> despite the ricketiness of the whole system, despite the constant feeling that everything might fall apart at any moment, there will come a time when crypto really arrives.
For me crypto was always Ponzi scheme and nothing more, but it is because I don't laundry money or sell drugs, so I am not the target for crypto.
The narrative that crypto is usefull jusy for buying drugs or laundering money is ridiculous.
A couple a weeks ago I did a wire half way across the globe. It took almost 7 days for the money to arrive. With bitcoin? 60 minutes.
Remember when OnlyFans was in trouble because of the payments processors wanting to pull the rug? You probably don't and you probably are not aware how many people would have been impacted.
Do you watch porn? How many times have have sites that provide it been in trouble because of some puritan bs from the dark ages? Do you know this is the majority of the internet? Are you aware that a lot of innovations (the internet included) took off and became mainstream because of porn?
Do you know about civil asset forfeiture? How do you feel about losing everything you own just on the suspicion that maybe you did something?
You are a target for crypto. You believe you are not because of all the bs the media peddles. Stick with Bitcoin and ETH and treat it as a high risk investment and you'll be fine.
Apart from everything else, even if all crypto goes away tomorrow, the real innovation when it comes to crypto is the blockchain. Without the blockchain crypto is just digital money (and 90%+ of money is already digital - ie numbers in bank systems, ie not real).
You do understand that Wiring money is not slow because of the technology right? And it has everything to do with government regulations around anti-terrorism, anti-money laundering, anti-fraud, etc.?
I think it’s hilarious that you think your wire was slow because of the geographical distance the message had to travel (“halfway across the world”) as opposed to the fact that it had to travel across jurisdictions with different laws.
If I want to send someone money within the US, for example, it’s near instantaneous, whether through a credit card/debit card purchase, Zelle/Venmo, PayPal, direct bank transfer, etc.
To the extent some forms of transfer require waiting a day it’s because, once again, banks do settlements once a day to reduce costs and to meet federal government regulations that prevent fraud and/or help keep the economy more stable.
Blockchain tech is significantly slower than decades old banking technology. You can go hours before someone mines something to close out a bunch of transactions. What slows down banking transactions is the very stuff the absence of which meant that $30bn of wealth evaporated overnight in FTX.
> I think it’s hilarious that you think your wire was slow because of the geographical distance the message had to travel
I don’t see anything in the post you are replying to that indicates they believe this. They noted the distance, which makes clear many practical issues (it was not only another country but not in a trading or common regulation block like the EU).
It’s clear the amount of time involved is the obstacle the person had issue with. This seems like a use case for crypto (even if I personally would tend to just do the wire whenever practical).
> I think it’s hilarious that you think your wire was slow because of the geographical distance the message had to travel (“halfway across the world”) as opposed to the fact that it had to travel across jurisdictions with different laws
Condescending straw man here.
Being able to use BTC to do this, routing around the various jurisdictional settlement layers, is a huge practical improvement.
Those 7 days don't make society better, they're a drag on the economy and the wallets of anyone who doesn't have access to quicker mechanisms.
The question you're posing assumes an argument the comment you're responding to doesn't make. It's not whether "preventing fraud, money laundering or terrorism funding" makes things better, it's whether the processes put in place are effective towards combating those things. It would be upsetting to know a $2b pipeline for catching these things were only able to detect $2m worth of illicit funds for example.
Your comment is also assuming funds would only be seized for a shared definition of "fraud, money laundering or terrorism" when that is not always the case. Preventing "terrorism" by placing embargoes on all individuals of disagreeable governments would seem like an overreach for many individuals with family overseas.
An unalterable public ledger does a lot more to prevent or expose those things than banking regulations. Weren’t there even a few banks that were making huge profits off of criminal activity recently?
> I think it’s hilarious that you think your wire was slow because of the geographical distance the message had to travel (“halfway across the world”) as opposed to the fact that it had to travel across jurisdictions with different laws.
They meant exactly that. The claim that blockchain is faster because of technology is obviously a complete strawman.
Many of us don't want everything we do monitored and tracked. I understand this leads to more financial fraud, laundering, and terrorism, but if I were to list my problems in life, those are nowhere near the top. Privacy is much higher.
That's not a universal statement -- that calculus could change -- but this is the case for me in the developed world in 2022.
> A couple a weeks ago I did a wire half way across the globe. It took almost 7 days for the money to arrive. With bitcoin? 60 minutes.
Ignoring the week-long wire detail (which deserves an explanation because that doesn't resonate with my experience), depending on when you sent that transaction, your wire could've lost a decent amount of value due to the price instability of bitcoin. Losing 5% in a matter of minutes because everyone is panicking is not a good deal.
You shouldn't call it "losing 5%," BTC price is not an exchange rate, it's a measure of exchange volatility with an integral component tracking trust in ECC, network availability. It's silly to try and compare software to what is essentially a government-financial-corporate feedback loop and it's behaviors.
Every country could severely limit mining, and the supply would continue its steady velocity, whereas sometimes executive behavior spurs financial institutions to simply make the federal banks buy everything.
Fractional reserve banking is an inherently unstable system.
True federation is not.
Ethereum crossed a similar threshold at the merge reducing the calculus, but it's not clear to me if there are any more "difficulty bombs" built in where executive control can be expressed, say in the consensus layer where unilateral control can be expressed over supply.
> You shouldn't call it "losing 5%," BTC price is not an exchange rate, it's a measure of exchange volatility with an integral component tracking trust in ECC, network availability.
No, I'm talking about the exchange rate. I don't care what bitcoin means internally or how it functions, I care about what it's worth on the market today and tomorrow, because there's no to way live in the purely crypto world.
That's the whole point of a currency, that you and I agree that some instrument of value will stay consistent enough to transact with. Crypto is just not there because the ecosystem is full of scams. You could design a perfectly federated system that's worthless because bad actors abuse the platform. If you build a system that assumes everyone is a criminal, then that's what you wind up building, a system in which everyone is a criminal.
> ”A couple a weeks ago I did a wire half way across the globe. It took almost 7 days for the money to arrive. With bitcoin? 60 minutes.”
And how long does it take to convert the Bitcoin to money in the destination country?
SWIFT wires normally clear the same day. If it took seven days, your transaction was being held for legal reasons. It’s foolish to think that Bitcoin somehow solves this problem — it just moves the responsibility for inspecting transactions to the “off-ramp” exchange you’d be using in the destination country.
If it took 7 days it was probably due to AML/KYC issues. Bitcoin would have been faster, of course, because it doesn't do AML/KYC, but that just means it's unsuitable for conducting business (other than businesses that are outside the law).
KYC & AML got a lot more thorough after 9/11, at the behest of the US government. A large part of the cost is extra guarantees against terrorist funding, and it's not obvious that this extra burden is worth the cost. It's kind of like airport security, except for money.
Simply making illegal activity more burdensome with fiat money requires less effort than what's currently being spent on these processes.
It's perfectly reasonable for the party receiving the funds to ask for a proof that the money didn't come from human trafficking. But that should be a fully automated process in most cases, and no one but the receiving party should have anything to say.
> Do you watch porn? How many times have have sites that provide it been in trouble because of some puritan bs from the dark ages? Do you know this is the majority of the internet? Are you aware that a lot of innovations (the internet included) took off and became mainstream because of porn?
The issue here is the American puritan mindset being forced on the world due to the duopoly of Visa and Mastercard. Similar issues stem from American social media. Here in Europe I see ads in the subway from museums that would violate e.g. the nudity rules on Instagram.
Funny, I’ve moved hundreds of thousands of dollars between the UK and Australia this year, and it’s never taken more than a few hours. And I got useful money out of the other end, not Bitcoin.
This idea that it’s both useful for large international transfers and a highly volatile investment also seems contradictory.
Here is a book recommendation for you: Zero to One: Notes on Startups, or How to Build the Future
Everyone and their dog hates Thiel nowadays but the ideas in the book ring true more than ever. Here is one of the questions asked in the book: “What important truth do very people agree with you on?”
Some people see the potential for crypto and believe in it. Most people think it's a scam. And it may eventually collapse and go to 0. But the point here is that for radical new things conventional ways of thinking rarely work out.
If I want Crypto to avoid my money being seized, to pay for porn, to send across the globe, then surely I also don't want it to be a high risk investment?
Where's the crypto with high stability and low changes? I guess stablecoins seem to fit that niche the most but they also seem very centralized and owned by specific companies?
I think 99% of people watch free/ad-supported porn, and anyone concerned about civil asset forfeiture is likely either a criminal, or a conspiracy theorist and/or paranoid schizo (i.e. a small minority of the population).
Wire transfers are a legitimate use-case maybe. I don't really know much about that as I've never personally had to do it. But if that's the only legitimate use case for cryptocurrency, then it's probably a better idea to try and improve the efficiency of traditional wire transfers than to use fake money that's a magnet for fraud/scams/crimes.
> Blockchain tech is here to stay.
This I agree with. Blockchain as a general technology is useful, but not for financial products/services.
> I think 99% of people watch free/ad-supported porn
Huh. You'd be surprised.
> anyone concerned about civil asset forfeiture is likely either a criminal, or a conspiracy theorist and/or paranoid schizo
This right here is the problem. Your argument goes along the lines of: I am doing nothing wrong/illegal therefore I have nothing to worry about. This assumes perfect laws, perfect law enforcement and following proper procedures. Sorry to burst your bubble but this is not how the real world works. You don't need to prove anything and you shouldn't just throw away your rights because you want to prove you're not schizo.
In the case you are a criminal, should the punishment fit the crime and should there be due process or are we just going to throw anyone that breaks a law, any law in jail and sentence them to death?
How many laws do you break during a day? https://www.businessinsider.com/most-commonly-broken-laws-in...
Should the government just come in an take all your stuff now because they suspect you've connected to an unsecured wifi? They don't even need to prove anything and poof... your stuff is gone. this is civil asset forfeiture. This is how dumb it is.
Wise or CurrencyFair take your money on a local account anywhere on the globe, and deposit it anywhere else with a local currency from a local account.
Rates are within 0.5% of the currency exchange, and no fixed or percentage fee, no wire fee since it’s all local accounts (it’s an example / please check the terms / this is not financial advice).
I honestly don’t see what’s there to save with crypto. Fees for credit card transactions are often 5 times above (2.5%).
> Stick with Bitcoin and ETH and treat it as a high risk investment and you'll be fine.
What you want in a currency is fungiblity (if that’s an actual word) and a stable store of value.
What you get with crypto is a billion competing chains and a “high risk investment”.
To compensate for this you get exchanges who also share your view that customer deposits are a “high risk investment” instead of a warehousing operation which is their legal obligation.
Perhaps I’m not the target of crypto because I can see it for what it is and not the utopian dream people want you to see?
> Do you know this is the majority of the internet? Are you aware that a lot of innovations (the internet included) took off and became mainstream because of porn
You really think that billions were poured into the Internet infrastructure to deliver porn more efficiently?
I'll tell you what: if we didn't need to stream hidef movies, see pictures in the internet it would have not taken of like it did. Porn had a lot to do with the pace at which the progress was made.
The only thing the article mentioned about a contribution of internet to porn is “high def streaming” but with no supporting evidence. The first thing that got most people wanting high speed internet was Napster.
Where's the value in crypto? What's the purpose? Decentralisation? Democratisation? And then you have to use wallets, exchanges...
There's literally no value in crypto currency, but trust. Like plain old money, which is highly regulated, so much more stability to use it in real economy. So why should I use crypto currencies? And which one, given that everyone can create their crypto currency?
Crypto is a decade-long exercise in teaching programmers why the mechanism used to update numbers in databases is the boring part of a money system, and why governance, policy-making and physical territory control are relevant.
What it really does is highlight inadequacies in education and discourse, and how intransparent "how things really work" (and by extension, what the tough problems are) can be even to intelligent people.
Bottom line: Technology is just a tool and an ineffective substitute for the human aspects of "society". Those who tend to think otherwise may be highly trained but still rather naive, under-educated and operating outside their element --- ideal marks for a good con artist.
Here are three things that are extremely valuable about blockchain technology:
* Financial infrastructure that is transparent and does not rely on corporate CEOs being honest: Enron, Lehman Brothers, and now FTX have shown that global regulators cannot be trusted to protect ordinary people when institutions are corrupted from the top. DeFi markets are fully transparent—with code and data being open and replicated thousands of times over—and users maintain custody of their assets at all times.
* Instantaneous settlement for payments and trades: With blockchain tech, vendors and merchants don't need to wait for credit-card payments to be deposited in their bank accounts—tokens are transferred in real-time. Traders don't need to wait for the proceeds of their sale to be wired to them two days after the trade takes place—settlement happens instantaneously with each DeFi trade. In some developed parts of the world, these settlement delays are slowly being fixed, but blockchain technology does this out of the box, today, and works everywhere.
* Security and automatic transfer of lending collateral: Overcollateralized DeFi loans hold collateral on-chain, and will instantly liquidate any outstanding loan that dips below the collateralization ratio. This is one reason that even through all the recent turbulence in crypto markets no one who leant money through DeFi on an overcollateralized basis—including, for instance, to Celsius—has lost money. (Note however that the courts have not yet ruled as to the disposition of these DeFi loans in bankruptcy cases.)
I think it's also important to differentiate between "crypto" and "blockchains".
Cryptocurrencies are a type of application that can run on blockchains, and they play an important role by creating a unified market to reimburse providers for delivering the computation and storage services that blockchains depend upon. I would agree with those that believe that they have been overhyped, however.
The point made in this article applies to your first point - companies like FTX playing fast and loose can tank your value even if you are playing as your own bank. Not using their custody doesn’t fully protect you from their actions.
Cryptocurrency does not settle instantaneously, in fact credit cards are usually faster. Nobody is “waiting” for settlement. The transaction is done very fast.
Defi collateralised loans have actually had several instances of losing money and whole schemes failing - ‘whales’ holding illiquid assets have taken out massive loans with no intention of repaying, and the collateral is sometimes only “over” on paper.
> Not using their custody doesn’t fully protect you from their actions.
Sure, but this is market risk, not counter-party risk, and is unmitigated in traditional markets as well. Just look at how Apple stock was affected by Lehman Brothers’ failure.
> Cryptocurrency does not settle instantaneously, in fact credit cards are usually faster.
Come again? If you pay me for goods using crypto, I can spend that money immediately, pending finalization.
> Nobody is “waiting” for settlement. The transaction is done very fast.
Can a merchant spend its customers’ money immediately after running the credit card? No.
Money from a credit card transaction processed on a Friday will hit the merchant’s account on Monday or Tuesday.
> Defi collateralised loans have actually had several instances of losing money and whole schemes failing - ‘whales’ holding illiquid assets have taken out massive loans with no intention of repaying, and the collateral is sometimes only “over” on paper.
OK. Yes, if your underlying collateral is worthless, or if there isn’t a meaningful pricing mechanism or liquid market in which to sell the collateral, automatic liquidation of the loan won’t work, and a different approach must be taken.
Like with anything in the world, there are some basic preconditions required for the thing to work. “This technology is inappropriate for these particular use cases” is not a very strong argument against it.
That being said, I am unaware of these particular cases that you are referring to. If you could point them out to me, I would appreciate it.
Yep, but with cryptocurrency the entire market is a shitshow. Unless you can somehow prevent these folks from playing their games, you haven’t improved upon the situation you complain about.
> Can a merchant spend its customers’ money immediately after running the credit card? No.
I see you’ve never used Square, the answer is “Yes”
> Particular cases
There was the near-collapse of Solend, and shenanigans around it earlier in the year. Looks like they had another problem with bad debt due to oracle manipulation recently too. BendDAO, had issues earlier in the year.
Moola Market and Mango Market both experienced some sort of collateral manipulation attack that drained reserves.
New Free DAO lost a million or so in a flash loan attack…
There have been a lot.
Thanks for sharing these cases. And you are right to point out that they represent a real problem in DeFi currently, which is that some protocols are poorly designed.
These examples are best categorized as hacks, though, which are important to distinguish from losses incurred due to bad debt.
The distinction is important because the question at stake is whether DeFi in general has value. If you look at more mainstream protocols like Aave, you don’t see these same problems. In the mid- to long-term, after the technology has stabilized, all the benefits of DeFi will accrue to users without the risks that you are pointing out.
With regards to Square: yes, you can get your money wired to you at the end of the day—if you are willing to pay an extra 1.5% fee.
This is more akin to very expensive financing—having an annualized interest rate in excess of 300%!—than “instantaneous settlement”. It’s also not standard. Square’s standard settlement process is as I described:
With BTC/ETH/USDC it takes seconds. The whole process is entirely transparent. It doesn't get blocked if you reach some threshold. And the fees are smaller than with the traditional banking system.
And unlike with banks, anybody is allowed to open a new wallet. You don't have to get approval, which is difficult if you live in the streets or in a 3rd-world country.
I'm not endorsing the rest of crypto but having a trusted and transparent ledger for large transactions is nice.
I am skeptical of all the crypto schemes, and this is the only use case I find convincing. The small producer in China is paid by the American company via a digital currency. Faster, easier, cheaper.
Continued use of such a medium could over the long-term conceivably lead to widespread adoption, regulation, and a global currency. Fiat is disadvantaged when transactions cross borders.
I think we'll look back on this period as a painful learning process, which will set back such a digital currency by years. Perhaps it is inevitable, though, that some people will in the short-term exploit such situations for personal gain at the expense of the rest of us. Now we have to sort out the mess and wait.
It seems that both in the adtech (Facebook etc.) and crypto spaces, our industry has disgraced itself. We are at an incredible moment in history when our skills are pivotal - we're building the infrastructure of the modern world. We need to use our skills to improve things. The most obvious way to improve the situation is to carefully choose who we work for.
At first I was excited to hear more about the process of “sending money” you had mentioned, but then I read your post, and realized that there weren’t any money involved, but “BTC/ETH/USD”...
Not sure about the others, but it takes a very long time to send Bitcoin (tens of minutes) if you care about waiting for one or more confirming blocks which most people do.
No, it's unfair to belittle all the financial innovation in crypto. There are pump-and-dump schemes, pig-butchering scams, outright embezzlement, and many other schemes, not just pyramid schemes.
Interesting read. A few days ago I stumbled over a twitter profile from a person who was seemingly living in one of those poor countries and was writing stuff like "the rich don't care about food for the poor" and "please send BNB to this address to help me living". Made me quite sad and makes me still think about it!
Unfortunately, twitter does not provide a history of tweets/profiles I have visited; I hope they add something like reddit. Would really like to revisit this account now.
So ... it was sus from the beginning, and you still had money in it? How does that compute?
It totally collapsed, but not a big deal, because you were smarter than others, so they took the loss in a zero-sum game ("who gets to take the remaining liquidity")?
Well the question has come up before, and since I also know people from all these countries. I have talked about insecure financial environments with them it is an interesting topic but not always ok to talk about. While I try not to bring up cryptos to normal people, I think it is telling that almost no one brings up crypto as a way to transfer money. People invested in bring it up but very seldom as a practical thing more as an investment.
As a caracan myself, it's actually "caraqueños" :)
Regarding the subject, it is indeed very popular. You can go to restaurants, car parts stores and clothing stores and find the Binance QR code prominently displayed.
And a LOT of freelancers working online have no way of receiving payments from abroad other than through Binance (verifying Paypal here because of currency controls). No one wants to receive the local currency.
I wouldn't say that you'll see grandmothers in the grocery store buying stuff with USDT, but it's definitely used.
I find it funny that people think these countries just ran up into this problem and they finally have a solution for it
Yeah they do use a "dollar denominated stable coin": dollar bills under the mattress. Or just pegging transaction to USD/EUR etc and doing the conversion at transaction time
BTC might be useful for transferring money, but compared to existing mechanisms (legal or kinda legal), maybe not so much
"stablecoins" are not decentralized. If you're going to trust a central issuing and custodial authority for a coin, do you even need crypto technology in the first place?
The stablecoin argument in failed states is always so funny... yes people in these countries want USD without the legal framework (of their own country and/or the US). It should be pretty clear to anyone that allowing a private and possibly criminal actor like Tether to fulfill this role isn't exactly viable in the long run. For starters when the US DoJ will finally get annoyed that USDT are used to evade international sanctions and launder billions of USD linked to large scale criminal networks, I believe a few people will learn about the ramification of the US extra-territorial jurisdiction. Good luck to your stash of USDT then.
Same with the "funding activists in repressive states" argument. Now you have a few centralized entities that can share data with the authorities. And they do, cf. Binance in Russia.
Ironically a CBDC from a powerful but non-cooperative state like China would probably be much safer for these people in Iran or Venezuela.
And I have always wondered about these stable-coins. Let's take these countries, who in there is willing to trade stable coins with exchange rate of near 1:1 to physical dollars?
There is a stark disconnect between valid crypto scenarios and where the money proportionally actually comes from, that the crypto proponents seem a little too happy to gloss over (who also ironically are the furthest away from being benefactors apart from speculation and speculative fiction) which to this day gives the community a weird cult vibe.
For me, Bitcoin (and the whole disappearing creator act and hints of NSA involvement) has always been a tinfoil moment. This is the perfect mechanism for total economic awareness not the supposed virtues, such as anonymity, that it does not really have. The Ponzi schemes seem to have been permitted to establish the necessary infrastructure (mining, exchanges, etc.) and normalize the technology. Next stop should be the regulators post MSM preparatory media campaign (“Explainer: why we need crypto regulations today”). Then it will likely support CBDCs transactions (the CBDCs being the actual main event here btw). You will get a ‘wallet’ at birth and say goodbye to banks and remember that all you spendings are now recorded for posterity. (Remember “cash is bad” & is also a vector of nasty viruses).
If the big 5 scammers go to real jail — double digit billions of dollars are involved here — and don’t end up suiciding themselves, i will reconsider my current take on this entire affair.
There is quite some evidence pointing to that. SBF's ma and pa seem to be quite involved in the ban-cash crowd[1][2].
However, S.Nakamoto was always anonymous and Bitcoin never stated to be anonymous, not even in the white paper. I think that the correct term here is pseudonymous.
P.S. To those suggesting regulation, do you realise that regulations are being crafted by people like these (SBF's family)? Is it really going to improve anything or just equalise it all with the absolute worst?
As Robert A. Heinlein put it: "When you vote, you are exercising political authority, you're using force. And force, my friends, is violence. The supreme authority from which all other authorities are derived."
Force is a big part of it, but the flip side is that a vote is also consent to abide by the outcome without force. The force is there, invisible, and most people don't even notice it exists because they consent.
That's a delicate illusion and does not survive well when largish minorities declare the social contract void.
Your idea that voting is consent is very flawed, no where in society is the ability to choose not to vote where by they absolves you from rule by the authority. If voting was actual consent then if I were to choose not to vote that would be withdrawing my consent thus I should not be under the rule / jurisdiction of the government.... Try that and you get Sovereign Citizens
So that alone invalidates the idea that voting is "consent to be governed", saying that is like saying when a mugger that comes upon you with a demand of "your money or your life" means you "consented" to give the mugger you money when you hand it over.
Second people feel the force of government every day, most have assimilated this consent threat into their lives as just a part of living but even in the most "free" nations consent threat is there, did you fill out your tax return correctly... is that cop going to pull me over.... etc etc etc etc
The delicate illusion is that this consent overriding threat of violence by the state is somehow legitimate, ethical and moral
No, if voters don't like the result, they can still use force, anytime they like. Like what Belarusians did in 2020 after obviously rigged circus election (though their force was far from enough vs. their government-in-power backed by Russia).
The idea that one consents to be governed is reminiscent of the Sovereign Citizen movement. No, you do not need to consent as an individual. Rather, choosing not to vote is an abdication of your responsibility to participate in democracy.
However so is the "responsibility" narrative. Both are over stating the importance and function of voting. One does not, and can not have a responsibility or obligation to choose between a Giant Douche and a Turd Sandwich [1].
Low participation rate is an indictment of the entire system.
…which has proven to be a remarkably effective way to create relatively stable currencies peoples actually use vs. utopian fever dreams that have largely ended in instability, corruption, and financial ruin.
All government tend towards authoritarianism, just look at what happened under "good governments" during COVID, with full support of the population. (which I am sure is an unpopular opinion here)
> Crypto is no more of a Ponzi Scheme than Fiat currency is, the big difference is Fiat currency is back by threats of violence (aka government).
"Fiat" currency has a lot of people overseeing it, and armies protecting it. I'll take that over SBF any day.
Even with fiat's issues--for example, with a stroke of a pen, Biden can print and confiscate money and transfer it to privileged college borrowers, causing inflation--it still works better. In this case, our court system is slowing the process down
Fact Check: False.... not slowing down at all... US Government spending is still extreme irresponsible and fast approaching insolvency... but hey the courts stopped a 0.0000015% increase so yea.....
TBH, BTC has always been quite alright, but those so-called altcoins are becoming more and more ridiculous by the day. Once the NFT craze was in full swing, I thought we had reached peak comedy, but it seems my imagination was too poor.
Also, I thought that not every single alt-coin is a ponzi-like fraud, but I will probably be disproven once again.
> For me crypto was always Ponzi scheme and nothing more, but it is because I don't laundry money or sell drugs, so I am not the target for crypto.
I find Bitcoin very intriguing because unlike TradFi it is not built in debt. Every dollar you have in your account is someone else's debt to you. Which is also the reason Bitcoin gets compared so much to gold! There is a fixed amount of nuggets and no debt is involved.
(Yes, I know that about 8% of the gold demand is actually driven by the technology sector, but the majority of gold's price is driven through pure speculation on... nothing productive! Gold's price is mostly driven by greed / price action.)
I think if you call gold or Bitcoin a Ponzi, you're using the wrong term. Greater Fool Theory is more fitting.
I think the debt model is more true to what a currency is supposed to represent though. You can ignore the entire regulatory structure and just imagine there was some magic substance that was created out of thin air whenever you gave someone something, and consumed when you received something. Debt is exactly what it would represent. You to others and others to you.
Gold at least is shiny, dense and virtually indestructible, and we humans naturally value things that draw our attention like that. Gold has also stood the test of time as something that most people appreciate when they see/touch it. It'll always be possible in any country to trade an ounce of gold (in any physical form) for /something/ well above $0. Can this guarantee be as easy to make with Bitcoin or any cryptocurrency of one's choosing?
For most normal (non-techy) people, what's the allure of Bitcoin once you remove all the marketing? Perhaps gold indeed still relies on the greater fool, but that fool on average is still less of a fool than the greater fool who has too much "invested" in cryptocurrency.
No, you're wrong. The whole money supply is controlled by the Federal Reserve through purchasing and selling securities. When the FED purchases a security, the money gets deposited in the reserves of commercial banks, which then increases the money in circulation through making loans to consumers and businesses. And the mentioned securities are, uhhh, treasuries!
To break it down:
If I have 1 dollar in my account, the bank owes me 1 dollar. And this goes all the way up.
I am certain that you're trolling, but I'm giving you the answer anyway: No.
When you have 1 dollar in your account, the bank still has the dollar! It's a liability owed to you.
Every financial asset is somebody else's liability. Every financial asset is similar to a promissory note. If you sign one, it is your liability, but it would be an asset for the note's holder. This is also true for your bank account. Your account statement is a promissory note that the bank owes you 1 dollar.
1) the article is very good news, because Crypto the hype newsline word is dead. This means we are past the hype phase of the hype cycle and collapsed to the steady climb of actual usefulness.
The US Dollar is a big scam too, if COVID didn't highlight that then... well, it doesn't really matter.
How the hell did COVID, a period over which the dollar’s value has increased, reveal the USD as a scam?
What COVID did is reveal what a currency actually is. It’s a bet on the reliability of the backers of the currency. In the case of the USD, that would be the US government and economy.
BTC only has value because people don’t seem to understand this basic fact of a currency.
For me crypto was always Ponzi scheme and nothing more, but it is because I don't laundry money or sell drugs, so I am not the target for crypto.