8 ms·

Reminder: good estimates place the number of people in the cryptocoin system in the 100,000s. BTC can support c. 7 transactions/sec. Ethereum c. 20. This is a

Reminder: good estimates place the number of people in the cryptocoin system in the 100,000s. BTC can support c. 7 transactions/sec. Ethereum c. 20. This is a scam. It's a self-organizing pyramid scheme. There is no "there" there -- the vitamins really arent a cure for cancer, and your friend telling you to buy a warehouse full is part of a cult of pushers who are desperate that their warehouses of vitamin pills (ie., tokens) doesn't become entirely unsellable. All the numbers reported by the cryptocoin system are made up: these are manipulated markets with almost no buyers. "Market cap"s are inventions. The amount of actual liquidity in the system is tiny: people are looking for the exists. These exits are mugs called "hodlers", ideally, You, who'll buy their vitamins from them. Usually, HN comments ought be somewhat more sober -- but I think this is now out of line. Sobriety in this matter is enabling a system of exploitation which should not be entertained by decent people.

Ferret7446 4y ago
BTC protocol can handle transactions off-chain. I cannot take any post that doesn't address that simple fact seriously, since you're just repeating talking points without any research or technical analysis.
kipchak 4y ago
Regarding number of people actually using the system, do you have any good estimates in mind by chance? I'm seeing claims of 7% of Indians for example, which would be in the millions by itself. https://triple-a.io/crypto-ownership-data/ https://triple-a.io/crypto-ownership-data/
- mjburgess 4y ago
  Keep in mind that all the major source on crypto, including the top dozen popular textbooks I could find on amazon -- and many "academic" looking papers -- are written by people profoundly invested in selling crypto. All crypto news is press releases from crypto companies. All crypto ideas are rehearsed sales pitches with no arguments or evidence. You should assume anything written on crypto which hypes it is a lie. You should investigate the site/author, and -- I'd predict -- you'll find that every single time it links back to people with profound economic incentives to lie to you. For BTC, you have 400,000 addresses used daily transacting about 300,000 transactions. This is trivial to obtain as a public record. How many of those addresses are associated with only one individual? If i wanted to simulate millions of users I could do so only with a trivial amount of money. What is a "user"? It's just an address. There are no "users" on the chain. There are 70mil addresses on BTC, I believe. How fast could an interested party double that? Pretty quick. These numbers, absent hard-hitting empirical data, should be regarded as fraud. They're made up, either at the level of the press release, or by technical manipulation. Eg., by moving lots of money around a few accounts to manipulate figures. This is a system which maps, at least provably and publicly, to the entire daily economy of a small town. And it's energy usage is measured in 10^12
  - kipchak 4y ago
    Even in a steel man argument I think someone would have to concede that BTC itself can not be the base layer most people, with a layer 2 like Lightning being necessary for scale which has it's own problems. Unfortunately as you say it is hard to tell how much genuine usage there is. The only thing I would add is that while crypto is worse, I feel the same concern regarding misaligned incentives in regular finance. In terms of address count, they're also as I understand intended to be use once[1]. On the other hand there's many people using the same wallet and transacting without ever leaving a exchange and causing a real transaction, though I probably wouldn't consider that as "counting" personally. [1]https://en.bitcoin.it/wiki/Address_reuse https://en.bitcoin.it/wiki/Address_reuse
  - pazimzadeh 4y ago
    > Keep in mind that all the major source on crypto, including the top dozen popular textbooks I could find on amazon -- and many "academic" looking papers -- are written by people profoundly invested in selling crypto > All crypto news is press releases from crypto companies Again, you could say the same thing about people trying to prop up the capitalist system as they are heavily invested in it and own property, etc.. I could argue that people arguing against crypto are mainly people who are upset that they missed the boat on the biggest price gains. But you could also make that argument about the stock market/capitalism. So it's not a valid point.
    - mjburgess 4y ago
      > So it's not a valid point. Economics textbooks are not written by people trying to hype an asset. > you could say the same thing about people trying to prop up the capitalist system Sure, and the heavily manipulated housing market, propped up by QE which dramatically inflated asset prices, is a major issue facing several large economies (eg., AU, UK esp.). However homes, at the end of the day, are homes. If you're conned into overpaying 100,000 on a home whose value will drop 150k at some point because of obvious on-coming market corrections -- well, you still have a home. Crypto's market correction is "to about zero". And there's no home left. Crypto is a scam. These ideas are part of the scam. These whatabouts and fasle equivocations. It's as much a homeopath saying, "what about big pharma?"
- patmcc 4y ago
  Owners are very distinct from users. What percent of that 7% have ever bought or sold anything using crypto (other than when they obtained it)?
- captn3m0 4y ago
  I tried to dig a little into how these numbers are being calculated. Most are based on surveys of Indian Internet users, which caters to selection bias of "internet users in India who want to earn money using surveys". Additionally, India has a 47% internet penetration, which most reports (citing the surveys) don't seem to be accounting for. The-Ken[c] did a report about how the number of Crypto users in India seems to be over-reported, on two counts - Users have accounts at multiple exchanges (Double Counting) and Users who are in it for the Free Crypto: > Estimates peak at an overly enthusiastic 100 million crypto owners, as claimed by broker discovery and comparison platform BrokerChooser, but the true number is likely a more conservative 10 to 15 million, according to three industry executives The Ken spoke with. > “We work with an internal estimate of about 4 to 5 million regular users in India,” said an executive at crypto exchange ZebPay. [...] Notably, the exchange takes into account not just individuals who made trades in the last 30 days, but also app opens while calculating the number of regular users. > The situation is further exacerbated by exchanges offering joining bonuses and crypto rewards for signing up, like the Rs 100 worth of free bitcoin offered by crypto exchange CoinDCX. > This lures users into creating an account—irrespective of whether they engage with it in the future or not—and helps the exchange pad up its user numbers. A better source to consider is the Reserve Bank of India, which has made 2 interesting statements about the number of crypto investors in India. 1. RBI Governor Shaktikanta Das, Nov 2021: "With a reasonable amount of confidence, I can say the number of investors in the crypto market seems to be exaggerated. Adding that most of the buyers of cryptos in those platforms have anyway invested just between Rs 1,000 and Rs 3,000. (12-36USD). [a] 2. RBI Deputy Governor T Rabi Sankar, Feb 2022: "there is no data to justify how many investors have invested in these instruments and what is the amount of investment. Data informally gathered in November seems to indicate that crypto investments by Indians is nowhere near to being significant (although the pace of growth could make it a concern in future). This data showed that four out of five investor accounts held investments of less than ₹10,000 (122USD), with an average holding size of ₹1,566 (20USD). Wealth loss, if at all it is a possibility, is likely to affect only a small fraction of these investors." [b] I also tried to dig into the original number from Triple-A (Which seems to have gotten a lot of traction because it was quoted in a policy-brief from UN-CTAD[5]) Here's where the number is coming from: 1. Triple-A, Crypto Firm, 2023 Figure[1] is 97.5M / 7.1% of India. The citation for this is their 2022 Report[4] (now deleted). 2. Finder.com, Stats Firm, latest figure is 29% based on a survey of 31k Indians[2]. 29% figure is based on self-selected participants, which are "internet, smartphone and Google AdMob users or Qualtrics research panel participants.". 3. Triple-A, Crypto Firm, 2022 Report[4], claims "over 100 million people, 7.30% of India" and cites HootSuite's Digital 2020 report along with Statista. 4. HootSuite numbers (survey backed), % of Internet Users aged 16 to 64 who own any form of cryptocurrency: 4.1 Digital 2023 - 16.8% [6]. Cites GWI-Q3-2022 4.2 Digital 2022 - 12.6% [7]. Cites GWI-Q3-2021 4.3 Digital 2023 - 7.1% [8] - *this seems to be the figure being used by Triple-A*, which ought to have an upper bound of 2.1% or so (63% of India is aged 15-64, with a 47% internet penetration). Cites GWI=Q3-2019. HootSuite in turn cites GlobalWebIndex, which is again survey backed, and I couldn't find any clarity about the methodology. 5. Statista, Stats Firm, Paywalled[9]. This is again survey backed: "Which of these financial products and investments do you currently use/own? (multi-pick)". The figures shown here concern respondents who selected the option "Cryptocurrency (e.g. Bitcoin)". I found a citation for their 2020 Figure[10], which puts an upper bound on this at 12% or so. [a]: https://bfsi.economictimes.indiatimes.com/news/fintech/numbers-exaggerated-most-indian-crypto-buyers-invested-rs-1000-rs-3000-das/87642507 https://bfsi.economictimes.indiatimes.com/news/fintech/numbe... [b]: https://m.rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=20870 https://m.rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=20870. Highly recommend reading this, as it tackles exactly the argument here ("so many Indians have already invested in cryptocurrencies and banning cryptocurrencies would lead to a loss of wealth for them. There are three reasons such arguments do not appear justified...") [c]: https://the-ken.com/tokenised-edition/the-double-counting-fluff-in-indias-crypto-numbers/ https://the-ken.com/tokenised-edition/the-double-counting-fl... [1]: https://triple-a.io/crypto-ownership-india-2022/ https://triple-a.io/crypto-ownership-india-2022/ [2]: https://www.finder.com/in/finder-cryptocurrency-adoption-index https://www.finder.com/in/finder-cryptocurrency-adoption-ind... [3]: https://bitcoinke.io/wp-content/uploads/2021/10/Geography-of-Cryptocurrency-2021.pdf https://bitcoinke.io/wp-content/uploads/2021/10/Geography-of... [4]: https://archive.is/icGl5 https://archive.is/icGl5 [5]: https://unctad.org/system/files/official-document/presspb2022d8_en.pdf https://unctad.org/system/files/official-document/presspb202... [6]: https://www.slideshare.net/DataReportal/digital-2023-india-february-2023-v01 https://www.slideshare.net/DataReportal/digital-2023-india-f... Slide 48 [7]: https://www.slideshare.net/gangavidya/digital2022indiafebruary2022v01pdf https://www.slideshare.net/gangavidya/digital2022indiafebrua... Slide 47 [8]: https://www.slideshare.net/DataReportal/digital-2020-india-january-2020-v01 https://www.slideshare.net/DataReportal/digital-2020-india-j... Slide 35 [9]: https://www.statista.com/statistics/1202468/global-cryptocurrency-ownership/ https://www.statista.com/statistics/1202468/global-cryptocur... [10]: https://www.mdpi.com/2227-7390/9/24/3263 https://www.mdpi.com/2227-7390/9/24/3263
yashg 4y ago
Cannot upvote it enough. This charade had gone on for far too long. The liquidity is coming from the poor, desperate people who have been sold a dream of eternal riches by the criminal scammers. Governments and law enforcement agencies must step in and put a stop to this planet destroying fraud.
- pazimzadeh 4y ago
  > The liquidity is coming from the poor Where are you getting this information? Have you experienced issues with liquidity when selling BTC or ETH?
  - yashg 4y ago
    One look at the Bitcoin and Cryptocurrency subs on Reddit and it is clear, many of the people still putting in money regularly in the crypto ponzi are the ones who can least afford to lose it.
    - pazimzadeh 4y ago
      That's not what liquidity means though. You could say that about /r/wallstreetbets too
      - mjburgess 4y ago
        Well indeed, crypto fanatics are stock touts for penny stocks. The biggest liquidity scam here is tether -- that's where you accept one real dollar from a pigeon and turn it into 100s by creating a row in an excel spreadsheet called lol-wewillallbeinjail-soon.xlsx That's the big real money pump into the system. Hopefully when tether fails, we can see past these manipulated numbers. ie., when people realise the 200bn+ they thought was there was 20bn, we may be able to estimate the actual amount of money being put in.
        yashg 4y ago
        Casino chips. Actually worse than casino chips because at the end of the day you can't even redeem them for real money and go home. The game is simple - create magic tokens, create "stable" magic chips. Wash trade tokens with magic chips, pump the price to moon. Lure naive idiots and unload magic tokens for real money. Laugh all the way to the bank while telling suckers to keep holding till eternity.
pazimzadeh 4y ago
> It's a self-organizing pyramid scheme > "Market cap"s are inventions. The amount of actual liquidity in the system is tiny Is this different than the stock market? Or the banking sector? There are penny stocks, and there are bigger players. It seems like in finance, sentiment is everything and it's a self-fulfilling prophecy. > BTC can support c. 7 transactions/sec. Ethereum c. 20 Would you criticize the whole internet because dial-up was slow? Oh, and regarding the vitamins: High-dose vitamin C enhances cancer immunotherapy https://www.science.org/doi/10.1126/scitranslmed.aay8707 https://www.science.org/doi/10.1126/scitranslmed.aay8707 It's all about the dose and delivery method, you can't just make blanket statements. https://www.cancer.gov/research/key-initiatives/ras/ras-central/blog/2020/yun-cantley-vitamin-c https://www.cancer.gov/research/key-initiatives/ras/ras-cent... Note how the vitamins aren't sufficient, but they enhance traditional treatments. Seems relevant.
- mjburgess 4y ago
  > Is this different than the stock market? There's a scale from "there are buyers at this market cap" (eg., suprisingly, twitter)... to "there are no buyers at this market cap". Consider if you and I start a business which sells shares in the business (and nothing else), and we sell 1/1000 shares for $1000 -- that makes our business $1m on paper. But is there a buyer for that $1m? Well sure, there was for SBF. Until jail, of course -- but many bought his shares in his business which sells shares in his business. This isnt unique to crypto... crypto is just the latest incarnation whose "productive valuation dial" is close to 0%.
  - pazimzadeh 4y ago
    It sounds like the only difference is scale. I have not experienced liquidity issues in practice, because I have avoided the tiny players in crypto. Have you had liquidity issues selling ETH or BTC? Regarding hodling, again I don't see how this is different than the stock market. You can try to time the market or you can just hold AAPL for 30 years, understanding that any point it could all come crashing down when you're looking away. In my experience though, every time I have sold ETH (including at the local peak in Jan 2018) it would have always been more profitable to hold it for longer (since I didn't have an immediate use for the cash).
daniel-cussen 4y ago
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xk_id 4y ago
Seriously, bizarre posts like this are starting to sound more and more like conspiracy theories.
- mjburgess 4y ago
  Well, a pyramid scheme is a kind of "automated conspiracy" What else would you call, say, the NFT phenomenon?
  - RestlessMind 4y ago
    NFTs are similar to art pieces. Why does a JPEG monkey cost millions? Why does a banana taped to a wall cost hundreds of thousands of dollars[1]? Why do paintings, which look like work of a 4 year old, sell for millions? [1] https://www.statista.com/statistics/238405/us-gold-production-since-2005/ https://www.statista.com/statistics/238405/us-gold-productio...
  - xk_id 4y ago
    The NFT “phenomenon”? It’s a code template and API called the ERC721 standard, which can be used to secure, verify and transfer digital ownership on a distributed ledger. There’s been so much done (and often right here on HN) to explain how crypto and NFTs are innovative, to link educational resources and list real world examples of legitimate use. As well as to resolve the various ideological controversies. Maybe it’s not quite common knowledge yet, but there’s no excuse in 2023 for being so clueless and, yet, assertive.
    - btilly 4y ago
      I'm well aware of all that has been done to explain the ideas behind crypto, NFTs, and the rest of the ecosystem. I know what the boosters say and can do a decent job of explaining it in a pinch. I've been hearing about it here and elsewhere since 2009. I also believe that the entire crypto ecosystem is a wasteful solution in search of a problem. And the biggest players in the space, over and over again have been proven to be criminal frauds trying to generate the next hype wave. Often through wash trading to make it appear that there is more of a market than there is. The current wave of legal problems for Celsius, FTX, Binance and so on have started to reveal the lies that many expected all along. For example we've found out in court that the "attestations" long used by many were faked. (Not that this was a surprise given that, for example, Tether was revealed previously to have been faking its numbers.) To the extent that there actually was money, a lot of it was in now failed banks like Signature Bank. Or it is connected to money laundering, as happened with Tether. (See https://protos.com/did-tether-falsify-documents-to-fool-cautious-banksc/ https://protos.com/did-tether-falsify-documents-to-fool-caut... for one of many places where that is reported.) The sky-high valuations for cryptocurrencies these days are not believable. Yes, people trade that many tethers for a bitcoin, but good luck getting tethers redeemed. And most consumers had their money in fraudulent exchanges like FTX and Binance. They are learning the hard way the truth of, "Not your keys, not your crypto." You say that there is no excuse in 2023 for being so clueless and, yet, assertive. I say that there is no excuse in 2023 for you being so dismissive about a field filled with Ponzi schemes, some of which have collapsed and others of which are still able to pretend to a solvency that they clearly don't have.
rocket_surgeron 4y ago
Most people rejected His message. They hated mjburgess because He told them the truth. The amount of actual goods and non-crypto-related actual services purchased with crypto in the last year probably wouldn't fill a high school basketball court. People who get paid in crypto immediately turn it into real money because the only thing it's used for is building virtual pyramidal constructs.
ChainOfFools 4y ago
The sock puppet liquidity argument, which I have agreed with for almost the entire time that I've been around crypto, now unfortunately well past 10 years, may finally get its first no BS test due to pending liquidation action by the Mt.Gox government trustee. This individual appears to be largely outside the influence of the cartel, at most couple hundred people with a further concentric core of four dozen or so, who control all the liquidity levers and self-reported "usage" and "transaction" metrics in the whole system. These would be the large, long-established and highly publicity-averse miners and the pools they (pretend not to) control, the only group that can afford to burn transaction fees the prop up usage metrics, because they are actually paying a substantial share of those fees to themselves. Obviously the payout to the people impacted by the gox hack has been perpetually delayed, and there's no guarantee it will happen anytime soon, but certain legal milestones have been reached that will make it quite difficult to delay past this year. When it does happen, we'll see a genuine liquidity event - something north of 120,000 Bitcoins - happen over a very short time, although the trustee has not disclosed how they will manage to do this without completely tanking the market or otherwise introducing slippage that privileges the earliest recipients of the payout over later recipients. This isn't tge same as a in-on-the-game joker like Musk talking about buying and selling a billion dollars in crypto in the past tense, where there is no way to measure his words against the market. The addresses that hold the gox coins are known and monitored.
RestlessMind 4y ago
> BTC can support c. 7 transactions/sec. Ethereum c. 20. This is a scam. In 2022, US mined only 5.4gram of Gold per sec[1]. This is a scam. Or not. Weighing BTC's utility based on how many transactions it supports per second is as pointless as measuring Gold's utility based on how much of it is mined per second. [1] https://www.statista.com/statistics/238405/us-gold-production-since-2005/ https://www.statista.com/statistics/238405/us-gold-productio...
- Gigachad 4y ago
  Go away. Crypto chuds have been pushing the "currency" angle for a decade. But whenever you point out it doesn't work as a currency, the goalposts move and now its a store of value. But it's not even good at that.
  - RestlessMind 4y ago
    I don't know any serious crypto user pushing BTC as a "currency" anymore, apart from Satoshi's original whitepaper. And I have been in crypto for many years. Everyone views BTC as digital Gold - an asset immune to government censorship.
  - danlugo92 4y ago
    Couldn't act further from your username. Lightning supports unlimited transactions per second.
  - lowkey 4y ago
    The original Bitcoin Whitepaper laid out multiple use cases: * digital cash * peer to peer transactions * digital gold * censorship resistant transactions * hard money with fixed monetery policy and capped supply * highly-decentralized with no single point of failure Never did it promise to be a high throughput alternative to Visa for buying coffee Nevertheless the Lightning Network has innovated in the space such that buying a coffee is now trivial using Bitcoin. I am a crypto “chud” and I believe eventually Bitcoin will become a viable currency and a stable unit of account. It isn’t that today as it is still a highly volatile asset class with rapidly growing adoption but we are still early. For now it provides dissidents a viable option that is apolitical and cannot be easily censored. It offers a hard-money alternative to fiat-money which can be arbitrarily inflated/diluted in value by centralized powers. It offers a digital asset that is highly liquid, difficult to confiscate, and easy to access for the billions of unbanked throughout the world. You may not see the use case for Bitcoin but that speaks more to your individual privilege as a citizen of a first world nation than it does for Bitcoin’s usefulness to millions or potentially billions of people around the world.
tornato7 4y ago
I don't entirely buy the "no liquidity" argument. I can sell 10,000 ETH on-chain right now and have a 0.28% price impact. That settles in 12 seconds with finality in six minutes. Guess how much Apple stock I can sell right now? Zero. Stock markets are currently closed and Apple cannot be traded. When they are open, I'm looking at a T+2 settlement window. That's not very liquid. One might even call it market manipulation to only open for trading 18% of the time, and of course to shut off trading at any other time on a whim.
- mjburgess 4y ago
  The alleged "market cap" of ETH is presently: $236,692,623,586 . Consider an IPO for a company which sells shares, there is no question "at what point does the share price collapse to zero" -- it has a price. The company is worth something: it has profit/loss, assets, etc. Consider selling all ETH for USD -- the obvious question, to me, is: at what point does the price collapse to zero? 10% of them? 15%? 25.00000001%? This is an extremely non-linear effect, after 20bn is sold it might just be the next dollar afterwards. Or 50bn. Or 15bn. I suspect there's about 20-50bn of "real money" in the system, radically double (-double-double) counted by many participants (esp, eg., via tether). If any coins on any chain were sold off at a high enough rate, perhaps so the total across the entire ecosystem were a trivial 10-20% of ETHs alleged "market cap" -- i think the whole thing goes to zero. At 18.9111123% there'll be no buyers at any price, everyone will realise, and bang goes the whole show. You can't say that about apple; or any stock whose value derives from owning a business that has *actual assets. ie., I think the fragility here, of this system and this posted numbers, is radically extreme in percentage terms. Yes, your $1m USD here or there will make no difference.
  - junofan 4y ago
    You’re basically just saying ETH itself isn’t an actual asset. However, it’s needed to use the Ethereum network.
    - mjburgess 4y ago
      I imagine you aren't joking... but this might well be a joke. The ethereum network has no use, right? Nothing is priced in ethereum, no one needs ETH, nor will they ever. Magic beans might be required to play the magic bean game -- casino chips are required by the casino, sure. But people enjoy gambling, there's an exchange of value -- a reason a person will work a day to make $100 and then trade it for an evening gambling. But cryptocurrency networks do not have any reason to use them: nothing is priced in them, no govs tax in them, no businesses hold them, and so on. There's smallish number of criminal gangs (and the like) who do have a use: a lot of crime today is priced in crypto. This gives highly anonymous networks an actual exchange value for their tokens. I suspect this minimal value will be targeted by relevant govs eventually, and disappear.

Ferret7446 4y ago

BTC protocol can handle transactions off-chain. I cannot take any post that doesn't address that simple fact seriously, since you're just repeating talking points without any research or technical analysis.

kipchak 4y ago

Regarding number of people actually using the system, do you have any good estimates in mind by chance? I'm seeing claims of 7% of Indians for example, which would be in the millions by itself. https://triple-a.io/crypto-ownership-data/ https://triple-a.io/crypto-ownership-data/

mjburgess 4y ago
Keep in mind that all the major source on crypto, including the top dozen popular textbooks I could find on amazon -- and many "academic" looking papers -- are written by people profoundly invested in selling crypto. All crypto news is press releases from crypto companies. All crypto ideas are rehearsed sales pitches with no arguments or evidence. You should assume anything written on crypto which hypes it is a lie. You should investigate the site/author, and -- I'd predict -- you'll find that every single time it links back to people with profound economic incentives to lie to you. For BTC, you have 400,000 addresses used daily transacting about 300,000 transactions. This is trivial to obtain as a public record. How many of those addresses are associated with only one individual? If i wanted to simulate millions of users I could do so only with a trivial amount of money. What is a "user"? It's just an address. There are no "users" on the chain. There are 70mil addresses on BTC, I believe. How fast could an interested party double that? Pretty quick. These numbers, absent hard-hitting empirical data, should be regarded as fraud. They're made up, either at the level of the press release, or by technical manipulation. Eg., by moving lots of money around a few accounts to manipulate figures. This is a system which maps, at least provably and publicly, to the entire daily economy of a small town. And it's energy usage is measured in 10^12
- kipchak 4y ago
  Even in a steel man argument I think someone would have to concede that BTC itself can not be the base layer most people, with a layer 2 like Lightning being necessary for scale which has it's own problems. Unfortunately as you say it is hard to tell how much genuine usage there is. The only thing I would add is that while crypto is worse, I feel the same concern regarding misaligned incentives in regular finance. In terms of address count, they're also as I understand intended to be use once[1]. On the other hand there's many people using the same wallet and transacting without ever leaving a exchange and causing a real transaction, though I probably wouldn't consider that as "counting" personally. [1]https://en.bitcoin.it/wiki/Address_reuse https://en.bitcoin.it/wiki/Address_reuse
- pazimzadeh 4y ago
  > Keep in mind that all the major source on crypto, including the top dozen popular textbooks I could find on amazon -- and many "academic" looking papers -- are written by people profoundly invested in selling crypto > All crypto news is press releases from crypto companies Again, you could say the same thing about people trying to prop up the capitalist system as they are heavily invested in it and own property, etc.. I could argue that people arguing against crypto are mainly people who are upset that they missed the boat on the biggest price gains. But you could also make that argument about the stock market/capitalism. So it's not a valid point.
  - mjburgess 4y ago
    > So it's not a valid point. Economics textbooks are not written by people trying to hype an asset. > you could say the same thing about people trying to prop up the capitalist system Sure, and the heavily manipulated housing market, propped up by QE which dramatically inflated asset prices, is a major issue facing several large economies (eg., AU, UK esp.). However homes, at the end of the day, are homes. If you're conned into overpaying 100,000 on a home whose value will drop 150k at some point because of obvious on-coming market corrections -- well, you still have a home. Crypto's market correction is "to about zero". And there's no home left. Crypto is a scam. These ideas are part of the scam. These whatabouts and fasle equivocations. It's as much a homeopath saying, "what about big pharma?"
patmcc 4y ago
Owners are very distinct from users. What percent of that 7% have ever bought or sold anything using crypto (other than when they obtained it)?
captn3m0 4y ago
I tried to dig a little into how these numbers are being calculated. Most are based on surveys of Indian Internet users, which caters to selection bias of "internet users in India who want to earn money using surveys". Additionally, India has a 47% internet penetration, which most reports (citing the surveys) don't seem to be accounting for. The-Ken[c] did a report about how the number of Crypto users in India seems to be over-reported, on two counts - Users have accounts at multiple exchanges (Double Counting) and Users who are in it for the Free Crypto: > Estimates peak at an overly enthusiastic 100 million crypto owners, as claimed by broker discovery and comparison platform BrokerChooser, but the true number is likely a more conservative 10 to 15 million, according to three industry executives The Ken spoke with. > “We work with an internal estimate of about 4 to 5 million regular users in India,” said an executive at crypto exchange ZebPay. [...] Notably, the exchange takes into account not just individuals who made trades in the last 30 days, but also app opens while calculating the number of regular users. > The situation is further exacerbated by exchanges offering joining bonuses and crypto rewards for signing up, like the Rs 100 worth of free bitcoin offered by crypto exchange CoinDCX. > This lures users into creating an account—irrespective of whether they engage with it in the future or not—and helps the exchange pad up its user numbers. A better source to consider is the Reserve Bank of India, which has made 2 interesting statements about the number of crypto investors in India. 1. RBI Governor Shaktikanta Das, Nov 2021: "With a reasonable amount of confidence, I can say the number of investors in the crypto market seems to be exaggerated. Adding that most of the buyers of cryptos in those platforms have anyway invested just between Rs 1,000 and Rs 3,000. (12-36USD). [a] 2. RBI Deputy Governor T Rabi Sankar, Feb 2022: "there is no data to justify how many investors have invested in these instruments and what is the amount of investment. Data informally gathered in November seems to indicate that crypto investments by Indians is nowhere near to being significant (although the pace of growth could make it a concern in future). This data showed that four out of five investor accounts held investments of less than ₹10,000 (122USD), with an average holding size of ₹1,566 (20USD). Wealth loss, if at all it is a possibility, is likely to affect only a small fraction of these investors." [b] I also tried to dig into the original number from Triple-A (Which seems to have gotten a lot of traction because it was quoted in a policy-brief from UN-CTAD[5]) Here's where the number is coming from: 1. Triple-A, Crypto Firm, 2023 Figure[1] is 97.5M / 7.1% of India. The citation for this is their 2022 Report[4] (now deleted). 2. Finder.com, Stats Firm, latest figure is 29% based on a survey of 31k Indians[2]. 29% figure is based on self-selected participants, which are "internet, smartphone and Google AdMob users or Qualtrics research panel participants.". 3. Triple-A, Crypto Firm, 2022 Report[4], claims "over 100 million people, 7.30% of India" and cites HootSuite's Digital 2020 report along with Statista. 4. HootSuite numbers (survey backed), % of Internet Users aged 16 to 64 who own any form of cryptocurrency: 4.1 Digital 2023 - 16.8% [6]. Cites GWI-Q3-2022 4.2 Digital 2022 - 12.6% [7]. Cites GWI-Q3-2021 4.3 Digital 2023 - 7.1% [8] - *this seems to be the figure being used by Triple-A*, which ought to have an upper bound of 2.1% or so (63% of India is aged 15-64, with a 47% internet penetration). Cites GWI=Q3-2019. HootSuite in turn cites GlobalWebIndex, which is again survey backed, and I couldn't find any clarity about the methodology. 5. Statista, Stats Firm, Paywalled[9]. This is again survey backed: "Which of these financial products and investments do you currently use/own? (multi-pick)". The figures shown here concern respondents who selected the option "Cryptocurrency (e.g. Bitcoin)". I found a citation for their 2020 Figure[10], which puts an upper bound on this at 12% or so. [a]: https://bfsi.economictimes.indiatimes.com/news/fintech/numbers-exaggerated-most-indian-crypto-buyers-invested-rs-1000-rs-3000-das/87642507 https://bfsi.economictimes.indiatimes.com/news/fintech/numbe... [b]: https://m.rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=20870 https://m.rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=20870. Highly recommend reading this, as it tackles exactly the argument here ("so many Indians have already invested in cryptocurrencies and banning cryptocurrencies would lead to a loss of wealth for them. There are three reasons such arguments do not appear justified...") [c]: https://the-ken.com/tokenised-edition/the-double-counting-fluff-in-indias-crypto-numbers/ https://the-ken.com/tokenised-edition/the-double-counting-fl... [1]: https://triple-a.io/crypto-ownership-india-2022/ https://triple-a.io/crypto-ownership-india-2022/ [2]: https://www.finder.com/in/finder-cryptocurrency-adoption-index https://www.finder.com/in/finder-cryptocurrency-adoption-ind... [3]: https://bitcoinke.io/wp-content/uploads/2021/10/Geography-of-Cryptocurrency-2021.pdf https://bitcoinke.io/wp-content/uploads/2021/10/Geography-of... [4]: https://archive.is/icGl5 https://archive.is/icGl5 [5]: https://unctad.org/system/files/official-document/presspb2022d8_en.pdf https://unctad.org/system/files/official-document/presspb202... [6]: https://www.slideshare.net/DataReportal/digital-2023-india-february-2023-v01 https://www.slideshare.net/DataReportal/digital-2023-india-f... Slide 48 [7]: https://www.slideshare.net/gangavidya/digital2022indiafebruary2022v01pdf https://www.slideshare.net/gangavidya/digital2022indiafebrua... Slide 47 [8]: https://www.slideshare.net/DataReportal/digital-2020-india-january-2020-v01 https://www.slideshare.net/DataReportal/digital-2020-india-j... Slide 35 [9]: https://www.statista.com/statistics/1202468/global-cryptocurrency-ownership/ https://www.statista.com/statistics/1202468/global-cryptocur... [10]: https://www.mdpi.com/2227-7390/9/24/3263 https://www.mdpi.com/2227-7390/9/24/3263

yashg 4y ago

Cannot upvote it enough. This charade had gone on for far too long. The liquidity is coming from the poor, desperate people who have been sold a dream of eternal riches by the criminal scammers. Governments and law enforcement agencies must step in and put a stop to this planet destroying fraud.

pazimzadeh 4y ago
> The liquidity is coming from the poor Where are you getting this information? Have you experienced issues with liquidity when selling BTC or ETH?
- yashg 4y ago
  One look at the Bitcoin and Cryptocurrency subs on Reddit and it is clear, many of the people still putting in money regularly in the crypto ponzi are the ones who can least afford to lose it.
  - pazimzadeh 4y ago
    That's not what liquidity means though. You could say that about /r/wallstreetbets too
    - mjburgess 4y ago
      Well indeed, crypto fanatics are stock touts for penny stocks. The biggest liquidity scam here is tether -- that's where you accept one real dollar from a pigeon and turn it into 100s by creating a row in an excel spreadsheet called lol-wewillallbeinjail-soon.xlsx That's the big real money pump into the system. Hopefully when tether fails, we can see past these manipulated numbers. ie., when people realise the 200bn+ they thought was there was 20bn, we may be able to estimate the actual amount of money being put in.
      - yashg 4y ago
        Casino chips. Actually worse than casino chips because at the end of the day you can't even redeem them for real money and go home. The game is simple - create magic tokens, create "stable" magic chips. Wash trade tokens with magic chips, pump the price to moon. Lure naive idiots and unload magic tokens for real money. Laugh all the way to the bank while telling suckers to keep holding till eternity.

pazimzadeh 4y ago

> It's a self-organizing pyramid scheme > "Market cap"s are inventions. The amount of actual liquidity in the system is tiny Is this different than the stock market? Or the banking sector? There are penny stocks, and there are bigger players. It seems like in finance, sentiment is everything and it's a self-fulfilling prophecy. > BTC can support c. 7 transactions/sec. Ethereum c. 20 Would you criticize the whole internet because dial-up was slow? Oh, and regarding the vitamins: High-dose vitamin C enhances cancer immunotherapy https://www.science.org/doi/10.1126/scitranslmed.aay8707 https://www.science.org/doi/10.1126/scitranslmed.aay8707 It's all about the dose and delivery method, you can't just make blanket statements. https://www.cancer.gov/research/key-initiatives/ras/ras-central/blog/2020/yun-cantley-vitamin-c https://www.cancer.gov/research/key-initiatives/ras/ras-cent... Note how the vitamins aren't sufficient, but they enhance traditional treatments. Seems relevant.

mjburgess 4y ago
> Is this different than the stock market? There's a scale from "there are buyers at this market cap" (eg., suprisingly, twitter)... to "there are no buyers at this market cap". Consider if you and I start a business which sells shares in the business (and nothing else), and we sell 1/1000 shares for $1000 -- that makes our business $1m on paper. But is there a buyer for that $1m? Well sure, there was for SBF. Until jail, of course -- but many bought his shares in his business which sells shares in his business. This isnt unique to crypto... crypto is just the latest incarnation whose "productive valuation dial" is close to 0%.
- pazimzadeh 4y ago
  It sounds like the only difference is scale. I have not experienced liquidity issues in practice, because I have avoided the tiny players in crypto. Have you had liquidity issues selling ETH or BTC? Regarding hodling, again I don't see how this is different than the stock market. You can try to time the market or you can just hold AAPL for 30 years, understanding that any point it could all come crashing down when you're looking away. In my experience though, every time I have sold ETH (including at the local peak in Jan 2018) it would have always been more profitable to hold it for longer (since I didn't have an immediate use for the cash).

daniel-cussen 4y ago

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xk_id 4y ago

Seriously, bizarre posts like this are starting to sound more and more like conspiracy theories.

mjburgess 4y ago
Well, a pyramid scheme is a kind of "automated conspiracy" What else would you call, say, the NFT phenomenon?
- RestlessMind 4y ago
  NFTs are similar to art pieces. Why does a JPEG monkey cost millions? Why does a banana taped to a wall cost hundreds of thousands of dollars[1]? Why do paintings, which look like work of a 4 year old, sell for millions? [1] https://www.statista.com/statistics/238405/us-gold-production-since-2005/ https://www.statista.com/statistics/238405/us-gold-productio...
- xk_id 4y ago
  The NFT “phenomenon”? It’s a code template and API called the ERC721 standard, which can be used to secure, verify and transfer digital ownership on a distributed ledger. There’s been so much done (and often right here on HN) to explain how crypto and NFTs are innovative, to link educational resources and list real world examples of legitimate use. As well as to resolve the various ideological controversies. Maybe it’s not quite common knowledge yet, but there’s no excuse in 2023 for being so clueless and, yet, assertive.
  - btilly 4y ago
    I'm well aware of all that has been done to explain the ideas behind crypto, NFTs, and the rest of the ecosystem. I know what the boosters say and can do a decent job of explaining it in a pinch. I've been hearing about it here and elsewhere since 2009. I also believe that the entire crypto ecosystem is a wasteful solution in search of a problem. And the biggest players in the space, over and over again have been proven to be criminal frauds trying to generate the next hype wave. Often through wash trading to make it appear that there is more of a market than there is. The current wave of legal problems for Celsius, FTX, Binance and so on have started to reveal the lies that many expected all along. For example we've found out in court that the "attestations" long used by many were faked. (Not that this was a surprise given that, for example, Tether was revealed previously to have been faking its numbers.) To the extent that there actually was money, a lot of it was in now failed banks like Signature Bank. Or it is connected to money laundering, as happened with Tether. (See https://protos.com/did-tether-falsify-documents-to-fool-cautious-banksc/ https://protos.com/did-tether-falsify-documents-to-fool-caut... for one of many places where that is reported.) The sky-high valuations for cryptocurrencies these days are not believable. Yes, people trade that many tethers for a bitcoin, but good luck getting tethers redeemed. And most consumers had their money in fraudulent exchanges like FTX and Binance. They are learning the hard way the truth of, "Not your keys, not your crypto." You say that there is no excuse in 2023 for being so clueless and, yet, assertive. I say that there is no excuse in 2023 for you being so dismissive about a field filled with Ponzi schemes, some of which have collapsed and others of which are still able to pretend to a solvency that they clearly don't have.

rocket_surgeron 4y ago

Most people rejected His message. They hated mjburgess because He told them the truth. The amount of actual goods and non-crypto-related actual services purchased with crypto in the last year probably wouldn't fill a high school basketball court. People who get paid in crypto immediately turn it into real money because the only thing it's used for is building virtual pyramidal constructs.

ChainOfFools 4y ago

The sock puppet liquidity argument, which I have agreed with for almost the entire time that I've been around crypto, now unfortunately well past 10 years, may finally get its first no BS test due to pending liquidation action by the Mt.Gox government trustee. This individual appears to be largely outside the influence of the cartel, at most couple hundred people with a further concentric core of four dozen or so, who control all the liquidity levers and self-reported "usage" and "transaction" metrics in the whole system. These would be the large, long-established and highly publicity-averse miners and the pools they (pretend not to) control, the only group that can afford to burn transaction fees the prop up usage metrics, because they are actually paying a substantial share of those fees to themselves. Obviously the payout to the people impacted by the gox hack has been perpetually delayed, and there's no guarantee it will happen anytime soon, but certain legal milestones have been reached that will make it quite difficult to delay past this year. When it does happen, we'll see a genuine liquidity event - something north of 120,000 Bitcoins - happen over a very short time, although the trustee has not disclosed how they will manage to do this without completely tanking the market or otherwise introducing slippage that privileges the earliest recipients of the payout over later recipients. This isn't tge same as a in-on-the-game joker like Musk talking about buying and selling a billion dollars in crypto in the past tense, where there is no way to measure his words against the market. The addresses that hold the gox coins are known and monitored.

RestlessMind 4y ago

> BTC can support c. 7 transactions/sec. Ethereum c. 20. This is a scam. In 2022, US mined only 5.4gram of Gold per sec[1]. This is a scam. Or not. Weighing BTC's utility based on how many transactions it supports per second is as pointless as measuring Gold's utility based on how much of it is mined per second. [1] https://www.statista.com/statistics/238405/us-gold-production-since-2005/ https://www.statista.com/statistics/238405/us-gold-productio...

Gigachad 4y ago
Go away. Crypto chuds have been pushing the "currency" angle for a decade. But whenever you point out it doesn't work as a currency, the goalposts move and now its a store of value. But it's not even good at that.
- RestlessMind 4y ago
  I don't know any serious crypto user pushing BTC as a "currency" anymore, apart from Satoshi's original whitepaper. And I have been in crypto for many years. Everyone views BTC as digital Gold - an asset immune to government censorship.
- danlugo92 4y ago
  Couldn't act further from your username. Lightning supports unlimited transactions per second.
- lowkey 4y ago
  The original Bitcoin Whitepaper laid out multiple use cases: * digital cash * peer to peer transactions * digital gold * censorship resistant transactions * hard money with fixed monetery policy and capped supply * highly-decentralized with no single point of failure Never did it promise to be a high throughput alternative to Visa for buying coffee Nevertheless the Lightning Network has innovated in the space such that buying a coffee is now trivial using Bitcoin. I am a crypto “chud” and I believe eventually Bitcoin will become a viable currency and a stable unit of account. It isn’t that today as it is still a highly volatile asset class with rapidly growing adoption but we are still early. For now it provides dissidents a viable option that is apolitical and cannot be easily censored. It offers a hard-money alternative to fiat-money which can be arbitrarily inflated/diluted in value by centralized powers. It offers a digital asset that is highly liquid, difficult to confiscate, and easy to access for the billions of unbanked throughout the world. You may not see the use case for Bitcoin but that speaks more to your individual privilege as a citizen of a first world nation than it does for Bitcoin’s usefulness to millions or potentially billions of people around the world.

tornato7 4y ago

I don't entirely buy the "no liquidity" argument. I can sell 10,000 ETH on-chain right now and have a 0.28% price impact. That settles in 12 seconds with finality in six minutes. Guess how much Apple stock I can sell right now? Zero. Stock markets are currently closed and Apple cannot be traded. When they are open, I'm looking at a T+2 settlement window. That's not very liquid. One might even call it market manipulation to only open for trading 18% of the time, and of course to shut off trading at any other time on a whim.

mjburgess 4y ago
The alleged "market cap" of ETH is presently: $236,692,623,586 . Consider an IPO for a company which sells shares, there is no question "at what point does the share price collapse to zero" -- it has a price. The company is worth something: it has profit/loss, assets, etc. Consider selling all ETH for USD -- the obvious question, to me, is: at what point does the price collapse to zero? 10% of them? 15%? 25.00000001%? This is an extremely non-linear effect, after 20bn is sold it might just be the next dollar afterwards. Or 50bn. Or 15bn. I suspect there's about 20-50bn of "real money" in the system, radically double (-double-double) counted by many participants (esp, eg., via tether). If any coins on any chain were sold off at a high enough rate, perhaps so the total across the entire ecosystem were a trivial 10-20% of ETHs alleged "market cap" -- i think the whole thing goes to zero. At 18.9111123% there'll be no buyers at any price, everyone will realise, and bang goes the whole show. You can't say that about apple; or any stock whose value derives from owning a business that has *actual assets. ie., I think the fragility here, of this system and this posted numbers, is radically extreme in percentage terms. Yes, your $1m USD here or there will make no difference.
- junofan 4y ago
  You’re basically just saying ETH itself isn’t an actual asset. However, it’s needed to use the Ethereum network.
  - mjburgess 4y ago
    I imagine you aren't joking... but this might well be a joke. The ethereum network has no use, right? Nothing is priced in ethereum, no one needs ETH, nor will they ever. Magic beans might be required to play the magic bean game -- casino chips are required by the casino, sure. But people enjoy gambling, there's an exchange of value -- a reason a person will work a day to make $100 and then trade it for an evening gambling. But cryptocurrency networks do not have any reason to use them: nothing is priced in them, no govs tax in them, no businesses hold them, and so on. There's smallish number of criminal gangs (and the like) who do have a use: a lot of crime today is priced in crypto. This gives highly anonymous networks an actual exchange value for their tokens. I suspect this minimal value will be targeted by relevant govs eventually, and disappear.