Cryptocurrency / Bitcoin

[Phaedrus 209521]

1 hour ago, OldandNerdy said:

It was built to be a replacement currency for country based fiat

Well, yes. That's what I thought. I'd love to believe it will get there, but I'm afraid I don't have your faith that it will.

 

1 hour ago, OldandNerdy said:

It's definitely not there yet, the network isn't scalable enough to be used for small payments, so instead it's currently being treated like an investment opportunity / store of value.

 

I might be completely wrong here, but my understanding is that the fundamental issue here is the computing power required to keep the blockchain sane, the cost of adding a new transaction to it, and the fact that this continually gets worse as the blockchain grows with every transaction. You can already find a whole bunch of hand-wringing articles about how much power that consumes and how bad for the environment it is. But if bitcoin becomes widely used, there will be several orders of magnitude more transactions. I don't see how it remains sustainable at that point.

 

1 hour ago, OldandNerdy said:

As it gets closer to the end of new coin generation, the price will bloom up again due to scarcity, and then eventually stabilize and then once it's not so volatile, it will be a useful currency.

Who's going to want to put all that computing horsepower at bitcoin's service once mining is no longer a thing? 

The end of mining won't necessarily make it stable; if people continue to speculate, then it'll continue to be volatile. We can get massive swings in the value of things that have absolutely nothing to do with their inherent worth (hi, Gamestop!).

The other issue here is that bitcoin, like any currency, only has value because we collectively agree that it has value. Traditional currencies are backed by central banks and by governments that attempt to keep them stable, and usually - but not always - succeed. Who does that for bitcoin? A run on a cryptocurrency could well end up looking like a bank run on steroids.

1 hour ago, OldandNerdy said:

Of course there are still some scalability and network issues, which once everything falls into place in 5-10 years, it will be usable as a currency.

I hope you're right, because I fundamentally love the idea of a currency that's easy to use and divorced from government control.

1 hour ago, OldandNerdy said:

The big thing to remember is that it's not just about the coin, it's about the technology that runs it.  Blockchain is the revolution.  

Perhaps. But a lot depends on what people do with it... and now that NFTs are news I'm doing a *lot* of eye-rolling. There is no technology so pure that we can't use it to do something stupid, alas.

 

[OldandNerdy 1301]

1 hour ago, Phaedrus said:

Well, yes. That's what I thought. I'd love to believe it will get there, but I'm afraid I don't have your faith that it will.

 

 

-- I truly believe it will get there, there will eventually be a shift in the overall network that will force the move forward.

 

1 hour ago, Phaedrus said:

 

I might be completely wrong here, but my understanding is that the fundamental issue here is the computing power required to keep the blockchain sane, the cost of adding a new transaction to it, and the fact that this continually gets worse as the blockchain grows with every transaction. You can already find a whole bunch of hand-wringing articles about how much power that consumes and how bad for the environment it is. But if bitcoin becomes widely used, there will be several orders of magnitude more transactions. I don't see how it remains sustainable at that point.

-- Right now, bitcoin mining is using a concept called "proof of work" - where complex "math" needs to be solved in order to gain consensus that a transaction has publicly occurred and should be written to the blockchain.  It's very hardware intensive and gets worse the closer we get to the final bitcoin.  

 

Miners get rewarded in 2 ways. When a new block is written, new coins are given out to the miners that participated in writing the block.  They also get paid by transaction fees.

 

Theres another method called "proof of stake" that works differently to write new blocks to the blockchain.  It is far faster and requires less hardware.  It's probably the way forward to the future, but because of the Democratic nature of blockchain, it takes a lot to get consensus.   Some alt coins are using proof of stake successfully and some others such as etherum are trying to move towards it.  

 

Eventually things will settle and the network will be robust enough to be self sustaining and fast enough for real time transactions.

1 hour ago, Phaedrus said:

Who's going to want to put all that computing horsepower at bitcoin's service once mining is no longer a thing? 

The end of mining won't necessarily make it stable; if people continue to speculate, then it'll continue to be volatile. We can get massive swings in the value of things that have absolutely nothing to do with their inherent worth (hi, Gamestop!).

The other issue here is that bitcoin, like any currency, only has value because we collectively agree that it has value. Traditional currencies are backed by central banks and by governments that attempt to keep them stable, and usually - but not always - succeed. Who does that for bitcoin? A run on a cryptocurrency could well end up looking like a bank run on steroids.

 

1 hour ago, Phaedrus said:

--Like you said, just like crypto, fiat currency only has value because we all agree it does.  The big difference is that there isn't any physical aspect of bitcoin.  So what would a "run on bitcoin" look like?  Take a look at Venezuela a few years back where their fiat became worthless due to various factors.  Many turned to bitcoin just to gain some stability. 

By not being based in a single country, it's harder for other countries to force a devaluation. But who knows, only time will tell.

 

 

1 hour ago, Phaedrus said:

 

I hope you're right, because I fundamentally love the idea of a currency that's easy to use and divorced from government control.

Perhaps. But a lot depends on what people do with it... and now that NFTs are news I'm doing a *lot* of eye-rolling. There is no technology so pure that we can't use it to do something stupid, alas.

-- the NFT thing is getting a lot of bad press because of what is being reported.  Paying millions for a tweet is ridiculous, but this again is the first stage of a proof of concept.  If blockchain technology can prove ownership of something so farcifarcical and stupid that people are willing to spend millions on something, imagine how else it can be used.  It can prove ownership of anything.   It is publicly viewable and not able to be forged/faked.  It could be used for tracking ownership of real property, cars, copyrights, all of these things that currently cost serious $$$ to maintain, are maintained in private and proprietary databases, and are complex to share.

1 hour ago, Phaedrus said:

 

[waterat 20911]

While I follow the comments from @Phaedrus and @OldandNerdy in theory, when it comes to practice Bitcoin drives me a bit Loonie (see what I did there?). I can use, and even repair, a chain block quite effectively but a blockchain, not so much. Many years ago my best friend, whose father was an electrician, and I used to file the small nub off the blanks from outlet boxes and use them as nickels in the vending machines of the day, sometimes they worked! - ah, the good ol' days. In case you've been driven loony twice and would prefer a 'tuney': Here is the late John Hartford with 'Back in the Goodle Days':

https://www.youtube.com/watch?v=Hfmr-Zn_nRI

p.s. I believe an NFT is what we've got now with the new Canadian bills as they won't mold after you've tipped the canoe with your wallet in your pocket :)     Apologies for the hijack.

[waterat 20911]

While NFTs provide discrete and unique payment opportunities here in the sex trade they are also connected to undesirable ransom requests. I hadn't thought about that - as I haven't needed to.....

 

[OldandNerdy 1301]

Unfortunately that video just once again highlights the use of "fear" in a campaign against something that is threatening the power that the people who control the flow of money currently.

 

Yes. A lot of criminals have used cryptocurrency.  But also many more have used US dollars worldwide.  Heck the US government uses untraceable USD to pay off "bad guys" all over the world.  

 

There are two reasons criminals use crypto, it provides some anonymity, and it can be used to instantly transfer something of value anywhere in the world.  These are the same reasons regular people want to use it.  

 

Just because something is used in a criminal act doesn't make it something only criminals use.  Hammers have been used to break into buildings for the purpose of theft.  Does that mean that everyone who uses a hammer is a criminal?

 

 

[Phaedrus 209521]

On 3/28/2021 at 8:18 PM, OldandNerdy said:

Unfortunately that video just once again highlights the use of "fear" in a campaign against something that is threatening the power that the people who control the flow of money currently.

TBH I think the anonymity is the thing they really hate. Governments will flood us with FUD about criminals using it, and I suspect there's a large part of the corporate world that hates it too. How can they sell more things to you if they don't know what you're spending your money on now?

[OldandNerdy 1301]

21 hours ago, Phaedrus said:

TBH I think the anonymity is the thing they really hate. Governments will flood us with FUD about criminals using it, and I suspect there's a large part of the corporate world that hates it too. How can they sell more things to you if they don't know what you're spending your money on now?

You're definitely onto something there.

 

See the thing is, it's not really anonymous once you convert bitcoin to fiat.  Unless you are doing it outside of an official exchange. And even then, you aren't anonymous to the person you're working with.  

 

There are entire teams within the US and Canadian government that do nothing but trace crypto transactions.  You can fairly easily trace them back to an individual if you follow the coin end to end.  So obviously it's really the anonymous nature of it that those in power fear, it's the lack of control.

 

As for the corporate world, there are some pretty big players that publicly speak out against crypto, while quietly investing in it and realizing major gains from it. 

 

Crypto and the tech behind it are a major step forward, and something that will probably have a similar impact on the world that the Internet has had.

[Guest]

      I'm not gonna describe the FTX dumpster fire as many other sources will do better. But the consequences will have a lasting effect on all forms of cryptocurrencies.

      This is not the first financial scandal in the crypto world, but none ever reached that scale before. Also, the visibility/marketing and high-profile celebrity endorsements brought many new investors unaware of risks involved. While not directly tied to Bitcoin and other currencies, the trust in that market will be significantly affected.

       Will also impact the numerous celebrities who helped promote this. Not the first time some ended up sued after bad endorsements, but this is on a completely different level. On the plus side, seeing Kevin O'Leary's trying to apologize for this is more than worth it.

        

[Orpheo12 70]

Love the O;Leary comment

[Guest]

         For those still unsure of Trump's financial problems, yesterday couldn't be clearer.

   On top of the idiocy of selling 99$ virtual "super-hero" cards at his image, he does it in the worst possible time. After the FTX trainwreck, trust in any form of crypto-investment is pretty much at it's lowest.

    This was bad enough when Trump's lawyers stopped accepting checks. But when far-right analysts are rolling their eyes, you know this is unsalvageable.

        ‘Losing the plot’: Trump mocked after announcing superhero card collection | Donald Trump | The Guardian

        Trump roasted after 'major announcement' turns out to be digital trading cards | Fox News

        Capitol Rioter Laments He's Going to Jail for 'NFT Salesman' Trump (newsweek.com)

[Guest]

   On the topic of worthless NFT's, our national disgrace Justin Bieber and other celebrities are being sued for promoting NFT's as investments:

   Jimmy Fallon, Gwyneth Paltrow, Justin Bieber Sued Over Bored Ape NFT Endorsements – The Hollywood Reporter

  Justin Bieber Paid $1.29 Mil For NFT That Is Now 'Worth' $69k (kotaku.com)

[Guest]

  In other Crypto NFT fraud news, Logan Paul is trapped in a dumpster fire of his own creation. His CryptoZoo was a complete scam exposed by other YouTubers and likely face criminal charges on top of other potential lawsuits.

  Who knew investing in a douchebag was a bad idea...

Logan Paul unveils $1.5M CryptoZoo recovery plan (cointelegraph.com)

Logan Paul’s crypto drama and pet pig fiasco, explained - Polygon

Logan Paul Called Out As Part Of A Massive CryptoZoo Scam (ringsidenews.com)

 

  

[PeroLok 0]

Hey there! That Bitcoin embroidery design sounds like a fun way to show off your interest in the world of cryptocurrency.

[NarayanSingh 1]

I had a similar experience to what you described. I stumbled upon the concept of cryptocurrency while researching investment options. It seemed like this mysterious, almost magical realm of finance at first. But as I learned more, I realized it's just another way of exchanging value, albeit with its own quirks.
I remember one instance where I was discussing investments with a friend, and they mentioned the concept of a backdoor Roth IRA. It was like a light bulb went off in my head! The idea of maximizing tax benefits while investing sounded too good to be true. But sure enough, after some research and consultation, I was able to set one up and start reaping the benefits.