I think it’s time to move into crypto

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vincent_c
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Re: I think it’s time to move into crypto

Post by vincent_c » Fri Jun 04, 2021 8:06 pm

doodle wrote:
Mon May 31, 2021 8:48 am
So as I have been playing around in the crypto space I am starting to be less and less impressed. Speeds are just not competitive with banking system...and it's wonkiness is terryfying at times. Sending substantial sums of money that doesn't arrive for a half hour with no one to call or recourse at all.

This older article in the guardian argues that the hype around block chain is misplaced.

https://www.theguardian.com/business/2 ... ipe-dream
You're just not doing it right. If you pay the right transaction fees, your transactions can happen quite quickly.
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Re: I think it’s time to move into crypto

Post by vincent_c » Fri Jun 04, 2021 8:09 pm

I Shrugged wrote:
Mon May 31, 2021 1:27 pm
doodle wrote:
Mon May 31, 2021 8:48 am
So as I have been playing around in the crypto space I am starting to be less and less impressed. Speeds are just not competitive with banking system...and it's wonkiness is terryfying at times. Sending substantial sums of money that doesn't arrive for a half hour with no one to call or recourse at all.

This older article in the guardian argues that the hype around block chain is misplaced.

https://www.theguardian.com/business/2 ... ipe-dream
I think the definition of fiat money is of an item or record that has no intrinsic value, and is commonly accepted as a means of payment.
Crypto has no intrinsic value. Whether it is accepted as a means of payment is definitely debatable. So at this point, it's not even good enough to be called fiat money! ;)

I'm not anti-crypto. I'm just not on board yet.
Can we explore this idea that crypto has no intrinsic value? First of all crypto is a very generalized term, do you mean the entire blockchain industry or are you referring to specific crypto-currencies because you have to differentiate between native tokens vs utility tokens, governance tokens, etc.
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Re: I think it’s time to move into crypto

Post by Smith1776 » Sat Jun 05, 2021 4:02 pm

The argument of an asset not having "intrinsic value" is very frequently cited as a rationale for not investing in an asset. It's a nuanced idea, but I also think it's too liberally applied.

I've seen gold being argued as having no intrinsic value because it doesn't produce cash flow. Cryptocurrencies have had the same argument applied. Even dollars apparently have no intrinsic value since they're created by fiat. I've even seen non-dividend paying stocks being argued as having no intrinsic value.

What does one really mean by intrinsic value though? This is bordering perilously towards the metaphysical, but not everyone agrees on the definition, so we frequently talk past each other. I think in many cases the question is irreconcilable because we don't all share the same financial value structure.
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process." - Alan Greenspan, 1966
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Re: I think it’s time to move into crypto

Post by vincent_c » Sat Jun 05, 2021 4:11 pm

Smith1776 wrote:
Sat Jun 05, 2021 4:02 pm
I think in many cases the question is irreconcilable because we don't all share the same financial value structure.
Objectively speaking though, I think that bitcoin having value in any sense of the word is more true than not true.
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Re: I think it’s time to move into crypto

Post by Smith1776 » Sat Jun 05, 2021 4:22 pm

vincent_c wrote:
Sat Jun 05, 2021 4:11 pm
Smith1776 wrote:
Sat Jun 05, 2021 4:02 pm
I think in many cases the question is irreconcilable because we don't all share the same financial value structure.
Objectively speaking though, I think that bitcoin having value in any sense of the word is more true than not true.
I agree.
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process." - Alan Greenspan, 1966
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Re: I think it’s time to move into crypto

Post by I Shrugged » Sun Jun 06, 2021 6:47 pm

I can see that say a Bitcoin has intrinsic value because it takes a lot of energy to produce it. Just as it takes work to produce gold.
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Re: I think it’s time to move into crypto

Post by vincent_c » Sun Jun 06, 2021 8:13 pm

Has anyone considered how much money it would take in marketing to get a coin that does exactly the same thing as bitcoin to be more popular than bitcoin?
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Re: I think it’s time to move into crypto

Post by Smith1776 » Sun Jun 06, 2021 8:19 pm

https://www.cnn.com/2021/06/06/investin ... index.html

El Salvador adopts Bitcoin as legal tender.
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process." - Alan Greenspan, 1966
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Re: I think it’s time to move into crypto

Post by boglerdude » Mon Jun 07, 2021 4:41 am

https://www.reddit.com/r/CryptoCurrency ... happening/

Ok, crypto solving a real problem. What's the US gov's incentive. They want everyone using dollars...but what about unfriendly regimes like Syria, will crypto destabilize those countries? Is dollar-pegged crypto in the US interest?
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Re: I think it’s time to move into crypto

Post by Kriegsspiel » Mon Jun 07, 2021 7:35 pm

LOL WHAT
The Justice Department said on Monday that it had recovered much of the ransom paid to hackers last month who shut down the computer systems of Colonial Pipeline, a critical pipeline operator.

The seizure on Monday marked a first-of-its-kind effort by a new Justice Department task force to hijack a cybercriminal group’s profits through a hack of its Bitcoin wallet. The Justice Department said that it had seized 63.7 Bitcoins, currently valued at about $2.3 million. (The value of a Bitcoin has dropped over the past month.)

“Earlier today, the Department of Justice has found and recaptured the majority of the ransom Colonial paid to the DarkSide network,” the deputy attorney general, Lisa O. Monaco, said at a news conference Monday.
link
"You haven't, I suppose, ever mixed with politicians at close quarters. They're awful. I think some of these must have been the dregs anyhow, but I've discovered, what previously I didn't believe possible, that politicians behave in private life and say exactly the same things as they do in public. Their stupidity is inhuman.
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Re: I think it’s time to move into crypto

Post by I Shrugged » Tue Jun 08, 2021 5:59 am

Kriegsspiel wrote:
Mon Jun 07, 2021 7:35 pm
LOL WHAT
The Justice Department said on Monday that it had recovered much of the ransom paid to hackers last month who shut down the computer systems of Colonial Pipeline, a critical pipeline operator.

The seizure on Monday marked a first-of-its-kind effort by a new Justice Department task force to hijack a cybercriminal group’s profits through a hack of its Bitcoin wallet. The Justice Department said that it had seized 63.7 Bitcoins, currently valued at about $2.3 million. (The value of a Bitcoin has dropped over the past month.)

“Earlier today, the Department of Justice has found and recaptured the majority of the ransom Colonial paid to the DarkSide network,” the deputy attorney general, Lisa O. Monaco, said at a news conference Monday.
link

So this should show up in the block chain, right?
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Re: I think it’s time to move into crypto

Post by vincent_c » Tue Jun 08, 2021 8:23 am

I Shrugged wrote:
Sun Jun 06, 2021 6:47 pm
I can see that say a Bitcoin has intrinsic value because it takes a lot of energy to produce it. Just as it takes work to produce gold.
Say all the gold in the world was mined and sold. Supply of gold only coming from people who choose to sell gold and vice versa. Does intrinsic value say that gold cannot have an arbitrary price because the market has to price it relative to competing goods and services?

For example, if the price of silver goes up and drives up silver jewelry and we make an assumption that people always will pay more for gold vs silver jewelry. There is a wide range of potential applications for gold that places a floor on price relative to other commodities.

Now if all bitcoin were mined, what can we compare it to? If it were used as payments we could compare it against the costs of alternatives but even if we assume bitcoin is a competitive form of payments (the coin itself perhaps not, but the blockchain can be), the cost for payment alternatives can quickly approach zero.

Bitcoin would have to have a globally recognized superiority over another commodity in order to have what might be called “intrinsic value”. I’m not sure it has that since it is positioned against gold and it’s possible gold is even a superior asset in some ways.

Am I missing anything that might give bitcoin that relative value?
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Re: I think it’s time to move into crypto

Post by flyingpylon » Tue Jun 08, 2021 10:29 am

Kriegsspiel wrote:
Mon Jun 07, 2021 7:35 pm
LOL WHAT
The Justice Department said on Monday that it had recovered much of the ransom paid to hackers last month who shut down the computer systems of Colonial Pipeline, a critical pipeline operator.

The seizure on Monday marked a first-of-its-kind effort by a new Justice Department task force to hijack a cybercriminal group’s profits through a hack of its Bitcoin wallet. The Justice Department said that it had seized 63.7 Bitcoins, currently valued at about $2.3 million. (The value of a Bitcoin has dropped over the past month.)

“Earlier today, the Department of Justice has found and recaptured the majority of the ransom Colonial paid to the DarkSide network,” the deputy attorney general, Lisa O. Monaco, said at a news conference Monday.
link
Perhaps the whole thing was an inside job and/or false flag operation. Or it could just be an incredibly stupid move by people supposedly smart enough to know how to hack into a critical pipeline operator.
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Re: I think it’s time to move into crypto

Post by I Shrugged » Tue Jun 08, 2021 1:41 pm

vincent_c wrote:
Tue Jun 08, 2021 8:23 am
I Shrugged wrote:
Sun Jun 06, 2021 6:47 pm
I can see that say a Bitcoin has intrinsic value because it takes a lot of energy to produce it. Just as it takes work to produce gold.
Say all the gold in the world was mined and sold. Supply of gold only coming from people who choose to sell gold and vice versa. Does intrinsic value say that gold cannot have an arbitrary price because the market has to price it relative to competing goods and services?

For example, if the price of silver goes up and drives up silver jewelry and we make an assumption that people always will pay more for gold vs silver jewelry. There is a wide range of potential applications for gold that places a floor on price relative to other commodities.

Now if all bitcoin were mined, what can we compare it to? If it were used as payments we could compare it against the costs of alternatives but even if we assume bitcoin is a competitive form of payments (the coin itself perhaps not, but the blockchain can be), the cost for payment alternatives can quickly approach zero.

Bitcoin would have to have a globally recognized superiority over another commodity in order to have what might be called “intrinsic value”. I’m not sure it has that since it is positioned against gold and it’s possible gold is even a superior asset in some ways.

Am I missing anything that might give bitcoin that relative value?
I am not bothered by the intrinsic value or lack thereof. My original comment on it was just a joking reference.

The most interesting question to me is, what gives bitcoin its high value? Sure there is relative scarcity. But what is the unique selling proposition? It has to be the anonymity (admittedly using that term broadly so we don't have to go down the anonymous/pseudonymous hole). If bitcoin was just a way to use blockchain and the transaction parties were completely known to any government, I don't think people would be paying $36,000 for one. In other words, while the blockchain may be elegant, it's not adding value anywhere near what people are paying for crypto. Or so it seems to me. No one can say for certain why bitcoin's price is what it is, but that's my present belief.
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Re: I think it’s time to move into crypto

Post by Kriegsspiel » Tue Jun 08, 2021 4:00 pm

flyingpylon wrote:
Tue Jun 08, 2021 10:29 am
Perhaps the whole thing was an inside job and/or false flag operation. Or it could just be an incredibly stupid move by people supposedly smart enough to know how to hack into a critical pipeline operator.
What would the point of the false flag have been? As far as I can tell, this pipeline shutting down for a few days just shows how much we lost out when Biden cancelled Keystone XL.
"You haven't, I suppose, ever mixed with politicians at close quarters. They're awful. I think some of these must have been the dregs anyhow, but I've discovered, what previously I didn't believe possible, that politicians behave in private life and say exactly the same things as they do in public. Their stupidity is inhuman.
- John Maynard Keynes
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Re: I think it’s time to move into crypto

Post by glennds » Tue Jun 08, 2021 5:21 pm

I Shrugged wrote:
Tue Jun 08, 2021 1:41 pm
vincent_c wrote:
Tue Jun 08, 2021 8:23 am
I Shrugged wrote:
Sun Jun 06, 2021 6:47 pm
I can see that say a Bitcoin has intrinsic value because it takes a lot of energy to produce it. Just as it takes work to produce gold.
Say all the gold in the world was mined and sold. Supply of gold only coming from people who choose to sell gold and vice versa. Does intrinsic value say that gold cannot have an arbitrary price because the market has to price it relative to competing goods and services?

For example, if the price of silver goes up and drives up silver jewelry and we make an assumption that people always will pay more for gold vs silver jewelry. There is a wide range of potential applications for gold that places a floor on price relative to other commodities.

Now if all bitcoin were mined, what can we compare it to? If it were used as payments we could compare it against the costs of alternatives but even if we assume bitcoin is a competitive form of payments (the coin itself perhaps not, but the blockchain can be), the cost for payment alternatives can quickly approach zero.

Bitcoin would have to have a globally recognized superiority over another commodity in order to have what might be called “intrinsic value”. I’m not sure it has that since it is positioned against gold and it’s possible gold is even a superior asset in some ways.

Am I missing anything that might give bitcoin that relative value?
I am not bothered by the intrinsic value or lack thereof. My original comment on it was just a joking reference.

The most interesting question to me is, what gives bitcoin its high value? Sure there is relative scarcity. But what is the unique selling proposition? It has to be the anonymity (admittedly using that term broadly so we don't have to go down the anonymous/pseudonymous hole). If bitcoin was just a way to use blockchain and the transaction parties were completely known to any government, I don't think people would be paying $36,000 for one. In other words, while the blockchain may be elegant, it's not adding value anywhere near what people are paying for crypto. Or so it seems to me. No one can say for certain why bitcoin's price is what it is, but that's my present belief.
It's just an new class of speculative asset. There is a list of marketing features. Anonymity is only one. There is the presumed (eventually) finite supply. It capitalizes on the ever present fear that the USD is on the verge of collapse. Right now, the risk of increased inflation is another feature. It is very appealing to those that live with a demarcation in their minds between that which is old and traditional, and that which is new and leading edge. I fail to see where the energy consumed in the mining process translates to stored value.

In the US, the IRS killed any prospect of being used as a currency or medium of exchange, when they deemed it property. Hence every transaction involving crypto will carry implied gain or loss.
At the end of the day, it really has no intrinsic value in the sense that you could consume. Or yield that it will generate. The limited supply makes it like a sophisticated version of a limited edition baseball card (or pick your collectible).
It's only worth what someone else will pay you for it. A speculative wager.

I suspect it will grow in popularity, especially in times of upward volatility where FOMO causes dogpiling. BTC and Ethereum have both survived their infancy, which is a good sign. A big risk in my mind would be if there were ever a time when the US government considered crypto a threat to its currency or the banking system. That happened in 1934 and FDR banned/confiscated gold, and the power of a crisis enabled him to do so. People say that will never happen again, but I'm not so quick to believe a leopard will change his spots.

My personal policy and advice to any friends who care to listen, is resist joining the crypto cults. Some of them are like religious zealots.
If you're an adventurous investor (gambler), don't put any more into it than you could truly afford to lose.
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Re: I think it’s time to move into crypto

Post by vincent_c » Tue Jun 08, 2021 7:34 pm

Bitcoin is also a network so you can code metadata to bitcoin transactions that can have real practical uses.
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Re: I think it’s time to move into crypto

Post by glennds » Tue Jun 08, 2021 8:30 pm

vincent_c wrote:
Tue Jun 08, 2021 7:34 pm
Bitcoin is also a network so you can code metadata to bitcoin transactions that can have real practical uses.
If I'm a bitcoin holder, how would I benefit from that?
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Re: I think it’s time to move into crypto

Post by vincent_c » Tue Jun 08, 2021 11:02 pm

Oh I am just adding to the list of features.

But the use cases still require transactions on the network to occur so you could technically come up with a DCF value for bitcoin.

Personally I wished bitcoin had no other use other than pure money/store of value so we don’t have to worry about other uses affecting the price like how silver has more uses than gold and that’s why it doesn’t function like gold in a portfolio.
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Re: I think it’s time to move into crypto

Post by boglerdude » Wed Jun 09, 2021 5:54 am

https://www.reddit.com/r/ethereum/comme ... _currency/

well, alright. I'll get ETH and a sprinkling of Monero, ALGO and Cardano.

Anyone got a coinbase referral link
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Re: I think it’s time to move into crypto

Post by flyingpylon » Wed Jun 09, 2021 6:31 am

boglerdude wrote:
Wed Jun 09, 2021 5:54 am
https://www.reddit.com/r/ethereum/comme ... _currency/

well, alright. I'll get ETH and a sprinkling of Monero, ALGO and Cardano.

Anyone got a coinbase referral link
https://www.coinbase.com/join/plsr
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Re: I think it’s time to move into crypto

Post by johnnywitt » Thu Jun 10, 2021 10:21 pm

Crypto: a decentralized Ponzi Scheme ;D
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Re: I think it’s time to move into crypto

Post by whatchamacallit » Fri Jun 11, 2021 8:57 am

johnnywitt wrote:
Thu Jun 10, 2021 10:21 pm
Crypto: a decentralized Ponzi Scheme ;D
I figured it was more pyramid than ponzi since there isn't a single asset manager.

https://www.investopedia.com/ask/answer ... yramid.asp

Pyramid schemes can be quite lucrative.
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Re: I think it’s time to move into crypto

Post by SomeDude » Sun Jun 13, 2021 6:59 pm

I Shrugged wrote:
Mon May 31, 2021 1:27 pm
I think the definition of fiat money is of an item or record that has no intrinsic value, and is commonly accepted as a means of payment.
Crypto has no intrinsic value. Whether it is accepted as a means of payment is definitely debatable. So at this point, it's not even good enough to be called fiat money! ;)
Fiat = 1 : a command or act of will that creates something without or as if without further effort According to the Bible, the world was created by fiat. 2 : an authoritative determination : dictate a fiat of conscience. 3 : an authoritative or arbitrary order : decree government by fiat.

Bitcoin is not fiat because it has not been declared money by a government. I don't know if the recent move by el Salvador makes bitcoin a fiat currency. They've declared it legal tender but i don't know if el Salvadorians are required to accept it as remittance of debts or to pay taxes in it like in the US.

They have declared something that was already performing some.....some functions of money to be legal tender so i suppose el Salvadorians no longer have to pay captial gains if bitcoin increases in value. I don't think this makes bitcoin fiat money anymore than the constitution made gold and silver fiat money. In that instance they were already money without the government decree.
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Re: I think it’s time to move into crypto

Post by SomeDude » Sun Jun 13, 2021 7:22 pm

I Shrugged wrote:
Sun Jun 06, 2021 6:47 pm
I can see that say a Bitcoin has intrinsic value because it takes a lot of energy to produce it. Just as it takes work to produce gold.
Cost to produce does not confer value, intrinsic or otherwise.

Plenty of things cost more to produce than their value. Business and people that produce them end up losing money and stop producing them. The cost to produce acts as a restraint on supply, not a conveyance of value.

Value is either intrinsic or extrinsic.

Obviously bitcoin has no extrinsic value. A bitcoin cannot be used to do anything. Unless someone else is willing to trade you something that has value there is nothing you can do with your bitcoin. It can be argued that even in the process of being transferred around the bitcoin is still doing nothing.

Intrinsic value is harder to comprehend. It is the desire for something for that thing's own sake, and not for it's useful properties.

Gold is the easiest example. Gold has tons of uses, it's a very useful metal. There are people who hold it though who will never put it to use, whether in electrical components, dental work, jewelry, or anything. Some are holding it as a store of value and a speculation on future price, but some will never part with it, no matter what the price ever does. They want gold for its own sake. It has intrinsic value.

Contrast this with an apple. An apple is useful, you can consume it. That's pretty much it. No one hoards apples for the sake of having them. It only has extrinsic value.

Bitcoin and crypto are neither. They have no properties that make them useful and no one wants them just to have them. It's 100% speculation that the future price will be higher. When no one believes that will happen the illusion will pop and i think the price will move quickly to match the intrinsic value.

In the meantime They might be a great trade, but only to those who cash out.
Last edited by SomeDude on Sun Jun 13, 2021 7:28 pm, edited 1 time in total.
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