Author Topic: Crypto speculating  (Read 380 times)

galumay

  • Administrator
  • nut
  • *****
  • Posts: 303
Crypto speculating
« on: December 20, 2017, 07:39:43 AM »
Thought I better get some ideas down about the lastest fad in the market so I have something to refer to after it all comes crashing down!

Heres my first thought provoking quote on the issue,

"Bitcoin never was, or will ever be, or is now, anymore or less riskier than the riskiest investment you can make. Its a Ponzi scheme with global reach that makes Bernard Madoff's $64.8 billion fraud look like small change. Instead of deceiving mere 5000 clients, Bitcoin has deceived millions of clients, and in spite of the clear warnings, no country has been able to move against Bitcoin because it operates outside the legal jurisdiction of any single country.

The deception is hidden in novelty of the technology, which lures investors into a false sense of trust. The focus on the strength of the cryptography distracts the investor from the Bitcoin having a fixed net value of absolute zero. Unlike conventional currencies that are based on the tangible assets of the country that owns it, Bitcoin is not underwritten by any assets whatsoever.

How is that possible?

The answer is that the "miners", who invest in the hardware necessary to generate the hash codes required for each Bitcoin transaction, participate in a winner takes all lottery for the next transaction that is paid in - you guessed it - Bitcoin. This creates an impression of a tangible asset underpinning Bitcoin, but the net value of this asset is negative, because the majority of miners are losing money (not being paid) and when they are paid it is in a massively overvalued currency. And because unsuccessful miners operate as individuals they never get to see mining for the pyramid scheme it is, proping up the ponzi scheme that is Bitcoin. And all other cryptocurrencies operate the same way.

Bitcoin has a long way to go before it exhausts the pool of 7billion potential suckers who cant recognise a ponzi scheme even when its right there hiding in plain sight.

It is believed Madoff ran his scheme for 30 years. The only thing keeping Bitcoin up is its ability to find more and more people stupid enough to invest in it. If you are so stupid as to knowingly invest in a pozi scheme, then you are going to be just as stupid in missing the point at which you should have sold it all - just before the whole scam bursts.

Crypto-currencies must be pegged to a tangible asset by linking it (eg) to an actual country where it can be regulated. Otherwise its fraud simple."



galumay

  • Administrator
  • nut
  • *****
  • Posts: 303
Re: Crypto speculating
« Reply #2 on: December 25, 2017, 08:25:36 AM »
Something I posted elsewhere,

I understand why traders see cryptos as a potential commodity for making money, anything with so much volatility must offer opportunity for those so inclined.

From a neutral viewpoint, ( i am not a trader and I have no interest in investing in cryptos or blockchain), the whole thing looks like a massive ponzi scheme that attracted libertarians, the disenfranchised and conspiracy theorists initially and then the ignorant 'mums & dads' by FOMO.

Part of the brilliance of the ponzi scheme was linking fairy money (cryptos) to the concept of blockchain, this meant that all the time, effort, hardware costs, energy costs and so on associated with maintaining an exponentially growing, publicly distributed ledger, (block chain); was paid for with fairy money. The utility of the fairy money with the dark web, drugs, criminals etc helped push the price up and then the FOMO did the rest.

At the same time the almost total lack of understanding of what blockchain technology actually is and what its actually suitable for meant that as it became increasingly hyped as the new tech, the internet 2.0, something the cool people got, something old people could never understand, businesses started looking for ways to integrate blockchain tech into their businesses.

The problem is its actually often a worse and less practical solution than whatever it replaces, ledgers, spreadsheets, databases etc, but the FOMO in the corporate world was too strong for many to resist and so enormous amounts of money, time, energy and effort are being applied to implementing something that is largely inappropriate.

I just read this quote on twitter from Ben Hamner (CTO at Kaggle)

"The blockchain movement is 100x worse than the NoSQL movement. Every time I see a new blockchain idea I ask “would a relational DB be unambiguously better in every regard here?” (generating page views expected). 99% of the time the answer’s yes"

Yes, there will be instances where blockchain tech makes sense, a lot of it wont be public blockchain though, and so wont need to be linked to fairy money. Yes, there will be cryptos in the future, but its most likely that the disruption of cryptos will simply lead to less 'ticket clipping' in the finance world, faster transactions, better FX rates, more security around online transactions - all still in existing fiat currency. Cryptos in some form will remain a substitute for cash in the dark web, criminal and underworld.

galumay

  • Administrator
  • nut
  • *****
  • Posts: 303
Re: Crypto speculating
« Reply #3 on: December 25, 2017, 08:36:12 AM »
This is the best thing I have ever read on fiat currency, let alone on the comparison to cryptos, essential reading!

http://www.interfluidity.com/uploads/2017/10/Fiat-Is-Effective-Minitalk-light-edit-to-share.pdf

galumay

  • Administrator
  • nut
  • *****
  • Posts: 303
Re: Crypto speculating
« Reply #4 on: January 03, 2018, 12:12:06 PM »

galumay

  • Administrator
  • nut
  • *****
  • Posts: 303
Re: Crypto speculating
« Reply #5 on: January 03, 2018, 12:13:32 PM »
more thoughts of mine, posted elsewhere,

Quote
It won’t be long and Govts are likely to link currency to a
Blockchain or Blockchain like technology

Its possible that they will use an encrypted ledger of some form, they possibly already do, but it will never be a public, decentralised, networked, ledger like blockchain - and therefore wont require a crypto to support the energy and work required to run and support a blockchain.

Thats really the problem with the pyramid/ponzi scheme that is blockchain and bitcoin, the 'currency' exists to allow the massively inefficient ledger to operate, the 'value' in the ledger is that it satisfies the libertarian's distrust of centralised social control. The whole pack of cards is basically built on lack of trust and it's existence is very precarious.

There is definitely some utility in blockchain, but its much more likely in the future that the cost of that utility will be paid for in existing currencies rather than the fairy money that the perpetrators of the sham are creating. Also because the likely form of those blockchain type technologies are likely to be centralised and private, the energy and work required to maintain them will be minimal, which lessens the need for any new currency to be magicked into existence.

Another nail in the coffin will be the fact that Governments and financial institutions are already responding to the disruption by removing the barriers to cross currency exchanges making them faster and cheaper. That removes a signifant benefit that cryptos enjoyed.

All of that aside, like any massive bubble market, cryptos have created fantastic opportunity for traders like yourself Mr Duck, I have no doubt you will extract significant personal gain and wealth creation from the madness! Sadly there are many who will give up significant wealth because they dont have the ability or knowledge to play the trading game.

galumay

  • Administrator
  • nut
  • *****
  • Posts: 303
Re: Crypto speculating
« Reply #6 on: January 11, 2018, 07:45:50 PM »
This is the best summary I have read to date on blockchain, a twitter thread by @sarahjeong

"People who keep touting smart contracts as "simplifying contracts" don't understand that litigating contracts is expensive because of human interpretation, not because someone forgot to write something down and get it notarized

The only place in the law that could use blockchain technology is land records, and even that doesn't make all that much sense given that what you really need is a *centralized* database, not a decentralized network.

Blockchain is an elaborate work-around for a *very specific problem*: verifying irreversible transfers of value without a centralized authority. In other words, it's a computationally burdensome way to hate the government.

Almost everything that is supposedly going to get solved with blockchain can be solved with some kind of version control hosted on a central server.

* except for the drugs, the scams, the tax evasion, and payment-blockade-circumvention. I acknowledge that those are valid use case scenarios for 

90% of the people who are dazzled by "crypto" right now absolutely do not understand the core technological premise of any of this shit. It's an interesting innovation with an *extremely limited* ability to actually effect any positive change in the world

and that's why I fucking hate bitcoin  /end"