Is Crypto dying or just dropping for the moment?

[T.G.G. Moogly]

So Colonial Pipeline paid ransom, at least bitcoins are useful for that

Maybe we should call it RansomCoin.

 

[funinspace]

Though slipping more off topic...

All money has purely imagined value; what makes it real is its acceptance by social convention and powerful economic institutions, not any inherent property of the medium. What Cryptocurrency has crucially failed to do is gain acceptance as anything other than the identity marker of a certain very narrow societal subgrouping, a demographic slice that is wealthy but largely inconsequential to the basic economic processes that move the world along.

Of course, but the dollar is backed by the US government. As long as there is trust in the government, the dollar has value. What exactly backs Bitcoin? Everything humans make up are based on myths.

The dollar is valuable not because of US government backing, but because the US government requires that you use dollars to pay your taxes, and won't let you pay in anything else (and certainly won't let you not pay at all).

It seems to me that it must be more complicated than just the fact that the US government requires Americans to pay taxes in dollars. I expect that Turkey (one modern example) requires its people to pay in their Lira as well. Yet, their currency relative to the US dollar and the value of imports, has not done that well.

https://en.wikipedia.org/wiki/Turkish_lira

After periods of the lira pegged to the British pound and the French franc, a peg of 2.8 Turkish lira = 1 U.S. dollar was adopted in 1946 and maintained until 1960, when the currency was devalued to 9 Turkish lira = 1 dollar. From 1970, a series of hard, then soft pegs to the dollar operated as the value of the Turkish lira began to fall.

The following are based on yearly averages:

1960s – 1 U.S. dollar = 9 Turkish lira
1970 – 1 U.S. dollar = 11.3 Turkish lira
1975 – 1 U.S. dollar = 14.4 Turkish lira
1980 – 1 U.S. dollar = 80 Turkish lira
1985 – 1 U.S. dollar = 500 Turkish lira
1990 – 1 U.S. dollar = 2,500 Turkish lira
1995 – 1 U.S. dollar = 43,000 Turkish lira
2000 – 1 U.S. dollar = 620,000 Turkish lira
2001 - 1 U.S. dollar = 1,250,000 Turkish lira
2005 – 1 U.S. dollar = 1,350,000 Turkish lira
<snip>
In December 2003, the Grand National Assembly of Turkey passed a law that allowed for redenomination by the removal of six zeros from the Turkish lira, and the creation of a new currency.

Since the 2003 reset, the Lira has again fallen from about 1.3/1 to 9.x/1 today.

 

[Jarhyn]

So Colonial Pipeline paid ransom, at least bitcoins are useful for that

Maybe we should call it RansomCoin.

I keep pointing out that in both in frequency AND volume of transaction, the aggregate "illegal" uses of Bitcoin far outstrip legal non-speculative applications. More, I would call it "crimebux".

 

[TSwizzle]

I never got why gold has value other than it’s shiny so people like it.

I think gold was widely used in electronics back in the day. I don't know if gold is still used significantly that way. I remember years ago a company I worked for was getting rid of a Honeywell mainframe which was huge and the scrap guy told me he was taking the circuit boards to get at the gold.

 

[ZiprHead]

I never got why gold has value other than it’s shiny so people like it.

I think gold was widely used in electronics back in the day. I don't know if gold is still used significantly that way. I remember years ago a company I worked for was getting rid of a Honeywell mainframe which was huge and the scrap guy told me he was taking the circuit boards to get at the gold.

Yup, gold is an excellent electricity conductor. High end sound equipment uses gold plated rca connectors. Frankly, I think plating over the steel does little to nothing because the current still has to go through far more steel than gold. It's like the myth of the high end Monster cables.

 

[bilby]

Though slipping more off topic...

The dollar is valuable not because of US government backing, but because the US government requires that you use dollars to pay your taxes, and won't let you pay in anything else (and certainly won't let you not pay at all).

It seems to me that it must be more complicated than just the fact that the US government requires Americans to pay taxes in dollars. I expect that Turkey (one modern example) requires its people to pay in their Lira as well. Yet, their currency relative to the US dollar and the value of imports, has not done that well.

https://en.wikipedia.org/wiki/Turkish_lira

After periods of the lira pegged to the British pound and the French franc, a peg of 2.8 Turkish lira = 1 U.S. dollar was adopted in 1946 and maintained until 1960, when the currency was devalued to 9 Turkish lira = 1 dollar. From 1970, a series of hard, then soft pegs to the dollar operated as the value of the Turkish lira began to fall.

The following are based on yearly averages:

1960s – 1 U.S. dollar = 9 Turkish lira
1970 – 1 U.S. dollar = 11.3 Turkish lira
1975 – 1 U.S. dollar = 14.4 Turkish lira
1980 – 1 U.S. dollar = 80 Turkish lira
1985 – 1 U.S. dollar = 500 Turkish lira
1990 – 1 U.S. dollar = 2,500 Turkish lira
1995 – 1 U.S. dollar = 43,000 Turkish lira
2000 – 1 U.S. dollar = 620,000 Turkish lira
2001 - 1 U.S. dollar = 1,250,000 Turkish lira
2005 – 1 U.S. dollar = 1,350,000 Turkish lira
<snip>
In December 2003, the Grand National Assembly of Turkey passed a law that allowed for redenomination by the removal of six zeros from the Turkish lira, and the creation of a new currency.

Since the 2003 reset, the Lira has again fallen from about 1.3/1 to 9.x/1 today.

When taxes are insufficient to mop up the excess cash created by government spending, the result is inflation. The Turkish government needs to tax more, or spend less, or get their economy to grow fast enough to soak up the extra Lira that they're generating.

It seriously doesn't help that a lot of the cash Turkey creates is spent unproductively - on military hardware imported from other countries, which does nothing to grow the Turkish economy. So they're creating lots of cash that just reduces the value of the existing cash. If they instead spent it on infrastructure that helped Turkish people become more productive, then the Lira wouldn't inflate so badly.

Spending that money on infrastructure would be a much less inflationary way to go; Or developing their own advanced weapons industries, so the value stays in their economy, rather than being handed to foreigners.

The USA has the opposite situation. Foreigners need US$ so they can buy stuff that only America (and a handful of other nations) has for sale. Boeing and Lockheed, and their US employees, can't pay their taxes in Turkish Lira.

And, of course, the Turkish economy is much smaller that the US economy, so there's less inertia - small influences have bigger effects in a smaller economy.

 

[bilby]

I never got why gold has value other than it’s shiny so people like it.

I think gold was widely used in electronics back in the day. I don't know if gold is still used significantly that way. I remember years ago a company I worked for was getting rid of a Honeywell mainframe which was huge and the scrap guy told me he was taking the circuit boards to get at the gold.

Yup, gold is an excellent electricity conductor. High end sound equipment uses gold plated rca connectors. Frankly, I think plating over the steel does little to nothing because the current still has to go through far more steel than gold. It's like the myth of the high end Monster cables.

Electrical connectors and optical coatings are both trivial uses of gold, compared to jewellery; And vastly more refined gold is sitting in storage than is used for all of these applications combined.

 

[barbos]

I never got why gold has value other than it’s shiny so people like it.

I think gold was widely used in electronics back in the day. I don't know if gold is still used significantly that way. I remember years ago a company I worked for was getting rid of a Honeywell mainframe which was huge and the scrap guy told me he was taking the circuit boards to get at the gold.

Yup, gold is an excellent electricity conductor. High end sound equipment uses gold plated rca connectors. Frankly, I think plating over the steel does little to nothing because the current still has to go through far more steel than gold. It's like the myth of the high end Monster cables.

gold is used in electronics because its chemically inert and does not react much with anything.

 

[Artemus]

I never got why gold has value other than it’s shiny so people like it.

I think gold was widely used in electronics back in the day. I don't know if gold is still used significantly that way. I remember years ago a company I worked for was getting rid of a Honeywell mainframe which was huge and the scrap guy told me he was taking the circuit boards to get at the gold.

Yup, gold is an excellent electricity conductor. High end sound equipment uses gold plated rca connectors. Frankly, I think plating over the steel does little to nothing because the current still has to go through far more steel than gold. It's like the myth of the high end Monster cables.

Copper is actually a better conductor than gold. (Silver is best.) The advantage of gold plating on connectors is that is does not oxidize. Back in the day I "fixed" a number of stereos by rotating the RCA plugs on the sockets to scrape off the corrosion that had built up.

The suggestion that the material a speaker wire (or its insulation) of sufficiently low resistance is made of affects the sound is one of the more ridiculous claims by the "high-end" audio charlatans. ($10,000 for a 2 m power cord is slightly more ludicrous, but only slightly.)

 

[ZiprHead]

Yup, gold is an excellent electricity conductor. High end sound equipment uses gold plated rca connectors. Frankly, I think plating over the steel does little to nothing because the current still has to go through far more steel than gold. It's like the myth of the high end Monster cables.

Copper is actually a better conductor than gold. (Silver is best.) The advantage of gold plating on connectors is that is does not oxidize. Back in the day I "fixed" a number of stereos by rotating the RCA plugs on the sockets to scrape off the corrosion that had built up.

The suggestion that the material a speaker wire (or its insulation) of sufficiently low resistance is made of affects the sound is one of the more ridiculous claims by the "high-end" audio charlatans. ($10,000 for a 2 m power cord is slightly more ludicrous, but only slightly.)

Copper prices are going through the roof. Was just going to buy a 25 ft 10/3 + ground to wire the upstairs laundry. 85 bucks. Hoping my BiL, the electrician, can get me some.

 

[TomC]

Copper prices are going through the roof. Was just going to buy a 25 ft 10/3 + ground to wire the upstairs laundry. 85 bucks. Hoping my BiL, the electrician, can get me some.

A bit of a derail, but...

This reminds me of a point made by a buddy of mine, years ago. He was in home building/remodeling/improvement business. Americans cannot maintain their standard of living in a global economy. If everyone expected this standard, there wouldn't be enough copper for all the wiring and refrigeration.
Tom

 

[Swammerdami]

These arguments about gold become silly. Note the following:

• The price of gold is determined by supply and demand. Miners are happy to mine as much as they can economically at the market price. Platinum, used as jewelry but not bullion, is also very expensive, but almost half the world's production of platinum is used for catalytic converters. To follow some "anti-gold" arguments, one might guess that platinum is used in these converters as some sort of expensive status symbol!
• Gold has a number of very useful properties. If it were as cheap as silver it would have lots of applications.
• True, about one-fifth of the world's gold stock is stored "uselessly" in vaults; but central banks continue to be net buyers of gold. IIUC they are buying at an accelerating and record-setting pace. Banks also hold foreign digital currencies; is it "useful"? Yes, it can be used in swaps, but so can gold.

Can we please find a middle ground? Is should be possible to admit that, yes, gold does have special intrinsic worth without being branded a pimp for YouTube gold-bug channels.

gold is used in electronics because its chemically inert and does not react much with anything.

Chemical inertness and high conductivity may be the most important reasons to use gold in electrical contacts, but they aren't the only reasons. Gold is very durable, very ductile, and is the most malleable of all metals. These properties also make gold very useful in dentistry.

Gold leaf has certain unique applications because it can be manufactured to be less than 0.1 microns thick; contrast this with aluminum foil (30 microns).


Although gold resists most corrosion, it does dissolve in Aqua regia (3 parts hydrochloric acid, and 1 part nitric acid).
Historical note: Two German scientists (Max von Laue and James Franck) fearful of the Nazis entrusted their Nobel Prize Medals to Neils Bohr; he kept them in his Institute in Copenhagen. When the Germans marched into Denmark, Bohr — who might have quickly accepted the U.S. offer of asylum — instead gave priority to emergency duties, including the safe-guarding of these Nobel Prizes (whose export to Denmark was illegal under Nazi law). The Medals were dissolved in aqua regia while German soldiers were marching outside the Institute. The solutions were kept in ordinary jars in a laboratory, even while German troops occupied the Institute. After the War, the Nobel Foundation recast these Medals from their original gold.

 

[Loren Pechtel]

I never got why gold has value other than it’s shiny so people like it.

I think gold was widely used in electronics back in the day. I don't know if gold is still used significantly that way. I remember years ago a company I worked for was getting rid of a Honeywell mainframe which was huge and the scrap guy told me he was taking the circuit boards to get at the gold.

Yup, gold is an excellent electricity conductor. High end sound equipment uses gold plated rca connectors. Frankly, I think plating over the steel does little to nothing because the current still has to go through far more steel than gold. It's like the myth of the high end Monster cables.

Good computer cables are also gold plated. It's not nonsense, the point is to avoid oxidation. Anything economic to make the wires out of will oxidize and eventually that will cause a problem with the connection. Digital signals are more resistant to this than analog but it's still relevant. Gold does not oxidize when exposed to oxygen, though. This means the connection will be just as good down the road as it is when the cable is new. Ever have to wiggle a connector to get it work properly? It almost certainly wasn't a gold-plated connector.

 

[none]

Yup, gold is an excellent electricity conductor. High end sound equipment uses gold plated rca connectors. Frankly, I think plating over the steel does little to nothing because the current still has to go through far more steel than gold. It's like the myth of the high end Monster cables.

Good computer cables are also gold plated. It's not nonsense, the point is to avoid oxidation. Anything economic to make the wires out of will oxidize and eventually that will cause a problem with the connection. Digital signals are more resistant to this than analog but it's still relevant. Gold does not oxidize when exposed to oxygen, though. This means the connection will be just as good down the road as it is when the cable is new. Ever have to wiggle a connector to get it work properly? It almost certainly wasn't a gold-plated connector.

and bestbuy is 9 miles away, hope the "fuel" cost goes down...

 

[TV and credit cards]

Yup, gold is an excellent electricity conductor. High end sound equipment uses gold plated rca connectors. Frankly, I think plating over the steel does little to nothing because the current still has to go through far more steel than gold. It's like the myth of the high end Monster cables.

Good computer cables are also gold plated. It's not nonsense, the point is to avoid oxidation. Anything economic to make the wires out of will oxidize and eventually that will cause a problem with the connection. Digital signals are more resistant to this than analog but it's still relevant. Gold does not oxidize when exposed to oxygen, though. This means the connection will be just as good down the road as it is when the cable is new. Ever have to wiggle a connector to get it work properly? It almost certainly wasn't a gold-plated connector.

And all this accounts for less than 8% of the world’s demand for gold. Though I suppose it would have more utility if nearly 80% wasn’t treated as just so much shiny stuff to hold on to. If the value was proportional to its utility.
I guess it does have a leg up on Bitcoin, assuming we discount the utility of criminal activity.

 

[Jarhyn]

Yup, gold is an excellent electricity conductor. High end sound equipment uses gold plated rca connectors. Frankly, I think plating over the steel does little to nothing because the current still has to go through far more steel than gold. It's like the myth of the high end Monster cables.

Good computer cables are also gold plated. It's not nonsense, the point is to avoid oxidation. Anything economic to make the wires out of will oxidize and eventually that will cause a problem with the connection. Digital signals are more resistant to this than analog but it's still relevant. Gold does not oxidize when exposed to oxygen, though. This means the connection will be just as good down the road as it is when the cable is new. Ever have to wiggle a connector to get it work properly? It almost certainly wasn't a gold-plated connector.

And all this accounts for less than 8% of the world’s demand for gold. Though I suppose it would have more utility if nearly 80% wasn’t treated as just so much shiny stuff to hold on to. If the value was proportional to its utility.
I guess it does have a leg up on Bitcoin, assuming we discount the utility of criminal activity.

Well, there is utility beyond the criminal. That's the worst part of all this.

Bitcoin and other Proof of Work coins were the only way crypto could be born, but the concept of blockchain currencies is not a bad one.

This is because fundamentally, we are in a day and age where banking is entirely technologically obsolete.

I don't need a bank to securely hold my cash, if I can prevent access to that cash, and send it, and receive it securely without them. The same is true with document filing and notaries in the realm of "smart contracts". It means I shouldn't have to pay arbitrary fees, either. It means no collusion or price fixing on fees, since the actors there are too different and disconnected.

Really, crypto is about 1000% better than normal banking. When I want to send money, I open the program, send the money, and then it has been sent. I want to receive money? I generate a new account, and I can get money in 5 minutes anonymously without asking another human being in the world for "permission" to do so, nor notification, nor any other thing.

The utility entirely comes from the fact that there's no way really to steal a transaction in flight with crypto. It's like cash or "gold" that you don't need to actually send anywhere, nor trust anyone to hold.

 

[Harry Bosch]

And all this accounts for less than 8% of the world’s demand for gold. Though I suppose it would have more utility if nearly 80% wasn’t treated as just so much shiny stuff to hold on to. If the value was proportional to its utility.
I guess it does have a leg up on Bitcoin, assuming we discount the utility of criminal activity.

Well, there is utility beyond the criminal. That's the worst part of all this.

Bitcoin and other Proof of Work coins were the only way crypto could be born, but the concept of blockchain currencies is not a bad one.

This is because fundamentally, we are in a day and age where banking is entirely technologically obsolete.

I don't need a bank to securely hold my cash, if I can prevent access to that cash, and send it, and receive it securely without them. The same is true with document filing and notaries in the realm of "smart contracts". It means I shouldn't have to pay arbitrary fees, either. It means no collusion or price fixing on fees, since the actors there are too different and disconnected.

Really, crypto is about 1000% better than normal banking. When I want to send money, I open the program, send the money, and then it has been sent. I want to receive money? I generate a new account, and I can get money in 5 minutes anonymously without asking another human being in the world for "permission" to do so, nor notification, nor any other thing.

The utility entirely comes from the fact that there's no way really to steal a transaction in flight with crypto. It's like cash or "gold" that you don't need to actually send anywhere, nor trust anyone to hold.

Crypto is a 1,000 better than normal banking? Can I get a Crypto line of credit for my business? Can I get a building loan? Can my customers pay for my products online through crypto? Can I pay vendors via ACH or wires via crypto? Is Crypto carefully regulated by the federal government so that the bad guys can't launder money through it? The answer is no.

 

[Jarhyn]

And all this accounts for less than 8% of the world’s demand for gold. Though I suppose it would have more utility if nearly 80% wasn’t treated as just so much shiny stuff to hold on to. If the value was proportional to its utility.
I guess it does have a leg up on Bitcoin, assuming we discount the utility of criminal activity.

Well, there is utility beyond the criminal. That's the worst part of all this.

Bitcoin and other Proof of Work coins were the only way crypto could be born, but the concept of blockchain currencies is not a bad one.

This is because fundamentally, we are in a day and age where banking is entirely technologically obsolete.

I don't need a bank to securely hold my cash, if I can prevent access to that cash, and send it, and receive it securely without them. The same is true with document filing and notaries in the realm of "smart contracts". It means I shouldn't have to pay arbitrary fees, either. It means no collusion or price fixing on fees, since the actors there are too different and disconnected.

Really, crypto is about 1000% better than normal banking. When I want to send money, I open the program, send the money, and then it has been sent. I want to receive money? I generate a new account, and I can get money in 5 minutes anonymously without asking another human being in the world for "permission" to do so, nor notification, nor any other thing.

The utility entirely comes from the fact that there's no way really to steal a transaction in flight with crypto. It's like cash or "gold" that you don't need to actually send anywhere, nor trust anyone to hold.

Crypto is a 1,000 better than normal banking? Can I get a Crypto line of credit for my business? Can I get a building loan? Can my customers pay for my products online through crypto? Can I pay vendors via ACH or wires via crypto? Is Crypto carefully regulated by the federal government so that the bad guys can't launder money through it? The answer is no.

Yes, with Etherium you can set up all of the above, from lines of credit, to interest, really any financial mechanism you can imagine is there.

The point is that ACH and wires are not things with crypto because they are absolutely obsolete. Because they are generally open ledgers, they absolutely can be regulated and monitored. They just aren't because government is broken and ancient.

The answer is, you didn't do your research.

 

[Swammerdami]

Really, crypto is about 1000% better than normal banking. When I want to send money, I open the program, send the money, and then it has been sent. I want to receive money? I generate a new account, and I can get money in 5 minutes anonymously without asking another human being in the world for "permission" to do so, nor notification, nor any other thing.

Just to be clear: The inability of governments to monitor transactions and thereby exert their legitimate taxation authorities is being treated as a feature, not a bug?

 

[bilby]

Really, crypto is about 1000% better than normal banking. When I want to send money, I open the program, send the money, and then it has been sent. I want to receive money? I generate a new account, and I can get money in 5 minutes anonymously without asking another human being in the world for "permission" to do so, nor notification, nor any other thing.

Just to be clear: The inability of governments to monitor transactions and thereby exert their legitimate taxation authorities is being treated as a feature, not a bug?

Governments only tax in the currencies they issue.

And that's not a problem, because they also only spend currencies that they issue.

If you want to live and work within the jurisdiction of a government, you are inevitably going to have to use their currency, at least some of the time. No matter how hard you try to avoid using government issued money, in favour of crypto, foreign currency, barter, or anything else, you will eventually be required to pay taxes of some kind, and to convert something of value into the local currency in order to do so.

The only escape is to leave the country, and live in a tax haven. At which point, it doesn't matter what media of exchange you use or don't use.