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it is hard to identify a specific economic problem which they currently solve Receiving, owning and spending money anonymously. Remember when extortionists

it is hard to identify a specific economic problem which they currently solve Receiving, owning and spending money anonymously. Remember when extortionists had to be paid with a suitcase full of banknotes? Receiving money without being exposed to the danger of fraud. Receiving money via Credit Card is surprisingly risky for the merchant. Transferring money internationally without additional costs. Portfolio optimization. Crypto currencies are probably not perfectly correlated to other assets. So it stabilizes the portfolio to add some crypto. All kinds of contractual setups. Example: "This accounts money can only be spend if 2 of the following 3 account holders agree: ..." .

brokensegue 8y ago
> Transferring money internationally without additional costs. nope > Portfolio optimization nope. i still await an explanation using MPT that shows why someone should hold non-zero cryptoassets. It's like saying I should hold euros because it stabilizes my portfolio. Euros are not a productive asset dude.
- hendzen 8y ago
  Even if you accept that they are uncorrelated textbook Markowitz would give you a very small allocation to crypto since the volatility is so high.
  - kgwgk 8y ago
    Only if the expected return is enough to make it optimal.
    - brokensegue 8y ago
      lotto tickets are uncorrelated with most of my assets but i don't hold them for the reasons you cited. the OP's argument about correlation is mostly bunk since the real debate is about expected upside which is the whole argument to begin with. if bitcoin is a store of value like gold then don't hold it in your portfolio for the same reasons you don't hold gold (it just sits there). if it's a currency then don't hold it for the same reason you don't hold cash (it just sits there).
- Sir_Substance 8y ago
  >> Transferring money internationally without additional costs. >nope It costs between $70 and $90 to send $1AUD from Australia to Iceland. Bitcoin transaction fees have _never_ been that high, and they're currently somewhere around $1AUD. $50-$70 of that fee is taken out of the transaction instead of charged seperately, which means it may be impossible to pay a bill accurately via SWIFT. I tried to pay for a tent via SWIFT from Iceland to the USA recently. Because the US bank used a customer support system that required you to log in via a wells fargo account that I didn't have, I was unable to ask whether they charged fees to receive swift transactions. I added $15 extra to the SWIFT payment as a hedge against any extra fees from wells fargo. I guess that was enough, because the merchant sent me the tent. If you think that the SWIFT system is better than bitcoin you haven't used SWIFT much.
  - Lazlo_Nibble 8y ago
    SWIFT charges pennies (well, eurocents) per message. The fees you’re referring to are imposed by the institutions on either end of the transaction.
    - Sir_Substance 8y ago
      Actually, it's imposed by the institutions in the middle of the transaction as well. Australian banks don't handle Icelandic krona, and Icelandic banks don't handle Australian dollars. As a result, they pick a third bank that handles both to be the middle man. If there's no one bank that handle both then it becomes a 4-player game. Every bank involved charges fees. I don't know how many banks get involved in AU->IS, but since the fee per bank seems to be about $15-$20AU as a standard, I'm guessing at least 4.
  - brokensegue 8y ago
    Sending money between countries is two things. Changing currencies and moving the cash. Bitcoin maybe saves you some money on the latter but you are going to need to do the former to do something useful no matter what and it doesn't save you anything there. Plus if you're an American suddenly this transaction has tax consequences. Plus I don't know where you got that quote but most transfers are much cheaper than that a/i. That pairing must just be incredibly non-competitive since it's very low volume. Why didn't you pay via a CC? Free foreign transaction fees is a common perk?
banachtarski 8y ago
> Receiving money without being exposed to the danger of fraud. Receiving money via Credit Card is surprisingly risky for the merchant. We have this well established thing called a credit score which is handled by the credit card agency and resolves trust issues for the merchant entirely. If a person suspects identity theft, they can put a hold on a card, preventing further use. Cards have expiration dates and periodically cycle out. I'm sorry but when people explain to me that using a token they are personally responsible for encrypting is "safer" somehow, I raise my eyebrows.
- CrazyInNewYork 8y ago
  Then why do merchants (especially startups) suffer so much from the credit card fraud problem? https://hn.algolia.com/?query=credit%20card%20fraud&sort=byPopularity&prefix&page=0&dateRange=all&type=story https://hn.algolia.com/?query=credit%20card%20fraud&sort=byP...
  - cjhopman 8y ago
    Because that is how we've decided to allocate the risk. There was a time when that allocation was different (and that users could be more liable for fraudulent use of their cards), but, at least in the U.S, we decided we didn't like that and legislated it away.
- kneel 8y ago
  >We have this well established thing called a credit score which is handled by the credit card agency and resolves trust issues for the merchant entirely. We have this well established phenomenon called 'data breaches' which has compromised nearly everyone's credit/personal data. Your info is on the dark web. Lots of databases that can be cross correlated. Banks increasingly don't know who they're dealing with, fraud is increasing.
  - a_c_s 8y ago
    Consumers don't need to worry about this though: all fraudulent charges are removed from the customer's account and are somebody else's problem. The customer gets a new credit card sent to them, sometimes even overnight, for free. I've had both credit and debit card fraud happen to my accounts: it is a pretty minor annoyance. (A data breach of my Social Security Number would be a whole different story however!)
DmenshunlAnlsis 8y ago
Receiving, owning and spending money anonymously. Remember when extortionists had to be paid with a suitcase full of banknotes? Most cryptocurrency isnt anonymous, and certainly Bitcoin isn’t. In fact it’s arguable that the public ledger nature makes it far less anonymous than almost anything else. What it is, is easier to launder, hence the extortionist wet dreams. Why is it a feature of a currency to have the most utility for thieves and other criminals? Receiving money without being exposed to the danger of fraud. Depends on the currency. There was a recent 51% attack, and the many many fraudulent ICO’s, exist scams, and exchange “robberies” to provide counterexamples. As a bonus, no insurance! Hooray... Receiving money via Credit Card is surprisingly risky for the merchant. It really isn’t. Transferring money internationally without additional costs. Transaction fees exist for crypto actually. Let’s also remember that all of this “utility” comes at the low low cost of an ungodly amount of wasted energy.
- vinceguidry 8y ago
  > Receiving money via Credit Card is surprisingly risky for the merchant. > It really isn’t. Nerdwallet article outlining the fraud risk: https://www.nerdwallet.com/blog/credit-cards/merchants-victims-credit-card-fraud/ https://www.nerdwallet.com/blog/credit-cards/merchants-victi...
- fernandopj 8y ago
  > Receiving money via Credit Card is surprisingly risky for the merchant. > It really isn’t. Also on that: receiving money via CC is not always straightfoward, you'd be suprised how much effort (not to mention money) merchants have to spend auditing and verifying that what they're supposed to get (what they sold) are actually being credited to their bank account.
soVeryTired 8y ago
> Receiving money without being exposed to the danger of fraud. Receiving money via Credit Card is surprisingly risky for the merchant. I'm pretty sure cryptocurrencies just move the risks around, rather than eliminating them. Currently, the vendor is on the hook for stolen credit cards. With cryptocurrencies, the currency owner is on the hook. You could accomplish the same shift in the burden of risks with a legislative change if you wanted: it's just that credit card owners don't want that.
- stale2002 8y ago
  Being able to move the trust around is still valuable. IE, if the merchant is more trustworthy, then we want that trust to be with the merchant, and on with the customer. When the merchant is less trustworthy, well that's what credit cards are for.
  - cjhopman 8y ago
    > Being able to move the trust around is still valuable. Right. And the current system handles that just fine. It would be trivial to make a credit card system where charges were irreversible. There hasn't been enough demand for that (possibly because it's not actually useful in a non-ideal world).
    - stale2002 8y ago
      No, it would not be trivial. You are still subject to the whims of the financial system. The financial system can still censor and reverse your transactions if it wants to. If the government comes knocking, then your transactions will be frozen, even if you have broken ZERO laws. All they have to do is vaguely threaten a credit card company behind the scenes, and the credit card company will freeze your transactions, even if the vague threat was illegal, and what you are doing is legal. And you will have zero recourse. Just go look at what happened to WikiLeaks back in 2010. WikiLeaks broke zero laws, and yet the financial system successfully censored donations to them, by blocking all credit card transactions. The use case of crypto is to send difficult to reverse, censorship resistant, near instant (yes, 10 minutes is small when compared to credit card settlement, which takes days), electronic transactions. And this worked great for WikiLeaks, as their crypto transactions were not censored, but their credit card transactions WERE.
scardine 8y ago
> Receiving money via Credit Card is surprisingly risky for the merchant. In this aspect cryptocurrencies are surprisingly dangerous for the customer because there is no easy way to revert a transaction done by mistake or fraud (lets say someone cracked your wallet). With credit cards in the worst case you just screw the merchant and I guess this is what marketplaces will end up doing instead of setting up their own escrow systems in order to protect both sides because handling disputes is hard work.
- EthanHeilman 8y ago
  You can build in the ability to reverse cryptocurrency transactions into wallets however that use case is well covered by credit cards. Credit cards/checks: Merchant trusts user, user doesn't trust merchant Wire-transfers/Cashiers Checks/Cash/Bitcoin: User trusts merchant, merchant doesn't trust user
  - bena 8y ago
    > You can build in the ability to reverse cryptocurrency transactions into wallets But that just puts the risk back with the other party. We're just back to the credit card scenario like you mentioned. The point is that crypto can't get rid of the issue of trust. At some level, there has to be some level of trust in order to perform a transaction. No matter what we do, all we're doing is pushing the trust somewhere else.
    - EthanHeilman 8y ago
      >The point is that crypto can't get rid of the issue of trust. At some level, there has to be some level of trust in order to perform a transaction. This is generally true however there are some exceptions. You can trustlessly trade Bitcoins for solutions to particular problems e.g. the preimage of a particular hash. This can be extended to a much larger class of problems with Zero Knowledge Contingent Payment (ZKCP).
    - stale2002 8y ago
      Ok, and that's fine. It gives people choice. If people want the option where you trust the customer, that's what credit cards are for. And if people make the opposite choice, that is ALSO ok, and is what crypto is for. It is still very valuable to be able to move that trust somewhere else. To give a concrete example, what if the merchant is inherently more trust worth in a specific market? Then, it is BETTER to put that trust on the merchant.
jeffreyrogers 8y ago
> Portfolio optimization. Crypto currencies are probably not perfectly correlated to other assets. So it stabilizes the portfolio to add some crypto. Considering cryptocurrencies have only come to prominence during a bull market and unusual macroeconomic conditions I don't think you can conclude this. I would bet they're strongly correlated with the stock market. And because of lack of liquidity are likely to crash harder than other, more liquid assets.
- chrisco255 8y ago
  I would not make that bet at all. Why would there be any correlation between crypto and the stock market? Also, crypto is arguably more liquid than stocks. They trade 24/7, there's decentralized exchanges, ATMs for BTC, etc...can't take my company stock to an ATM machine. And cashing out stock often takes weeks.
  - chrisco255 8y ago
    Hey downvoters: OP made an unsubstantiated claim about correlation of stock markets and crypto markets. There is no reason to believe this to be true. Statements about 24/7 access to crypto markets is a fact. Statements about stock exchanges being limited to business hours are facts. What gives?
gfo 8y ago
You're joking, right? > Receiving, owning and spending money anonymously. Remember when extortionists had to be paid with a suitcase full of banknotes? As stated in other comments, Bitcoin is hardly anonymous anymore. There's a much greater ability to trace wallet addresses back to individuals or groups than there used to be. > Receiving money without being exposed to the danger of fraud. Receiving money via Credit Card is surprisingly risky for the merchant. Fraud was (and likely still is) rampant in the digital currency community when Bitcoin hit its peak. Plenty of it was going on in direct relation to the system and we've also seen the 51% attacks plus price manipulation. Also, at least with credit there's legal recourse. It's at least something compared to nothing with digital currencies. > Transferring money internationally without additional costs. At Bitcoin's peak there was a significant cost to doing any transfers. This is now admittedly lower but to the average person I don't think this is a strong enough argument alone. > Portfolio optimization. Crypto currencies are probably not perfectly correlated to other assets. So it stabilizes the portfolio to add some crypto. This is where I start to think you're joking. The volatility of digital currencies doesn't stabilize any portfolio. At best it contributes to a diversified portfolio. At worst, you're correct, it doesn't really correlate to any asset. It is tied to nothing tangible. You can argue that something is worth whatever someone is willing to pay for it but that's such a terrible argument when the few businesses who tried accepting it are moving away from that, volatility again being one of the major issues. At a certain point there's nothing to be gained other than 'street cred' for having more of these coins attributed to an address that you claim to own. Blockchain technology will stick around, digital currencies, at least those supposedly worth thousands, will not. I'm sure by now readers can tell I'm very against this. The people riding the digital currency hype train sound no different to me than those involved in pyramid and/or ponzi schemes. The fact that Bitcoin is consuming so much electricity and takes so much computing power to confirm a transaction should be enough of an argument against it. Also, what do you propose when quantum becomes mainstream? Every wallet in existing currencies will be cracked in mere seconds and investors will lose all of the coin they will have amassed. I'm sure someone will try to create a quantum digital currency but by then the opportunists that make up most of this market will hopefully realize how overhyped this was.
- istorical 8y ago
nerdwaller 8y ago
The anonymity is extremely over sold with most cryptocurrencies. If the goal is to pay and be paid with them, then the second you pay or get paid you’re trusting the other party to not disclose the user/wallet relationship. The second they do, every thing you’ve ever done with that wallet is visible. I’d expect the current selling of user data to 3rd parties to continue, regardless of payment methodologies. Even if you strictly “invest” with cryptocurrencies you’re moving money in via fiat, so whomever you do that through also ties you to an address (or omnibus pool while you’re on an exchange).

brokensegue 8y ago

> Transferring money internationally without additional costs. nope > Portfolio optimization nope. i still await an explanation using MPT that shows why someone should hold non-zero cryptoassets. It's like saying I should hold euros because it stabilizes my portfolio. Euros are not a productive asset dude.

hendzen 8y ago
Even if you accept that they are uncorrelated textbook Markowitz would give you a very small allocation to crypto since the volatility is so high.
- kgwgk 8y ago
  Only if the expected return is enough to make it optimal.
  - brokensegue 8y ago
    lotto tickets are uncorrelated with most of my assets but i don't hold them for the reasons you cited. the OP's argument about correlation is mostly bunk since the real debate is about expected upside which is the whole argument to begin with. if bitcoin is a store of value like gold then don't hold it in your portfolio for the same reasons you don't hold gold (it just sits there). if it's a currency then don't hold it for the same reason you don't hold cash (it just sits there).
Sir_Substance 8y ago
>> Transferring money internationally without additional costs. >nope It costs between $70 and $90 to send $1AUD from Australia to Iceland. Bitcoin transaction fees have _never_ been that high, and they're currently somewhere around $1AUD. $50-$70 of that fee is taken out of the transaction instead of charged seperately, which means it may be impossible to pay a bill accurately via SWIFT. I tried to pay for a tent via SWIFT from Iceland to the USA recently. Because the US bank used a customer support system that required you to log in via a wells fargo account that I didn't have, I was unable to ask whether they charged fees to receive swift transactions. I added $15 extra to the SWIFT payment as a hedge against any extra fees from wells fargo. I guess that was enough, because the merchant sent me the tent. If you think that the SWIFT system is better than bitcoin you haven't used SWIFT much.
- Lazlo_Nibble 8y ago
  SWIFT charges pennies (well, eurocents) per message. The fees you’re referring to are imposed by the institutions on either end of the transaction.
  - Sir_Substance 8y ago
    Actually, it's imposed by the institutions in the middle of the transaction as well. Australian banks don't handle Icelandic krona, and Icelandic banks don't handle Australian dollars. As a result, they pick a third bank that handles both to be the middle man. If there's no one bank that handle both then it becomes a 4-player game. Every bank involved charges fees. I don't know how many banks get involved in AU->IS, but since the fee per bank seems to be about $15-$20AU as a standard, I'm guessing at least 4.
- brokensegue 8y ago
  Sending money between countries is two things. Changing currencies and moving the cash. Bitcoin maybe saves you some money on the latter but you are going to need to do the former to do something useful no matter what and it doesn't save you anything there. Plus if you're an American suddenly this transaction has tax consequences. Plus I don't know where you got that quote but most transfers are much cheaper than that a/i. That pairing must just be incredibly non-competitive since it's very low volume. Why didn't you pay via a CC? Free foreign transaction fees is a common perk?

banachtarski 8y ago

> Receiving money without being exposed to the danger of fraud. Receiving money via Credit Card is surprisingly risky for the merchant. We have this well established thing called a credit score which is handled by the credit card agency and resolves trust issues for the merchant entirely. If a person suspects identity theft, they can put a hold on a card, preventing further use. Cards have expiration dates and periodically cycle out. I'm sorry but when people explain to me that using a token they are personally responsible for encrypting is "safer" somehow, I raise my eyebrows.

CrazyInNewYork 8y ago
Then why do merchants (especially startups) suffer so much from the credit card fraud problem? https://hn.algolia.com/?query=credit%20card%20fraud&sort=byPopularity&prefix&page=0&dateRange=all&type=story https://hn.algolia.com/?query=credit%20card%20fraud&sort=byP...
- cjhopman 8y ago
  Because that is how we've decided to allocate the risk. There was a time when that allocation was different (and that users could be more liable for fraudulent use of their cards), but, at least in the U.S, we decided we didn't like that and legislated it away.
kneel 8y ago
>We have this well established thing called a credit score which is handled by the credit card agency and resolves trust issues for the merchant entirely. We have this well established phenomenon called 'data breaches' which has compromised nearly everyone's credit/personal data. Your info is on the dark web. Lots of databases that can be cross correlated. Banks increasingly don't know who they're dealing with, fraud is increasing.
- a_c_s 8y ago
  Consumers don't need to worry about this though: all fraudulent charges are removed from the customer's account and are somebody else's problem. The customer gets a new credit card sent to them, sometimes even overnight, for free. I've had both credit and debit card fraud happen to my accounts: it is a pretty minor annoyance. (A data breach of my Social Security Number would be a whole different story however!)

DmenshunlAnlsis 8y ago

Receiving, owning and spending money anonymously. Remember when extortionists had to be paid with a suitcase full of banknotes? Most cryptocurrency isnt anonymous, and certainly Bitcoin isn’t. In fact it’s arguable that the public ledger nature makes it far less anonymous than almost anything else. What it is, is easier to launder, hence the extortionist wet dreams. Why is it a feature of a currency to have the most utility for thieves and other criminals? Receiving money without being exposed to the danger of fraud. Depends on the currency. There was a recent 51% attack, and the many many fraudulent ICO’s, exist scams, and exchange “robberies” to provide counterexamples. As a bonus, no insurance! Hooray... Receiving money via Credit Card is surprisingly risky for the merchant. It really isn’t. Transferring money internationally without additional costs. Transaction fees exist for crypto actually. Let’s also remember that all of this “utility” comes at the low low cost of an ungodly amount of wasted energy.

vinceguidry 8y ago
> Receiving money via Credit Card is surprisingly risky for the merchant. > It really isn’t. Nerdwallet article outlining the fraud risk: https://www.nerdwallet.com/blog/credit-cards/merchants-victims-credit-card-fraud/ https://www.nerdwallet.com/blog/credit-cards/merchants-victi...
fernandopj 8y ago
> Receiving money via Credit Card is surprisingly risky for the merchant. > It really isn’t. Also on that: receiving money via CC is not always straightfoward, you'd be suprised how much effort (not to mention money) merchants have to spend auditing and verifying that what they're supposed to get (what they sold) are actually being credited to their bank account.

soVeryTired 8y ago

> Receiving money without being exposed to the danger of fraud. Receiving money via Credit Card is surprisingly risky for the merchant. I'm pretty sure cryptocurrencies just move the risks around, rather than eliminating them. Currently, the vendor is on the hook for stolen credit cards. With cryptocurrencies, the currency owner is on the hook. You could accomplish the same shift in the burden of risks with a legislative change if you wanted: it's just that credit card owners don't want that.

stale2002 8y ago
Being able to move the trust around is still valuable. IE, if the merchant is more trustworthy, then we want that trust to be with the merchant, and on with the customer. When the merchant is less trustworthy, well that's what credit cards are for.
- cjhopman 8y ago
  > Being able to move the trust around is still valuable. Right. And the current system handles that just fine. It would be trivial to make a credit card system where charges were irreversible. There hasn't been enough demand for that (possibly because it's not actually useful in a non-ideal world).
  - stale2002 8y ago
    No, it would not be trivial. You are still subject to the whims of the financial system. The financial system can still censor and reverse your transactions if it wants to. If the government comes knocking, then your transactions will be frozen, even if you have broken ZERO laws. All they have to do is vaguely threaten a credit card company behind the scenes, and the credit card company will freeze your transactions, even if the vague threat was illegal, and what you are doing is legal. And you will have zero recourse. Just go look at what happened to WikiLeaks back in 2010. WikiLeaks broke zero laws, and yet the financial system successfully censored donations to them, by blocking all credit card transactions. The use case of crypto is to send difficult to reverse, censorship resistant, near instant (yes, 10 minutes is small when compared to credit card settlement, which takes days), electronic transactions. And this worked great for WikiLeaks, as their crypto transactions were not censored, but their credit card transactions WERE.

scardine 8y ago

> Receiving money via Credit Card is surprisingly risky for the merchant. In this aspect cryptocurrencies are surprisingly dangerous for the customer because there is no easy way to revert a transaction done by mistake or fraud (lets say someone cracked your wallet). With credit cards in the worst case you just screw the merchant and I guess this is what marketplaces will end up doing instead of setting up their own escrow systems in order to protect both sides because handling disputes is hard work.

EthanHeilman 8y ago
You can build in the ability to reverse cryptocurrency transactions into wallets however that use case is well covered by credit cards. Credit cards/checks: Merchant trusts user, user doesn't trust merchant Wire-transfers/Cashiers Checks/Cash/Bitcoin: User trusts merchant, merchant doesn't trust user
- bena 8y ago
  > You can build in the ability to reverse cryptocurrency transactions into wallets But that just puts the risk back with the other party. We're just back to the credit card scenario like you mentioned. The point is that crypto can't get rid of the issue of trust. At some level, there has to be some level of trust in order to perform a transaction. No matter what we do, all we're doing is pushing the trust somewhere else.
  - EthanHeilman 8y ago
    >The point is that crypto can't get rid of the issue of trust. At some level, there has to be some level of trust in order to perform a transaction. This is generally true however there are some exceptions. You can trustlessly trade Bitcoins for solutions to particular problems e.g. the preimage of a particular hash. This can be extended to a much larger class of problems with Zero Knowledge Contingent Payment (ZKCP).
  - stale2002 8y ago
    Ok, and that's fine. It gives people choice. If people want the option where you trust the customer, that's what credit cards are for. And if people make the opposite choice, that is ALSO ok, and is what crypto is for. It is still very valuable to be able to move that trust somewhere else. To give a concrete example, what if the merchant is inherently more trust worth in a specific market? Then, it is BETTER to put that trust on the merchant.

jeffreyrogers 8y ago

> Portfolio optimization. Crypto currencies are probably not perfectly correlated to other assets. So it stabilizes the portfolio to add some crypto. Considering cryptocurrencies have only come to prominence during a bull market and unusual macroeconomic conditions I don't think you can conclude this. I would bet they're strongly correlated with the stock market. And because of lack of liquidity are likely to crash harder than other, more liquid assets.

chrisco255 8y ago
I would not make that bet at all. Why would there be any correlation between crypto and the stock market? Also, crypto is arguably more liquid than stocks. They trade 24/7, there's decentralized exchanges, ATMs for BTC, etc...can't take my company stock to an ATM machine. And cashing out stock often takes weeks.
- chrisco255 8y ago
  Hey downvoters: OP made an unsubstantiated claim about correlation of stock markets and crypto markets. There is no reason to believe this to be true. Statements about 24/7 access to crypto markets is a fact. Statements about stock exchanges being limited to business hours are facts. What gives?

gfo 8y ago

You're joking, right? > Receiving, owning and spending money anonymously. Remember when extortionists had to be paid with a suitcase full of banknotes? As stated in other comments, Bitcoin is hardly anonymous anymore. There's a much greater ability to trace wallet addresses back to individuals or groups than there used to be. > Receiving money without being exposed to the danger of fraud. Receiving money via Credit Card is surprisingly risky for the merchant. Fraud was (and likely still is) rampant in the digital currency community when Bitcoin hit its peak. Plenty of it was going on in direct relation to the system and we've also seen the 51% attacks plus price manipulation. Also, at least with credit there's legal recourse. It's at least something compared to nothing with digital currencies. > Transferring money internationally without additional costs. At Bitcoin's peak there was a significant cost to doing any transfers. This is now admittedly lower but to the average person I don't think this is a strong enough argument alone. > Portfolio optimization. Crypto currencies are probably not perfectly correlated to other assets. So it stabilizes the portfolio to add some crypto. This is where I start to think you're joking. The volatility of digital currencies doesn't stabilize any portfolio. At best it contributes to a diversified portfolio. At worst, you're correct, it doesn't really correlate to any asset. It is tied to nothing tangible. You can argue that something is worth whatever someone is willing to pay for it but that's such a terrible argument when the few businesses who tried accepting it are moving away from that, volatility again being one of the major issues. At a certain point there's nothing to be gained other than 'street cred' for having more of these coins attributed to an address that you claim to own. Blockchain technology will stick around, digital currencies, at least those supposedly worth thousands, will not. I'm sure by now readers can tell I'm very against this. The people riding the digital currency hype train sound no different to me than those involved in pyramid and/or ponzi schemes. The fact that Bitcoin is consuming so much electricity and takes so much computing power to confirm a transaction should be enough of an argument against it. Also, what do you propose when quantum becomes mainstream? Every wallet in existing currencies will be cracked in mere seconds and investors will lose all of the coin they will have amassed. I'm sure someone will try to create a quantum digital currency but by then the opportunists that make up most of this market will hopefully realize how overhyped this was.

istorical 8y ago

nerdwaller 8y ago

The anonymity is extremely over sold with most cryptocurrencies. If the goal is to pay and be paid with them, then the second you pay or get paid you’re trusting the other party to not disclose the user/wallet relationship. The second they do, every thing you’ve ever done with that wallet is visible. I’d expect the current selling of user data to 3rd parties to continue, regardless of payment methodologies. Even if you strictly “invest” with cryptocurrencies you’re moving money in via fiat, so whomever you do that through also ties you to an address (or omnibus pool while you’re on an exchange).