The Crypto-Currency Thread

[Shofercia]

So, uhh, this happened: http://fortune.com/2018/02/03/bitcoin-n ... g-crushed/

After surging to almost $20,000 in December following the introduction of regulated futures contracts in the U.S., the world’s largest cryptocurrency has lost more than half its value, plummeting to as low as $7,614 on Friday. It regained some ground on Saturday, rising 7.5 percent to $9,290.15 as of 2:58 p.m. in New York, according to coinmarketcap.com.

Particularly hard hit have been those who got swept up in the mania just before what skeptics ranging from Jamie Dimon to Nouriel Roubini have labeled as one of the biggest asset bubbles in history began showing signs of deflating. Selling by “weak hands,” as latecomers are sometimes called across the investing world, contrasts with the view of early advocates pledging to HODL — one frenzied trader’s misspelled entreaty to hold onto the tokens during an earlier rout that’s become the mantra of Bitcoin purists.

Bitcoin lost half of its value, http://fortune.com/2018/02/02/bitcoin-i ... this-year/ losing nearly $87 billion in less than three months. Ouch!

However, there are other cryptocurrencies, http://www.businessinsider.com/list-top ... on-2017-10

including Ethereum, Ripple, Litecoin, Dash, etc. There's even a cryptocurrencies for pot, appropriately named HempCoin.

So, my fellow NSGers - what do you think about crypto currencies? Are any of your crypto-experts? Did you guys lose a house on Bitcoin? This is the crypto-currencies thread!

I think it's an interesting innovation that needs to be discussed.

[Washington Resistance Army]

I almost bought a ton of Litecoin when it was twenty cents a piece or some ridiculously low price ;_;

Not shocked Bitcoin dropped though, all the criminals were probably miffed that their preferred currency was suddenly an investment item.

[Bombadil]

I liken it a bit to the Internet bubble of 99/00. Insane valuations for domains such as Pets.com and a huge crash leading everyone to sneer and remark the Internet is a fad.

Cryptocurrency has some underlying value, just think it will take another 10-20 years before it settles into actual business use and starts to seriously effect how we reserve and pay for things.

I guess the difference is governments have far greater interest in regulating if not choking it off completely.

[UniversalCommons]

Bitcoin and most cryptocurrency once it reaches a certain point becomes legitimized by the increasing power needed to generate new currency. More and more powerful machines are needed to generate additional coins. These machines get out of the price range of the ordinary consumer and small businesses. Soon only banks and large institutions will be able to generate the older cryptocurrencies.

[Reploid Productions]

Bitcoin and most cryptocurrency once it reaches a certain point becomes legitimized by the increasing power needed to generate new currency. More and more powerful machines are needed to generate additional coins. These machines get out of the price range of the ordinary consumer and small businesses. Soon only banks and large institutions will be able to generate the older cryptocurrencies.

According to the folks at my local Frys, they already can't keep mid-to-high end video cards on the shelves because of it. Got some friends who want to upgrade their gaming computers who are stuck waiting for the fad to pass because supply-and-demand has the going rate for a lot of the gaming-level cards jacked way up.

[Bombadil]

Bitcoin and most cryptocurrency once it reaches a certain point becomes legitimized by the increasing power needed to generate new currency. More and more powerful machines are needed to generate additional coins. These machines get out of the price range of the ordinary consumer and small businesses. Soon only banks and large institutions will be able to generate the older cryptocurrencies.

According to the folks at my local Frys, they already can't keep mid-to-high end video cards on the shelves because of it. Got some friends who want to upgrade their gaming computers who are stuck waiting for the fad to pass because supply-and-demand has the going rate for a lot of the gaming-level cards jacked way up.

Same complaint serial killers had about pick axes during the gold rush.

[Shofercia]

According to the folks at my local Frys, they already can't keep mid-to-high end video cards on the shelves because of it. Got some friends who want to upgrade their gaming computers who are stuck waiting for the fad to pass because supply-and-demand has the going rate for a lot of the gaming-level cards jacked way up.

Same complaint serial killers had about pick axes during the gold rush.

That's totally random, and yet quite a good comparison.

[Likar]

Same complaint serial killers had about pick axes during the gold rush.

That's totally random, and yet quite a good comparison.

I have invested in bitcoin. What should I do??

[Sovaal]

That's totally random, and yet quite a good comparison.

I have invested in bitcoin. What should I do??

If you sell now to you still make a profit? Of course, who would buy now? Not may I assume.

[Neu Leonstein]

My views on crypto are a matter of record on NSG. And, yeah, I'm a "nocoiner", despite fitting most of the demographic characteristics of the typical crypto enthusiast: I'm white, male, fairly into tech and online a lot, and I am lucky enough not to have to live from paycheck to paycheck or be financially responsible for anyone other than myself. Plus, I even have the deep-seating anger about the unearned privilege and wealth of the baby boomer generation.

But sadly, I also work in finance (and worse, actually: in central banking), so I was never going to get as swept up in this as an amateur would. To me, Bitcoin is not an asset, it is a payment platform. It is not very efficient time- and energy-wise, and it is quite expensive once people actually start using it. There's a reason for this, and that is that these characteristics are the cost of the extreme resilience against failure and manipulation of transaction data that the public blockchain allows. It is a cool idea, and it's no wonder that a lot of people are looking at applying the concept for other things (though I suspect that in 99% of cases it will turn out not to be an improvement over a well-run, private ledger system/database).

But if I think about who would use this as their payments system, I struggle to see the mass adoption that enthusiasts are banking on. Outside the libertarian internet, people are not only not as worried about the government or banks interfering with the back end of their transactions: they actually want it to. They want reversibility of transactions that might have been done in error or fraudulently, they want law enforcement to be able to track and stop criminal financial activity. They want to have their savings kept safe not just from burglary, but also from forgetting your internet banking password. You can recreate all these things in Bitcoin, but only by setting up new intermediary institutions that serve the same role as banks, and thereby defeating the purpose. And even when we're not talking about savings, but about investments, people don't want to risk their portfolio disappearing because some unaccountable bucket shop got itself hacked, and they don't want their investment decisions to be made on the basis of fraudulent prices on exchanges because no one regulates spoofing or pump-and-dump tactics. So why should they pay for higher transaction- and energy-costs to get features that they don't really want?

All of these features are fine for some small subset of the population, but not for enough people for the crypto space to seriously replace the regulated fiat system we currently have. One use case I can see is cross-border transfers in countries with shitty banking systems or capital controls - but that doesn't replace banks, it replaces street corner money changers (and even then, it probably doesn't replace them, it just becomes their tool of choice). Not enough for a $20,000 valuation, in my view.

But I've been wrong pretty consistently for years now, because I underestimated the amount of new users who would buy into the hype. Not so much because of its use value, but because of expected capital gains (i.e. the typical bubble mechanic). I figured when the Chinese government cracked down on miners and/or exchanges, that'd be the end of it. But I hadn't reckoned with the Koreans flooding in at just the right time to cushion the blow, which then fed into the last stage of the bubble back in the western world too. Nor did I see the tether scam emerging in time to pump things further once the Korean new money started to fade. So that's how we got almost all the way to $20,000.

There are people who say that Bitcoin has seen plenty of similar-sized reversals too, and it's bounced back from there. But, consistent with the above, I think this time is sufficiently different to question that. If you're now at a point where the price is supported by fraud in the hundreds of millions of USDT (=/= USD), and everyone potentially dumb enough to still jump on the bandwagon has now heard of it and will also hear of the reversal, I really struggle to think who will be the next wave of new money to prop the price up. So if you bought some near the highs, I don't think you'll make that money back. There might be some applications of blockchain technology that will be useful (semi-private blockchains between large investment banks and investment funds to automate OTC derivative contract margining, for example), but I think most of these coins will turn out to be nothing and will be valued accordingly. Bitcoin will never go to zero, but it'll be a specialist thing useful for criminals, for money transfers in and out of particular countries in which government interference prevents banks from competing for offshore transfers, and a fetish for die-hard doomsday preppers and internet ancaps. But most of the population on this earth will go on not knowing or caring.

[Constitutional Technocracy of Minecraft]

There's a surprisingly successful cryptocurrency called Dogecoin. Based around doge.

[Minoa]

There's a surprisingly successful cryptocurrency called Dogecoin. Based around doge.

Dogecoin is more of a parody of cryptocurrencies, because it is pro-inflation and only exists to make fun of ridiculous bubbles like the bitcoin.

To be honest, the collapse of the cryptocurrency craze would be a relief for us computer builders (Machiavellian it may seem), because we will then be able to buy new graphics cards at (or less than) the recommended retail price again.

I just don't get how bitcoin can be an alternative to conventional currency when it fundamentally depends on electricity for it to exist, unlike gold and silver coins.

[Minoa]

1 XBT currently trading at a still grossly unrealistic 6,148.96 EUR. I still question as to what really backs bitcoins, if there is anything backing it at all: that question doesn’t apply to precious metals, because they are tangible and most importantly don’t require electricity to use them.

[Hurdergaryp]

Often I saw online ads about investing in crypto-currency the last few weeks, but those seem to have disappeared. It often is a sign of a bubble about to burst when you see such ads.

[-Ocelot-]

I still question as to what really backs bitcoins, if there is anything backing it at all: that question doesn’t apply to precious metals, because they are tangible and most importantly don’t require electricity to use them.

People consider BC to be a currency. It is divisible, can be stored and can be used for transactions. You can't create an endless amount of BC, despite it's digital nature. Therefore, it has value. The same is true for fiat money most people use daily. A 100€ note isn't actually worth 100€ but we have universally accepted that it does.

[Dumb Ideologies]

It's still got some devaluing to go before it finds a temporary level again and starts to grow/decline in a (slightly) less manic way. Boomcoin for the early investors who sold at the peak, Bustcoin for the Jonny-come-latelys who fell for the only-way-is-up adverts based on partial and misleading renditions of Moore's Law.

Often I saw online ads about investing in crypto-currency the last few weeks, but those seem to have disappeared. It often is a sign of a bubble about to burst when you see such ads.

Trying to get the last few breaths of air into the bubble before it pops and they can sell instantaneously for maximum profit. Or honest good people who misunderstood their own market and are now devastated by how other people's savings have gone up in smoke.

You decide!

[Hurdergaryp]

I still question as to what really backs bitcoins, if there is anything backing it at all: that question doesn’t apply to precious metals, because they are tangible and most importantly don’t require electricity to use them.

People consider BC to be a currency. It is divisible, can be stored and can be used for transactions. You can't create an endless amount of BC, despite it's digital nature. Therefore, it has value. The same is true for fiat money most people use daily. A 100€ note isn't actually worth 100€ but we have universally accepted that it does.

We have yet to embrace Dogecoin as the only logical world currency, though.

[Shofercia]

That's totally random, and yet quite a good comparison.

I have invested in bitcoin. What should I do??

I have no idea. If I start a neutral thread like this one, I'm looking for advice.

(And even if I don't, I always appreciate good advice )

There's a surprisingly successful cryptocurrency called Dogecoin. Based around doge.

It's an interesting concept, but isn't it primarily used for transfer of funds, fundraising, and wallet/tipping trading?

[Oil exporting People]

Was literally about to invest in my savings back in January in Tron, BNBt, and others; thank God I didn't.

[MERIZoC]

An amazing grift.

[Chestaan]

As currencies go, bitcoin and other cryptos are among the poorest. They aren't useful because the price is far too volatile to be used for transactions. Really they need to be seen as more speculative assets than currencies because that is in essence what they are used for. But then that brings up the question, if there value doesn't lie in their use as a currency, because they aren't used as a currency, then what value do they really have?

[Partybus]

And then there is my buddy who bought 200$ worth at...get this...5$ a bit, could you imagine?t/The, his account got hacked and, lo and behold...zero bit coins...
Plus, now suddenly a bunch of online shopping sites I go on are taking bitcoins as payment... I now question their integrity...

[Hurdergaryp]

And then there is my buddy who bought 200$ worth at...get this...5$ a bit, could you imagine?t/The, his account got hacked and, lo and behold...zero bit coins...
Plus, now suddenly a bunch of online shopping sites I go on are taking bitcoins as payment... I now question their integrity...

Webstores also need financial reserves for ordering assassins, narcotics and highly illegal pornography on the Dark Web, apparently.

[Trumptonium]

That's totally random, and yet quite a good comparison.

I have invested in bitcoin. What should I do??

get some financial education and go away to the corner and think about what you've done

[Hurdergaryp]

I have invested in bitcoin. What should I do??

get some financial education and go away to the corner and think about what you've done

Or go exactly the opposite way and become a hardcore libertarian.