Crypto Currency Thread (Vol.2)

[wisbech]

dimots said:

Meanwhile, bitcoin has built a secure unhackable public ledger that is secured ever further by the proof of work that goes into creating it. It does everything banks are supposed to do

.

Genuinely interested - how does bitcoin act as an intermediary between short term depositors and long term borrowers as a bank does? For a simple example - a mortgage. If I want to borrow enough money for a 25 year mortgage, how is it funded in bitcoin, what are the repayment terms and interest rates? Who is going to repossess if I stop paying?

[rodericb]

Jiebo said:

I find it fascinating that you don’t think the governor of the Bank of England, the most qualified financier on the land, to understand 1)what crypto is 2) the difference between intrinsic and extrinsic value.

If you want to collect your silly coins, enjoy. But don’t try to convince others that an apple is actually a dog.

Does Bitcoin or other intangible assets not have any value because of what it is? A gold watch has intrinsic value as a watch and it has intrinsic value as a lump of gold. A bitcoin has instrinsic value as it's a method of containing value which can be traded with someone else, like currencies do. As long as two people agree that there's a purpose in it then it has intrinsic value. People might be bringing in elements of intangible assets into their thinking as there's no physical representation of Bitcoins to confer some sort of intrinsic value to them. You couldn't even use a bitcoin to flip to make a choice (heads or tails...) but as it has no physical utility one might think it has no utility at all.

Central banks don't like crypto currencies as they are not within the existing international currency systems. If you thought crypto currency is a bit whoo whoo computers man whoah hackers and were able to create your own country and start making noises about your currency becoming the default reserve currency you can bet you'd quickly find yourself in deep doo doo with those who have something to lose.

Edited by rodericb on Tuesday 24th May 03:59

[dmahon]

wisbech said:

Genuinely interested - how does bitcoin act as an intermediary between short term depositors and long term borrowers as a bank does? For a simple example - a mortgage. If I want to borrow enough money for a 25 year mortgage, how is it funded in bitcoin, what are the repayment terms and interest rates? Who is going to repossess if I stop paying?

Borrowing and lending is in the process of being solved by DeFi (decentralised finance.). People and institutions deposit their coins in various protocols and lend them out for yields much higher than a bank.

You could then borrow billions in the next 5 minutes if you have digital assets as collateral. I’m 3 months in to doing the same in the real world.

See Aave, BlockFI, https://medium.com/coinmonks/the-current-state-of-...

DeFi has huge potential to replace the activities of a bank with P2P smart contracts.

Of course the two worlds aren’t equivalent yet, and the legal system does need to catch up in places (and only in places, that’s not an admission of failure). There are also bugs/hacks etc so it hasn’t begun plain sailing. Crypto has had 10 years to mature vs millenia in traditional finance though.

Edited by dmahon on Tuesday 24th May 06:05

[g4ry13]

dimots said:

Jiebo said:

I find it fascinating that you don’t think the governor of the Bank of England, the most qualified financier on the land, to understand 1)what crypto is 2) the difference between intrinsic and extrinsic value.

If you want to collect your silly coins, enjoy. But don’t try to convince others that an apple is actually a dog.

He is absolutely not the most qualified financier in the land are you dizzy? He's gonnna be out of a job very soon.

There's nothing very qualified about him at all. He's more versed in the regulation side of it than anything from his experience.

I doubt he'll be out of a job soon though because of what's going on. Unless you mean because BTC / crypto will pull people away from Fiat.

[WY86]

g4ry13 said:

There's nothing very qualified about him at all. He's more versed in the regulation side of it than anything from his experience.

I doubt he'll be out of a job soon though because of what's going on. Unless you mean because BTC / crypto will pull people away from Fiat.

He would be the time of shady character that would make out Crypto is bad and doesn't hold himself... However his wife has bags loaded up.

[Scootersp]

dimots said:

He is absolutely not the most qualified financier in the land are you dizzy? He's gonnna be out of a job very soon.

He is one of 9 that is on the committee? So they must have some acumen as a group?

Andrew Bailey, Chair
Ben Broadbent
Jon Cunliffe
Jonathan Haskel
Catherine L Mann
Huw Pill
Dave Ramsden
Michael Saunders
Silvana Tenreyro

I get if you have a low confidence/faith in the system as that's part of crypto's ideology, but all these people can't be unqualified, just perhaps institutionalised, perhaps largely powerless/ineffective these days......

[wisbech]

dmahon said:

Borrowing and lending is in the process of being solved by DeFi (decentralised finance.). People and institutions deposit their coins in various protocols and lend them out for yields much higher than a bank.

You could then borrow billions in the next 5 minutes if you have digital assets as collateral. I’m 3 months in to doing the same in the real world.

See Aave, BlockFI, https://medium.com/coinmonks/the-current-state-of-...

DeFi has huge potential to replace the activities of a bank with P2P smart contracts.

Of course the two worlds aren’t equivalent yet, and the legal system does need to catch up in places (and only in places, that’s not an admission of failure). There are also bugs/hacks etc so it hasn’t begun plain sailing. Crypto has had 10 years to mature vs millenia in traditional finance though.

Edited by dmahon on Tuesday 24th May 06:05

Thanks. Reading up on Centrifuge, it appears to have a flaw at the moment.

"Investors can request a redemption of their DROP or TIN tokens at any time subject to the provisos that DROP tokens have redemption priority over TIN tokens and TIN token investments must not drop below the minimum TIN buffer set for the pool. The redemptions are executed pro-rata between the addresses requesting a redemption on a best-effort basis. All repayments from the underlying assets (NFTs) will be used for open redemption requests before they can be recycled to finance new assets (NFTs). This means a pool stops to finance new assets if redemptions exceed investments. The pool is forced by its investors into liquidation as already outlined above [INSERT LINK HERE] purely by the Tinlake smart contracts with all DROP investors treated equally"

I.e. if enough investors in the pool financing my house decide to redeem their money, the SPV holding the asset is forced into liquidation. Sure, I guess you can refinance, but having the mortgage callable at any time by the depositors is a risk. Note the procedures about liquidating a pool aren't written yet

[MesoForm]

Hope this wasn't anyone here
Norfolk couple: 'We’ve lost £30k in cryptocurrency scam'
https://www.edp24.co.uk/news/crime/norfolk-couple-...
"But Mr Edwards believes his losses are not just the result of falling prices but may also be a scam after he was encouraged to invest by someone he met on an online discussion group for motoring enthusiasts."

[WY86]

MesoForm said:

Hope this wasn't anyone here
Norfolk couple: 'We’ve lost 30k in cryptocurrency scam'
https://www.edp24.co.uk/news/crime/norfolk-couple-...
"But Mr Edwards believes his losses are not just the result of falling prices but may also be a scam after he was encouraged to invest by someone he met on an online discussion group for motoring enthusiasts."

I can't work out if he was duped and the company or person executing the trades was just pocketing the money, if he bought bitcoin at £30k he would still have around £24k in value as bitcoin has not dropped to zero.

[g4ry13]

WY86 said:

MesoForm said:

Hope this wasn't anyone here
Norfolk couple: 'We’ve lost 30k in cryptocurrency scam'
https://www.edp24.co.uk/news/crime/norfolk-couple-...
"But Mr Edwards believes his losses are not just the result of falling prices but may also be a scam after he was encouraged to invest by someone he met on an online discussion group for motoring enthusiasts."

I can't work out if he was duped and the company or person executing the trades was just pocketing the money, if he bought bitcoin at 30k he would still have around 24k in value as bitcoin has not dropped to zero.

Sounds like he was duped and the person created some fake platform to log into and look at balances etc. but it was smoke and mirrors.

[Zoon]

dmahon said:

You could then borrow billions in the next 5 minutes if you have digital assets as collateral. I’m 3 months in to doing the same in the real world.

Which is what caused Tether to collapse if you believe what people are saying

[Ari]

g4ry13 said:

As for your intrinsic value question, didn't we just have this discussion?!?

We did, and apparently you can earn up to 300% interest by holding it which is fantastic!

Details as to what generates that 300% are a little sketchy admittedly, and the question about whether you could get it in actual cash wasn't answered either, but hey, Bernie Madoff was only paying 10% interest, so this is loads better!

[r3g]

WY86 said:

MesoForm said:

Hope this wasn't anyone here
Norfolk couple: 'We’ve lost 30k in cryptocurrency scam'
https://www.edp24.co.uk/news/crime/norfolk-couple-...
"But Mr Edwards believes his losses are not just the result of falling prices but may also be a scam after he was encouraged to invest by someone he met on an online discussion group for motoring enthusiasts."

I can't work out if he was duped and the company or person executing the trades was just pocketing the money, if he bought bitcoin at 30k he would still have around 24k in value as bitcoin has not dropped to zero.

There wasn't any scam. As the article says towards the bottom, he saw the price of BTC going up 2 years ago and doubled his initial investment so dumped a load more money in, thinking it would keep going up forever, probably encouraged by the BTC shills and fanboys on whatever motoring forum he's on (where has RichTT gone? ). He then took out a bunch of loans, no doubt with the plan to pay them back from his continually rising BTC profits, and then May 2022 arrived where BTC is half the price it was and so now he's £30k in debt.

He gambled. He lost. The End.

[Sheets Tabuer]

MesoForm said:

Hope this wasn't anyone here

They certainly look like they could be members.

[WY86]

Ari said:

We did, and apparently you can earn up to 300% interest by holding it which is fantastic!

Details as to what generates that 300% are a little sketchy admittedly, and the question about whether you could get it in actual cash wasn't answered either, but hey, Bernie Madoff was only paying 10% interest, so this is loads better!

Yes on some pairs crypto/USD or USD/crypto depending on the pairing you could earn that level of interest dependent on the pair being chosen, and yes the interest is paid on the crypto and on the dollars/

[dazmanultra]

Zoon said:

Which is what caused Tether to collapse if you believe what people are saying

Tether (USDT) hasn't collapsed, the coin that collapsed was Luna Terra.

Tether is a whole other discussion. A stablecoin supposedly backed by ~$80bn in collateral; there are massive questions about what/where this collateral is. It's certainly not a bank deposit or cash. They say it's commercial paper backed - and one potential route is likely Chinese real estate, there were lots of rumours flying around about Evergrande debt. But potentially the scarier thing is if the collateral is actually loans to other crypto companies, which becomes a big systemic risk as their fortunes are entirely correlated.

[Condi]

r3g said:

He gambled. He lost. The End.

Not so sure...

"Having seen his investment supposedly grow to $100,000 he took out two bank loans after being told he’d have to pay an upfront 20pc commission fee to withdraw the money."

Why would anyone have to pay 20% to withdraw unless it's a scam?

Anyway, I hope it was nobody on here who was affected and hope it was nobody on here who encouraged them into it.

[WY86]

r3g said:

There wasn't any scam. As the article says towards the bottom, he saw the price of BTC going up 2 years ago and doubled his initial investment so dumped a load more money in, thinking it would keep going up forever, probably encouraged by the BTC shills and fanboys on whatever motoring forum he's on (where has RichTT gone? ). He then took out a bunch of loans, no doubt with the plan to pay them back from his continually rising BTC profits, and then May 2022 arrived where BTC is half the price it was and so now he's 30k in debt.

He gambled. He lost. The End.

He should of learned the first rule of investing, only invest what you can afford to loose. Still think something went on with a third party, the article reads like he was left with zero.

[Ari]

r3g said:

There wasn't any scam. As the article says towards the bottom, he saw the price of BTC going up 2 years ago and doubled his initial investment so dumped a load more money in, thinking it would keep going up forever, probably encouraged by the BTC shills and fanboys on whatever motoring forum he's on (where has RichTT gone? ). He then took out a bunch of loans, no doubt with the plan to pay them back from his continually rising BTC profits, and then May 2022 arrived where BTC is half the price it was and so now he's 30k in debt.

He gambled. He lost. The End.

It is remarkable what people will convince themselves is true if they think it's going to allow them to get rich quick with little effort.

I have a friend who's very into crypto. He's convinced that next year his stake will have at least doubled, probably gone up much more, and he'll cash out then. His logic is that cash is being withdrawn, and he's ahead on the replacement for it (he seems to struggle a bit with the difference between actual cash and currency), Elon Musk is into it and he's a billionaire, and his brother in law recommended it to him.

You can't argue with that! Genuinely, you can't argue with him, he really wants to be rich, so this will work.

[WY86]

Ari said:

It is remarkable what people will convince themselves is true if they think it's going to allow them to get rich quick with little effort.

I have a friend who's very into crypto. He's convinced that next year his stake will have at least doubled, probably gone up much more, and he'll cash out then. His logic is that cash is being withdrawn, and he's ahead on the replacement for it (he seems to struggle a bit with the difference between actual cash and currency), Elon Musk is into it and he's a billionaire, and his brother in law recommended it to him.

You can't argue with that! Genuinely, you can't argue with him, he really wants to be rich, so this will work.

which Crypto is it?