Crypto The problem with crypto investing

The US dollar or Australian for that matter are used more for all of the above. This is the old go to fud that has been around for years! Bitcoin is fully auditable and track able. It’s a silly way to do any of the above. Mining is getting more distributed every year although it isn’t a major issue. Nodes distribution is what matters and this is going well. Bitcoin is by far the most decentralised network.

 

the ol' "but fiat is used for crime" argument. Thought this would eventually get rolled out.

The difference between crypto and fiat is that fiat is genuinely useful. It has mainstream adoption and has many, many uses.

Aside from speculation and all the unsavoury, criminal things I have mentioned, what else is crypto good for?

i neglected to mention financing terrorism and buying drugs!
Yellen Calls Terrorist Financing Using Crypto a 'Concern' - CoinDesk

 

how is a network where one country dominates mining decentralised?
A Single Chinese Region Accounts for One-Third of Global BTC Hash Rate

"The US dollar or Australian for that matter are used more for all of the above."

are you telling me that the majority of AUD and USD cash transactions throughout the world are for criminal purposes?

 

Mate most of the stuff you’ve sprouted is nonsense! Pot calling the kettle black!

 

what exactly is nonsense? Can you refute any of the claims i have made, giving evidence as to why they are incorrect?

 

If you read what is said, Nodes are what matters for decentralisation. Where did I say majority? Definitely more money is laundered through the dollar as it is untraceable.

 

so you are not concerned with the geographic location of the nodes, just as long as there are a sufficient number of them?
for e.g. you find the 40 nodes of the EoS network insufficient? The limited number of Tezos bakers to be insufficient, you don't consider them truly decentralised? If that's the case, i agree.

However, because so many nodes are concentrated in China and a handful of manufacturers have monopolised miner production, i don't consider the Bitcoin blockchain properly decentralised. It's the same story with the wallets with the majority of large wallets held by a few, how is this decentralisation?

 

Yep amazing isn’t it. The argument goes both ways! You only like it to go one way even though in reality it isn’t a one way street!
Bitcoin is the the greatest use case. Borderless, immutable, censorship resistant value transfer. No person or government can corrupt or tamper with without consensus of the nodes of the network. It gives people the freedom to opt out of traditional banking and offers an easy secure way for them to take control of their own personal wealth.
Ask the people of Greece, Cyprus, Argentina, Venezuela, Zimbabwe etc. how important this is to them.

 

Like i said I’m not here to convince anyone but when I see the nonsense being punched into your keyboard I couldn’t help myself.
You may think you’ll never have to worry about the fate of the previously mentioned countries (Russia is another that comes to mind) but if it does you’ll thank you lucky stars that there maybe another option in bitcoin and the government can’t just decide to give your bank account a haircut to save the banks or you have you gold confiscated at the airport when your trying to flee.

 

opt out of traditional banking - how exactly? few merchants take bitcoin due to its high fees and volatility. Notice how all those crypto ATMs that sprung up a few years ago are no longer around? Most ecosystem participants are speculators betting the price will go up, why would you use your crypto for anything else? Not to mention the high fees, scamming, rug pulls

Alot of issues with the "ask the people of these countries argument"
First off, most of the world is politically stable and not experiencing hyper-inflation. Even in Venezuela where hyper-inflation existed, electicity shortages makes it difficult to transact in crypto.

What exactly is the appeal of be your own bank anyway? The Australian government guarantees cash deposits up to 250k if the bank collapses. If a merchant rips me off i can make a charge back claim with the card company, no such luxury in the wild west that is crypto land.

Besides, do coiners ever think of the end game if this actually went mainstream? They will just regulate it out of existence or into some permissioned, centralised token like they are doing with the central bank tokens.

And what of the countless exchanges that were hacked or exit scammed? The constant pumping and dumping of tokens, the lack of accountability, how is this superior to the current banking system?

 

Do you not listen to what I’ve said? All other projects apart from bitcoin are centralised garbage. it seems you don’t know the difference between a node and a miner and are confusing the two.
Wallet distribution is old fud! You go on about the “coiners” come up with the same old line and then you spew out the same old fud about centralisation and wallet distribution. Most large wallets are exchange wallets accounting for thousands of individuals. The data show that year on year distribution increases.

 

It’s not easy I’m not saying it is but can be done just ask didi taihuttu who sold up everything his family owns and went travelling the world with his family back in 2016. He only spends bitcoin.
Rome wasn’t built in a day. We are talking about the most disruptive financial innovation ever. People expecting it to be smooth sailing and not have violent up and down swing are kidding themselves!
The 250k bank guarantee comes with caveats. And do you really think the government wouldn’t just take it away if they felt they needed to?
Look back through history to find your answer of most of the world being politically stable. This doesn’t last forever. Unless we have finally figured out the perfect way to run civilisation history will repeat. Major empires will fall and new ones will emerge. Ask the Russians how quick the change can be.
You don’t listen! The way it is better is it is censorship resistant, borderless, immutable money. It cannot be inflated, stolen or corrupted by any government. Everyone on the network is on a level playing field. It doesn’t matter if your the president of the USA or a begged on the streets. The network doesn’t care. Your transaction is no more important than anyone else’s and no “superior” can tell you that you have no right to send money back to your family in India.

 

re: didi, not all transactions have been in crypto. He has had to exchange some for fiat via ATMs or transactions with locals.

The 250k bank guarantee has been around since 2007, no, i don't think it is going to disappear anytime soon. The point is, crypto has no such guarantees. If i get ripped off in crypto i have no legal recourse. If someone steals your coins

re: your "the world is super unstable, countries and economic systems collapse all the time FUD" is hogwash. Bitcoin was created in the wake of the GFC to be a safe haven and as an electronic cash system. It was supposed to be an uncorrelated asset class. This was tested during the March 2020 crash when the S&P 500 fell 35%, Bitcoin should've soared as people flocked to the safety of this digital gold, it fell 55%, more than the S&P 500 as the masses fled to the safety of fiat. It failed. Just as it has failed as a payment system by having to burn through a New Zealand's worth of electricity to process a measly 5 transactions per second. Don't get me started on gold, classic inflation hedge and store of value in times of great uncertainty for aeons that has had mass adoption for quite some time.

Besides, if crypto ever went mainstream, governments will just legislate the on and off ramps as India is looking at doing. The proposed STABLE act is not good for crypto and look at how the ATO data matches with exchanges. What value is a decentralised, slow, inefficient, immutable network processing transactions of tokens that you can't exchange for fiat or real world goods? How is this innovation?

 

Didi often has to innovate to spend his bitcoin yes. He often sets up the vendors of the different places he goes with a bitcoin wallet. In a recent interview he explains it is getting a lot easier now compared to when he first started. Merchant adoption will increase over time as UI improves. Again Rome wasn’t built in a day. Bitcoin is 12 years old and akin to the early internet. You know how long it took to develop the internet. Email was just text. Video was painfully slow and grainy. Instant video streaming was never thought possible. It all takes time to grow.
Government already control on and off ramps. Although you still can transact purely peer to peer out of government control with physical cash. And obviously once more merchants accept it as payment you no longer need an off ramp. Once major listed companies like Tesla and smaller ones like microstratergy have it on their balance sheet and major etf’s are established it makes it highly unlikely it will ever be banned.
I think the word you’re looking for regarding countries/empires collapsing is history (not hogwash). You don’t think history will repeat like it has for the previous 5000years? The US and their dollar will reign supreme for eternity? The country who dominates the world controls the money.

Regarding bitcoins tps. Remember Rome not being built in a day. Bitcoin will scale in layers. 1000’s of tps are already possible via the lightning network. Companies like strike already providing instant transactions at scale. Bitcoin is the settlement layer for large important transactions. There is no need to record your coffee transaction on the blockchain. As it stands today when you talk about final settlement bitcoin is the fastest that exists. Fully settled in an hour compared to 2-30 days in the traditional banking system.
Bitcoin is a newborn asset and therefore still in price discovery mode. It will have violent up and down swings and be more volatile than current assets. It will crash hard in uncertain times but then rebound a lot more than other assets. I see bitcoin at this point as more a hedge against inflation and averaged out it has performed incredibly well for the last 12 years.
Regarding inflation have you ever cared to look at what the 1966 Australian 50cent piece is worth today. It was minted with 80% silver. In today dollars it is worth $11 for its silver content! That’s an inflation rate of over 6%. How many peoples wages have kept up with that? Answer is zero. That is why mothers are forced straight back into the workforce these days to keep the family afloat. The way this system is going is not sustainable and will collapse. Is bitcoin the answer I don’t know, but it’s where I choose to put my money and I’m glad we have another option.

 

Also regarding your 250k “guarantee”. If banks collapsed and the government didn’t move the goal posts and not honour the promise which they could easily do. Where do you think the bailout 250k comes from? Who pays it?

 

Bitcoin and the internet are not alike, the internet had a use case from the get-go and quickly scaled into mass adoption. Yes, i am aware the empires/the world order come and go all the time. We have had a hedge for that for aeons, it is called gold. Most of the world will be stable enough in our lifetimes. Gold bugs have been making the "society is on the verge of collapse, the dollar is about to collapse, hyper-inflation is upon us" arguments for decades, they have mostly been proven wrong.

Besides, look at what happened during the March 20 crash and the GFC. Economies were stabilised, jobs and livelihoods saved by central bank QE, money printing, stimulus and other government and central bank intervention. How is a decentralised world superior to this? Where are the back stops, the circuit breakers?

Ligthning, yeah, been talking about this, side-chains, etc for a while. Where is the mass adoption? The current blockchain you and I conduct our transactions on are not using it. Same goes for Vitalik's promises of switching to PoS, we are still waiting.

Inflation: there are other hedges, take on debt to purchase assets such as property and let the debt deflate away or just apportion part of a portfolio to gold. For the majority, these are adequate hedges. Also, we haven't gotten into the issue of the scarcity of there only every being 21 million coins. If Bitcoin replaced the USD as a universal means of exchange and it was used for all transactions, how on earth are the billions of occupants of this planet going to be constrained to just using what would be a handful of tokens compared to the trillions in fiat that exchanges hands every day?

The 250k guarantee. In the unlikely event an Australian bank collapsed and the government refused to honour the payment, they could just print more or use more tax dollars. so what? I much prefer this than having no recourse if my coins are stolen or i am scammed, etc. Most people do. Crypto is totally inferior in this regard. Ultimately, all exchanges are probably going to be seriously regulated and will have to provide guarantees, they will be scrutinised and alot of the fraud will disappear. So too will alot of the pumping and dumping, wash trading, etc. I think this will actually be good for crytpo, get rid of alot of scammers in the industry and make it safer.

 

we were saying....

 

‍♂️It’s like talking to a brick wall. The internet was first developed in the 1960’s. Definetly wasn’t a quick process like you make out. It’s obvious you have little idea what you are talking about and know little about bitcoin. Sub satoshi payments a possible through lightning and other layer 2 solutions. We now live in a digital world. Do you really think wealth storage isn’t going to go digital like everything else? Millennials want digital. Bitcoin makes sense. Gold doesn’t. Gold is expensive and hard to transport. Difficult to carry across borders. Easily confiscated. Not easily divisible. Hard to verify authenticity.
It is not hard to secure your coins. If you fall for a scam it’s your own stupid fault. People these days expect to be baled out of everything. They act like children who need someone to protect them. It’s laughable to me. How about taking control and if you mess up the onus is on you. Be an adult and take responsibility for your actions!

 

re: layer 2, lightning, etc. can you point to widescale mass adoption? If this is the case, why are the majority of transactions still conducted on the inefficient 5tps blockchain?

Yes, money has been digital and ephemeral for quite some time now. Just numbers on a screen.

Around 20% of bitcoins are in lost or stranded wallets - awesome store of value indeed. Unlike a tangible property, precious metals, share in a company that is traded on a regulated exchange and whose board must answer to corporate regulators and shareholders. Tens of billions worth of Bitcoin have been locked by people who forgot their key.

"if you fall for a scam, it's your own stupid fault" - wow! harsh. Sounds very much like dystopian economic darwinism. We moved away from this quite some time ago as too many people got hurt. Why would anyone want to return to a system with no safety nets? How on earth do you expect such ideology to ever go mainstream? So, if you are scammed out of your bitcoins, do you expect me to have no pity for you because it's your own damn fault, you foolish child?

*picturing Bitcoin Maxis standing on the hill to die on, surrounded by the carcasses of gold bugs of decades past who perished waiting for the economic apocalypse that never happened*

 

Probably a dumb question, but why doesn't someone create a decentralised cryptocurrency, where it can only be bought and sold at a fixed price (maybe peg it to the average price of a Big Mac across a dozen or so countries).

If volatility is the problem for mainstream uptake (especially in commerce etc.) then why not remove the volatility entirely?