The Mystery of Bitcoin

Discussion in 'Off-Topic Discussions' started by nosborne48, Aug 27, 2022.

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  1. nosborne48

    nosborne48 Well-Known Member

    After seeming to rally a bit, BTC sank below 20,000 again. One BTC apologist site points put that it can't be a burst bubble because it hasn't fallen to zero. I don't know about his definition but I do find the "floor" to be difficult to understand. Why hasn't BTC dropped to nothing as I've predicted? What holds it up so to speak?
     
    Charles Fout likes this.
  2. Charles Fout

    Charles Fout Active Member

    Bitcoin and every other cyber currency remain a mystery to me. Perhaps I've missed the boat but, I'm not inclined to understand it.
     
  3. Johann

    Johann Well-Known Member

    As I see it, good boat to miss, Charles. Yellow flag. Plague ship. :eek:
     
    Charles Fout likes this.
  4. Rich Douglas

    Rich Douglas Well-Known Member

    PT Barnum.
     
    Johann likes this.
  5. Johann

    Johann Well-Known Member

    Indeed. But, unlike a Barnum show, the admission to THIS tent can be ruinously expensive!
     
  6. Johann

    Johann Well-Known Member

    My take: Hot air.
     
    elcastor21 likes this.
  7. LevelUP

    LevelUP Active Member

    Cryptocurrency is largely based on the greater fool theory.

    Bitcoin, Ethereum, and some cryptos, such as asset-backed cryptos, will be the last to fall.

    There are many crypto scams, such as the Elon Goat Token Scam.
     
    elcastor21 likes this.
  8. Johann

    Johann Well-Known Member

    Quite a few "asset-backed" cryptos have fallen. Often because the "assets" didn't exist, or didn't exist in sufficient quantity. Others, including more than one "gold-backed" crypto - have collapsed when somebody runs off with the gold or other assets and they're never seen again...

    "Gold-backed" cryptos seem especially susceptible to this. Gee, I wonder why... :)
     
  9. Johann

    Johann Well-Known Member

    There are some Muslims who are trying to get Islamic approval for a gold-backed Crypto. I like the Islamic system and I really don't want to see it happen. Some argue "It's OK. Crypto isn't really money." I don't get that. It's valued in money terms. Money is what you spend / get when you buy / sell crypto. And money is what you spend or get when you buy / sell drugs - or gamble illegally. That doesn't make buying /selling drugs - or illegal gambling - OK.

    To me, the idea of Islamic crypto - gold-backed or not - is an oxymoron. Crypto - of whatever type - is built for gambling and speculation, both of which are haram - ritually unclean.

    The Infidel, Johann, has spoken. :) Let it be written thus, for all to see. :)
     
  10. Johann

    Johann Well-Known Member

    Yes - the Qur'an expressly forbids gambling - but many Muslims - especially wealthy ones - DO gamble in pretty well all countries where there are casinos.
    I don't care two cents about the religious proscription - I'll have nothing to do with religion - ANY religion. But in this (crypto) case, I'm against ANYTHING that will mess up - or go against - the Islamic financial system - one that has:

    (1) Revolutionized my thinking about money.
    (2) Helped me do better with money than I ever did in the past.
    (3) For the first time in my life, has made me AT PEACE with money matters

    Right. I'm unwilling to accept something that might mess all that up. Don't want to go back to where I was.
     
  11. Rich Douglas

    Rich Douglas Well-Known Member

    Money is a form of score keeping. When Bitcoin moved from that to being a speculative venture—based on nothing—it was doomed to get tossed next to that pile of leftover tulips. It might not happen overnight, and it might not happen completely, but despite what PT Barnum implied, there will be an end to the lineup of suckers willing to pay to purchase nothing.
     
  12. SweetSecret

    SweetSecret Well-Known Member

    I would not be expecting crypto to drop to zero. I have used it in the past to buy things from overseas at a deep discount that saved me hundreds per month. Additionally, with everything going on in terms of the metaverse and VR, I suspect it will grow.
     
  13. Rich Douglas

    Rich Douglas Well-Known Member

    Your talking about using it as currency. But the real controversy is its use as an "investment." I have to think the vast majority of its current price is based on the latter, which really is based on nothing but baselessness.
     
    JBjunior likes this.
  14. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    LOL, as soon as I saw you all talking about it again I knew it must have gone down. Seems to be back over $20K now.
     
    nosborne48 likes this.
  15. SweetSecret

    SweetSecret Well-Known Member


    That's the thing though, if everyone is just HODLing, which is what many seem to do, then what value does it have? It's like if we all stopped using fiat currency and just held tight to what we have... people would then be forced to come up with a new currency. The currency only has value when people decide to use it for trade. If everyone stopped using crypto tomorrow then then value drops to zero. What needs to be happening, to drive the value up, is getting more people on board to use crypto for purchasing goods and services. Getting more people to HODL is not something that will lead to investment value sustainability alone.

    Additionally, the demonetization that happened in India is an example of why many around the globe might want to consider using crypto.
     
    Last edited: Aug 29, 2022
  16. Rich Douglas

    Rich Douglas Well-Known Member

  17. SweetSecret

    SweetSecret Well-Known Member

    His argument to me feels like saying that if I don't make money off my personal bank account then it is then a ponzi scheme and a scam. Most people are either not making money off their bank accounts or are making very little. As the video stated, the government split personal banking and investment banking for a reason. If I go to another country, transfer my money into their currency and use it to buy goods and services, but then leave the country with that money's country in my purse... I do not think of it as a ponzi scheme or scam. Nor do I get made because it did not gain some significant value. I can use the money when I go back another time though or exchange it back to my home currency for a fee. With that said, the system really needs to be used within systems of trust. When I was using it I was paying a company that I had previously done the business with. I knew their product, I trusted them to send it to me, and because of changes in US regulations they were willing to give me a discount for using the cryptocurrency rather than going to a company elsewhere. What I purchased was literally life-saving. I'm grateful the cryptocurrency existed so that I could get what was needed. With that said, I do not view cryptocurrency like an account with Vanguard or Fidelity.
     
    Messdiener and SteveFoerster like this.
  18. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    Given what I've heard from him as a commentator on NPR and elsewhere, I expect that Reich's real problem with cryptocurrency is an ideological disinclination to consider how a financial system that didn't originate under the all-seeing eye of the state could possibly be a good thing.
     
    elcastor21 likes this.
  19. Rich Douglas

    Rich Douglas Well-Known Member

    He's saying that there are multiple risks for fraud in a system with almost no regulation. He didn't call for banning it, but instead for regulating it. That's the best use of government: curbing the roughest edges of capitalism.

    It's still the buying and selling of nothing, with no protections and very little transparency, run by companies with almost zero oversight.
     
    Johann likes this.
  20. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    My ex specializes in advising companies in the cryptocurrency space on regulatory compliance, and I can confidently assure you that this is completely untrue.
     

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