Is cryptocurrency a scam?

Cryptocurrencies are a scam :slight_smile: I am sure we’ll disagree on that which is fine. But the technology was never as advanced as claimed by its supporters. The way the blockchain gets updated etc, that whole thing belongs to a big and important subset of computer science called Distributed Computing which studies things like Consensus Protocols as in “can we agree that at time X the value of Y is Z”. Sounds familiar? Before Crypto, there were already more advanced and efficient Consensus Protocols like Paxos, etc.
There’s a reason why Big Tech companies don’t use any of the Blockchain protocols to build their products because they think it sucks.

I used to work for a huge global bank, and we had to deal with problems like the USD is traded globally 24 hours a day all over the world, so what’s the value of the USD/JPY, USD/TWD, etc, etc at time X? Again sounds familiar? The bank solved it without using the blockchain, and compared to the volume of USD trading in the world any single second, microsecond or even nanosecond, cryptocurrencies don’t really register, and performance was never an issue. When’s the last time you’ve heard “oh crap, we can’t trade the USD/X pair due to system and performance issues?” Yeah some brokers might have issues from time to time, but those tend to occur on their end and not at the backbone layer in the big banks or big hedge fund shops.

Cryptocurrencies are simply reinventing the wheel. Satoshi Nakamoto (who could be a single person or could also be a bunch of people) didn’t seem to understand the time value of money (TVM), something the Ethereum guys are at least recognizing. Without TVM, no one will ever lend money to anyone guaranteeing a stagnant economy. Yeah there’s nothing revolutionary about Crypto in the end. If people are trading it like the next tulip bulb, that’s fine, but saying that the value of money comes from some fancy tech, that’s just a fundamental misunderstanding of money.

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If they are all a scam how come they are prospering and developing 10 years later?

Open blockchain platforms have tremendous value (trustless, decentralized, immutable, transparent, censorship resistant ) and the more users they have the more valuable they become.

The whole point is that Facebook or Google or Goldman sachs doesn’t contol them, that it isn’t their proprietary data.

It took more than ten years for the first networks to become consumer internet and then another fifteen years for the cloud to become ubiquitious.

So we are around 2002 in terms of ‘internet’ years in my opinion (and maybe 1997…doesnt really matter). There is a tremendous road ahead and many fortunes to be made still, especially based on Ethereum .

Everybody had the chance to get in on Amazon in 2002 and everybody has the chance to be an Ethereum investor now. To say that it is the base layer of a world computer isnt too hyperbolic in my opinion. Transactions will almost all run on other layers and Ethereum will anchor the whole network.

And Ethereum can always upgrade as technologgy changes in future, but that ownership layer is locked in, just like how we are changing to ETH 2.0 now. In the future there will be ETH 3.0, 4.0…maybe for centuries?

The only one I have serious concerns about is BTC’S ENERGY use ,eventually they will come around and fix that. This is why I don’t support BTC much.

Ethereum issuance will be limited and deflationary soon, apart from which network will become the most popular Layer 2 (undetermined still) it could be the investment of the 21st century. Invest monthly to DCA and hold on to some of it for your grandchildren.

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Hype and greedy hopes. Crypto gets more and more attention so its speculative value grows attracting more attention, in a spiral of speculation.

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Ahem. Taiwan real estate. cough* :money_mouth_face:

The test of time is probably the only fool proof stress test.

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Well, just tell me one thing: do you know anybody who bought it for reasons other than speculation?

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Bernie Madoff was prospering before he got caught, and he had run that Ponzi scheme for 20 30 years? And really how can you say crypto currencies are doing well after the big crash this year? The fact of the matter is the authorities are allowing this “experiment” to continue while they build their own crypto solution(s), because we are supposedly all going to live cashless from year X. Once their solution is ready, they’ll probably tax all the other Crypto currencies to extinction. I mean the Chinese already kicked out all of their crypto players, what prevents the US and other Governments from doing the same? Also that should tell you that the monetary value of currencies flows partly from state violence. When I think of Crypto currencies, I think “you and what army?”.

Crypto will not stop money laundering, drug dealing, fraud, trust issues, theft, etc. The banks though need to exercise KYC (Know Your Client) and they can stop payment. Now if you say there are loopholes, there will always be loopholes, but the solution is you close them one at a time. I am a technologist and I code everyday building big complex systems. No technology will ever stop greed. Greed, War, Disease, Love, etc, they are fundamental forces in the universe. They were already here waiting for us when the first man/woman was born. They’ll be here long afterwards. All we can try to do is minimize their impact and that can only be done through a strong lawful state. No I am not saying the state should control everything, but it has to introduce laws that make sense and enforce them. Like all the people involved in the mortgage fraud of 2008 should have been arrested just the government sent hundreds of bankers to prison during the S&L crisis of the 198x.

If by “it” you mean:

Real estate, yes.

crypto currency, also yes. but far less. some people buy it out of distrust in the system being more and more corrupted. One might say the same for some if those that buy land.

Arguably all investments made globally that arent in yourself and your work are speculations. Stock market being a great example. Sometimes it gets so silly one can manipulate the speculation, thus crypto gained popularity out of a percieved sense of less fuckery possible. Which seems likely flawed.

Er… I think that’s just some cool varnish they give it, but they buy it in the hope of getting more money out of their “investment”.

I would argue that people buying real estate know they buy something useful, tangible, that isn’t a temporary hollow hype.

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agreed. I prefer tangible things as well. buying crypto seems more like a luxury gamble. But hey, varnish has its uses as well…

Crypto whale asking for government intervention. How ironic.

Well if I see that Ethereum was 80 USD a few years ago and now 1600 after a big crash …or just a few dollars per ETH a few years before that you think it is not doing well over time? Just in terms of monetary gain its doing extremely well over a multi year period. All you have to do is invest a bit month after month it couldn’t be easier. Nobody is saying put all your money in volatile cryptocurrency, but eventually if you invest over time it can become all your money. Funny how that works.

Ethereum is literally the exact opposite of a Bernie Madoff scheme you seem confused.

The whole world runs on software, this is just a giant decentralised software network that anybody can partake in . But its not free and already generating daily revenue and returns from its use.

Its just that crypto markets are extremely volatile (unregulated market) and that obscures somewhat the underlying growth over time.

Look at the fees generated by various platforms already. These platforms have value and people are paying to use them. For instance AAVE is getting half a mill in fees per day. I know the guy that started AAVE still only 25 years old or something. Now imagine what happens when AAVE and partners build consumer apps to onboard regular non crypto folks…(AAVE is a decentralised lending and credit network)

I agree with that counter argument, but that’s exactly what its value is: that its value is growing so its demand is growing hence its price is growing so its demand grows… so… etc.

Its value is not really anything to do with any practical application because then demand wouldn’t come from speculators but from people implementing solutions, but that’s really marginal if existent at all.

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I just showed you above, AAVE is built around Ethereum. They have billions of collateral and loans running on their decentralised platform, nobody knows who are the creditors and who are the debtors, but it doesn’t matter because smart contracts govern the system.

And? marginal.

The reason why its value has gone up is pure speculation.

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AAVE gets half million USD in fees everyday from lending and staking transactions on its network. Their platform depends on Ethereum to run the underlying smart contracts. Its all automated and controlled by the users. Very little human interaction and no govt institutions involved. All anonymous…Anyway I’m tired of debating with folks who have never used these platforms or researched this area properly. I can tell you they are still a little clunky that’s why I said maybe 1997 in internet years.

I highly doubt AAVE is the reason why people buy Ethereum. Also it would be funny if the transactions in AAVE are for… speculating with those loans.

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What is investment but speculation ? Notice that AAVE did not collapse and in fact earns as much money as ever (well down a bit) during the recent crash.

Investment is putting money to produce some value expecting get some interests that come from that generated value.

If there’s no project, no real value generated except for getting more investors who are looking for where to put their money for getting more money, then that’s pure speculation, because there isn’t a generated value.

You can say that it’s just semantics, but I think that we all know what “purely speculative” means VS investment.

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Not sure what you are saying, there are many working credit platforms already generating fees. I even gave you the link.

Look at the whole picture. What drives crypto hype and value? those projects or the hope of getting 10x your investment? You know the answer, because your motivation was the same than many others’.

Also, those platforms again seem to be oriented to make people get some capital growth, not necessarily facilitate goods and services production.

Crypto is to a big degree all what their followers criticise in capitalism.

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