You guys seem to be saying the same thing just focusing on different aspects. crypto itself is surely driven by speculation, and perhaps some distrust in other institutions. Brian’s point seems to be that the crypto system (of speculation) has created industries around it in the sense of trading. not unlike the stock market, though with less tangible products. Which is undeniable.
But this seems to lend to another point above about only time can truly test. things built on such high levels of speculation tend to be unpredictable over time. Crypto, unlike gold, can vanish instantly quite easily. At least gold remains in your hand. So even as a way of investing out of worry of corrupt leadership’s, you still need a device, electricity and the internet to trade digital numbers. crypto seems, in some ways, like a decoupled bond scheme without anyone at the helm. once people think its shit, you just have paper. gold can be used. as can land and other forms of long lasting investments.
The year is still early. I think there’s a bigger crash coming. Also, wasn’t crypto supposed to do well during periods of high inflation? So much for that.
Some of us looked at it as a way to get around Chinese (and Taiwan) currency controls, until China shut things down.
I thought the big idea for crypto was that central authority would not be needed, and thereby moving Year X to go cashless to sooner than later. Kinda forgot about the huge amounts of energy needed to operate all the mining, though
Yeah, well, it also was popular among drug dealers and similar for the same reasons, but my point is that its current value doesn’t represent other thing but the amount of people who are trying to speculate with it. Its value is just that people want to get money out of investing on it, not that blockchain and similar are the ultimate solution to anything.
I have no opinion on the speculative/marketing aspect of crypto pushers, as I think this is still unfolding. So you may call it whatever you think it is, and justifiably so.
But I dont think it is fair to attack the tech itself >“reinventing the wheel”<. As it has more or less achieved what it set out to do, and it is not possible to be utilized by banks/governments:
Providing a decentralized currency + ledger system, that is not under any single entity’s control.
While Satoshi initially hoped to popularize this tech so people can truly have “their own money” without fear of bank collapsing, or government interference (the first block in Bitcoin contains a Times article about the mishandling of 2008 financial crisis), crypto has became a hotbed for money laundering and shady activities. I believe he has good intentions, but maybe some misunderstanding of the problems and solutions. But!! it still does what it is advertised to do, I am just waiting for the tech to be used by the right people now.
Funnily enough, during the Rubles crash/blockade in Russia due to war, many picked up crypto to become a hedging currency, so it has seen some practical use that was reminiscent of Satoshi’s vision.
The most laughably glaring reason is its alleged unique independence from state managed fiat currency. The commonly bleated gimmick about crypto being a “decentralized system” is pretty weak, especially when one considers the rather large (and few) coin mining operations that are required to validate / generate more transactions / coins. Add to this another most obvious fact: crypto is only “valuable” so long as one values it against fiat currencies… Crypto is an extremely inconvenient currency for daily life at best, and there isn’t a single crypto investor who isn’t everyday mentally converting his crypto back into dollars – “to measure his/her profits”…
It costs very little to exchange fiat currency and shift it around the globe via instantaneous telegraphic transfers. For a very long time already our old-fashioned fiat money has become a digital entity. Defending crypto becomes ludicrous when you take a look at how much many crypto-exchanges will ding you in fees for cashing out, converting, etc. Is that the only way these lazy but brilliant guys can make money? Alarm bells should be ringing…
Crypto has no inherent worth. The mumbo-jumbo about the supposed value of the Blockchain validation / generation process is rather like a species of mystification akin to an old-fashioned “idol of the marketplace” (1) that so troubled Francis Bacon: visit almost any crypto promotion website, and try to read through the convoluted rationalizations they use to justify the strange contradictions between the “efficacy of crypto” versus the cumbersome process and gross energy waste required for its propagation and transaction. If you don’t start laughing, they’ve successfully pulled the wool over your eyes! (And if you don’t understand what I am talking about, read Bacon.)
Finally, crypto is proved even more worthless because of its volatility. While gold may not be worth what people are willing or forced to pay for it, that doesn’t detract from the fact of its substance and ease of measure, even as crypto is totally insubstantial and intrinsically worthless.
Fiat currencies retain their value mostly due to the “money cycle” – a continuous, uninterrupted exchange process generated by real work and the consumption of real goods. Crypto doesn’t come close to playing any such important socio-economic role.
I think fashionable greed and gullibility are behind crypto: time and again I noticed that crypto enthusiasts do not actually understand how validation and coin generation actually work in relation to the Blockchain transactional system. Instead, the highest discussion they can muster is always about buying this or that crypto and converting it via this or that exchange system, and that blabber runs pretty thin. Comes down to this: most crypto guys confess that it’s all just random speculation and lucky timing, lol. Air-head-lemming-land…
(^)(°) (•)(•)
(1) "Idola fori (singular Idolum fori), sometimes translated as “Idols of the Market Place” or “Idols of the Forum”, are a category of logical fallacy which results from the imperfect correspondences between the word definitions in human languages, and the real things in nature which these words represent .
Paul Krugman gets more annoying the further away he gets from economics and the closer he gets to politics. But talking about crypto sounds to me to be closer to the dismal science. Some interesting quotes here
“The way I see it, crypto evolved into a sort of postmodern pyramid scheme. The industry lured investors in with a combination of technobabble and libertarian derp; it used some of that cash flow to buy the illusion of respectability, which brought in even more investors. And for a while, even as the risks multiplied, it became, in effect, too big to regulate.” ("Crypto Is Crashing. Where Were the Regulators?") (July 11, 2022)
The enthusiasm for cryptocurrencies seems very odd, because it goes exactly in the opposite of the long-run trend. Instead of near-frictionless transactions, we have high costs of doing business, because transferring a bitcoin or other cryptocurrency unit requires providing a complete history of past transactions. Instead of money created by the click of a mouse, we have money that must be mined — created through resource-intensive computations." (“Transaction Costs and Tethers: Why I’m a Crypto Skeptic”) (July 31, 2018)
Better than buying in late. Those who bought Bitcoin at 20K and above are all underwater. For those who bought at the top, they are all nursing huge losses.
They didn’t fail for most of the founders though, some of whom ran off with the bank. Most simply never went anywhere I’m betting since you can found your own crypto in an hour, many have tiny marketcaps and extremely low volume.
Are we near peak crypto , doom, and ponzi scheme claims?
If so…there has NEVER been a better time to start investing lol. Or speculating. Or gambling. Whatever you want to call it.
P.S. Transaction costs, computing power demand, huge file sizes, all very acceptable criticisms but all are being worked out as we speak. For instance I use polygon matic solves a lot of transaction cost issues on Ethereum.
Imagine crypto now is like the internet back in 1999, that where I take my reference from. The cloud existed then but it was clunky and expensive, it just wasn’t very useful until the infrastructure and everything started to be plugged into it, maybe from 2007 onwards, then accelerated rapidly in 2010s combined with fast internet and cheap memory. I’m not sure that crypto will challenge the banks withon 10 years, but maybe withon 20 years banks as we know them will start to get replaced by crypto platforms. Same as the way Uber has changed the taxi industry. I’m convinced access to truly global pools of credit and investors will upend things,I’m just not sure what will be up ended first.
What they always say is the initial phase is slower than expected and the second phase can go faster than expected.
Crypto is just one more part of a virtual world I guess. It is not bigger than the the internet, the metaverse, but it has a part to play.
Frictionless, self-regulating (blockchain) financial transactions would be a genuine service to humanity that would fill a real need. Governments will never allow money to escape their control though because money is power. When that became clear to crypto bros as governments began circling them cryptos devolved into a Ponzi scheme, with greed being its only goal.
