Is it too soon to talk about Crypto yet?

[Tpondel]

Not confrontational, interested in why it is not actually just a widely embraced ponzi scheme.

Research the term “rug pull”.

 

[kenmbz]

Started as an easy way for money to move without prying eyes.
I should have invested when I saw the cartels so heavily using it, but I let morality step in the way.

Now it's more mainstream and less about moving money outside of the legal banking system.
Maybe now is the time for me to invest?

 

[Fuddyduddy1952]

Anyone can take what Warren Buffet said about cryptocurrency with a grain of salt, although one of the most successful investors of all time:
"Bitcoin, the most valuable cryptocurrency in the world, was "probably rat poison squared.""
Mutual funds your money is diversified among many stocks across a variety of small-mid-large cap with various degrees of risk, gains, dividends, etc.

 

[ericm979]

Not confrontational, interested in why it is not actually just a widely embraced ponzi scheme.

It is. Or a little more accurately, it's like the tulip mania in the the 1600s. When people are buying just because it's going up and there's either no intrinsic value or very little, it's a mania.

Cryptocurrencies are not anonymous. The ledger is public! Unless your operational security is very good it's easy for police or anyone else to figure out what you own. A bank account is more private.

Crypto wallets and trading platforms have terrible security, and when your money disappears from them you can't get it back. Bank accounts are insured, crypto is not. Often it's an inside job. There's an entire centuries long legal infrastructure that keeps your dealings with banks and investments like stocks relatively secure and fair. Crypto was invented by engineers who understood little of that and dismissed what little they did know. I was running the mailing list where the people who invented crypto discussed it. I know the guy who invented smart contracts. Which actually turned out to be dumb- who knew that throwing out centuries of contract law and trying to write contracts in code would be so terrible? To be fair I didn't see the problems at the time either.

I've known about bitcoin since it was invented. I understand how it works. I've never owned any. While it's possible to make money on it if you're lucky, I would not recommend it to anyone.

 

[ericm979]

Research the term “rug pull”.

Web3 is Going Just Great is a great source. Very well researched.

 

[fiddlearound]

So, when you hand over your pile of failing fiat money, what exactly do you get in return?

 

[ericm979]

Another good source of info is Matt Levine's newsletter Bloomberg - Are you a robot?

He writes about a lot of other stuff in finance besides crypto but it's all interesting.

 

[jmc]

My money's in Ratbert's Discount Lottery Tickets. While skeptics point out that they are merely expired lottery tickets, they don't dispute the fact that expired tickets have virtually the same odds as those more expensive tickets.

 

[ericm979]

So, when you hand over your pile of failing fiat money, what exactly do you get in return?

When someone says things like "failing fiat money" I realize they're posturing, not discussing. But I'll answer anyhow for the people who have open minds.

What you get with a fiat currency is stability. If I sell you a ton of hay, the $250 or whatever I get from that is still going to be worth about a ton of hay when I use it next month to buy diesel fuel. If it wasn't I'd have to try to buy diesel with hay. That's a problem because the diesel guy doesn't want hay, you do. The whole purpose of money is so I don't have to try to talk the diesel guy into taking hay. Instead I can give him something with a universal agreed upon value that he can use to buy anything he needs.

Inflation and deflation can change currency values, but that's generally bad and to be avoided. It causes a lot of problems. If you think the currency is going to appreciate rapidly, you're not going to want to give me $250 for a ton of hay. You may hold off buying hay, which is bad for me (and the economy if a lot of people do it). Or you may try to buy it for less than $250. Now we're not only negotiating the price of hay, we're also negotiating on our feelings about the future of the currency we're using to trade hay. That's bad for commerce.

Cryptocurrency's value fluctuates wildly compared to any real currency. That makes it terrible as a currency. "Stable coins" try to address that by (usually) pegging the value to the dollar. So now you're using something that's got a stable value, but it gets rid of many of the supposed benefits of not being fiat currency, and still keeps the drawbacks of crypto (lack of privacy and incredibly high transaction costs).

Anyhow, go buy some bitcoin or doge or whatever and then try to buy hay or diesel with them. You can't. It's clear that they're investments (of questionable quality) not currency.

 

[ruffdog]

Not confrontational, interested in why it is not actually just a widely embraced ponzi scheme.

Grifters promoting ponzi schemes......what could go wrong?