8 ms·
Every bit of evidence is that the crypto boom has crashed to Earth. In tech it is basically a dirty word now and is overwhelmingly associated with the worst pro
by llm_nerd 3y ago
Every bit of evidence is that the crypto boom has crashed to Earth. In tech it is basically a dirty word now and is overwhelmingly associated with the worst products, the worst teams and the worst get rich and quick sorts. In the rest of the market it has made little to no impact.
Yet somehow BTC is still trading at close to historic highs.
Now to be fair the market cap of all of BTC is 1/4 Apple, but if it were remotely a functioning market or were at all "real", it would be trading at a tiny fraction of that amount. The fact that it still holds is the best demonstration of how illusory the whole sham is.
- tempodox 3y agoWhy would anybody buy something that they can't sell for real money any more? Shouldn't that convince even the dumbest acolytes that there is no value to be had?
- tim333 3y agoYou can still sell for USD. You just have to use another company like Coinbase or Kraken.
- EVa5I7bHFq9mnYK 3y agoAnd yet the longest and most passionate threads on HN are on crypto topics. Even Rust doesn't come close.
- nmitchko 3y agoBTC =/= crypto at large. Despite all the bad press, shady exchanges, bubbles and busts, a large amount of BTC owners don't sell, and that alone will drive it's price up. Other cryptos, I can't speak for.
- tromp 3y ago> that alone will drive it's price up Wrong; you need people buying the roughly $25M worth of daily new bitcoins just to maintain the current price.
- dragontamer 3y agoWhat's the $ in your remark? Hint: Its not USD. For an exchange like Binance, its USDT, or Tethers. Its not so hard for them to print USDT and pretend that they're dollars.
- RestlessMind 3y agoUSDT / Tether came out recently with the proof of reserves. Even US regulators looked into that and found nothing - https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settlement-with-new-york-attorney-general.html https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settle... Rising interest rates certainly helped them and USDC/USDT are a money making machine now for their owners.
- AlexandrB 3y ago> USDT / Tether came out recently with the proof of reserves. Do you have a link for this? All I could find is an "attestation" of reserves from a few months ago but could not find any evidence of an audit by a third party that might constitute "proof".
- RestlessMind 3y agohttps://tether.to/en/transparency/#reports https://tether.to/en/transparency/#reports Latest report from an independent auditor: https://assets.ctfassets.net/vyse88cgwfbl/63oJePOHqIvrcnXWMPZ1M0/4cfaf2e7cdf80c30b17fdc70faaf741f/ESO.03.01_Std_ISAE_3000R_Opinion_30-06-2023_BDO_Tether_CRR.pdf https://assets.ctfassets.net/vyse88cgwfbl/63oJePOHqIvrcnXWMP... Key stats: "Cash & Cash Equivalent & Other Short-Term Deposits" are $73,567,577,334 (out of total assets of $86,499,251,218). Remaining assets are precious metals ($3,270,216,824), bitcoin ($1,676,229,360), corporate bonds ($115,496,758) etc. It is no rocket science to see why USDT is in black now - with 83B USDT, they have that much cash available to park in T-bills and earn 5+% interest just like that. Even if they were in a hole a few years back, they would have recovered over the last 12-18 months when interest rates started rising.
- 3y ago
- bunderbunder 3y agoIt's not the asking price that determines market rates, nor is it the price that people who aren't currently selling believe their assets are worth. It's the price at which active buyers are willing to buy. One of the challenges with price discovery in the BTC market, though, is that there's not really an effective mechanism to prevent wash trades in place. That means that all you need to do to create a bunch of fraudulent liquidity at a higher price is create a sock puppet account and start trading with yourself. Anyone sitting on a hoard of BTC is highly incentivized to do this to try and prevent their on-paper losses in the hope that it will mitigate their becoming real losses. And that can concievably become the bulk of BTC trading volume if there isn't a steady supply of new people who are willing to buy in to Bitcoin at any price.
- dingnuts 3y agoif you trade with yourself you still have to pay transaction fees to the cluster. Every transaction would incur a loss. >And that can concievably become the bulk of BTC trading volume if there isn't a steady supply of new people who are willing to buy in to Bitcoin at any price. that would end up just slowly transferring all of the BTC to miners as transaction fees... what a scam! I uh, guess that creates liquidity though?
- rchaud 3y agoWhat's the mystery? Bitcoin doesn't need actual dollars to prop up the price. Unaudited virtual dollar IOUs like USDT that can be issued out of thin air will be sufficient.
- snapcaster 3y agoIt does until mining rewards go to zero right? unless there is a closed ecosystem whereby miners can pay their electricity bills and other expenses with crypto. Eventually actual money has to enter? Just sort of thinking out loud maybe missing something
- lamontcg 3y agoAt some point the crypto ecosystem hits the real economy and miners need to pay for power and datacenter space with real currency. A lot of the people employed in the crypto space are also out there buying houses, cars, taking vacations, and buying the odd pizza. That all requires real currency.
- jonathankoren 3y agoI don’t know why it’s surprising. Cryptocurrency’s killer app was always crime, and crime is big business.
- tim333 3y agoDon't forget speculation/gambling which is probably a larger business than even crime.
- EVa5I7bHFq9mnYK 3y agoyou mean, stock market?
- tim333 3y agoI guess the stock market is maybe 30% speculation, 70% actually investing in companies? Crypto is maybe 90% speculation, property 20% speculation? You can't really separate the two very cleanly but a lot of speculating goes on.
- Ferret7446 3y agoKeep in mind that some things you do regularly may be considered crimes by other governments, and perhaps your own government at some point in time.
- codedokode 3y agoIf cryptocurrency wasn't so volatile it would be better than worthless government paper because 1) cryptocurrency doesn't lose its value at rate of 2-13% per year 2) nobody will ban your cryptocurrency account if you use it for business 3) nobody will require to provide documentation and proof for every transaction that happened in last 6 months in your account.
- parineum 3y ago> 3) nobody will require to provide documentation and proof for every transaction that happened in last 6 months in your account. reply Except for the government when they, very easily, match your public blockchain activity to your personal identity.
- ReflectedImage 3y agoI'm not convinced that crypto is much worse than the rest of tech. Your average VC tech company is run as a pump and dump scheme. They take a crazy idea, get a ton of funding for it, go public and sell the shares to uninformed investors who are left holding the bag when it all comes crashing down.
- Guvante 3y agoThere are success stories in tech at least. Crypto only has "Bitcoin has above market returns" in terms of success. There was some neat smart contract stuff but some of that technically breaks trading rules (aka is questionable legality) and others are a coin flip as to whether a vulnerability will let someone drain the entire fund.
- saalweachter 3y agoThe S&P 500 pays out half a trillion in dividends each year, and performs another half a trillion worth of stock buybacks, funded by the profits from the economic activities of the traded companies. It's not all "number goes up"/a zero sum game of early investors selling to later investors.
- RestlessMind 3y ago> Crypto only has "Bitcoin has above market returns" in terms of success. Ethereum is equally successful.
- deleted 3y ago[deleted]
- georgespencer 3y agoI know you're exaggerating for effect but I'm having trouble threading the needle here. The "average VC tech company" gets nowhere near public market investors and, if indeed it is run "as a pump and dump scheme" would have a narrow impact on the LPs of the venture funds. Gotta imagine most LPs are sophisticated investors? Pension funds, that sort of thing. Crypto, on the other hand, seems to be predicated on retail investors and consumers. So they do seem manifestly different as you have expressed them (maybe my issue is with the notion of the "average" VC-backed company?).
- codedokode 3y ago[flagged]
- freejazz 3y agoDid we really land on the moon?!?
- optimalsolver 3y agoI believe there’s something up their sleeve.
- uxp8u61q 3y agoIf crypto crashes when leaders of countries with worthless currency ban it, then maybe crypto isn't really that great at solving any of the problems it purports to solve (independence from central authority etc).
- codedokode 3y agoNothing can win against the motivated enough government.
- diggan 3y agoExcept a sufficiently large amount of pissed off civilians.
- velox 3y agoworthless paper which happens to be the only thing one can use to pay taxes. Not so useless
- acdanger 3y agoBTC was around $65,000 a couple years back, no? I wonder how much of the current price of $28,000 is propped up by lost thumb drives , or wallets seized by authorities - limited supply rather than continued speculation.
- olalonde 3y agoYour conclusion is pretty funny. In general, when reality doesn't match up with my sources of information, I assume that my sources of information are biased or wrong, not that reality itself is. I was genuinely expecting your last sentence to be something like: "The fact that it still holds is the best demonstration of how biased the tech echo chamber is."
- llm_nerd 3y agoThe price of BTC reflects one incredibly narrow band of reality. BTC can quadruple tomorrow and the broad reality still is that crypto has not achieved any of the promises, and is less relevant today than it was 10 years ago. But BTC is "traded" in a largely unregulated market, has poor liquidity, and there is every indication that it is being held afloat by manipulation. BTC has close to zero barrier to entry, can be replaced in a second, and technically is just a giant bag of dogshit, so even if somehow crypto had actual value, it wouldn't be BTC. A few years ago, virtually all of professional sports were sponsored by crypto companies. Since almost all of them have folded, usually under massive fraud, and have been replaced by gambling firms. So I guess nothing has changed.
- olalonde 3y agoBitcoin has achieved its promise: "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution." There is no credible evidence that Bitcoin is being "held afloat by manipulation", that's just wishful thinking. It is also a very liquid market: billions of dollars in daily volume. > BTC has close to zero barrier to entry That's wrong. Mining power is a big one. Some other barriers: developer mind share, network effect, branding, perceived fairness of initial distribution, software ecosystem, etc. If it was easy to "replace in a second", it wouldn't still be the top cryptocurrency. Like I said, you might want to reconsider your sources of information.
- afpx 3y agoI know enough people now that have lost significant money through crypto scams that it's tainted its appeal to me. As for the price of BTC - it's deflationary and its holders only have incentive to buy and hold as long as they can while they hype it to the world - it'll never go down in price until the majority of holders have to sell.
- 5350-uiop-1130 3y agoBTC went from like 3-4k covid lows to 69k. BTC is a symptom of clown world economics money printing. investing in BTC is a bet that people in power of money will continue to act in their own selfish interest. it's a bet on clown world continuity. i love that. i think it has utility but is there good reason for it to be $30k and not $1k outside of money printing...i doubt it.
- tim333 3y agoYou can kind of calculate the value as (number of people invested)x(amount they hold in us$)/(number of bitcoins) For the present price that is approx 48 mil x $10k / 16 mil = $30k Early 2017 would have been 1.6 mil x $10k / 16 mil = $1k It's rough and ready but kind of how things play out. Most of the growth in price over the years has come from more people buying in. Not sure where it ends. We might get another 10x and 500 million people at some point?
- etchalon 3y agoBTC isn't a stock, and the network continues to have significant transactional volume. Whatever the merits of the technical, its found a niche that continues to provide value. It is illogical, but so are many, many things.
- jrm4 3y agoWait, WHAT? Your argument is: because a ton of people have put a ton of money into it, that proves that it's a scam? So the stock market, which has a much bigger market cap is therefore MORE of a scam? What are you trying to do here?
- llm_nerd 3y agoWhat a bizarre bit of strawmanning. The crypto brigade has arrived so this has all gone very desperately defensive. No, that isn't what I said. I said that clearly crypto in any rational sense has failed. Not just failed, overwhelmingly, catastrophically failed. It has zero relevance to the broader market. It has retreated from even where it was five years ago, that being a massively failed experiment. BTC has held value because most of the people who hold it didn't "put a ton of money into it". BTC is the very definition of HODL behaviour, with negligible daily liquidity. It is a house of cards.
- jrm4 3y agoAgain, I don't see how you're strongly distinguishing failure from extreme volatility? What makes an investment vehicle successful? And perhaps, more do the point -- why is BTC maintaining a pretty high price? Your point on liquidity only stands if you presume what I think a lot of people incorrectly presume: which is, crypto as an alternative to day-to-day currency (edit: or perhaps other generally designed-to-be-liquid thing). Which, I agree with most, it will almost certainly NEVER be. But that doesn't exclude the possibility of crypto as long-term investment/hedge against inflation. I wouldn't necessarily argue that "crypto in the future will definitely be a big and useful thing," but I think it's wildly premature to call it dead.
- deleted 3y ago[deleted]
- tim333 3y agoDaily spot liquidity is ~usd 3 bn. Not sure that's negligible?
- rspeele 3y agoAs much as I would like to believe BTC's market is completely fake, there has to be some real liquidity there. The hashrate is ~421 EH/s which represents a tremendous amount of ongoing spending on mining equipment and energy. That spending has to be funded somehow and the only way that makes sense is by selling the mined BTC. So there may be a lot of wash trading and games played with stablecoins trying to prop up the price, but there also must be enough real buyers to purchase the 6.25 BTC (~$175k) generated every 10 minutes. Otherwise the miners would not be able to pay their bills (surely owed in Real Money), would shut down, and we would see evidence of that in the network's hashrate plummeting.
- gobip 3y agoYes, thank you for your comment. Altcoins are terrible, NFTs are terrible, it was all a trend and I'm glad it's gone now. Bitcoin is different, always has been, always will be. Bitcoin is the digital gold. In my opinion it's not a currency and will not function like a currency but rather like gold. You don't buy your latte with gold, but you own gold stocks. Same thing with Bitcoin. It's the safest, oldest, most tested blockchain out there. You can't beat that.
- Baeocystin 3y agoEven Etherium? I was impressed they seemed to manage the transition to proof of stake and not blow up the whole thing. (not a stakeholder myself, so this is only an outside view opinion)
- mindslight 3y agoI personally see Bitcoin itself falling apart because it lacks the critical ecash property of untraceability, meaning it is the original non-fungible token. Regardless of how many honest verifiers are following the protocol, it's always possible to build a parallel system that judges which transactions/flows are legitimate or not according to completely different criteria - eg AML. This is happening slowly from both the bottom and the top - from the cryptocurrency industry with "blockchain analysis" and from the incumbent financial system with slowly creeping KYC rules. Right now you can still squint, use a mixer, and perhaps a less regulated exchange - just as ten years ago many people blissfully thought the whole thing was "anonymous". But the writing is on the wall. As soon as the more regulated exchanges start routinely rejecting transactions based on the source wallets' provenance, anything that's touched those wallets will become less desirable. Everyone will be drawn to the attractor of heeding the augmented rulesets to make sure they're not receiving tainted coins, and the currency will essentially fork.
- jgilias 3y agoI don’t get the reasoning behind saying that if the market would be real, the market cap would be a fraction of what it is now. Like, how do you determine that?
- throw_pm23 3y agoTrue value is zero, so the closer to that the more real.
- mvdtnz 3y agoThere's still plenty of crimes to be done.
- golergka 3y agoMost of HN users live in US, where they have legalised weed, are banked and don't have to transfer large sums of money from one country to another — therefore, don't have any real reasons to use crypto and only see it as a sham. Many other people around the world have no other choice but to use crypto when their local currency is spiralling down with inflation, when banks refuse to work with them, when they immigrate and have to transfer their life savings, or work for remotely with people from other countries, or simply when they want to buy a few grams of marijuana. The fact that you don't see any personally don't have any legitimate uses for a product doesn't mean that there are none.
- koonsolo 3y agoMaybe people outside of HN have a different perspective on this.
- api 3y agoMoney laundering, gambling, flight capital from Russia and China, and scams are all very active niches that could be responsible for a lot of that liquidity.