Crypto Currency Thread (Vol.2)

Crypto Currency Thread (Vol.2)

Author
Discussion

DonkeyApple

54,934 posts

168 months

Tuesday 28th June 2022
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I've had a couple of approaches over the years from crypto firms. I would say that on the whole, the majority appear to have little comprehension of genuine risk and almost no knowledge of history. This seems to be a combination of a lack of education combining with a near religious delusion that their maths and humanity is genuinely different from maths and humanity.

You can see it with the verbal twaddle of their acolytes who use made up words to explain away how their chosen punt defies the laws of gravity.

However, a lot of these acolytes come from third world nations where banking protections are an anathema.

It's more an issue for Westerners who have benefited from an actual education have grown up within a regulated financial environment and being fully aware of that importance and then choosing to punt more than they can afford.

But we saw all this with P2P, minibonds and all that sort of rubbish which attracted folk with no desire to understand risk or to ever ponder why such protects were kept out of the FSCS pot.

There are some extremely smart folk involved in crypto and it will be interesting to eventually see the use the concept gets picked up for but a lot of these very smart folk simply aren't very wise. There is a naive, village mentality within the industry which is what has made it so easy for others to either rip off the punters or rip off the companies.

Right at the beginning of this thread I said that validity could only ever come from the product becoming regulated, protected and taxed so that it fits into the real world. Without those norms it just remains trapped as a punting tool, a third world micro transaction protect, a delusion for the tin foilers and a playground for scammers.

But punters will never be able to understand why everyone else around them isn't punting, like they will never understand why those around them can afford things while they can't and will stick to the belief that more punting is the solution.

Pretty much every one of the punters' arguments over the last few years has been finally put to bed as punters' fallacy. If we are lucky this current event will be the clear out needed to reset the mentality of the industry and to allow it to move forward in a conventional direction as a conventional tool, which requires the very securities that the most fervently religious have always believed were essential to not have.

The problem, arguably, is that if the sell off isn't deep enough to capitulate the biggest gamblers, break enough of the flawed religious zeal and to clear out the worst of the scams then things are just going to carry on as before and the concept remain nothing more than lottery tickets for the brome or desperate.

Ari

19,328 posts

214 months

Tuesday 28th June 2022
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DonkeyApple said:
I've had a couple of approaches over the years from crypto firms. I would say that on the whole, the majority appear to have little comprehension of genuine risk and almost no knowledge of history. This seems to be a combination of a lack of education combining with a near religious delusion that their maths and humanity is genuinely different from maths and humanity.


You can see it with the verbal twaddle of their acolytes who use made up words to explain away how their chosen punt defies the laws of gravity.
Quite. We've seen that mentality on here. Anyone who points out how these schemes always end up (and have since Tulip Mania) gets called a 'boomer' and told that they're too old to understand why it's different this time.

DonkeyApple said:
However, a lot of these acolytes come from third world nations where banking protections are an anathema.

It's more an issue for Westerners who have benefited from an actual education have grown up within a regulated financial environment and being fully aware of that importance and then choosing to punt more than they can afford.

But we saw all this with P2P, minibonds and all that sort of rubbish which attracted folk with no desire to understand risk or to ever ponder why such protects were kept out of the FSCS pot.

There are some extremely smart folk involved in crypto and it will be interesting to eventually see the use the concept gets picked up for but a lot of these very smart folk simply aren't very wise. There is a naive, village mentality within the industry which is what has made it so easy for others to either rip off the punters or rip off the companies.

Right at the beginning of this thread I said that validity could only ever come from the product becoming regulated, protected and taxed so that it fits into the real world. Without those norms it just remains trapped as a punting tool, a third world micro transaction protect, a delusion for the tin foilers and a playground for scammers.

But punters will never be able to understand why everyone else around them isn't punting, like they will never understand why those around them can afford things while they can't and will stick to the belief that more punting is the solution.
Ah no, they 'know' why everyone else isn't punting, it's because those choosing to give it a big swerve are Just not someone who is flush with money to throw at Bitcoin, just bobbing along. Best to keep your money for a rainy day. It suits the 'I'm a bit smarter/more savvy/more big league' mentality that attracted them to this in the first place. Ironic, really...

DonkeyApple said:
Pretty much every one of the punters' arguments over the last few years has been finally put to bed as punters' fallacy. If we are lucky this current event will be the clear out needed to reset the mentality of the industry and to allow it to move forward in a conventional direction as a conventional tool, which requires the very securities that the most fervently religious have always believed were essential to not have.

The problem, arguably, is that if the sell off isn't deep enough to capitulate the biggest gamblers, break enough of the flawed religious zeal and to clear out the worst of the scams then things are just going to carry on as before and the concept remain nothing more than lottery tickets for the brome or desperate.
If there's one thing that we learn from history, it's that people learn nothing from history. That, and wishful thinking and the desire to get rich quick is all some people need to believe.

Very insightful post.



DonkeyApple

54,934 posts

168 months

Tuesday 28th June 2022
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Ari said:
If there's one thing that we learn from history, it's that people learn nothing from history. That, and wishful thinking and the desire to get rich quick is all some people need to believe.
Indeed. You can't stand in front of human nature. The only thing that's different with this product is the magnitude of the global scale. This behaviour is typically quite ring fenced, a penny stock for example.

But while much to date has just been a global spankers' charter there is something tangible in the product, something that has the potential to have value. In order to have that value it must attract non punters and that requires the product to evolve to contain the regulation and security that the sane and affluent expect.

I wonder whether pegging a coin, legally and properly to real assets may transpire to be such a solution. The extreme cheapness of issue and maintenance combined with the truly global reach does open the door to interesting opportunities to raise capital.

Imagine, as a developer, legitimately funding a project via a coin or a company effectively issuing equity as coin?

Crypto is a potential solution for fractional equity and all sorts of solutions that could distribute title on real, tangible assets to much smaller investors.

Ari

19,328 posts

214 months

Tuesday 28th June 2022
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My interest in crypto, and in particular the mentality of those 'investing' in it was originally sparked by a good friend who strikes me as the 'classic' crypto buyer. Really nice bloke, bit naive, always wanted to get rich, very keen to believe that he's found an easy way to.

He tried to get me interested in it last year, which is why I posted my original 'where is the value in crypto?' post, because I just couldn't see any at all from what he was telling me beyond the ponzi-esque 'you buy it because it's going up and sell it to the next bloke who's also buying it because it's going up, to sell to the next bloke who's...'

This has been a rather rude awakening for him, he was absolutely convinced that he was going to make a fortune out of it because, apparently, conventional money was being phased out, and Elon Musk was into it, and his brother in law had made a fortune! I think he genuinely believed it was a safe bet.

He's lost about half of what he put in, so could have been worse I suppose. But he's hanging on in there because:

Ripple have a big court case around being regulated, and if they do get regulated then the price will shoot up!

It takes four days to transfer money using a bank, crypto is instant. I did point out that so is a bank really, but apparently that's because banks are already using crypto to transfer money, another reason it will shoot up.

Because it probably will.

I suggested he think seriously about cutting his losses and take what he can (it's several thousand pounds) rather than potentially ride it into the ground, but I don't think he can bring himself to do it.

He did admit that it's been a big (and expensive) life lesson.

jammy-git

29,776 posts

211 months

Tuesday 28th June 2022
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I don't think I've once seen anyone called a boomer on this topic or that they're too old to understand.


But anyway, I agree with the stance that crypto either needs to become regulated to be adopted into the mainstream, or remain a wild west where it'll only be used for criminal activity or gambling.

However, my question is, once it becomes regulated, what is the point of it? If it one day comes under the control of governments and financial institutions, why would anyone use it?

Condi

17,089 posts

170 months

Tuesday 28th June 2022
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jammy-git said:
However, my question is, once it becomes regulated, what is the point of it? If it one day comes under the control of governments and financial institutions, why would anyone use it?
I've been waiting for someone to answer that for about 5 years. biggrin

The underlying technology may/does have some advantages (smart contracts, etc), although whether those advantages are truly large enough over other solutions to justify the cost is another question. Otherwise, as you say, you end up with something which is very similar to the existing banking system which people have confidence in, are protected by, and have been using for the last 500 years.

DonkeyApple

54,934 posts

168 months

Tuesday 28th June 2022
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jammy-git said:
I don't think I've once seen anyone called a boomer on this topic or that they're too old to understand.


But anyway, I agree with the stance that crypto either needs to become regulated to be adopted into the mainstream, or remain a wild west where it'll only be used for criminal activity or gambling.

However, my question is, once it becomes regulated, what is the point of it? If it one day comes under the control of governments and financial institutions, why would anyone use it?
To gain exposure to assets that they are currently locked out from due to low wealth?

If you look at equity exchanges, property assets, classic cars, fine wines, Rolexes even hedge funds and all sorts of perceived assets, they all have minimum tickets one way or another that ultimately lock most people out.

There has all ways been a desire to break these assets down into smaller components so that the wider investment audience can participate and the only real solution has been to convert that asset into an equity issue but due to weak reach and high running costs that has never been as efficient as desired to work.

With crypto tech you could break down things like Berkshire Hathaway stock, a wine collection, a Monet, an office block, car collection into $1 units that are cheap enough to issue, maintain and transact.

Many on here for years have stated that crypto is not a currency and the word currency is steadily being dropped as the reality is that this is not an area where the tech works or has its future. V2 crypto is almost certainly going to form around crypto being viewed as equity, which is what it's really always been. The change being to actually have a value on the back end as opposed to hot air, a dream or a delusion or scam.

Condi

17,089 posts

170 months

Tuesday 28th June 2022
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DonkeyApple said:
With crypto tech you could break down things like Berkshire Hathaway stock, a wine collection, a Monet, an office block, car collection into $1 units that are cheap enough to issue, maintain and transact.
Can you not do that already? Robinhood offer fractional shares I believe, and you can invest (via a proxy) into almost whatever asset class you want. Via ETF's I already own part of an office block and some barrels of oil. I'm sure if I wanted to invest in a wine collection there would be a product somewhere which could be traded in small volumes to gain exposure.

jammy-git

29,776 posts

211 months

Tuesday 28th June 2022
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Exactly! I can already invest in shares via any number of trading apps.

And none of those use cases really necessitate the overheads of a blockchain technology.

DonkeyApple

54,934 posts

168 months

Tuesday 28th June 2022
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Condi said:
I've been waiting for someone to answer that for about 5 years. biggrin

The underlying technology may/does have some advantages (smart contracts, etc), although whether those advantages are truly large enough over other solutions to justify the cost is another question. Otherwise, as you say, you end up with something which is very similar to the existing banking system which people have confidence in, are protected by, and have been using for the last 500 years.
Only in developed nations though. Few people around the world have anywhere close to the banking protections that we have. In many developing nations the banking system is no more legitimate than an offshore crypto exchange founded by a convicted fraudster. biggrin

Even in the EU there have been bail-in events in living memory.

Imagine if U.K. banks offered money storage services via a crypto to the billions of tiny investors across the planet who don't trust their domestic banks or governments to keep their money safe? The BoE or FED could even issue debt through such a mechanism.

If you lived under an unstable currency, unstable banks or unstable government then being able to store vital wealth in a stable currency under a regulated environment may have value. The real stumbling block may be AML?

Ari

19,328 posts

214 months

Tuesday 28th June 2022
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jammy-git said:
I don't think I've once seen anyone called a boomer on this topic or that they're too old to understand.
Scroll up a bit, people got very upset about a few pertinent questions being asked about where the real value in crypto is?

digger_R said:
I find this thread amusing for that reason alone!
It's hilarious now that we have a downtrend that the boomers come out saying I told you so - just looks like a case of sour grapes as they've been watching it but haven't been able to capitalize on the best performing asset of the last decade.

No one knows if it will continue - though it's impossible to argue with bitcoins $ value increase over the last decade.

I'd be happy to contribute more as it seems like there are a couple of clued up individuals - the thread is just kind of swamped by the dullards who would rather just argue with random people on the internet.
Enjoy your weekend!
Lots similar, my favourite was Warren Buffet being referred to a 'dinosaur' because he saw no actual value in crypto. Doesn't know what he's talking about apparently. biggrin

I actually backed off completely for a while as some people were clearly getting so upset and the name calling was getting tiresome.

DonkeyApple

54,934 posts

168 months

Tuesday 28th June 2022
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Ari said:
Scroll up a bit, people got very upset about a few pertinent questions being asked about where the real value in crypto is?
Weren't they technically saying you were gay and too poor to punt in something a third world, hill shepherd can afford?

I think it was me who suggested that your car meant the odds favoured you being old and bald? wink

Condi

17,089 posts

170 months

Tuesday 28th June 2022
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DonkeyApple said:
Imagine if U.K. banks offered money storage services via a crypto to the billions of tiny investors across the planet who don't trust their domestic banks or governments to keep their money safe? The BoE or FED could even issue debt through such a mechanism.
But even then, why does it require any cryptography to make it happen? What can crypto do which a trusted database cannot do? Probably wouldn't be an excel sheet, but if all you need to do is record ownership and transfer that ownership from one person to another that is nothing beyond having a central database. The fractional bit is irrelevant, that is just a case of designing the product.

DonkeyApple

54,934 posts

168 months

Tuesday 28th June 2022
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Condi said:
DonkeyApple said:
Imagine if U.K. banks offered money storage services via a crypto to the billions of tiny investors across the planet who don't trust their domestic banks or governments to keep their money safe? The BoE or FED could even issue debt through such a mechanism.
But even then, why does it require any cryptography to make it happen? What can crypto do which a trusted database cannot do? Probably wouldn't be an excel sheet, but if all you need to do is record ownership and transfer that ownership from one person to another that is nothing beyond having a central database. The fractional bit is irrelevant, that is just a case of designing the product.
Cost and simplicity. The end holder would still be accountable for storage risk which over time would even create a bulletproof bit of capital for a bank as per the Swiss banks that were holding Jewish assets after 1945.

But more importantly, you have an entire segment of the consumer market that now has crypto and may well favour that mechanism for transacting and storing than a specific bank account and banking app etc.

With the FCA aiming to regulate the market it should open up viable avenues for using the concept other than just a wild punt in the hope for riches?

DonkeyApple

54,934 posts

168 months

Tuesday 28th June 2022
quotequote all
jammy-git said:
Exactly! I can already invest in shares via any number of trading apps.

And none of those use cases really necessitate the overheads of a blockchain technology.

There is a cost of clearing, transacting and holding that is not of too much concern to affluent Westerners but does become relevant to many overseas and also a cost of raising funding via equity issues on local exchanges that limits the audience you can go out to as well as what you can raise against.

It's the latter cost that gives rise to exchanges such as the pink sheets or Aquis as well as creates spaces for things like crowdfunding. If you can decentralise that type of business from recognised local exchanges and instead distribute via global crypto exchanges you can grow that market enormously.

Condi

17,089 posts

170 months

Tuesday 28th June 2022
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DonkeyApple said:
Cost and simplicity.
Is running a crypto chain more cost efficient and simple than a well designed database? If the security comes from proof of work then the whole point is it's complicated (and therefore expensive) to do the calculations which is what makes it secure. If you can have a protected database which is private it doesn't require the same proof of work effort to make it secure, which must, in turn, make it cheaper to operate.

You also have proof of stake, but I don't fully understand how that works.

Ari

19,328 posts

214 months

Tuesday 28th June 2022
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DonkeyApple said:
Ari said:
Scroll up a bit, people got very upset about a few pertinent questions being asked about where the real value in crypto is?
Weren't they technically saying you were gay and too poor to punt in something a third world, hill shepherd can afford?

I think it was me who suggested that your car meant the odds favoured you being old and bald? wink
I got called a 'hairdresser' for some reason. You can't really argue with someone at that level of 'debate' can you? laugh

Yes, also that I was too poor, and that's the reason I wasn't 'investing'.

I think it's fair to say that the arguments in favour of crypto were not what you might call 'robust' from certain quarters! biggrin

jammy-git

29,776 posts

211 months

Tuesday 28th June 2022
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DonkeyApple said:
jammy-git said:
Exactly! I can already invest in shares via any number of trading apps.

And none of those use cases really necessitate the overheads of a blockchain technology.

There is a cost of clearing, transacting and holding that is not of too much concern to affluent Westerners but does become relevant to many overseas and also a cost of raising funding via equity issues on local exchanges that limits the audience you can go out to as well as what you can raise against.

It's the latter cost that gives rise to exchanges such as the pink sheets or Aquis as well as creates spaces for things like crowdfunding. If you can decentralise that type of business from recognised local exchanges and instead distribute via global crypto exchanges you can grow that market enormously.
There are mobile phone based payment systems that already exist in Africa and I'd be willing to bet will take hold in emerging economies over there WAY before crypto will.

Tagteam

285 posts

22 months

Tuesday 28th June 2022
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Condi said:
DonkeyApple said:
Imagine if U.K. banks offered money storage services via a crypto to the billions of tiny investors across the planet who don't trust their domestic banks or governments to keep their money safe? The BoE or FED could even issue debt through such a mechanism.
But even then, why does it require any cryptography to make it happen? What can crypto do which a trusted database cannot do? Probably wouldn't be an excel sheet, but if all you need to do is record ownership and transfer that ownership from one person to another that is nothing beyond having a central database. The fractional bit is irrelevant, that is just a case of designing the product.
We will soon realise crypto is just emperors new clothes .

DonkeyApple

54,934 posts

168 months

Tuesday 28th June 2022
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Tagteam said:
We will soon realise crypto is just emperors new clothes .
I thought that was a given as far back as page 1 and we've just been pondering whether the underpants can be salvaged? biggrin