Bitcoin: Censorship-Resistant Digital P2P Currency

[RunningMn9]

FWIW despite recent runs on some cryptocurrencies, BTC is still flying pretty high and can fall 66% yet to reach 2020 levels which would still be multiples of the 2011 price. In any case, every time there is some market turbulence someone predicts the end of crypto. Maybe it'll happen this time but I sort of doubt it.

No one is trying to predict the timing of the collapse, merely it’s inevitability. This isn’t market turbulence, it’s a front row seat to how stupid the concept of cryptocurrency as an “asset” is at its root.

It’s doesn’t matter how or why Terra Luna crashed, it matters that it did, and that it could.

Yesterday at this time, there were something like 1.2B coins floating around (Luna). A day later there are 6.5 *trillion* coins, and they are now worth 1/10000 of a cent (down from $116 a month ago).

It’s a house of cards. They are *all* a house of cards. Now you’ve seen an example of it happening to one of the biggest coins (in terms of market cap).

That all digital tulips haven’t gone to zero yet, isn’t evidence that the other digital tulips are somehow *really* worth actual money.

[RunningMn9]

The current circulating supply of Luna coins is:
6,530,469,829,708

Five days ago it was:
346,000,000

[malchior]

FWIW despite recent runs on some cryptocurrencies, BTC is still flying pretty high and can fall 66% yet to reach 2020 levels which would still be multiples of the 2011 price. In any case, every time there is some market turbulence someone predicts the end of crypto. Maybe it'll happen this time but I sort of doubt it.

No one is trying to predict the timing of the collapse, merely it’s inevitability. This isn’t market turbulence, it’s a front row seat to how stupid the concept of cryptocurrency as an “asset” is at its root.

I know - you've been arguing this for a long time and I think you're wrong and time has proven this is (edit: probably) wrong. It isn't necessarily inevitable. It's possible. This is from an economics point of view like arguing that the dollar is inevitably going to crash because it isn't backed by gold. That isn't 100% lined up but conceptually plenty of assets are backed by faith in other mechanisms.

It’s doesn’t matter how or why Terra Luna crashed, it matters that it did, and that it could.

Yesterday at this time, there were something like 1.2B coins floating around (Luna). A day later there are 6.5 *trillion* coins, and they are now worth 1/10000 of a cent (down from $116 a month ago).

It’s a house of cards. They are *all* a house of cards. Now you’ve seen an example of it happening to one of the biggest coins (in terms of market cap).

Except the how in this case is very specific. It looks like a specifically broken algorithm/financial application and extrapolating it to all crypto is fundamentally flawed. We're not seeing race conditions on BTC and ETH for example because they operate completely differently.

That all digital tulips haven’t gone to zero yet, isn’t evidence that the other digital tulips are somehow *really* worth actual money.

Maybe. But you're arguing with no uncertainty the opposite. Don't you see that?

[RunningMn9]

I’m not arguing that all digital “currency” will fail in the same way that this one flamed out. I’m saying that all digital “currency” has the same fundamental flaw. You are giving someone money for nothing, hoping that some day in the future you can convince someone else to give you even more money for your nothing.

I wish you the best of luck and hope that you exit early enough to not be the one holding the bag. If you are a believer, then my apologies in advance when you are the one left holding the bag.

[malchior]

I’m not arguing that all digital “currency” will fail in the same way that this one flamed out. I’m saying that all digital “currency” has the same fundamental flaw. You are giving someone money for nothing, hoping that some day in the future you can convince someone else to give you even more money for your nothing.

This is literally the same argument people made about dollars when they were created. The same was said about company scrip. The same argument against various forms of credit in the 1700s and 1800s. All I'm saying is that's what I'm hearing. This argument has been made the *same way in so many forms*. And where mediums of exchange failed others arose. It feel way too early to think that a stable digital currency can never be created.

I wish you the best of luck and hope that you exit early enough to not be the one holding the bag. If you are a believer, then my apologies in advance when you are the one left holding the bag.

I actually own zero crypto now. It's not that I'm a believer. I'm not trying to make myself feel better. I'm talking about it from a technical stand point. Every form of crypto currency might crash and burn - it's certainly possible - but people have been predicting spectacular failure since they were created. There is no mathematical proof here to prove you right or wrong here. I'm just saying you are arguing to an absolute certainty as if it is a fact. That seems ... unwise when it consistently is clashing with reality.

[Isgrimnur]

All economics is a shared delusion.

[Blackhawk]

What do you have against barter?

[Isgrimnur]

Skate keys for dinner. (h/t to an old BC comic)

[stessier]

All economics is a shared delusion.

This is where I've landed.

[stessier]

Incidentally, hyperinflation is not unheard of in traditional currency, so it's not like this is unique to crypto.

[RunningMn9]

Incidentally, hyperinflation is not unheard of in traditional currency, so it's not like this is unique to crypto.

Indeed. I wouldn’t recommend investing in third world currencies either.

At some point the same thing can happen to the USD. But that’s a lot less likely, because the full faith and credit of the US economy is more reliable than this nonsense.

And to malchior’s point, this has nothing to do with the the technology. When I’m buying a Bitcoin, I’m not buying the technology.

[malchior]

Incidentally, hyperinflation is not unheard of in traditional currency, so it's not like this is unique to crypto.

Indeed. I wouldn’t recommend investing in third world currencies either.

At some point the same thing can happen to the USD. But that’s a lot less likely, because the full faith and credit of the US economy is more reliable than this nonsense.

This is important because that full faith is faltering to an extent. I'll avoid hard R&P and talk high level but we see preparations by some central banks to move away from using the dollar as the sole reserve currency or peg for their local currency. We are seeing now seeing increasing O&G contracts not denominated in USD and instead EUR. We also are seeing due to the Ukraine situation...demands for RUB payments. In any case, it's stress on the USD. And the model behind the "nonsense" is there is a demand for a currency not tied to any nation. Partly for political reasons but unfortunately also because it enables crime and financial opaqueness.

[Max Peck]

El Salvador’s Bitcoin Losses Are Equal to Next Bond Payment

El Salvador’s gamble on Bitcoin has already led to losses that equal the cash-strapped nation’s next interest payment to bondholders, showing the increased risks posed by its experiment with the cryptocurrency.

The rout that has driven Bitcoin down some 40% since late March has deepened President Nayib Bukele’s cumulative losses on the government’s holdings to about $40 million, according to an estimate by Bloomberg. That’s a little more than the country’s next coupon payment on its foreign debt, with $38.25 million due in June 15 on notes maturing in 2035.

[RunningMn9]

This is important because that full faith is faltering to an extent.

Now imagine how tenuous the situation would be if you didn’t even have a faltering full faith and credit.

If you want to base the strength of a currency on something - a $25+T annual economy is probably a better bet than “absolutely nothing”.

[Max Peck]

I like to think of cryptocurrencies as being backed by a strategic reserve of burned-out GPUs and Bored Ape Yacht Club NFTs.

[RunningMn9]

I like to think of cryptocurrencies as being backed by a strategic reserve of burned-out GPUs and Bored Ape Yacht Club NFTs.

Don’t even get me started on the stupidity of NFTs.

[Blackhawk]

I like to think of cryptocurrencies as being backed by a strategic reserve of burned-out GPUs and Bored Ape Yacht Club NFTs.

Don’t even get me started on the stupidity of NFTs.

I think everyone's with you on that one.

[malchior]

This is important because that full faith is faltering to an extent.

Now imagine how tenuous the situation would be if you didn’t even have a faltering full faith and credit.

This is a non sequitur to the point being made. Not every currency must have the exact same foundation. We have plenty of examples of this in the real world.

If you want to base the strength of a currency on something - a $25+T annual economy is probably a better bet than “absolutely nothing”.

Conservative estimates of annual transactions in BTC amount to somewhere near ~$750B equivalent. This is activity that isn't necessarily recorded in official GDP tallies wherever the commerce is transacted. It is unaccounted for. It however represents the exchange of goods/services/extortion payments/etc. This is something not quite defined as an economy but more something that has near equivalence.

Anyway, I'll restate my point. Now that it exists it seems very likely that there is a permanent level of demand for a cryptocurrency. It has features that traditional nation state controlled currencies lack. That's not 'absolutely nothing' - in terms of how money works at least.

[malchior]

I like to think of cryptocurrencies as being backed by a strategic reserve of burned-out GPUs and Bored Ape Yacht Club NFTs.

Don’t even get me started on the stupidity of NFTs.

I think everyone's with you on that one.

Indeed - NFTs are spectacularly dumb.

[LawBeefaroni]

I like to think of cryptocurrencies as being backed by a strategic reserve of burned-out GPUs and Bored Ape Yacht Club NFTs.

Don’t even get me started on the stupidity of NFTs.

I think everyone's with you on that one.

Indeed - NFTs are spectacularly dumb.

NFTs aren't dumb. Buying NFTs of JPGs and other worthless digital ephemera is dumb.

Using NFTs to track land deeds or monitor a supply chain is not dumb.

[malchior]

I like to think of cryptocurrencies as being backed by a strategic reserve of burned-out GPUs and Bored Ape Yacht Club NFTs.

Don’t even get me started on the stupidity of NFTs.

I think everyone's with you on that one.

Indeed - NFTs are spectacularly dumb.

NFTs aren't dumb. Buying NFTs of JPGs and other worthless digital ephemera is dumb.

Using NFTs to track land deeds or monitor a supply chain is not dumb.

Fair enough. I'm specifically talking to the pop culture usage of the term which I think is what others were getting at as well.

[LawBeefaroni]

I like to think of cryptocurrencies as being backed by a strategic reserve of burned-out GPUs and Bored Ape Yacht Club NFTs.

Don’t even get me started on the stupidity of NFTs.

I think everyone's with you on that one.

Indeed - NFTs are spectacularly dumb.

NFTs aren't dumb. Buying NFTs of JPGs and other worthless digital ephemera is dumb.

Using NFTs to track land deeds or monitor a supply chain is not dumb.

Fair enough. I'm specifically talking to the pop culture usage of the term which I think is what others were getting at as well.

That's a problem. The pop culture idiot speculators are poisoning a very useful well. It will hinder adoption of actual productive uses of NFTs. Imagine proposing to use NFTs to identify patient EMRs. "What, that ape shit?"

[malchior]

That's a problem. The pop culture idiot speculators are poisoning a very useful well. It will hinder adoption of actual productive uses of NFTs. Imagine proposing to use NFTs to identify patient EMRs. "What, that ape shit?"

Yeah I imagine if something useful is invented they'll switch to another term.

This is getting to be important since there is at least one in blockchain based fintech solution getting close to launch. It's been a lot of talk and little actual blockchain adoption. But we'll maybe see DTCC pilot stock settlement on ETH (at least I think it's ETH based) this year. It'd be a big get as it would mean they convinced the always clueless regulators to allow it. Which might start the ball rolling on more projects despite this pop shit.

[RunningMn9]

NFTs aren't dumb. Buying NFTs of JPGs and other worthless digital ephemera is dumb.

Using NFTs to track land deeds or monitor a supply chain is not dumb.

I was going to amend this earlier - the notion of a means to independently verify ownership of something isn’t dumb. The technological idea of the blockchain isn’t dumb. However, giving someone $N for a digital receipt that I “own” an image of a dumb fucking ape (that literally everyone can obtain a copy of for free) is just about as dumb as someone spending $29,000 to buy a digital token to buy shit on a blockchain.

In other words, the technology has real value. The coins / ape pictures do not. In even other words, BTC isn’t trading for tens of thousands of dollars because of the value of the technology. It’s trading at that rate because it’s caught in an absurd speculative bubble, and when it pops, the loss in confidence will do the rest of the damage.

Sort of like TSLA.

[The Meal]

Using NFTs to track land deeds or monitor a supply chain is not dumb.

Are those appropriately called NFTs or are they just full use of the Etherium blockchain? (Legit question, as I'm not really sure how all the nomenclature goes together.)

[LordMortis]

Sort of like TSLA.

But once TSLA got put in the S&P it "will do the rest of us the damage." TSLA is probably still a good $150 or $200 stock, given it is no longer speculation and still has plenty of room to grow. A $200 billion valuation basically says they will grow into analog of a Toyota sized and profitability company and you would be willing to pay that premium to be there now.

But yes TSLA and Bitcoin rise and fill together. I don't think there is any coincidence there, though bitcoin is bit more volatile than TSLA (possibly because it does not close with the market)

Gotta admit I was tempted to buy COIN at around $250 because everyone but Buffet was hammering you need exposure. I couldn't pull the trigger, watching the volatility of BTC and knowing that my investments are going to be converting into my living expenses. For now I''m glad I didn't.

[RunningMn9]

But once TSLA got put in the S&P it "will do the rest of us the damage." TSLA is probably still a good $150 or $200 stock, given it is no longer speculation and still has plenty of room to grow. A $200 billion valuation basically says they will grow into analog of a Toyota sized and profitability company and you would be willing to pay that premium to be there now.

But yes TSLA and Bitcoin rise and fill together. I don't think there is any coincidence there, though bitcoin is bit more volatile than TSLA (possibly because it does not close with the market)

Gotta admit I was tempted to buy COIN at around $250 because everyone but Buffet was hammering you need exposure. I couldn't pull the trigger, watching the volatility of BTC and knowing that my investments are going to be converting into my living expenses. For now I''m glad I didn't.

I brought TSLA into the conversation because it's the same situation. The underlying "thing"? Yeah, that's not stupid, and it's reasonable to think "I want to invest in that thing". But TSLA stock is also trapped in a bubble, which moves it from investing to gambling. Which is fine, if you want to gamble. Just stop pretending that it's a sensible investment. Although at least with TSLA you are actually buying *something*.

[noxiousdog]

The dollar will have value as long as you have to pay your taxes in dollars. That means that 99.99999% of all transactions in the US will need dollars.

Add to that the global market for anything else priced in dollars and there's real value there. It will fluctuate, but it's value. To malchoir's point, when those things change, the the value of the dollar will go down. But it's nothing like cryptocurrency. There's just no real market. It's like tulips.

[LawBeefaroni]

Using NFTs to track land deeds or monitor a supply chain is not dumb.

Are those appropriately called NFTs or are they just full use of the Etherium blockchain? (Legit question, as I'm not really sure how all the nomenclature goes together.)

From what I understand blockchain in a broad sense can do this without "NFTs" per se, but NFTs are currently the best solutions at the most granular levels. They don't have to be on the ETH blockchain but most are.

[pr0ner]

BTC is under $19k and has dropped over 60% in 2022.

[The Meal]

Video cards back on sale!

[LawBeefaroni]

BTcC is down 58% YTD.

The NASDAQ composite is down 31%

TSLA is down 46%.

It's almost like we're in a recession that is hitting all classes.

[malchior]

BTcC is down 58% YTD.

The NASDAQ composite is down 31%

TSLA is down 46%.

It's almost like we're in a recession that is hitting all classes.

Yeah it's definitely weird. I think we'll find that on a real basis we will have shrunk the economy this year. We did in Q1 based on besr current data. It'll probably continue for a good part of the year. The good thing is there is so much liquidity right now and supply is so messed up that we just aren't seeing the penny pinching we'd typically be seeing.

[Drazzil]

BTcC is down 58% YTD.

The NASDAQ composite is down 31%

TSLA is down 46%.

It's almost like we're in a recession that is hitting all classes.

Gold and silver are FINE!

[LawBeefaroni]

Gold is flat YTD, silver is down ~8%. So outperforming but not exactly the safe haven they're supposed to be.


The best thing about them is that you can buy and store physical fairly easily.

[malchior]

Crypto hedge defaults on loan

Prominent crypto hedge fund Three Arrows Capital has defaulted on a loan worth more than $670 million. Digital asset brokerage Voyager Digital issued a notice on Monday morning, stating that the fund failed to repay a loan of $350 million in the U.S. dollar-pegged stablecoin, USDC, and 15,250 bitcoin, worth about $323 million at today’s prices.

3AC’s solvency crunch comes after weeks of turmoil in the crypto market, which has erased hundreds of billions of dollars in value. Bitcoin and ether are both trading slightly lower in the last 24 hours, though well off their all-time highs. Meanwhile, the overall crypto market cap sits at about $950 billion, down from around $3 trillion at its peak in Nov. 2021.

Voyager said it intends to pursue recovery from 3AC (Three Arrows Capital). In the interim, the broker emphasized that the platform continues to operate and fulfill customer orders and withdrawals. That assurance is likely an attempt to contain fear of contagion through the wider crypto ecosystem.

[LawBeefaroni]

BTC is a commodity.

Securities and Exchange Commission Chairman Gary Gensler said Monday that bitcoin was the only cryptocurrency he was prepared to publicly label a commodity, rather than a security, in an interview with CNBC.

The debate over whether any particular cryptocurrency can be labeled a commodity rather than a security has far reaching implications because financial instruments that are securities can only be legally sold to the public if the issuer registers with the SEC and adheres to strict disclosure regime.

“Many of these tokens…the investing public is hoping for a return just like when they invest in other financial assets we call securities,” he said in an interview on Squawk Box. “Many of these financial assets, crypto financial assets have the key attributes of a security,” and are therefore under the SEC’s jurisdiction.

[malchior]

Drats. It would have been amusing to see them try to regulate BTC as a security.

[LordMortis]

Anyone else been paying attention to FTX and potential fallout?

https://www.cnbc.com/2022/11/11/sam-ban ... uptcy.html

Sam Bankman-Fried’s cryptocurrency exchange FTX has filed for Chapter 11 bankruptcy in the U.S., according to a company statement posted on Twitter. Bankman-Fried has also stepped down as CEO and has been replaced by John J. Ray III, though the outgoing chief will stay on to assist with the transition.

Approximately 130 additional affiliated companies are part of the proceedings, including Alameda Research, Bankman-Fried’s crypto trading firm, and FTX.us, the company’s U.S. subsidiary.

In the 23-page bankruptcy filing obtained by CNBC, FTX indicates that it has more than 100,000 creditors, assets in the range of $10 billion to $50 billion, as well as liabilities in the range of $10 billion to $50 billion. Bankman-Fried also indicated that he wishes to appoint Stephen Neal as the firm’s new chairman of the board.

[R&P]Noted Free Market uber alles advocate Kevin O'Leary was just on TV in the background railing on government for not regulating Crypto and allowing these sorts of problems for such a vital technology.[/R&P]

I was surprised to find bitcoin back up to nearly 17,000.

[Isgrimnur]

I'm just looking forward to not seeing their logo on MLB umpires.