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There clearly are a lot of scammers and grifters in this market, as with all upcoming markets usually, but how is crypto a scam industry? In 13 years the fundam

by zpeti 5y ago

There clearly are a lot of scammers and grifters in this market, as with all upcoming markets usually, but how is crypto a scam industry? In 13 years the fundamentals of Bitcoin have not been exploited. Algorithmically I mean. Human element wise perhaps.

cookiengineer 5y ago
> 13 years I am not sure where you've lived the last 13 years, but in this reality lots of projects that were aspiring use cases of that technology were founded, somebody got wind of it with their disciples...and the coin got dumped afterwards. So yeah, I would say crypto coins overall are a ponzi scheme. Doesn't matter how good your tech is, people will exploit it to get rich. And they successfully did, otherwise everybody (meaning the whole society) invested in BTC would be a millionaire by now and the current oligarchic structure with almost neverending wealth through manipulation of other people would not exist. Count the coins, count the IPOs that successfully were dumped. They have a different view on it. Also ask them about whether or not two years after the IPO they've build any actual code or any actual program. Most of them, even the successful ones, abandoned their ideas because they got money out of it and that was the thing they cared about the most. People in the crypto bubble always forget to ask these questions, because they themselves think that they are already invested into crypto and have no alternative way of using their resources anymore. But that's not true either. Coming back to BTC: a stable coin does not have more than 20k$ difference in worth per day. Sorry, BTC failed. And now it's the competition of high frequency traders that you as a citizen have no chance against anymore. That is why I'd say BTC also has failed.
- randomhodler84 5y ago
  Is your thesis that BTC failed because it’s price is not stable? I don’t think that is a good metric. Most asset prices are not stable. By all the metrics I consider, it’s pretty damn successful actually. Just because you want it to fail, doesn’t really matter. It is not failing, in fact, we had a country adopt it as legal tender last year, with another few to follow in 2022. I like that kind of failure!
  - cookiengineer 5y ago
    A stable economy should be the goal of every economy. Otherwise it cannot not be defined as an economy. My thesis is that BTC failed at exactly that. It's the opposite of stable. BTC only works advantegous for the HODLers because they actually buy things in another currency, and not in BTC. If they would have to buy electricity, food and shelter and actual physical assets via BTC, they would have to pay millions for it; because BTC is in the state of maximum inflation eversince the HFTs went on it. I would recommend you read up on the financial crisises that happened all over the world after the second world war, and what the obligations of a central bank (e.g. European central bank) are and why they exist, and what they prevent. Otherwise this "but it's awesome cause I think I'm rich" discussion is gonna be pretty pointless, because we have really opposing views on what "stability" means in regards to e.g. inflation vs. amount of goods that back up the economy's currency.
    - randomhodler84 5y ago
      This was never about personal enrichment, it was about freedom and sound money. At least to me. I am a cypherpunk. I am well aware of the monetary systems post WW2. What happened was the great US did what no other nation could do in history — monetize their debt and get the world to treat it as their money. It was genius, really. The problem emerged where Governments got really slack with the backing. Now we just print it any time it is politically expedient. I want a system where that isn’t possible. Bitcoin was invented to solve this problem.
      - cookiengineer 5y ago
        Sorry, I was referring to the European countries that were on the other end of that deal. We couldn't afford creating a credit-based system at the time, and the issue was that the inflation was so high that you literally had bills with "1.000.000" printed on it because the paper was running out on a daily basis. The issue that I see behind BTC and other crypto currencies is that they kind of want to introduce a new good that balances the value of the currency: computation power (and maybe bandwidth/storage). But these goods are heavily dependent on the physical world, the progress of other economies (e.g. chip shortage is gonna hit BTC real hard soon, I "would predict") and the advancements of tech (e.g. ASICs or FPGA-based hash generation methods that are more efficient than what's available to everyone). Those dependencies is what I think are messed up, because they favor the ones that already have money in the physical space. As long as the goods required by the crypto currency are in the physical space, this inflation and behaviours of created sub-economies iteratively failing at some point won't change. I don't have an idea how to solve it, it's just what I've come to realize after years investing in the crypto currency space; and observing the shitshow that's NFTs right now. The current state is certainly not what BTC or any crypto currency was intended for as an idea, and getting a database entry somewhere because you were the first is not a reasonable approach to how an economy should work, algorithmically speaking. We need a better approach for throttling and redistribution of wealth, because the gas price in ETH obviously isn't enough. If an economy favors the ones that were in it first, it's also not an economy that can scale. Because it will result in an oligarchic bank-like structure, where money is hoarded that cannot flow and push the rest of the economy where it would be needed to get out of unfavorable situations like poverty (that is in regards to goods aka only having an old computer).
lottin 5y ago
A fiat (aka unbacked) currency that is issued privately is indistinguishable from a scam, because a fiat currency has a nominal value that is higher than what it costs to produce. This is true of bitcoins, because bitcoins are fiat money too (just not very convenient to use). The average production cost of all bitcoins in circulation is likely less than $1. These bitcoins are now being sold for tens of thousands of dollars. People profiting from this, largely early producers of bitcoins, are being rewarded with millions of dollars for basically doing nothing. They took no risk, they did absolutely nothing that would justify the profits that they have made. I call this a scam.
- randomhodler84 5y ago
  You are just bitter. Folks that bought Amazon or Apple stock at IPO did nothing either. In fact, a great deal of wealth floating about wasn’t wasn’t earned by the holders at all. Are you angry with every house owner who’s property appreciated, every investor to took to risk with assets?
  - lottin 5y ago
    No, I don't have an issue with people making money from their entrepreneurial activities, in fact I applaud who people do that. I have an issue with people being handed millions of dollars when all they've done is downloading a computer program and running it on a god-damn laptop. I don't agree with that. I think it's a scam, and this is why I'll never buy a cryptocurrency or accept it as payment for anything, because I don't I agree to these people getting rich at my expense.
    - randomhodler84 5y ago
      Nobody is getting paid millions to run software. It doesn’t work that way. Some folks took a risk early by buying it and were very compromised for it. (All the mt gox trade and KYC data leaked, passports etc). Nobody is making millions mining without spending a compatible sum on hardware to do it. That sounds entrepreneurial to me. Solo CPU mining was such a small thing to a small niche, maybe those super super early folks deserve something for their efforts. Some folks are getting paid to stake, which may be more of a scam, and we can agree on that, they sacrifice nothing to produce more wealth. You haven’t said why it is a scam, except that people were entrepreneurs or investors in risky assets who were rewarded for their risk? Lottin you have been passionate against this for a long time, are you sure you are rationally evaluating this?
tick_tock_tick 5y ago
Ehh depends on what you call "exploited" the original 0.8 upgrade resulting fork effectively allowed a double spend https://bitcointalk.org/index.php?topic=152348 https://bitcointalk.org/index.php?topic=152348
- randomhodler84 5y ago
  Not a real double spend, just some central exchange accounting mismatch with the active chain. That’s why we wait for confirms. Still, glad you brought this up. 0.7/0.8 db issue was a scary time. Seems like a lifetime ago.

by zpeti 5y ago

cookiengineer 5y ago

> 13 years I am not sure where you've lived the last 13 years, but in this reality lots of projects that were aspiring use cases of that technology were founded, somebody got wind of it with their disciples...and the coin got dumped afterwards. So yeah, I would say crypto coins overall are a ponzi scheme. Doesn't matter how good your tech is, people will exploit it to get rich. And they successfully did, otherwise everybody (meaning the whole society) invested in BTC would be a millionaire by now and the current oligarchic structure with almost neverending wealth through manipulation of other people would not exist. Count the coins, count the IPOs that successfully were dumped. They have a different view on it. Also ask them about whether or not two years after the IPO they've build any actual code or any actual program. Most of them, even the successful ones, abandoned their ideas because they got money out of it and that was the thing they cared about the most. People in the crypto bubble always forget to ask these questions, because they themselves think that they are already invested into crypto and have no alternative way of using their resources anymore. But that's not true either. Coming back to BTC: a stable coin does not have more than 20k$ difference in worth per day. Sorry, BTC failed. And now it's the competition of high frequency traders that you as a citizen have no chance against anymore. That is why I'd say BTC also has failed.

randomhodler84 5y ago
Is your thesis that BTC failed because it’s price is not stable? I don’t think that is a good metric. Most asset prices are not stable. By all the metrics I consider, it’s pretty damn successful actually. Just because you want it to fail, doesn’t really matter. It is not failing, in fact, we had a country adopt it as legal tender last year, with another few to follow in 2022. I like that kind of failure!
- cookiengineer 5y ago
  A stable economy should be the goal of every economy. Otherwise it cannot not be defined as an economy. My thesis is that BTC failed at exactly that. It's the opposite of stable. BTC only works advantegous for the HODLers because they actually buy things in another currency, and not in BTC. If they would have to buy electricity, food and shelter and actual physical assets via BTC, they would have to pay millions for it; because BTC is in the state of maximum inflation eversince the HFTs went on it. I would recommend you read up on the financial crisises that happened all over the world after the second world war, and what the obligations of a central bank (e.g. European central bank) are and why they exist, and what they prevent. Otherwise this "but it's awesome cause I think I'm rich" discussion is gonna be pretty pointless, because we have really opposing views on what "stability" means in regards to e.g. inflation vs. amount of goods that back up the economy's currency.
  - randomhodler84 5y ago
    This was never about personal enrichment, it was about freedom and sound money. At least to me. I am a cypherpunk. I am well aware of the monetary systems post WW2. What happened was the great US did what no other nation could do in history — monetize their debt and get the world to treat it as their money. It was genius, really. The problem emerged where Governments got really slack with the backing. Now we just print it any time it is politically expedient. I want a system where that isn’t possible. Bitcoin was invented to solve this problem.
    - cookiengineer 5y ago
      Sorry, I was referring to the European countries that were on the other end of that deal. We couldn't afford creating a credit-based system at the time, and the issue was that the inflation was so high that you literally had bills with "1.000.000" printed on it because the paper was running out on a daily basis. The issue that I see behind BTC and other crypto currencies is that they kind of want to introduce a new good that balances the value of the currency: computation power (and maybe bandwidth/storage). But these goods are heavily dependent on the physical world, the progress of other economies (e.g. chip shortage is gonna hit BTC real hard soon, I "would predict") and the advancements of tech (e.g. ASICs or FPGA-based hash generation methods that are more efficient than what's available to everyone). Those dependencies is what I think are messed up, because they favor the ones that already have money in the physical space. As long as the goods required by the crypto currency are in the physical space, this inflation and behaviours of created sub-economies iteratively failing at some point won't change. I don't have an idea how to solve it, it's just what I've come to realize after years investing in the crypto currency space; and observing the shitshow that's NFTs right now. The current state is certainly not what BTC or any crypto currency was intended for as an idea, and getting a database entry somewhere because you were the first is not a reasonable approach to how an economy should work, algorithmically speaking. We need a better approach for throttling and redistribution of wealth, because the gas price in ETH obviously isn't enough. If an economy favors the ones that were in it first, it's also not an economy that can scale. Because it will result in an oligarchic bank-like structure, where money is hoarded that cannot flow and push the rest of the economy where it would be needed to get out of unfavorable situations like poverty (that is in regards to goods aka only having an old computer).

lottin 5y ago

A fiat (aka unbacked) currency that is issued privately is indistinguishable from a scam, because a fiat currency has a nominal value that is higher than what it costs to produce. This is true of bitcoins, because bitcoins are fiat money too (just not very convenient to use). The average production cost of all bitcoins in circulation is likely less than $1. These bitcoins are now being sold for tens of thousands of dollars. People profiting from this, largely early producers of bitcoins, are being rewarded with millions of dollars for basically doing nothing. They took no risk, they did absolutely nothing that would justify the profits that they have made. I call this a scam.

randomhodler84 5y ago
You are just bitter. Folks that bought Amazon or Apple stock at IPO did nothing either. In fact, a great deal of wealth floating about wasn’t wasn’t earned by the holders at all. Are you angry with every house owner who’s property appreciated, every investor to took to risk with assets?
- lottin 5y ago
  No, I don't have an issue with people making money from their entrepreneurial activities, in fact I applaud who people do that. I have an issue with people being handed millions of dollars when all they've done is downloading a computer program and running it on a god-damn laptop. I don't agree with that. I think it's a scam, and this is why I'll never buy a cryptocurrency or accept it as payment for anything, because I don't I agree to these people getting rich at my expense.
  - randomhodler84 5y ago
    Nobody is getting paid millions to run software. It doesn’t work that way. Some folks took a risk early by buying it and were very compromised for it. (All the mt gox trade and KYC data leaked, passports etc). Nobody is making millions mining without spending a compatible sum on hardware to do it. That sounds entrepreneurial to me. Solo CPU mining was such a small thing to a small niche, maybe those super super early folks deserve something for their efforts. Some folks are getting paid to stake, which may be more of a scam, and we can agree on that, they sacrifice nothing to produce more wealth. You haven’t said why it is a scam, except that people were entrepreneurs or investors in risky assets who were rewarded for their risk? Lottin you have been passionate against this for a long time, are you sure you are rationally evaluating this?

tick_tock_tick 5y ago

Ehh depends on what you call "exploited" the original 0.8 upgrade resulting fork effectively allowed a double spend https://bitcointalk.org/index.php?topic=152348 https://bitcointalk.org/index.php?topic=152348

randomhodler84 5y ago
Not a real double spend, just some central exchange accounting mismatch with the active chain. That’s why we wait for confirms. Still, glad you brought this up. 0.7/0.8 db issue was a scary time. Seems like a lifetime ago.