Is Crypto dying or just dropping for the moment?

[Jimmy Higgins]

If we really want true justice we can do away with currency and just make everything free, right?

If you get rid of currency there is still economics.

What and how much gets produced
Who gets what and how much
Who does what and how much does a person get, or does everybody get exactly the same

You can not discuss currency outside of the free market system and how goods, devices, and labor are valued in terms of a currency. Supply and demand.

The value of currency itself floats. A problem we have had with China is they have not in the past allowed its currency to float which can make cost of manufacturing artificiality low. They can fix wages and cost of materials.

I am no expert, but global economics on the scale of today is not trivial and changes can have serious unintended consequnces. Trump's China tariffs for example harmed American farmers more than it did anything to China.

I do not see how going to crypto changes anything. In most systems a crypto currency woud have to be able to float with economic conditions. I think a gloabl currncy with a fixed value woud be a problem.

If each country went crypto as a standard equivalent to paper money then nothing chnanges.

Just because it never has been done does not necessarily mean a better global financial system is not possible.

Of course but crypto currency does nothing. The global economic system as we have it today was not designed, it evolved over time. It is what it is because it works reasonably well most of the time.

Indeed a good point. The field of economics isn't pure science. Our understanding, shifting, modifications are based on trail and error... a lot of error. And our Great Recession which was a regulatory driven failure, still didn't do anything to our economy as drastic as the Great Depression and the reactions of nations to it.

If anybody has an idea for a different system on a global scale that works better in terms of some definition of justice or fatness that works with humans and nations as they are, I am all ears.

On paper Russian ad Chinese communism was fair and just.

Russian communism never existed on paper as far as I'm aware. I don't think any of those guys were smart enough to actually put forth an actual proposal.

 

[Loren Pechtel]

The value of currency itself floats.

Not sure if you mean this is how it is today or if you mean this is how it should be. If you mean this is how it is today, I agree with you. But if you mean this is in anyway desirable, I very much disagree. One of the biggest goals of a currency is stability. In the perfect economic world, the global reserve currency would never inflate or deflate and it would always remain perfectly stable. And in the beginnings of the UK reserve currency and US reserve currency this was indeed the case. Business producers and consumers alike would always know what the paper in their pocket was worth and they would count on what their savings would buy exactly that value in the future. Such a perfectly stable currency would greatly reduce pricing errors and mal-investments that we routinely see today in the energy, housing, and auto markets.

In the perfect economic world, there would always be a small amount of inflation, to reflect the fact that any sane person would rather have $20 today than $20 next week.

First you have to have a dead stable unit of exchange. After that you can talk about setting your interest rate.

I didn't say a word about interest rates. A dead stable currency implies that $20 today is exactly as valuable as $20 next week, or next year.

But everyone values money today over money later. So $20 next week is worth less than $20 today, unless your money continually increases in value.

Therefore (ceteris paribus) you can only have a stable currency if you also have deflation.

Nope. You're not proving your point. A currency is stable if the $ buys the same amount of stuff every year.

 

[Jayjay]

The value of currency itself floats.

Not sure if you mean this is how it is today or if you mean this is how it should be. If you mean this is how it is today, I agree with you. But if you mean this is in anyway desirable, I very much disagree. One of the biggest goals of a currency is stability. In the perfect economic world, the global reserve currency would never inflate or deflate and it would always remain perfectly stable. And in the beginnings of the UK reserve currency and US reserve currency this was indeed the case. Business producers and consumers alike would always know what the paper in their pocket was worth and they would count on what their savings would buy exactly that value in the future. Such a perfectly stable currency would greatly reduce pricing errors and mal-investments that we routinely see today in the energy, housing, and auto markets.

In the perfect economic world, there would always be a small amount of inflation, to reflect the fact that any sane person would rather have $20 today than $20 next week.

First you have to have a dead stable unit of exchange. After that you can talk about setting your interest rate.

I didn't say a word about interest rates. A dead stable currency implies that $20 today is exactly as valuable as $20 next week, or next year.

But everyone values money today over money later. So $20 next week is worth less than $20 today, unless your money continually increases in value.

Therefore (ceteris paribus) you can only have a stable currency if you also have deflation.

Nope. You're not proving your point. A currency is stable if the $ buys the same amount of stuff every year.

No currency is stable by that metric, because prices of goods also change relative to each other. Your future dollar is worth different amount depending on what you intend to use it for.

 

[Jarhyn]

The value of currency itself floats.

Not sure if you mean this is how it is today or if you mean this is how it should be. If you mean this is how it is today, I agree with you. But if you mean this is in anyway desirable, I very much disagree. One of the biggest goals of a currency is stability. In the perfect economic world, the global reserve currency would never inflate or deflate and it would always remain perfectly stable. And in the beginnings of the UK reserve currency and US reserve currency this was indeed the case. Business producers and consumers alike would always know what the paper in their pocket was worth and they would count on what their savings would buy exactly that value in the future. Such a perfectly stable currency would greatly reduce pricing errors and mal-investments that we routinely see today in the energy, housing, and auto markets.

In the perfect economic world, there would always be a small amount of inflation, to reflect the fact that any sane person would rather have $20 today than $20 next week.

First you have to have a dead stable unit of exchange. After that you can talk about setting your interest rate.

I didn't say a word about interest rates. A dead stable currency implies that $20 today is exactly as valuable as $20 next week, or next year.

But everyone values money today over money later. So $20 next week is worth less than $20 today, unless your money continually increases in value.

Therefore (ceteris paribus) you can only have a stable currency if you also have deflation.

Nope. You're not proving your point. A currency is stable if the $ buys the same amount of stuff every year.

No currency is stable by that metric, because prices of goods also change relative to each other. Your future dollar is worth different amount depending on what you intend to use it for.

Not to mention that stability of that kind chokes the economy: the closer to "dead" stability, the more it drives speculation on the currency itself.

But keeping the currency inflationary, it makes for a situation where holding too much is a losing game.

The problem, of course, is that the truly wealthy invest in things that don't lose value for sitting on them.

The problem, again, is that ownership of estate, currency, etc, is tight.

If our system allowed for these resources to accrete over time from the holders to the producers, the whole situation would resolve itself, maybe over the course of 5-10 years.

 

[Loren Pechtel]

Not to mention that stability of that kind chokes the economy: the closer to "dead" stability, the more it drives speculation on the currency itself.

But keeping the currency inflationary, it makes for a situation where holding too much is a losing game.

The problem, of course, is that the truly wealthy invest in things that don't lose value for sitting on them.

The problem, again, is that ownership of estate, currency, etc, is tight.

If our system allowed for these resources to accrete over time from the holders to the producers, the whole situation would resolve itself, maybe over the course of 5-10 years.

Inflation hurts the people who have dollars or dollar-denominated debt instruments. The average person and retirees, not the wealthy.

 

[Jarhyn]

Not to mention that stability of that kind chokes the economy: the closer to "dead" stability, the more it drives speculation on the currency itself.

But keeping the currency inflationary, it makes for a situation where holding too much is a losing game.

The problem, of course, is that the truly wealthy invest in things that don't lose value for sitting on them.

The problem, again, is that ownership of estate, currency, etc, is tight.

If our system allowed for these resources to accrete over time from the holders to the producers, the whole situation would resolve itself, maybe over the course of 5-10 years.

Inflation hurts the people who have dollars or dollar-denominated debt instruments. The average person and retirees, not the wealthy.

That's why I would apply equally leaky functions to stock operations: on sale or dividend, lose a percentage of each stock towards the worker share for that company. It would create a granularity to stocks, essentially Satoshi much like cryptocurrencies have and then if someone wants to sell as a worker, they can sell out their share, or accrete it as a voting bloc.

I've brought this up before. It would have to be a percentage rate set by the Fed on all companies traded and held by residents as part of their declared income.

I'm not exactly sure the mechanics of it, and it's not like I expect it to happen or become a popular idea in my lifetime. I'm still going to consider it and try to figure good mechanics of such out.

Ownership cannot be allowed to exist in perpetuity.

 

[Jayjay]

Not to mention that stability of that kind chokes the economy: the closer to "dead" stability, the more it drives speculation on the currency itself.

But keeping the currency inflationary, it makes for a situation where holding too much is a losing game.

The problem, of course, is that the truly wealthy invest in things that don't lose value for sitting on them.

The problem, again, is that ownership of estate, currency, etc, is tight.

If our system allowed for these resources to accrete over time from the holders to the producers, the whole situation would resolve itself, maybe over the course of 5-10 years.

Inflation hurts the people who have dollars or dollar-denominated debt instruments. The average person and retirees, not the wealthy.

That's why I would apply equally leaky functions to stock operations: on sale or dividend, lose a percentage of each stock towards the worker share for that company. It would create a granularity to stocks, essentially Satoshi much like cryptocurrencies have and then if someone wants to sell as a worker, they can sell out their share, or accrete it as a voting bloc.

Or you could create new worker stocks out of thin air (much like cryptocurrency mining) at each transaction. That would dilute the value of all other stocks in circulation though.

 

[Jarhyn]

Not to mention that stability of that kind chokes the economy: the closer to "dead" stability, the more it drives speculation on the currency itself.

But keeping the currency inflationary, it makes for a situation where holding too much is a losing game.

The problem, of course, is that the truly wealthy invest in things that don't lose value for sitting on them.

The problem, again, is that ownership of estate, currency, etc, is tight.

If our system allowed for these resources to accrete over time from the holders to the producers, the whole situation would resolve itself, maybe over the course of 5-10 years.

Inflation hurts the people who have dollars or dollar-denominated debt instruments. The average person and retirees, not the wealthy.

That's why I would apply equally leaky functions to stock operations: on sale or dividend, lose a percentage of each stock towards the worker share for that company. It would create a granularity to stocks, essentially Satoshi much like cryptocurrencies have and then if someone wants to sell as a worker, they can sell out their share, or accrete it as a voting bloc.

Or you could create new worker stocks out of thin air (much like cryptocurrency mining) at each transaction. That would dilute the value of all other stocks in circulation though.

Yeah, essentially there's no entropy at play as regards leverage in financial terms.

The realization came to me one day when I made a bad decision in an MMO that had major losses on certain kinds of character death (EVE online).

Someone leveraged me into an extortion where they were able to kill my character which would have cost me a large amount of progression, and then after the extortion, did not resolve the situation as they had promised.

This led to the realization that bad actors, if there is nothing to force the release of leverage, will not relinquish it no matter what they extort with it.

Legal markets need the means to decay leverage, because otherwise, such leverage allows infinite extortion. Perhaps that was even the point of the design of ownership, laid down as it were by people who had the leverage and wanted to "keep a good thing going".

The thing is, it's not a good thing. It's the shape of a boot stomping on a human face for all eternity and a lot of people just haven't seen it yet.

 

[steve_bank]

Inflation is a part of the system
Wages growing faster than inflation is a growing economy.
Wages growing lower than inflation is a recession.

Inflation is a continuous dynamic interaction of supply & demand, increasing supply costs, and wage increases.

There is entropy. If you suiff yiur money in a mattress it looses value. Investing in a growing economy cancels inflation.

Currency is irrelevant. What matters is how much you have to pay and how many hours you have to work locally to buy something.

Big Mac Index - Wikipedia

en.wikipedia.org

The Big Mac index was introduced in The Economist in September 1986 by Pam Woodall[2] as a semi-humorous illustration of PPP and has been published by that paper annually since then. Although the Big Mac Index was not intended to be a legitimate tool for exchange rate evaluation, it is now globally recognised and featured in many academic textbooks and reports.[3] The index also gave rise to the word burgernomics.[4]

The theory underpinning the Big Mac index stems from the concept of PPP, which states that the exchange rate between two currencies should equalize the prices charged for an identical basket of goods.[5] However, in reality, sourcing an identical basket of goods in every country provides a complex challenge. According to the Organisation for Economic Co-operation and Development (OECD), over “3,000 consumer goods and services, 30 occupations in government, 200 types of equipment goods and about 15 construction projects” are included in the current PPP calculations.[6] In effort to simplify this important economic concept, The Economist proposed that a single McDonald’s Big Mac could be used instead of a basket of goods. A McDonald’s Big Mac was chosen because of the prevalence of the fast food chain worldwide, and because the sandwich remains largely the same across all countries.[7] Although a single sandwich may seem overly simplistic for PPP theory, the price of a Big Mac is derived from the culmination of “many local economic factors, such as the price of the ingredients, local wages, or how much it costs to put up billboards and buy TV ads”.[8] As a result, the Big Mac index provides a “reasonable measure of real-world purchasing power”.[8]

 

[Derec]

That's why I would apply equally leaky functions to stock operations: on sale or dividend, lose a percentage of each stock towards the worker share for that company. It would create a granularity to stocks, essentially Satoshi much like cryptocurrencies have and then if someone wants to sell as a worker, they can sell out their share, or accrete it as a voting bloc.

Sounds less like Satoshi and more like penny shaving from Office Space, but with stocks.

 

[Derec]

(contd.)

I'm not exactly sure the mechanics of it, and it's not like I expect it to happen or become a popular idea in my lifetime. I'm still going to consider it and try to figure good mechanics of such out.

It would either involve a 3.5" floppy disk ...

... or Richard Pryor typing in "Overide[sic] all security"

Ownership cannot be allowed to exist in perpetuity.

Why the fuck not?
Now, if a company wants to reward their employees with this stock shaving scheme, they should be free to do so. But it should not be government mandated.

 

[Jarhyn]

@Derec nice dishonest quote, asking for a reasoning when you had already cut the reasons offered

Legal markets need the means to decay leverage, because otherwise, such leverage allows infinite extortion.

 

[Jayjay]

... or Richard Pryor typing in "Overide[sic] all security"

That guy delivering the mail is going to have serious back problems if he keeps it up. Get the man a taller cart. If this is how fictional corporations treat their fictional employees, I'm all for "overiding security" and redistributing their obscene profits to the common man.

 

[Bronzeage]

I never got why gold has value other than it’s shiny so people like it. It has no utility. Bitcoin, near as I can figure has no utility either. I tried to find why some of the others might have value based on some utility and end up reading about their blockchain. The blockchain looks to have some utility, like Ethereum but the coin associated with it? I can’t make the connection. Ripple has a coin that has a definable utility but other than that, I don’t know. I haven’t read them all and have no intention of doing so. I suppose I’m just missing the connection between blockchain and it’s associated coin.

Gold became the gold standard of portable wealth because it's fairly rare and most people are confident of their ability to tell real gold from counterfeit. The inherent problem with a gold based economy is it's difficult to move beyond subsistence living. If you produce a surplus of wheat, it will spoil before you can eat it all. You have to sell, or lose it.

That's great if someone has gold, but the supply of wheat can easily out grow the gold supply. In preindustrial days, most things of immediate utility had a shelf life. I'll trade wheat for eggs, but only as many eggs as I can eat before they spoil. It's crazy to limit the increase in wealth created by a good harvest by the availability of a rock. The modern economy is based on easy transfer of wealth and more importantly, loaning your surplus wealth to someone else. Credit banking is essentially a magic trick which creates money. If we're limited to how many rocks we own, that's not possible.

What puzzles me about bitcoin and the like is, the original premise was to create a currency which could not be manipulated by governments and international banks. What they created was a currency which is dependent on an international infrastructure which is controlled and maintained by governments.

Whatever temptation to buy bitcoin I may have had evaporated when I saw a bitcoin terminal in my local convenience store. I can use this machine to buy bitcoin, or transform bitcoin into dollars and deposit them in my bank. All I need are my account numbers and passwords, which I will happily type into the keyboard on the big yellow box next to the Slurpee machine.

 

[Jarhyn]

I never got why gold has value other than it’s shiny so people like it. It has no utility. Bitcoin, near as I can figure has no utility either. I tried to find why some of the others might have value based on some utility and end up reading about their blockchain. The blockchain looks to have some utility, like Ethereum but the coin associated with it? I can’t make the connection. Ripple has a coin that has a definable utility but other than that, I don’t know. I haven’t read them all and have no intention of doing so. I suppose I’m just missing the connection between blockchain and it’s associated coin.

Gold became the gold standard of portable wealth because it's fairly rare and most people are confident of their ability to tell real gold from counterfeit. The inherent problem with a gold based economy is it's difficult to move beyond subsistence living. If you produce a surplus of wheat, it will spoil before you can eat it all. You have to sell, or lose it.

That's great if someone has gold, but the supply of wheat can easily out grow the gold supply. In preindustrial days, most things of immediate utility had a shelf life. I'll trade wheat for eggs, but only as many eggs as I can eat before they spoil. It's crazy to limit the increase in wealth created by a good harvest by the availability of a rock. The modern economy is based on easy transfer of wealth and more importantly, loaning your surplus wealth to someone else. Credit banking is essentially a magic trick which creates money. If we're limited to how many rocks we own, that's not possible.

What puzzles me about bitcoin and the like is, the original premise was to create a currency which could not be manipulated by governments and international banks. What they created was a currency which is dependent on an international infrastructure which is controlled and maintained by governments.

Whatever temptation to buy bitcoin I may have had evaporated when I saw a bitcoin terminal in my local convenience store. I can use this machine to buy bitcoin, or transform bitcoin into dollars and deposit them in my bank. All I need are my account numbers and passwords, which I will happily type into the keyboard on the big yellow box next to the Slurpee machine.

To be fair, the way those work is that you make an ATM transaction and they send it to your Bitcoin wallet address.

The wallet address you send it to SHOULD just be a number, no password required. It is... Well, I'm not going to say impossible but "not plausible" to reverse engineer anything from a wallet address.

I'm unsure how the reverse would function.

 

[Bronzeage]

I never got why gold has value other than it’s shiny so people like it. It has no utility. Bitcoin, near as I can figure has no utility either. I tried to find why some of the others might have value based on some utility and end up reading about their blockchain. The blockchain looks to have some utility, like Ethereum but the coin associated with it? I can’t make the connection. Ripple has a coin that has a definable utility but other than that, I don’t know. I haven’t read them all and have no intention of doing so. I suppose I’m just missing the connection between blockchain and it’s associated coin.

Gold became the gold standard of portable wealth because it's fairly rare and most people are confident of their ability to tell real gold from counterfeit. The inherent problem with a gold based economy is it's difficult to move beyond subsistence living. If you produce a surplus of wheat, it will spoil before you can eat it all. You have to sell, or lose it.

That's great if someone has gold, but the supply of wheat can easily out grow the gold supply. In preindustrial days, most things of immediate utility had a shelf life. I'll trade wheat for eggs, but only as many eggs as I can eat before they spoil. It's crazy to limit the increase in wealth created by a good harvest by the availability of a rock. The modern economy is based on easy transfer of wealth and more importantly, loaning your surplus wealth to someone else. Credit banking is essentially a magic trick which creates money. If we're limited to how many rocks we own, that's not possible.

What puzzles me about bitcoin and the like is, the original premise was to create a currency which could not be manipulated by governments and international banks. What they created was a currency which is dependent on an international infrastructure which is controlled and maintained by governments.

Whatever temptation to buy bitcoin I may have had evaporated when I saw a bitcoin terminal in my local convenience store. I can use this machine to buy bitcoin, or transform bitcoin into dollars and deposit them in my bank. All I need are my account numbers and passwords, which I will happily type into the keyboard on the big yellow box next to the Slurpee machine.

To be fair, the way those work is that you make an ATM transaction and they send it to your Bitcoin wallet address.

The wallet address you send it to SHOULD just be a number, no password required. It is... Well, I'm not going to say impossible but "not plausible" to reverse engineer anything from a wallet address.

I'm unsure how the reverse would function.

I wonder how often bitcoins are sent to someone else's wallet.

 

[steve_bank]

In the news crypto fraud is in full swing. Criminals have figured out how to launder crypto currency so it can't be traced.

 

[Jarhyn]

In the news crypto fraud is in full swing. Criminals have figured out how to launder crypto currency so it can't be traced.

Dude, all it takes is an atomic swap through XMR, then doing all operations in XMR, then doing an atomic swap back to BTC.

I never got why gold has value other than it’s shiny so people like it. It has no utility. Bitcoin, near as I can figure has no utility either. I tried to find why some of the others might have value based on some utility and end up reading about their blockchain. The blockchain looks to have some utility, like Ethereum but the coin associated with it? I can’t make the connection. Ripple has a coin that has a definable utility but other than that, I don’t know. I haven’t read them all and have no intention of doing so. I suppose I’m just missing the connection between blockchain and it’s associated coin.

Gold became the gold standard of portable wealth because it's fairly rare and most people are confident of their ability to tell real gold from counterfeit. The inherent problem with a gold based economy is it's difficult to move beyond subsistence living. If you produce a surplus of wheat, it will spoil before you can eat it all. You have to sell, or lose it.

That's great if someone has gold, but the supply of wheat can easily out grow the gold supply. In preindustrial days, most things of immediate utility had a shelf life. I'll trade wheat for eggs, but only as many eggs as I can eat before they spoil. It's crazy to limit the increase in wealth created by a good harvest by the availability of a rock. The modern economy is based on easy transfer of wealth and more importantly, loaning your surplus wealth to someone else. Credit banking is essentially a magic trick which creates money. If we're limited to how many rocks we own, that's not possible.

What puzzles me about bitcoin and the like is, the original premise was to create a currency which could not be manipulated by governments and international banks. What they created was a currency which is dependent on an international infrastructure which is controlled and maintained by governments.

Whatever temptation to buy bitcoin I may have had evaporated when I saw a bitcoin terminal in my local convenience store. I can use this machine to buy bitcoin, or transform bitcoin into dollars and deposit them in my bank. All I need are my account numbers and passwords, which I will happily type into the keyboard on the big yellow box next to the Slurpee machine.

To be fair, the way those work is that you make an ATM transaction and they send it to your Bitcoin wallet address.

The wallet address you send it to SHOULD just be a number, no password required. It is... Well, I'm not going to say impossible but "not plausible" to reverse engineer anything from a wallet address.

I'm unsure how the reverse would function.

I wonder how often bitcoins are sent to someone else's wallet.

Almost never. Bitcoin wallet have a certain pattern to how they exist, so invalid addresses will not transact.

 

[lpetrich]

Crypto money laundering rises 30%, report finds - BBC News - 2022 Jan 26

Criminals laundered $8.6bn (£6.4bn) of cryptocurrency in 2021, up by 30% from the previous year, a report by blockchain data company Chainalysis says.

Chainalysis says it tracks cryptocurrency wallets controlled by criminals such as ransomware attackers, malware operators, scammers, human traffickers, dark net market operators, and terrorist groups.

By following flows of cryptocurrency from addresses associated with criminal activity, Chainalysis was able to estimate the amount "laundered".

It says most cryptocurrency is laundered through a limited number of services - for example, particular exchanges favoured by criminals - and shutting these could have a big impact.

 

[Jarhyn]

Crypto money laundering rises 30%, report finds - BBC News - 2022 Jan 26

Criminals laundered $8.6bn (£6.4bn) of cryptocurrency in 2021, up by 30% from the previous year, a report by blockchain data company Chainalysis says.

Chainalysis says it tracks cryptocurrency wallets controlled by criminals such as ransomware attackers, malware operators, scammers, human traffickers, dark net market operators, and terrorist groups.

By following flows of cryptocurrency from addresses associated with criminal activity, Chainalysis was able to estimate the amount "laundered".

It says most cryptocurrency is laundered through a limited number of services - for example, particular exchanges favoured by criminals - and shutting these could have a big impact.

The issue is that at this point, you can't shut down the exchanges because at this point, it's all going to be atomic swaps, of bitcoins to XMR. You would have to shut down a peer network to do it and good luck at doing that!

From an observer standpoint on the Bitcoin blockchain, it is all just transfer into and out of the XMR black box network as a constant and uninterruptible stream of exchange with an unobservable middle.