Is Crypto dying or just dropping for the moment?

[barbos]

What is a Ponzi scheme to you? What I did was, use a computer I was already using for other things to mine 5 bitcoins. Years later I was able to exchange it for cash. In a Ponzi scheme don't you have to give someone fiat currency?

The fact that you "mined" it is an irrelevant variation. And you paid for electricity/computer. You got paid by people who entered the game later.

I was paying for Electricity/Computer before and well after I quit mining. How is my mining irrelevant to participating in (as you put it) the Ponzi scheme? In what other way could I have participated in said Bitcoin Ponzi scheme without Bitcoin mining? Are you drunk too?

Are you aware that computer doing calculations consumes more electricity than the one idle and doing nothing and especially the one turned off?

 

[Gospel]

I was paying for Electricity/Computer before and well after I quit mining. How is my mining irrelevant to participating in (as you put it) the Ponzi scheme? In what other way could I have participated in said Bitcoin Ponzi scheme without Bitcoin mining? Are you drunk too?

Are you aware that computer doing calculations consumes more electricity than the one idle and doing nothing and especially the one turned off?

Yes. Now can you fit that into your claim that I participated in a Ponzi scheme?

 

[Jayjay]

I was paying for Electricity/Computer before and well after I quit mining. How is my mining irrelevant to participating in (as you put it) the Ponzi scheme? In what other way could I have participated in said Bitcoin Ponzi scheme without Bitcoin mining? Are you drunk too?

Are you aware that computer doing calculations consumes more electricity than the one idle and doing nothing and especially the one turned off?

Yes. Now can you fit that into your claim that I participated in a Ponzi scheme?

He's right that it's irrelevant whether you mine the bitcoins yourself or buy them from the market. But is it a Ponzi scheme? I don't think so. Bitcoins are exchanged on open market. There is no "scheme" to transfer funds from new investors to old, at best there is a collective tulip mania.

 

[Gospel]

Yes. Now can you fit that into your claim that I participated in a Ponzi scheme?

He's right that it's irrelevant whether you mine the bitcoins yourself or buy them from the market. But is it a Ponzi scheme? I don't think so. Bitcoins are exchanged on open market. There is no "scheme" to transfer funds from new investors to old, at best there is a collective tulip mania.

Ok, if Bitcoin is a Ponzi scheme, how does one participate in it? I'm trying to figure out what is relevant when it comes to the participation part.

 

[Jarhyn]

Yes. Now can you fit that into your claim that I participated in a Ponzi scheme?

He's right that it's irrelevant whether you mine the bitcoins yourself or buy them from the market. But is it a Ponzi scheme? I don't think so. Bitcoins are exchanged on open market. There is no "scheme" to transfer funds from new investors to old, at best there is a collective tulip mania.

Ok, if Bitcoin is a Ponzi scheme, how does one participate in it? I'm trying to figure out what is relevant when it comes to the participation part.

Yeah, like, the only way it benefits earlier investors is the same way the stock market always rewards early investment: their investment increases in perceived value.

 

[Harry Bosch]

Ok, if Bitcoin is a Ponzi scheme, how does one participate in it? I'm trying to figure out what is relevant when it comes to the participation part.

Yeah, like, the only way it benefits earlier investors is the same way the stock market always rewards early investment: their investment increases in perceived value.

The difference though is that the stock market contains stocks of companies that are working. They are generating sales. Paying people. Paying vendors. Their value may be high (may be low) but they are generating concrete activity. They do not rely solely on appreciation. I have some stocks that don't appreciate much at all, only pay dividends. What backs up bitcoin?

 

[Jimmy Higgins]

As flawed as the Stock Market it, it looks nothing like the market for cryptocurrency! The amplitude on the instability is magnitudes higher.

 

[Jarhyn]

Ok, if Bitcoin is a Ponzi scheme, how does one participate in it? I'm trying to figure out what is relevant when it comes to the participation part.

Yeah, like, the only way it benefits earlier investors is the same way the stock market always rewards early investment: their investment increases in perceived value.

The difference though is that the stock market contains stocks of companies that are working. They are generating sales. Paying people. Paying vendors. Their value may be high (may be low) but they are generating concrete activity. They do not rely solely on appreciation. I have some stocks that don't appreciate much at all, only pay dividends. What backs up bitcoin?

I see, so Gold does work now. Does the Dollar, too?

 

[barbos]

Yes. Now can you fit that into your claim that I participated in a Ponzi scheme?

He's right that it's irrelevant whether you mine the bitcoins yourself or buy them from the market. But is it a Ponzi scheme? I don't think so. Bitcoins are exchanged on open market. There is no "scheme" to transfer funds from new investors to old, at best there is a collective tulip mania.

Tulip mania is a better analogy, but not many people remember it.

 

[Jimmy Higgins]

The difference though is that the stock market contains stocks of companies that are working. They are generating sales. Paying people. Paying vendors. Their value may be high (may be low) but they are generating concrete activity. They do not rely solely on appreciation. I have some stocks that don't appreciate much at all, only pay dividends. What backs up bitcoin?

I see, so Gold does work now. Does the Dollar, too?

This seems like a silly comparison. Iron, Gold, and Sodium are all metals, does this mean they behave the same way?

The perceived value for cryptocurrency is wholly and exclusively based on nothing but perception. The OP asked whether there is a shock to crypto if the perceived concept of its use as currency dissipates. If you can't spend it like other currency, it's benefits are fewer. And there can be no doubt that both the amplitude of volatility of cryptocurrencies is magnitudes higher than that of first world currencies, and the deflation of its value is detrimental as use as a currency. Just because a currency or commodity can deflate or have volatility doesn't mean we get to white wash away the repeated extreme volatility and deflation of crypto.

 

[Jimmy Higgins]

Yes. Now can you fit that into your claim that I participated in a Ponzi scheme?

He's right that it's irrelevant whether you mine the bitcoins yourself or buy them from the market. But is it a Ponzi scheme? I don't think so. Bitcoins are exchanged on open market. There is no "scheme" to transfer funds from new investors to old, at best there is a collective tulip mania.

Tulip mania is a better analogy, but not many people remember it.

Joe Biden remembers.

 

[barbos]

The difference though is that the stock market contains stocks of companies that are working. They are generating sales. Paying people. Paying vendors. Their value may be high (may be low) but they are generating concrete activity. They do not rely solely on appreciation. I have some stocks that don't appreciate much at all, only pay dividends. What backs up bitcoin?

I see, so Gold does work now. Does the Dollar, too?

The point is, cryptocurrency have no connection to anything productive/useful. They make promises and these promises support speculative interest but as of right now they are useless. And I don't consider illegal stuff useful.

 

[TV and credit cards]

The difference though is that the stock market contains stocks of companies that are working. They are generating sales. Paying people. Paying vendors. Their value may be high (may be low) but they are generating concrete activity. They do not rely solely on appreciation. I have some stocks that don't appreciate much at all, only pay dividends. What backs up bitcoin?

I see, so Gold does work now. Does the Dollar, too?

The point is, cryptocurrency have no connection to anything productive/useful. They make promises and these promises support speculative interest but as of right now they are useless. And I don't consider illegal stuff useful.

That’s not completely true. Look at Ripple/XRP. The coin has a purpose. As a bridge between international currency exchanges. Their target is the SWIFT banking system. Their claim is you can fly a planeload of cash from country A to country B before you can clear a transaction through SWIFT.

Now if they could just get the SEC off their backs.

 

[Jarhyn]

The difference though is that the stock market contains stocks of companies that are working. They are generating sales. Paying people. Paying vendors. Their value may be high (may be low) but they are generating concrete activity. They do not rely solely on appreciation. I have some stocks that don't appreciate much at all, only pay dividends. What backs up bitcoin?

I see, so Gold does work now. Does the Dollar, too?

The point is, cryptocurrency have no connection to anything productive/useful. They make promises and these promises support speculative interest but as of right now they are useless. And I don't consider illegal stuff useful.

Eh, neither does the dollar, intrinsically. It just happens that the dollar gets used, because there's no artificial barrier to entry to using it. I am not arguing that ANY extant cryptocurrency is in its current iteration "widely used", or "not environmentally awful". I would argue though "highly useful" is definitely in a variety of their toolchains.

I am arguing that the systemic model is light-years better than "cash" or even current electronic banking tool. The reason you don't see adoption on this metric is that this falls into the same problem you see all over: the niche is already being bogarted by the inferior system for allowing numerical "ownership".

 

[barbos]

I am arguing that the systemic model is light-years better than "cash" or even current electronic banking tool. The reason you don't see adoption on this metric is that this falls into the same problem you see all over: the niche is already being bogarted by the inferior system for allowing numerical "ownership".

What are you talking about? Bitcoin (and others) are light years behind conventional electronic banking in terms of throughput.
Every transaction has to go through each node and you need few cycles (each is about 10 minutes) to be sure.
It's utterly incapable to compete with ordinary banking.

 

[Jarhyn]

I am arguing that the systemic model is light-years better than "cash" or even current electronic banking tool. The reason you don't see adoption on this metric is that this falls into the same problem you see all over: the niche is already being bogarted by the inferior system for allowing numerical "ownership".

What are you talking about? Bitcoin (and others) are light years behind conventional electronic banking in terms of throughput.
Every transaction has to go through each node and you need few cycles (each is about 10 minutes) to be sure.
It's utterly incapable to compete with ordinary banking.

Again, NOT TALKING BITCOIN. Also, Bitcoin specifically, as mentioned, given proof of work has been designed with that intent in mind. This is not a problem for "modern" cryptocurrencies. Much like modern banking can't be displaced by crypto due to niche domination, other coins can't displace Bitcoin for the same reason.

The issue is that Bitcoin has limits to transaction throughput per block to ensure more "awards". This has been patched a couple times to increase transaction rates, IIRC, but this design decision was made with respect to Bitcoin to ensure that more transactions, which imply more participation, leads to a pot that in theory grows with the network utilization. That's not a requirement for crypto, that's just Bitcoin being Bitcoin.

This is the same proof of work problem that I keep talking about. In reality, I could send you over a million dollars right now (assuming I had a million dollars... ;_; ) on Bitcoin.

 

[southernhybrid]

I read an article that I will link that discussed crypto. I'll quote parts of it since it may be behind a pay wall if you're not a WaPo subscriber.

https://www.washingtonpost.com/business/2021/05/17/dogecoin-bitcoin-cryptocurrency/

As cryptocurrency goes wild, fear grows about who might get hurt
Cryptocurrency’s extraordinary run has attracted hordes of new investors, drawn by the potential for huge profits and a culture soaked in humor and risk-taking

For a brief moment, Brian Cardarella was a Dogecoin millionaire.
The 41-year-old said he invested tens of thousands of dollars earlier this year in the cryptocurrency. As the digital token — created in 2013 based off a humorous online meme — surged, he watched the value of his investment cross $1 million.
Despite a recent reversal, it is still worth hundreds of thousands of dollars, according to a screenshot he provided of his trading account. “It is an emotional roller coaster,” said Cardarella, who lives near Boston and founded a software consulting firm.
The rise of bitcoin — a type of cryptocurrency that exists on computers all over the Internet and does not rely on any government to oversee it — has often dismissed as a financial fad for techie speculators.
But this year has seen the number of cryptocurrency explode, minting hordes of newly successful investors drawn by the potential of huge profits, a culture soaked in humor and the encouragement of celebrity billionaires including Elon Musk. Dogecoin, named after the Shiba Inu “doge” meme, is up over 9,000 percent this year, according to Coindesk, a media outlet that tracks cryptocurrency.
Image without a caption
But the wild turns of the crypto market are colliding with intensifying concern from regulators about the risks taken on by ordinary investors and the potential for these largely anonymous digital payment systems to facilitate misconduct.

Last week, the U.S. Securities and Exchange Commission warned investors that bitcoin is a “highly speculative investment,” pointing to “the lack of regulation and potential for fraud or manipulation.”
The cryptocurrencies, which now number nearly 10,000, have been fueled by websites that allow investors to easily trade the investments, as well as stimulus checks that could easily be used to speculate as Americans were stuck at home during the coronavirus pandemic.

Recent days have underscored the extreme volatility of the market and the breathtaking sums trading hands.
Following his May 8 appearance on “Saturday Night Live,” where Musk, who has called himself the “Dogefather,” appeared to disparage the cryptocurrency, Dogecoin tumbled more than 30 percent. Musk followed that performance with another market-moving event, tweeting that his electric-vehicle company Tesla would no longer accept bitcoin as payment, citing its high-energy demands.
Bitcoin, the most valuable digital token, shed about 10 percent, taking many other names along with it. On Sunday, Musk suggested on Twitter that Tesla may have already sold or will sell its bitcoin holdings — sending prices diving.
The whims of a billionaire executive and his wrecking-ball tweets were only part of the story this month. A new cryptocurrency dubbed Internet Computer, which aims to foster open, decentralized versions of social media and enterprise software, debuted to the tune of $90 billion, with its market cap settling near $40 billion on Friday.

Regulators face increasing pressure to set new policy on cryptocurrency not just because of the risks to retail investors, but the broader crypto boom bolstered by premier financial institutions such as JPMorgan Chase and Goldman Sachs advancing plans to offer crypto-based financial products to their clients.
“The more that these tendrils from crypto are weaving their way into the mainstream financial system, the more they can pose a systemic risk,” said Walch of St. Mary’s University. “They cease being their own alternative-world projects — it’s not just those dedicated people anymore.”
And as the Colonial Pipeline ransomware crisis made clear, government officials have yet to resolve a fundamental tension at the heart of bitcoin and other cryptocurrencies.

A couple of years ago, I compared this to the tulip craze that was mentioned in this thread. If you're not familiar with it, you can do your own DD. I'm not sure that's the right analogy right now, but I can see that the crypto craze comes with a lot of potential dangers. It's often used by criminals and since it's unregulated, it can't be traced. Who knows what direction this will ultimately take, but there are many potential dangers with the crypto craze.

The article also mentions that due to the pandemic a lot of Americans used their stimulus checks to buy Bitcoin etc. or that a lot of people felt as if they were left out when they saw their friends making money this way, so they joined the craze. They compare it to some of the meme stocks too. It's all crazy imo and nobody knows where the craziness will lead to in the long run.

 

[Gospel]

Ok, if Bitcoin is a Ponzi scheme, how does one participate in it? I'm trying to figure out what is relevant when it comes to the participation part.

Yeah, like, the only way it benefits earlier investors is the same way the stock market always rewards early investment: their investment increases in perceived value.

The difference though is that the stock market contains stocks of companies that are working. They are generating sales. Paying people. Paying vendors. Their value may be high (may be low) but they are generating concrete activity. They do not rely solely on appreciation. I have some stocks that don't appreciate much at all, only pay dividends. What backs up bitcoin?

What backs up the dollar?

 

[Jimmy Higgins]

The difference though is that the stock market contains stocks of companies that are working. They are generating sales. Paying people. Paying vendors. Their value may be high (may be low) but they are generating concrete activity. They do not rely solely on appreciation. I have some stocks that don't appreciate much at all, only pay dividends. What backs up bitcoin?

What backs up the dollar?

• The US economy
• The US paying its bonds/debt

Again, currency can be susceptible to inflation, deflation, volatility. The US Dollar isn't impervious to these things. The difference is, in the last 50 years, the dollar's value has been relative stable. Bitcoin has only gone periods of less than six months of being "stable".

Crypto-Evangelist: Bitcoin rocks!
Person A: But it is very volatile.
Crypto-Evangelist: So can the US Dollar.
Person A: Well, yes, that is possible, but Bitcoin itself has been very volatile.
Crypto-Evangelist: So can the US Dollar.

Bitcoin has lost around 18% of its value in less than 5 days. If the US dollar did that... oh boy!

That you could make $150,000 in Bitcoin proves it is a failure as a currency. Do you know how much you'd need to invest in the US Dollar's ups and downs to turn that profit?

 

[bilby]

The difference though is that the stock market contains stocks of companies that are working. They are generating sales. Paying people. Paying vendors. Their value may be high (may be low) but they are generating concrete activity. They do not rely solely on appreciation. I have some stocks that don't appreciate much at all, only pay dividends. What backs up bitcoin?

What backs up the dollar?

Taxation.

Nobody's required to have bitcoin in order to pay their taxes. But hundreds of millions of people, and tens of thousands of corporate entities and other organisations, are absolutely required by law to at some point have US dollars to give to the IRS.

No matter what else happens, I can rely on the fact that someone, somewhere, will be legally required to have some US dollars, as long as the United States continues to raise taxes, and to require US dollars in payment of them.

Who is required by law to have bitcoin?