Elixir
Made in America
A government sponsored version of bitcoin, equivocable to bitcoin.
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Is Crypto dying or just dropping for the moment?
- Thread starter Jimmy Higgins
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bilby
Fair dinkum thinkum
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You can buy anything with bitcoin that you could buy with any other foreign currency.
You can't buy potatoes in Idaho or Washington with euros, but that doesn't make the euro valueless or useless.
OK. And are they?
Yes, according to you, they are.
steve_bank
Diabetic retinopathy and poor eyesight. Typos ...
A claimed benefit was transparency and traceability of global trasactions. The idea was it would be impoosible for organized crime to move money around.
That did not work out.
Like many I use a credit card for daily purchasing, and I pay it off every month.
Credit cards and debit cards as well have a degree of fraud protection. If you buy online with crypto and it is bogus you are probably shit out of luck.
As the ecoonomy improves and inflation drops bank CDs and money markets are a generally safe way to get some relief from inflation.
Investing in the stock market in the long run is the best way to make money and beat inflation.
That did not work out.
Like many I use a credit card for daily purchasing, and I pay it off every month.
Credit cards and debit cards as well have a degree of fraud protection. If you buy online with crypto and it is bogus you are probably shit out of luck.
As the ecoonomy improves and inflation drops bank CDs and money markets are a generally safe way to get some relief from inflation.
Investing in the stock market in the long run is the best way to make money and beat inflation.
Jayjay
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I'm not sure what you're talking about.
If a bank gets robbed by Bonnie and Clyde, insurance or the bank covers certain amount of savings in $ or € or other currencies. All I'm saying is that there's no reason why it couldn't work exactly the same way with bitcoin. How the insurance works is immaterial.
Cheerful Charlie
Contributor
One of the problems with bitcoin et al is exchanges and the like. Almost weekly I read about some hack, enbezzlement, or collapse costing millions or more. Virtual currencies draw theives like over ripe bananas draw fruit flies.
Harry Bosch
Contributor
Yea, but in exchange for the FDIC insurance, the banks have to follow rigorous regulations and laws.
marc
Veteran Member
One question I have about crypto currency.
say a bitcoin is worth $1,200 at the moment. I want to buy something with it that costs $159. How is change handled?!? Can you have a fraction of a coin?
say a bitcoin is worth $1,200 at the moment. I want to buy something with it that costs $159. How is change handled?!? Can you have a fraction of a coin?
Jayjay
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Yes. It's just a decimal number and the smallest unit is "satoshi", which is 0.00000001 bitcoin. I suppose the system can be updated to be able to handle even smaller fractions in the future, if bitcoin value becomes ridiculously large.
Due to transaction fees, it's actually really hard to own "one bitcoin". You almost always have something like 1.00497 or 0.99997 in your wallet.
The problems arise when cryptonites try to do things that are usually done by highly regulated institutions. FTX and its uncountable number of subsidiaries tried to be an investment bank and use other people's cryptocurrency as if it were regular money. National banking regulators such as the Federal Reserve and the Bank of England work very hard to keep their currency stable.
Crypto, by its very nature is volatile. A crypto bank can very easily wake up one morning to discover the value of its assets have dropped by double digit percentages. It's all very predictable. The things like European wars, Brexit, and a rise in the price of oil, are what national banks try to anticipate and act accordingly. When the smoke clears, I'm sure we'll find the root cause of all of this is the people in charge simply didn't know what they were doing.
steve_bank
Diabetic retinopathy and poor eyesight. Typos ...
Mining Explained: A Detailed Guide on How Cryptocurrency Mining Works
Most people think of crypto mining simply as a way of creating new coins. Learn More....
freemanlaw.com
Bitcoin Uses More Electricity Than Many Countries. How Is That Possible? (Published 2021)
The most popular cryptocurrency wastes energy by design. Why is that, and could it ever be greener?
It sounds a lot like a pyramid scheme. It is interesting that my Firefox browser says it inhibits crypto mining.
It is also not green. A cmpany wanted to buy a shut down natural gas power plant to power a crypto miming operation.
It appers that as crypti grows the CPU time grows and enrgy demnd grows. It is not a fixed bounded opertion.
People don't trust banks and governments but trust crypto companies with no oversight, transparency, and accountability.
You are better off buying gold and burying it in the back yard.
The first time someone explained bitcoin to me, my first thought was it was either a Ponzi scheme or a Bubble. Now I think crypto is actually both.Mining Explained: A Detailed Guide on How Cryptocurrency Mining Works
Most people think of crypto mining simply as a way of creating new coins. Learn More....Bitcoin Uses More Electricity Than Many Countries. How Is That Possible? (Published 2021)
The most popular cryptocurrency wastes energy by design. Why is that, and could it ever be greener?www.nytimes.com
It sounds a lot like a pyramid scheme. It is interesting that my Firefox browser says it inhibits crypto mining.
It is also not green. A cmpany wanted to buy a shut down natural gas power plant to power a crypto miming operation.
It appers that as crypti grows the CPU time grows and enrgy demnd grows. It is not a fixed bounded opertion.
People don't trust banks and governments but trust crypto companies with no oversight, transparency, and accountability.
You are better off buying gold and burying it in the back yard.
Swammerdami
Squadron Leader
I'm not sure why you didn't understand what I am talking about.
Banks pay premiums to an entity backed by an entity with great financial strength (the same entity, BTW, which prints the Benjamins in which restitution is made). That is how FDIC works.
Bitcoin deposits are not operated by banks — nor by anything else — this is the "beauty" of Bitcoin, at least in the eyes of some beholders.
"How the insurance works is immaterial" ?? Can you at least give us a clue? WHO is paying premiums to WHOM? Is the restitution made in the insured coin? Can you agree that "work exactly the same way" is at best an . . . exaggeration?
Jayjay
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I'm talking about a hypothetical scenario where banks would provide a custodial service to its customers to hold their bitcoin (or other crypto) for them. Basically what all crypto exchanges do already now. (Except that they don't have any insurance, so it's insane to keep your bitcoin in the exchanges for any longer duration of time.)
I'm not sure why you didn't understand what I am talking about.
Banks pay premiums to an entity backed by an entity with great financial strength (the same entity, BTW, which prints the Benjamins in which restitution is made). That is how FDIC works.
Bitcoin deposits are not operated by banks — nor by anything else — this is the "beauty" of Bitcoin, at least in the eyes of some beholders.
"How the insurance works is immaterial" ?? Can you at least give us a clue? WHO is paying premiums to WHOM? Is the restitution made in the insured coin? Can you agree that "work exactly the same way" is at best an . . . exaggeration?
For the customer, it would be just another account, just "bitcoin" as the currency instead of dollar, euro, or yen.
For the bank, it would be just handling digital numbers just like with regular currencies. They'd need to have the actual bitcoin in some cold wallet and need to keep that secure, but that would not be specific to any customer. It's like money in a bank vault.
From insurance point of view, it'd mean that if someone does nick the keys and steals the actual bitcoin, or if there is a fire at and all the keys and their backups gets destroyed, the bank still owes its customers the bitcoin which it now has to buy back at market price. To avoid non-payment in case of bankruptcy, there would need to be enough funds reserved somewhere to do this. Either by the bank itself, or the insurer.
There is nothign fundamentally preventing banks from dealing with bitcoin exactly the same way they do with other currencies, if there was demand for it. Right now it seems banks are hesitant because of the lack of regulation and high volatility.
Swammerdami
Squadron Leader
OK. With FDIC the bank is the money's custodian and the insurEE; insurance is against failure OF THAT BANK. The insuror is a "firm" with unrivaled financial strength.
In your scenario, bank is both custodian AND insurOR. The custodian is guaranteeing his custody is secure. I think custody already comes with such a "guarantee"; the problem is that that guarantee doesn't protect against custodian's bankruptcy.
In your scenario, bank is both custodian AND insurOR. The custodian is guaranteeing his custody is secure. I think custody already comes with such a "guarantee"; the problem is that that guarantee doesn't protect against custodian's bankruptcy.
Swammerdami
Squadron Leader
Considering various security problems, the chance that the ID(s) on the blockchain owned by the custodian are compromised (some enemy has the key) should not be ruled out! Bitcoin reserves might be drained quite quickly by even untalented criminals. Contrast this with. e.g. SWIFT where large illicit transactions are likely to be spotted and stopped. (SWIFT, like blockchain, is a reliable protocol in its own way .)
And anyone who commits to buying Coins at some unknown future price assumes great risk.
And anyone who commits to buying Coins at some unknown future price assumes great risk.
steve_bank
Diabetic retinopathy and poor eyesight. Typos ...
STX took daily user money and invested in risky ventures,. A regulated bank could never do that.
If rthe intent was a decentralized banking system crypto failed. It has a defacto central bank.
If rthe intent was a decentralized banking system crypto failed. It has a defacto central bank.
Jayjay
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Hey, I'm just interested in the tech. I have no clue if crypto is a good investment.
I got some cryptos around somewhere but I take the attitude that it's worth nothing, and maybe will check again in decade or two.
TSwizzle
Let's Go Brandon!
Are you kidding, sarcasm or just a bad memory?
Harry Bosch
Contributor
Steve is correct. The FDIC would not allow a bank to make the crazy investment that FTX did. The comparison to 2009 is faulty. They crypto investments are gone. No recovery. Many of the bad loans from 2009 were paid back (often when the home sold or was foreclosed).Hey, I'm just interested in the tech. I have no clue if crypto is a good investment.
I got some cryptos around somewhere but I take the attitude that it's worth nothing, and maybe will check again in decade or two.