Nasdaq, with higher and higher correlations.  On Friday ETHE rose +11.16% and ARKK rose +11.82%, which also provides support for my view.

https://finance.yahoo.com/quote/ETHE/
https://finance.yahoo.com/quote/ARKK/

scottish

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Re: crypto is the new MLM
« Reply #133 on: May 14, 2022, 10:51:47 AM »
Im getting the distinct feeling that every bro who could have bought into the MLM has bought into the MLM, and we just ran out of bros. In hindsight, the Super Bowl ads were the signal, just like when pets.com and others bought ads in 2000, burning capital obtained from stock holders.

There's probably an extremely small subset of crypto bros who actually know how to manipulate this game and are making big bucks on it.  The rest of the Faux Bros just lost their shirts.  Funny how I haven't seen much Facebook crypto bragging from random friends in my feed lately....

FTFY

There's probably an extremely small subset of crypto bros who actually know how to manipulate this game and are are lucky enough to be making big bucks on it.  The rest of the Faux Bros just lost their shirts.  Funny how I haven't seen much Facebook crypto bragging from random friends in my feed lately....

caleb

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Re: crypto is the new MLM
« Reply #134 on: May 14, 2022, 12:12:35 PM »
Im getting the distinct feeling that every bro who could have bought into the MLM has bought into the MLM, and we just ran out of bros. In hindsight, the Super Bowl ads were the signal, just like when pets.com and others bought ads in 2000, burning capital obtained from stock holders.

There's probably an extremely small subset of crypto bros who actually know how to manipulate this game and are making big bucks on it.  The rest of the Faux Bros just lost their shirts.  Funny how I haven't seen much Facebook crypto bragging from random friends in my feed lately....

FTFY

There's probably an extremely small subset of crypto bros who actually know how to manipulate this game and are are lucky enough to be making big bucks on it.  The rest of the Faux Bros just lost their shirts.  Funny how I haven't seen much Facebook crypto bragging from random friends in my feed lately....

There's a good article in the WSJ today that says institutional investors have such a large stake in crypto at this point that it's functioning like a highly speculative tech stock, rather than a stable store of value.

https://www.wsj.com/articles/how-more-than-1-trillion-of-crypto-vanished-in-just-six-months-11652434202

The bros were promised digital gold, but it has turned out to be pets.com.

I do hope the financial regulators are keeping an eye on the institutional exposure so that we don't end up with another too big to fail episode of bailouts.

I'd like to say my visceral aversion to any bailout is principled, or even adult.  It's not.  It's that after enduring the insufferable crypto bro douchebaggery for years now, we're all entitled to watch them get publicly hosed.
« Last Edit: May 14, 2022, 12:22:43 PM by caleb »

MustacheAndaHalf

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Re: crypto is the new MLM
« Reply #135 on: May 15, 2022, 03:54:00 AM »
The bros were promised digital gold, but it has turned out to be pets.com.

I do hope the financial regulators are keeping an eye on the institutional exposure so that we don't end up with another too big to fail episode of bailouts.

I'd like to say my visceral aversion to any bailout is principled, or even adult.  It's not.  It's that after enduring the insufferable crypto bro douchebaggery for years now, we're all entitled to watch them get publicly hosed.
US Treasury Secretary Yellin asked Congress to look into "stable coins", after "UST" collapsed earlier this week.  You could also use the collapse of that supposedly "stable" crypto coin as more evidence of problems.  But in this case, if you actually write to a member of Congress, the timing will be perfect.

Unfortunately, bailouts are pretty much what Congress does.  You might agree with it during Covid-19 and think it was not justified in the global financial crisis, but you'd have to agree it's a regular occurrence.  There's an unknown amount of leverage in crypto, which I'd guess the U.S. government doesn't even monitor yet, let alone know the amounts involved.

Glenstache

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Re: crypto is the new MLM
« Reply #136 on: May 15, 2022, 11:11:22 AM »
El Salvador's bet on bitcoin appears to be going poorly too. I feel sorry for the citizens.
https://www.newsweek.com/bitcoin-crash-el-salvador-faces-potential-default-crytocurrency-1706098

MustacheAndaHalf

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Re: crypto is the new MLM
« Reply #137 on: May 15, 2022, 02:59:37 PM »
El Salvador's bet on bitcoin appears to be going poorly too. I feel sorry for the citizens.
https://www.newsweek.com/bitcoin-crash-el-salvador-faces-potential-default-crytocurrency-1706098
El Salvador owes $800 million in bond payments at the start of 2023... and people are worried about a loss 1/20th that size, because it's Bitcoin?

GuitarStv

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Re: crypto is the new MLM
« Reply #138 on: May 15, 2022, 03:52:20 PM »
El Salvador's bet on bitcoin appears to be going poorly too. I feel sorry for the citizens.
https://www.newsweek.com/bitcoin-crash-el-salvador-faces-potential-default-crytocurrency-1706098
El Salvador owes $800 million in bond payments at the start of 2023... and people are worried about a loss 1/20th that size, because it's Bitcoin?

They might actually be related.  The IMF is no fan of bitcoin.  I could see them calling it in because they want to see El Salvadore's risky gamble on crypto fail as an example for other countries.

ChpBstrd

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Re: crypto is the new MLM
« Reply #139 on: May 16, 2022, 06:54:10 AM »
El Salvador's bet on bitcoin appears to be going poorly too. I feel sorry for the citizens.
https://www.newsweek.com/bitcoin-crash-el-salvador-faces-potential-default-crytocurrency-1706098
El Salvador owes $800 million in bond payments at the start of 2023... and people are worried about a loss 1/20th that size, because it's Bitcoin?

They might actually be related.  The IMF is no fan of bitcoin.  I could see them calling it in because they want to see El Salvadore's risky gamble on crypto fail as an example for other countries.
One weakness of democracies is that elected leaders are often incentivized to go after longshot gambles with possible short-term payouts rather than muddling through the natural recessions and slow growth periods with policies that won't increase productivity until the next election. From the perspective of the president of El Salvadore, the Bitcoin thing was either going to work out beautifully or crash. But then again, so was his re-election, so might as well take the shot.

In the U.S. we do the same thing with tax policy.

zolotiyeruki

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Re: crypto is the new MLM
« Reply #140 on: May 16, 2022, 08:29:40 AM »
One weakness of democracies is that elected leaders are often incentivized to go after longshot gambles with possible short-term payouts rather than muddling through the natural recessions and slow growth periods with policies that won't increase productivity until the next election. From the perspective of the president of El Salvadore, the Bitcoin thing was either going to work out beautifully or crash. But then again, so was his re-election, so might as well take the shot.
I would say not just longshot gambles, but also short-term, emotionally-charged issues, rather than addressing the hard-but-also-mundane stuff.

My dad served on his local school board for 15 years.  He's an engineer and retired management, so a lot of his work focused on finances, long-term planning, and measurable academic performance.  One of the results is that his district is likely in better financial shape than it ever has been in its 70-plus-year existence--almost zero debt, a thorough plan for capital projects for the next decade or more, and a solid capital projects fund so that the capital projects won't require taking on debt.  After winning five terms in a row, he didn't even make it past the primary this year--the two candidates who went on to the general election are a firebrand of an anti-CRT conservative and a DEI-focused liberal, both of whom are focused on short-term issues.

shureShote

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Re: crypto is the new MLM
« Reply #141 on: May 16, 2022, 08:54:23 AM »
One weakness of democracies is that elected leaders are often incentivized to go after longshot gambles with possible short-term payouts rather than muddling through the natural recessions and slow growth periods with policies that won't increase productivity until the next election. From the perspective of the president of El Salvadore, the Bitcoin thing was either going to work out beautifully or crash. But then again, so was his re-election, so might as well take the shot.
I would say not just longshot gambles, but also short-term, emotionally-charged issues, rather than addressing the hard-but-also-mundane stuff.

My dad served on his local school board for 15 years.  He's an engineer and retired management, so a lot of his work focused on finances, long-term planning, and measurable academic performance.  One of the results is that his district is likely in better financial shape than it ever has been in its 70-plus-year existence--almost zero debt, a thorough plan for capital projects for the next decade or more, and a solid capital projects fund so that the capital projects won't require taking on debt.  After winning five terms in a row, he didn't even make it past the primary this year--the two candidates who went on to the general election are a firebrand of an anti-CRT conservative and a DEI-focused liberal, both of whom are focused on short-term issues.

Ouch, that might turn out very poorly in the longish run. Some critical underlying infrastructure crumbling at the expense of short-term fancy soundbites.

ChpBstrd

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Re: crypto is the new MLM
« Reply #142 on: May 16, 2022, 09:41:05 AM »
One weakness of democracies is that elected leaders are often incentivized to go after longshot gambles with possible short-term payouts rather than muddling through the natural recessions and slow growth periods with policies that won't increase productivity until the next election. From the perspective of the president of El Salvadore, the Bitcoin thing was either going to work out beautifully or crash. But then again, so was his re-election, so might as well take the shot.
I would say not just longshot gambles, but also short-term, emotionally-charged issues, rather than addressing the hard-but-also-mundane stuff.

My dad served on his local school board for 15 years.  He's an engineer and retired management, so a lot of his work focused on finances, long-term planning, and measurable academic performance.  One of the results is that his district is likely in better financial shape than it ever has been in its 70-plus-year existence--almost zero debt, a thorough plan for capital projects for the next decade or more, and a solid capital projects fund so that the capital projects won't require taking on debt.  After winning five terms in a row, he didn't even make it past the primary this year--the two candidates who went on to the general election are a firebrand of an anti-CRT conservative and a DEI-focused liberal, both of whom are focused on short-term issues.

Ouch, that might turn out very poorly in the longish run. Some critical underlying infrastructure crumbling at the expense of short-term fancy soundbites.

Democratic systems "work" in the sense that voters can course-correct when things start getting bad. We currently have the luxury of playing social status games with abstract topics of tribal outrage, but that will not always be the case.

When governments and organizations go broke or cease to be effective, voters may well pivot away from moralistic entertainers and back toward technocrats and candidates who run on a track record of competency. That's how democratic politics are supposed to work of course. Voters get punished for their foolishness and must change their priorities to return to working systems. Democracy is less about making optimal decisions than it is about holding people (i.e. the voters) accountable when they make dumb decisions and empower blowhards instead of competent people. Voters must suffer until they change. This feedback mechanism has worked for centuries.

Here's what I worry about: People now consume hours per day of what is fair to call addictive political propaganda, from intentionally-tilted pseudo-news companies, from social media algorithms, and from targeted advertising posing as information. There is so much misinformation that voters cannot now agree on basic facts such as whether schools are performing well, whether healthcare systems in other countries work better, whether the economy is booming or in recession, whether wars were won or lost, what history was, or who won elections. Thus, the feedback mechanism is broken and there is no way for people to tell if their various systems are performing well or badly. Typically, when one's own party is in power, one's selected media sources and social media algorithms deliver good news, and vice versa when the other party is in power.

There are countries in the world where voters only get to choose between political extremists from the left or right, and no one pays attention to competent moderates. Those countries tend to be very poor, corrupt, dysfunctional, and unstable. Something has broken the feedback mechanism in those places, and so instability has become a feature of the system. The dissolution of traditional media may have tilted the U.S. into such a dynamic.

GuitarStv

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Re: crypto is the new MLM
« Reply #143 on: May 16, 2022, 09:45:06 AM »
Agreed.  An electorate that can be successfully kept uninformed cannot continue to support a democracy.

MustacheAndaHalf

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Re: crypto is the new MLM
« Reply #144 on: May 16, 2022, 10:52:17 AM »
El Salvador's bet on bitcoin appears to be going poorly too. I feel sorry for the citizens.
https://www.newsweek.com/bitcoin-crash-el-salvador-faces-potential-default-crytocurrency-1706098
El Salvador owes $800 million in bond payments at the start of 2023... and people are worried about a loss 1/20th that size, because it's Bitcoin?

They might actually be related.  The IMF is no fan of bitcoin.  I could see them calling it in because they want to see El Salvadore's risky gamble on crypto fail as an example for other countries.
One weakness of democracies is that elected leaders are often incentivized to go after longshot gambles with possible short-term payouts rather than muddling through the natural recessions and slow growth periods with policies that won't increase productivity until the next election. From the perspective of the president of El Salvadore, the Bitcoin thing was either going to work out beautifully or crash. But then again, so was his re-election, so might as well take the shot.

In the U.S. we do the same thing with tax policy.
I believe they bought $100 million of Bitcoin, so if that surged to $200 million it translates to re-election... and there's still $800 million to pay!  But politically, it might mean something.

To me, this setup an ideal experiment that I hoped we'd see the results.  Some country's currencies have collapsed repeatedly, causing a total loss.  Bitcoin might collapse to zero, but compared to a local currency that alreay collapsed repeatedly, it might look appealing.  A currency that also fluctuates upwards must be appealing.

El Salvador probably has a one collapsing currency, and one currency they can't control in the form of Bitcoin.  It would be interesting to see how they deal with exchange rates, and how people react to Bitcoin as a rather new maybe-official currency.  It's a new dynamic, and it would have been nice to see if the widespread presence of a second currency could change the speed of the collapse or recovery.

Years ago a co-worker of mine from Brazil explained a crisis in his country.  Inflation was out of control, and the government finally announced they would introduce a new currency.  They started publishing exchange rates, which showed a fixed rate of exchange from old currency to new currency.  The country's inflation returned to normal levels in anticipation of using the new currency to buy things.  The best part, which I don't know if it was planned... they never used the new currency.  Inflation had become entirely driven by behavior, so when everyone started treating prices as stable, high inflation simply stopped.  The switch to new currency changed everyone's perspective, and was no longer needed.

I kinda hoped we'd get a story - good or bad - out of El Salvador's experience of having a Bitcoin alternate currency in a crisis.

aasdfadsf

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Re: crypto is the new MLM
« Reply #145 on: May 21, 2022, 03:28:16 AM »
"High transaction costs like moving billions of dollars for $0.78?"

Oh come on. It doesn't matter if you can move "billions" in one move, if it cost that much per transaction, that is an absurdly high transaction cost that cannot be scaled up to the whole economy. If my bank told me I had to pay that for every transaction, I'd tell them to piss off.