Fresh in-pouring of victims to sustain the whole thing, while some bigger players benefit.
Im sorry, I don't want to argue anymore with crypto advocates. There is no more rational discussion to possibly be had about any of the current contenders in this space. The whole thing needs to be pulled apart. Just because some people earn money from it, doesn't make it moral, a good idea , useful, or bettering human society. Oil companies also make a lot of money and we can see where that has ended up.
The comparison to oil isn't quite fair to oil. Oil has a lot of negative side effects, to be clear, but the benefits to society from the use of oil include pretty much all the things we depend on for modern civilization. That is why replacing oil with renewables is going to be such a challenge.
When it comes to crypto, on the other hand, I think the challenge would be listing any real benefits to begin with.
You have to distinguish between absolute benefits, and benefits in our current society. I also think absolute or real benefits are very slim, but there are certain motivations for it today:
In our current society, one "benefit" is that you can use it to buy drugs anonymously. I would argue for some soft drugs like cannabis, that is a good thing. But even better to just legalize it - then you can get the benefits of regulation (harder for people to slide into heavier drugs, you have a bit more control over consumption, you can tax it...).
Another benefit is that you could take your money that you earn in your day job and funnel it into activism. In many countries, there are a lot of scary political developments, combined with a growing surveillance state. Crypto can help that you are not cut off critical resources if you are a dissident.
Finally, I wouldn't dismiss the aspect that it promises you to "get rich quickly". We have a very stratified society, where most people are individual laborers, and only a few are successful entrepreneurs and employers. Yes, in silicon valley you can earn a lot even as an IC, and there are many stories of successful founders. But to be honest, the way to the financial elite, the "ruling class", is barred for 99% of people, even for the most talented. A lot of people in tech probably find this unjust, and I can really relate to this feeling. But most would never question the system as a whole. Instead of trying to completely change society, we look for a literal hack or cheat, and crypto is this hack. It is the nerds' revenge, and we phantasize it will allow us to get what is our due.
I'm not sure whether crypto is a good or bad thing overall but there are plenty of good uses for it:
* In countries with unstable currencies they are useful stores of value (Venezuela, Turkey and Zimbabwe right now). I was in Zim back in 2010 and visited someone's house. It was filled with petrol because he had been paid and had to spend the money before it lost its value so he bought what was available. Bitcoin would have been a lot safer and less likely to cause shortages of goods (and more inflation).
* They offer a much cheaper and simpler way to move money between countries both for ordinary people and small businesses.
* By making online retail anonymous they've allowed the circumvention of all sorts of prohibitions. Sometimes that might be a bad thing, but I think it's a part of the reason we've seen weed legalised in so many US states.
And remember: we don't ban things because you or I don't see the point. If someone else thinks they see a point, and they're not hurting anyone, they have every right to pursue what interests them
I don't get why this is being downvoted. Living in an unstable third world country I know these points are true.
There's less and less jobs, the few there are offer miserable wages(less than 3000k/year), and crypto is pretty much the only way to get paid working remotely for other countries as freelancer or contractor.
If you go the official route(only around 5% of workers do it even locally anyways) then more than half of your money is confiscated by the state and forced to convert to a local currency that's worth nothing two months down the road due to high inflation rates.
It doesn't seem like people in stable countries understand what it's like to live in places like this so I guess it's no wonder all they see is a bunch of "crypto bros" making money.
> In countries with unstable currencies they are useful stores of value (Venezuela, Turkey and Zimbabwe right now)
Also, Cuba and Argentina. While Bitcoin may be more accessible to people in these countries, they could also store value in USD, or other stable assets.
> By making online retail anonymous
I really don't understand the persistent myth that blockchains are anonymous.
In Argentina you can only buy 200 USD per month and even that isn't guaranteed, you have to make appointments with banks in a lot of places. And even if you get them, you can't use them outside of the country because such payments are mostly blocked. You can pay online services or internatioal shippings by converting to crypto first and trade it with a foreigner to deposit USD in a foreign bank account, and then make the actual payment.
> I really don't understand the persistent myth that blockchains are anonymous.
They are, at least in principle.
Sure, if you pay for something and have it delivered to your home, someone now knows the address linked to the wallet you used; do this a lot, and the chances increase that this link will end up in the wrong databases.
But that doesn't mean bitcoin & co. aren't, at least on their own, fairly anonymous.
Blockchain is anonymous if you use it correctly I believe (don't reuse wallets, launder you coins etc) but you're right that the vast majority of people don't do that as far as I'm aware.
Full disclosure: I've never actually done it either and I'm no expert...
* Bitcoin is and has been available in countries where there are currency problems and it has yet to solve any of them. This canard has been trotted out for over a decade, there have been plenty of chances to demonstrate this notion, and none of them have panned out. When do we stop flogging this obviously-false excuse?
* Transaction fees and exchange rates into and out of the crypto economy make transferring money in bitcoin incredibly expensive. Also, slow.
* The person I was responding to claim it could be an alternative. OK, Bitcoin has been around a while and several countries have had currency problems. Notably, Bitcoin didn't save the day. Why? It has literally never happened, but people keep claiming it will.
* Claim was made that Bitcoin made this "cheaper and simpler". That isn't true.
* Which part of the public ledger exactly is anonymous? You say "pretty much all of it", I see "public" and say pretty much none of it.
The difference between us is that I haven't hinged my hopes of personal financial success on a Ponzi scheme, so we're probably not going to see eye to eye.
To be clear, I didn't say it would solve the country/currency's problems. I said it would let individuals work around them.
Also, the only details on the public ledgers (for bitcoin) are the balance, wallet IDs and transactions. If I buy or sell bitcoin you can't tell it was "me" you can only tell that wallet #12345 transferred to wallet #67890. You still have to be careful your Id isn't linked to your wallet in some other way. But until that happens you're as anonymous as it's possible to be really.
The part where you identity is linked to the wallet can be anonymous. The transactions are public, but if your identity is unlinked, that only matters so much.
I mean, an digital account will always have an identifier. If having a number associated with the wallet makes it only pseudonymous rather than anonymous, then fine, though it seems like a trivial distinction. The upshot is that it can be private, though you need to do things in a certain way.
Then let's ban gift cards first, because those get used for scamming as well and I don't really see the point in them in the first place, other than making money.
* It is a store of nothing, in fact it is drain of enormous amounts of electricity and computational power.
* I wish it were cheaper or simpler, it was true in its early days but not anymore once there is speculation & "store of value"
* I agree that some countries like Venezuela can benefit. In a pure capitalist society one still has to risk their money to buy shares at the minimum. In the case of Bitcoin one only has to sit on it and wait for Venezuelan assets to come and back it up. Poor Venezuelans are are going to part with their assets to make some speculator rich, let us not forget the other unsavoury type who most need anonymity.
* There is a very high chance that major countries are going to bar private crypto being backed by regulated institutions like banks.
> * In countries with unstable currencies they are useful stores of value (Venezuela, Turkey and Zimbabwe right now). I was in Zim back in 2010 and visited someone's house. It was filled with petrol because he had been paid and had to spend the money before it lost its value so he bought what was available. Bitcoin would have been a lot safer and less likely to cause shortages of goods (and more inflation).
It'd only be true if Bitcoin was actually stable and a store of value. At the moment is a highly speculative and volatile asset, fueled by a mania, not a stable supply of value and liquidity. It's liquid until the next big crash, for people who actually depend on having a stable store of value for their survival, a crash of 20% in a day can be devastating, less than a crash of their own currency but still not stable enough to warrant it as a safe way to park money.
Just buy USD or another powerful currency, if one of these currencies crash to the point where it's mostly worthless then humanity has a much, much larger problem and having some bucks saved somewhere won't really help you.
And yes, even in Venezuela, Argentina, Cuba, etc., there is a black/grey market for other currencies, it will be more expensive than the official exchange rate (if those are manipulated by the government) but is still doable, even more given the technical knowledge required to properly use cryptocurrencies, it's easier for the general population to hoard cash in a better currency.
> * They offer a much cheaper and simpler way to move money between countries both for ordinary people and small businesses.
Much cheaper? TX costs are really high, the solution to this has only been talked about and implemented as Proof of Concepts. The solution is either a L2 network (I've been hearing about Lightning as "the next big thing" for almost half a decade now) or moving away from proof-of-work to proof-of-stake, this move has been much harder and slower than any proponent of it has publically pitched.
Small businesses are not sophisticated enough to be able to hedge against huge price fluctuations such as the ones cryptocurrencies experience, small businesses relying on crypto at this time would be just a major risk to themselves, with the only benefit being "it's fast to move money abroad". Very few small businesses really care about moving money as fast as possible across international borders with no legal checks, usually they are illegal businesses.
> * By making online retail anonymous they've allowed the circumvention of all sorts of prohibitions. Sometimes that might be a bad thing, but I think it's a part of the reason we've seen weed legalised in so many US states.
Quite a libertarian take that anything should be free of controls. I agree that governments seem to be getting more draconian lately in the West, at the same time protections against prohibitions will mostly fuel and incentivise exactly the behaviour that was prohibited (financial scams, anyone? or drug trade?), enabling that without discussing the merits of such prohibitions is just inviting and incentivising the worst kind of behaviours, the ones most prohibited and more taboo.
I would like to know where are you drawing the parallel of weed being legalised to cryptocurrencies, I don't remember seeing anywhere an explanation of this link and I believe it's wishful thinking from your part.
> And remember: we don't ban things because you or I don't see the point. If someone else thinks they see a point, and they're not hurting anyone, they have every right to pursue what interests them.
Just the sheer amount of electricity being consumed to run this system is hurting societies, energy is probably the single most valuable resource for modern societies, spending it so some people can play around to inflate some numbers is a huge waste, even more if energy is coming from fossil sources.
Oil and natural gas have lifted billions of people out of generational poverty. It wouldn't be possible for you to type that comment on your computer or laptop and post it to Hacker News without their existence.
When I got into Bitcoin I wasn't a "victim" and I'm still not one. Maybe you're the victim of your own preconceived notions.
Since you categorically state that "the whole thing needs to be pulled apart" and attribute all sorts of evils to what is essentially just an open cryptographic protocol that anyone can freely use or not use as they please, I'd say it's you who is more closely edging towards being unable to rationally discuss bitcoin. Many things can be arbitrarily defined as bad ideas without having to be banned and something doesn't need to "better human society" (according to your definition of how that's decided no less) in order to have legitimate reasons for existing.
Agreed. Let's get rid of ice cream next. I find I don't like the flavor, it uses a lot of CO2 to create, and it has some negative side effects. I also hate how people are big ice cream boosters, how annoying. Also people are making money from selling ice cream. I'm not making money that way, and don't think other people should, either.
"I won't argue because you're not rational. The thing you believe in is awful and should cease to exist" is a perfectly fine stance to have about bitcoin and crypto in general.
Its causing massive amounts of pollution, global spikes in price of computer parts, exacerbates shortages in silicon and facilitates all sorts of illegal activity from money laundering to ponzi schemes to trading of illegal goods.
And for what? The shittiest database you could imagine.
My criticism on the original comment is not about his take on crypto, it is about taking that stance about quite literally anything.
If one refuses to argue because they believe the other side is irrational, then abstain for conversation instead of just name-calling/shitting on the thing on a public forum. This is somewhat equivalent to posting some egregious opinion and then saying "don't @ me".
You're assuming a level of good faith in crypto bros that frankly doesn't exist. They aren't interested in any criticism of bitcoin and the like, they personally stand to make money from it and you are just their next potential victim.
I take the dismissive stance you're talking about when dealing with anti-vax, flatearthers, and qanon types. I'm not above that.
Having said that, my original point is the same: then don't engage at all. I don't go posting on flatearther forums how "i won't argue and that their opinion is stupid". I either fully engage and endure what I perceive to be unbelievable stupidity, or don't engage at all.
Several of the totally OG cryptographers, like Chaum or Micali, have created blockchains that are using PoS (Micali is behind Algorand and Chaum behind an upcoming "elixxir" coin I think, forgot the name).
Of course there's also Ethereum which is currently switching to PoS.
Cryptocurrencies haters better find another argument than "energy consumption" because I think the gigantic energy waste is coming to an end soon.
How is Bitcoin unconfiscatable? Just confiscate all wallets. If they are encrypted in some way, they would still be inaccessible to the person. If they can be recreated, the person can be monitored to determine how to recreate the wallet and then be drained.
A person can hide the fact that they have a wallet. Confiscating information, that can be stored as a secret passphrase in your brain, is extremely difficult.
Well, if crypto is meant to be used as a method of investment, then sorry, nothing which does not generate rent can be a viable method of investment (can sometimes be a method of preserving wealth e.g. gold but even that barely). In this sense, i agree with you.
But crypto is also very useful for undermining governments - making them unnecessary. Which is a beneficial thing for all humankind. Whenever government realises it is not necessary and can be circumvented with no way to fight back - it becomes more flexible (example: legalisation of weed).
Crypto makes the world more free. Freedom is a universal value.
All institutions should constantly be forced to justify their necessity.
One thing to keep in mind about having different currencies out in the wild and usable within the same system, we've already had something like this. Before nation states had central banks you could find regional currencies all over the place. It was a mess. One of the main issues is that most of them weren't guaranteed in any way, similar to what we see with crypto today. Its only a matter of time before this bites people in the butt again. And the nation states and their central banks will still be there cashing in on the calamity.
>>Before nation states had central banks you could find regional currencies all over the place. It was a mess. One of the main issues is that most of them weren't guaranteed in any way, similar to what we see with crypto today.
Governments could destroy crypto if they wanted. See China as the most obvious example. A novel technology doesn't stand much of a chance against men with guns.
Well, you can't mine using VPN or proxy because you can't conceal multi-megawatt power consumption that it takes. Prohibition of mining is simply about consumption of electricity which suddenly became in short supply.
Crypto is not banned in China and it is not bannable. Mining of course, is.
This argument is so basic yet it keeps being repeated over and over on HN...
It boils down to you can't expect a return on bitcoin hence it's shouldn't be worth anything. If that argument was true, then gold is a ponzi that shouldn't be worth anything and the same would apply to art.
A slightly more advanced rebuttal would be to say, yes but gold has some industrial use and you pay for art because you can enjoy consuming it. But the price of gold and rare artistic pieces is many times their "useful value" if defined as such.
All these arguments show a deep misunderstanding of what constitute money, the history of money [1] and the concept of "hard money". Bitcoin is the only way to transfer an arbitrary amount of money in a way that is fast, verifiable, permissionless and to an arbitrary location. This particular use, that no other tool makes possible, means it has some value to some people and consequently should be worth something. The question of what its fair value is harder to answer but just because gold is worth more than its industrial value doesn't make it a ponzi scheme.
Indeed my first assessment way back when it was <$1 was that it was a Ponzi scheme. However, the market has been saying something I ignored for years... so I took another look at things and this time really took the time to study it. By study it I mean:
1) Read the Whitepaper
2) Read the Bitcoin Standard Book (and subsequently the Fiat Standard book)
3) Listened to The Saylor Series on YouTube, and
4) Did the MIT Blockchain and Money course.
I then re-considered criticism from:
1) Various Warren Buffet and Charlie Munger interviews
2) The Blackpaper by Nassim Taleb, and
3) Various interviews with Peter Schiff.
My conclusion is that most arguments raised by the above respectable figures in criticism of Bitcoin are ignorant of evidence contrary to their arguements and display a surprising lack of knowledge or understanding that careful study would have overcome. I say that as I was that ignorant person. There are some valid criticisms, however they are in the same category as any new emerging technology.
I then decided to venture into crypto with money I could completely lose and not worry about, and it really helped my understanding further.
I'm now convinced this is like the pre-dotcom bust whereupon Amazon, Google, Facebook etc emerged to generate enormous value. There is enormous Alpha here to be made but I'm not arrogant to believe I know what will emerge as the market winners, but I have a stake in it now, and I'm further educating myself. I encourage dedicated study and an open, but critical mind, before making any aspersions on crypto.
It would be more helpful if you could say what changed your mind. From your comment I can't say whether you changed your mind because you learned something in your studies, or because BTC went from <1$ to 10k$+.
I am not the OP, but like him, I though Bitcoin was a scam until early this year. What changed my mind when a centralized entity like Robinhood took away the buy button of an equity in most capital-friendly country on Earth. I wasn't even involved, so I wasn't mad.
But rationally, if someone can wake up one day and decide you can't buy an equity with little consequences, then it is entirely possible for a bank to take away the withdraw button.
Even if we assume competence and good sense of the state and the banks (big if!), they will always act for the good of the majority - which is not always good for you or your family. (take the pros and cons of inflation for example)
Follow the logic of what's possible with the centralization of money, and quickly you would realize that you really own nothing, except what's in a cold-wallet secured by a decentralized, global network and mathematical facts. There is nothing stopping any central bank from inflating ANY national currency to 0, except good sense and competence.
You can and should still believe in their competence and good sense if you are in a democratic country with stable regime, but it would be irrational to not insure against it. Also, it is completely irrational to believe in the good sense and competence of someone like Erdogan or any of the many clown head of states around.
I'm not familiar with Robinhood, but I think it's mostly about buying stocks. Blockchains won't help you do this, at least not in a decentralized manner. You'll be stuck buying tokens with no real connection to e.g. the US economy, until it's been approved legally.
> Follow the logic of what's possible with the centralization of money, and quickly you would realize that you really own nothing
Inflation is a problem, and has had dramatic impact historically, but there's no indication that bitcoin is a solution to this. Just look at the USD/BTC rate over the last year.
> I'm not familiar with Robinhood, but I think it's mostly about buying stocks.
Nope. You missed the point. It's about a company (or centralized entity) being in control of your money.
> Blockchains won't help you do this, at least not in a decentralized manner. You'll be stuck buying tokens
Blockchains and tokens are non-sense words. Bitcoin is a protocol and a network, the first blockchain. It is an open-ledger that facilitates value exchange between two willing participants (you don't have to take part if you don't want).
> it's been approved legally
Bitcoin is approved legally in the US, and has the world's smartest and most experienced money managers and hedge funds invested in it. Just a few names:
1. Stanley Druckenmiller
2. Ray Dalio
3. Geroge Soros
4. Paul Tudor Jones
5. Steve Cohen
6. Louis Bacon
> > I'm not familiar with Robinhood, but I think it's mostly about buying stocks.
> Nope. You missed the point. It's about a company (or centralized entity) being in control of your money.
Sorry, I meant that the company Robinhood is mostly about buying stocks.
I was trying to say that people used Robinhood because they wanted to buy some products that it was offering, such as stocks, but decentralized systems won't help prevent the situation you deplored. You could imagine having tokens representing stocks, but it'd just mean that a centralized entity issues them.
I just read chapter 9, I haven't seen arguments I hadn't read before. Any particular reason why you're recommending this book? What are the takeaways you hadn't seen elsewhere?
Just an anecdote, but I find it interesting that the foreword was written by Nassim Nicholas Taleb, who as of 2021 seems to have completely changed his mind about bitcoin and is now highly critical of it, to say the least.
I first "looked" at BTC @ <$1 and by looked I visited a few websites.
I then looked again at ~$100 and felt that it was too involved with crime for me to be associated in any way with it (I work in Regulated Financial markets and I didn't want to take any career chance I could get accused of money laundering).
At ~$1,000 I actually played with some code in Python to mine BTC but figured I'd need an ASIC rig and didn't bother.
7 December 2020 one of the smartest people I know recommended I read The Bitcoin Standard I think BTC was ~$23,000. I then spent the next year studying it and talking through it with my father (he's a Boomer who favours Real Estate over all other asset classes) as a way to understand it better by discussing it with someone else.
I started buying BTC at about ~$55,000 before the recent crash. I'm fine with the volatility as I have a 10+ year time horizon. I did however start accumulating other cryptos post crash and have been working through portfolio construction based on several themes.
Surprisingly my Boomer father has decided to build his own crypto portfolio through a company based in NYC but the AML KYC hurdles with US based crypto companies (I won't name and shame them) has taken so long that he still hasn't managed to buy anything... which I suppose is a good thing since he missed the recent "crash". However, he's fine with it going to zero (and so am I). I think that unless you're diversified across different asset classes, lived through a total market crash (or two), and can lose the lot, you shouldn't be speculating in crypto.
Sorry, I must be tired. Did I misunderstand your answer, or are you saying that you did change your mind about BTC just because it increased in value? If that's not the case, why did you change your mind about it?
Edit: sorry I just saw another comment of yours down below, will read that.
A) Personal, life changing, events forced a total re-examination of my psychology and beliefs
B) One of the smartest people I know making a book recommendation.
At this time, and moving forward, I began to really challenge myself as to my virtues and examine my emotions and thoughts for vices (anti-virtues if you will).
My initial reaction to the book recommendation was dubious, especially due to the parabolic price rises and volatility.
It was at this time I decided I need to work on being humble and curious, so I embarked upon the real start of my crypto "journey".
> Imagine you're Turkish, Venezuelan, Argentinian, etc.
> BTC might be your best bet.
I can sympathize with this idea, although if the US government just allowed Turkish people to open bank accounts in USD and transact with each other, they might do that instead. Many countries already use the USD as their de facto currency.
> Now guess which 1st world countries are next.
Why would they be next? I think it's rather the reverse: once a country is developed enough with a working banking system, it tends to rely on it because it's more efficient and provides more guarantees.
It's not beneficial to use money from another country. Managing your own monetary policy and being able to spend without limits is important tool for governments. Currencies are one tool which countries use to compete with each other. Those countries which use US dollar suffer from its inflation, but don't get the benefit of unlimited spending. In other words, inflation in Turkey would fund deficit spending in USA. Using US dollar would be better for the people, but their governments don't want to give up this power. That's why the local financial institutions place limitations on foreign currencies or outright make them illegal.
With Bitcoin, people can completely opt-out of this "inflation tax" without asking permission from their governments. Another option is to use stablecoins such as Tether USD, which seems to be gaining popularity as a currency in countries with high inflation. This is problematic because Tether gains the power of a central bank without any oversight. Bitcoin is the only currency which has very high guarantees of its expected monetary inflation, and that's why it would be the best choice for individuals.
> Managing your own monetary policy and being able to spend without limits is important tool for governments.
Sure, but we're talking about switching to BTC, which doesn't allow this either.
> Bitcoin is the only currency which has very high guarantees of its expected monetary inflation.
As somebody else pointed out in another thread, bitcoin is either a currency or an asset depending on who you talk to. You mention it is a currency, but it's hard to find it credible in this role given its volatility.
Given that its price is a function of supply and demand, but that we can't predict what the demand will be, which strong guarantees are you thinking about?
Monetary inflation is the amount of new money that is created, i.e. how much the supply expands. In Bitcoin, inflation schedule is predefined and there's an absolute limit, and these rules can't be changed. This means that if Bitcoin's demand increases, then the price increases. In other currencies, supply will be expanded if demand increases to stabilize the price. This applies to everything else too, like commodities or real estate. Increased price will increase production, until the price corrects to cost of production.
Demand can't really be predicted, but historically we know that if supply expansion is predictably low (like in gold), most people would prefer to save their wealth in that money.
Volatility is expected to decrease in time, making it more practical in short-term transactions.
I thought your were talking about price inflation, but you actually wrote "monetary inflation", my bad. But what's the point of taming monetary inflation if that does nothing for price inflation? I thought that price inflation was the practical consequence we have to deal with, isn't that the case?
> Demand can't really be predicted, but historically we know that if supply expansion is predictably low (like in gold), most people would prefer to save their wealth in that money.
The supply of bitcoins is low, but the supply of bitcoin-like tokens seems limitless. The question is: which pool do we consider? Are BTC and ETH in the same pool? What about other tokens? The same reasoning applies to gold and other metals, but at least you won't come up with a new one on a whim like you can with cryptocurrencies.
Monetary inflation is a major component of price inflation. See this recent article by Lyn Alden, which explains it pretty well: https://www.lynalden.com/price-signals/
No, they are different pools of supply. Each currency has their own network effect, and building the network effect is not limitless. On the contrary, money tends to concentrate on a single or a few winners. People want to use the currency everyone else is using.
Your link mention historical correlations that contain the impact of central bank policies, it's not clear to me how well this generalizes to a given and strict supply policy such as the one bitcoin has.
> No, they are different pools of supply.
I guess we'll see in the long term what happens, I'll just say that the correlations between BTC/USD and ETH/USD make it less than obvious.
For what it's worth, for me the truly enlightening moment was when VISA and other "payment" networks shut down wikileaks access to funding an they switched to Bitcoin and were able to continue the mission.
Not really, I don't dwell on it. If anything it was a series of life changes that has nothing to do with crypto that caused me to reassess life in a different way and question and challenge thoughts and decisions I had made in the past. You could just put it down to my personal growth. At that time my friend recommended I read the Bitcoin standard and rather than arrogantly believing I knew better, I read the content as an exercise in humility and curiosity.
Did you become a believer without evidence (faith) or do you wish to share what changed your mind? Like physicist Richard Feynman said, if you can't explain it simply, then you don't understand it.
I'll try to be brief because there are lots of reasons why I changed my mind:
1) I actually think I understand it now (I could still be wrong) because I studied it.
2) I had a very annoying use case sending money to a company in China and after having a terrible time with AliPay and getting nowhere, when I tried using crypto (not BTC) it was a breeze.
3) The way our financial system is setup has bothered me since 2000 and as a Finance professional one of the biggest problems our clients have is inflation, not CPI or RPI, but the growth of the M2 money supply. I've spent a long time thinking of solutions and the problems with fractional reserve banking and fiat currency. I've seen how money rots in real terms over decades sitting in cash (frankly due to poor investment decisions) and I'm certain that there needs to be a better way to store value in real terms. BTC is a likely contender for an intergenerational store of value. It's obviously not gold... but it could be as useful. Since the market cap of gold is ~10T, I think BTC could at least reach that level of utility.
I have other reasons but I rather not write an essay.
2. wise.com (not familiar with alipay) says I can send USD5000 to China and have it arrive by tomorrow. I guess you were trying to send a bigger amount? Did your transfer just bypass regulations, either in the country you were sending it from or in China? See https://news.ycombinator.com/item?id=29646492
Not saying it's something nobody wants to do, but if it does end up being a significant use-case, there's no reason wise.com and others can't catch up, apart from regulatory reasons.
Thanks. I hear international money transfer a lot and I can understand that. It's not something I ever do, but I'm glad Bitcoin works for those who do.
> BTC is a likely contender for an intergenerational store of value
OP here. Please refer to the study resources I posted above and please go through them.
Yes there is a lot of FUD, FOMO and scammers... but I encourage you to think about cognitive biases and take the time to assess crypto through the lens of a new technology.
Honestly it's in the spirit of discussion and idea exchange that I post on HN. Karma points aren't really worth anything except a proxy for my contribution to the discussion and community.
As for encouraging you study it, it's really because I didn't myself, and I wished I did, that's all.
Take it or leave it, either way you have my best wishes moving forward!
> I then decided to venture into crypto with money I could completely lose and not worry about, and it really helped my understanding further.
Did he?
Did he really?
As someone who has genuinely used bitcoin for one of the (VERY few) use cases where it's actually useful - buying drugs on a dark market. I don't buy it. You can find a lot more detail on my position here: https://news.ycombinator.com/item?id=29331167
OP here. Yes, I had to send "money" to China, for a service rendered in the US, while I am physically in London. It was a totally legitimate transaction and had nothing to do with anything dark market or drug related. Thanks for the link to your discussion, I will read it, but please don't throw out criminal accusations in HN.
> please don't throw out criminal accusations in HN.
Pointing out that you have a very clear conflict of interest here, and that you should be taken with many grains of salt, is not a criminal accusation.
If you think I'm claiming you use dark markets, please go read my comment again. I'm very clearly not... ( and I hope you had better reading comprehension on the crypto materials! :P )
My prediction: it will take years for this to pop in the absence of a general economic crysis. The crypto coins gave just struck the most anti tech circle of my friends. They are watching youtube videos of how to mine on mobile phones besides buying the most obscure coins they can find.
So it looks to me like there's plenty of potential "investors" out there who can sustain this thing for years to come.
I think crypto "investing" might be here to stay, for quite a while at least.
Not that I think it should: it's a non-productive asset valued almost totally based on the greater fool theory, and there seem to be very credible indications that there may be large-scale price manipulation going on. But it appears to have managed to become entrenched in culture to the point that my non-tech-savvy colleagues talk about it like a normal thing, and financial media personalities comment on the price movements alongside securities and other asset classes.
But to be fair, in some ways securities are quite disjoint from "true value" as well. If I buy a share in AAPL from another investor, the minuscule dividend and voting rights I acquire do very little to justify the price of the stock. I am really buying it in hopes that the market value will increase in time to make my retirement a bit more comfortable.
> But to be fair, in some ways securities are quite disjoint from "true value" as well. If I buy a share in AAPL from another investor, the minuscule dividend and voting rights I acquire do very little to justify the price of the stock. I am really buying it in hopes that the market value will increase in time to make my retirement a bit more comfortable.
Feel free to buy dividend stocks then. It's just that the growth types are expected to have a greater "total growth" over time.
That's true but it's adjacent to my argument. Would you argue that growth stocks offer some utility or intrinsic value which is substantially greater than that of cryptocurrency? It seems to me both asset classes are largely based on a greater fool theory. The only difference is that securities have been around much longer.
There was a period of time where bitcoin was almost exclusively used for illegal substances / activity - predominately for drugs (the only time I ever used bitcoin was to buy adderall on silkroad), but also for things like hiring hitmen, weapons, and child pornography.
To see cryptocurrency grow to what it is today, especially given the context of what it originally was used for is a bit demoralizing.
This "guilt by association" type thinking makes no sense at all. Why would it matter who the earlier adopters of bitcoin were and what they were using it for? This is like saying TOR is bad because most people associate it with those same things (drugs, hitmen, etc.)
It matters because it is basically funding the worldwide crime system, if some bought slaves for 1000s of bitcoin, that is now worth many millions of dollars and guess what? That money is going to be reinvested into a bigger, better and more sophisticated criminal organization.
Crime is a business like anything else, profits get reinvested
> Bitcoin ownership is even more concentrated than the real financial system.
The concentration of Bitcoin ownership and the service that Bitcoin provides to humanity (please do everyone a favor and don't re-post one of the 100 lame arguments present in the thread as to why there isn't any) are completely orthogonal, especially given the fact that a Bitcoin can be divided into 10^8 pieces.
1. With exchanges, non-self custody solutions, and smart early adopters splitting their ownership in many wallets, no one knows the concentration of Bitcoin.
2. I much prefer the crypto dons of Lebanon[0] as the new elite than the old white guys currently running the shows. Bernie Madoff was literally the chairman of NASDAQ.
3. No one says Bitcoin will eliminate the elites, nope. Just erode the power of the current elites, where they made it via financial engineering, wars, and oil.
The Bitcoin situation reminds me of one wing of current U.S. politics. It's a complete fraud that's been obvious to a lot of people for quite a while now. But countless people have become so married to it and have allowed it to become a core part of their identity that they're no-longer capable of seeing reality clearly.
It comes with all the same kinds of personalities too:
- The angry commenter who just wants you to know that _you're_ the idiot, not them
- The "just show me the facts then" perpetually recursive denier
- The few who manage to benefit from it and are amplified as a signal that _everyone_ will benefit
- The few at the top actually making all the money, funding the further manipulation of the weaker minds at the bottom
The biggest irony of Bitcoin and similar schemes is that they actually commoditized money-printing and caused massive inflation, despite the libertarian claims that come along with it about how deflationary they are, and how we need to prevent government to do so.
It is pretty counter-intuitive to understand that you can have two transactions between three parties, where everything is properly accounted for with double-entry check, and yet, more money is created in the system as a whole.
So people, of course, in this gold rush, run the money printers 24/7. Of course, if Bitcoin replaced normal currency, it could be conceivably deflationary (probably for worse). But it doesn't, it just adds to it. I don't think humanity is fully aware of the amount of inflation that various crypto-schemes caused around the world.
It's obvious that there is global demand for money which is separated from state control. You can see this demand in Bitcoin price. Bitcoin is the opposite of a Ponzi scheme, because there's no central operator which can arbitrarily print more money for its own benefit. It's completely transparent and traded on open markets.
Im sorry, I don't want to argue anymore with crypto advocates. There is no more rational discussion to possibly be had about any of the current contenders in this space. The whole thing needs to be pulled apart. Just because some people earn money from it, doesn't make it moral, a good idea , useful, or bettering human society. Oil companies also make a lot of money and we can see where that has ended up.