Bitcoin/cryptocurrency thread

[Kejan]

Hate the BTC Maxi crew, but even as an altcoin person, genuine want to see all of us to do well in this, but the Saylor 21k pish will be funny to see him spin it.

Sure everyone is, but if not be ready for the "Heard yer Bitcoins were doon, mate".

 

Edited June 14, 2022 by Kejan

[Satoshi]

12 hours ago, Albus Bulbasaur said:

After Satoshi's last post I put my life savings into the dip. I've now taken out several QuickQuid loans and I'm planning on buying some Gorillianaire Bored Thugs to hopefully flip and get back to the moon. 

If you take the right combination of drugs, you are always on the moon.

Is my investing advice.

12 hours ago, welshbairn said:

I won't celebrating a load of people losing money, but neither will I be happy when the inevitable true believer comes along to say it's an amazing opportunity to get rich as they'll never be this low again.

It might keep going getting lower, but it will be higher again in future.

I'm fairly on confident on that but we'll wait and see.

If you aren't willing to lose 20 odd % in one day, best not to invest in crypto (or the stock market for that matter). Going up isn't certain, going down is, and anyone investing should go in with their eyes open on that.

I usually check all my assets monthly, had a quite aggressive target I wanted to reach this year and despite some falls I've stayed on track, not sure how it will be looking this month 

I calculate it based on my allowable discretionary spending per month, going to make a fun graph as to how this has changed since Jan.

Edited June 14, 2022 by Satoshi

[hk blues]

21 minutes ago, oaksoft said:

That's what everyone involved in a ponzi scheme says. 

[ICTChris]

[DiegoDiego]

That's what everyone involved in a ponzi scheme says. [emoji23]

Cryptocurrencies are assets publicly traded on exchanges with public ledgers. When you buy 1 bitcoin, you can prove you have received 1 bitcoin. It is impossible for it to be a Ponzi scheme.

[Left Back]

14 minutes ago, DiegoDiego said:

Cryptocurrencies are assets publicly traded on exchanges with public ledgers. When you buy 1 bitcoin, you can prove you have received 1 bitcoin. It is impossible for it to be a Ponzi scheme.

https://www.ft.com/content/83a14261-598d-4601-87fc-5dde528b33d0

Worse than a Ponzi scheme allegedly.

[topcat(The most tip top)]

11 hours ago, DiegoDiego said:

*though it's absolutely not a ponzi scheme and I wish people would stop using (and pronouncing) the term incorrectly.

You're technically correct, at least  in the narrow sense of the term.

Correct in the same manner as statements such as "He's not a serial killer because the 3rd victim survived" and "He's not a paedophile as the illegally trafficked girls he took advantage of at those parties were post pubescent " 

And while Ponzi was Italian the ponzi scheme was American so using different pronunciations is  entirely appropriate.

[topcat(The most tip top)]

8 minutes ago, Left Back said:

https://www.ft.com/content/83a14261-598d-4601-87fc-5dde528b33d0

Worse than a Ponzi scheme allegedly.

Many readers who don't have access to ft.com. 
It's not that expensive but I guess our digital currency plutocrats may be short of cash this month so as a service to them 

DECEMBER 22 2021

This is a guest post by Robert McCauley, a non-resident senior fellow at Boston University’s Global Development Policy Center and associate member of the Faculty of History at the University of Oxford. In this post McCauley argues that comparing bitcoin to a Ponzi scheme is unfair to Ponzi schemes.

Bitcoin is off its all-time high of $69,000 set on November 9, 2021. It suffered a wrenching $12,000 flash crash over the first weekend in December, amid accounts of leveraged positions being closed out. And yet, even at the current price of $49,000, guests on financial TV news continue to tout it as the best-performing asset of the last N years, where N can be just about any number from one to ten. They also increasingly judge it as a credible investment in its own right.

This contradicts the longstanding sceptical view by many economists and others that what bitcoin really is, in effect, is a Ponzi scheme. Brazilian computer scientist Jorge Stolfi is one voice who has contended this. His view is based on the following observations:

Investors buy in the expectation of profits.

That expectation is sustained by the profits of those that cash out.

But there is no external source for those profits; they come entirely from new investments.

And the operators take away a large portion of the money.

All of this rings true true. But in calling bitcoin a Ponzi scheme, critics are arguably being too kind on two counts. First, bitcoin doesn’t have the same endgame as a Ponzi scheme. Second, it constitutes a deeply negative sum game from a broad social perspective.

On the first count, it’s worth assessing how it compares to the original scheme devised by Charles Ponzi. In 1920, Ponzi promised 50 per cent on a 45-day investment and managed to pay this to a number of investors. He suffered and managed to survive investor runs, until eventually the scheme collapsed less than a year into it.

In the largest and probably the longest running Ponzi scheme in history, Bernie Madoff paid returns of around one per cent a month. He offered to cash out his scheme’s participants, both the original sum “invested” and the “return” thereon. As a result, the scheme could and did suffer a run; the Great Financial Crisis of 2008 led to a cascade of redemptions by participants and the scheme’s collapse.

But the resolution of Madoff’s scheme has extended beyond its collapse on account of the remarkable and ongoing legal proceedings. These have outlived Madoff himself, who died in early 2021.

Many are unaware that a bankruptcy trustee, Irving H. Picard, has doggedly and successfully pursued those who took more money out of the scheme than they put in. He even managed to follow the money into offshore dollar accounts, litigating a controversial extraterritorial reach of US law all the way to the US Supreme Court. Of the $20bn in recognised original investments in the scheme (which the victims had been told had reached a value more than three times that sum), some $14bn, a striking 70 per cent, has been recovered and distributed. Claims of up to $1.6m are being fully repaid.

By contrast to investments with Madoff, Bitcoin is bought not as an income-earning asset but rather as a zero-coupon perpetual. In other words, it promises nothing as a running yield and never matures with a required terminal payment. It follows that it cannot suffer a run. The only way a holder of bitcoin can cash out is by a sale to someone else.

Bitcoin’s collapse would look very different to that of Ponzi’s or Madoff’s scheme. One possible trigger could be the collapse of a big so-called stablecoin, that is, ersatz US dollars that have sprung up to provide a cash leg for cryptocurrency transactions. These “unregulated money market funds” have been sold as dollar stand-ins with safe assets that match their outstanding liabilities. Given the lack of regulation and disclosure, it is not hard to imagine a big stablecoin “breaking the buck”, as occurred with a regulated money market fund that held Lehman paper in 2008. This could so disrupt the whole ecology of crypto that there could be no bids for bitcoin. The market might close indefinitely. 

In this event, there would be no long-running legal effort to chase down those who cashed in their bitcoin early in order to redistribute their profits to those left holding bitcoins. Holders of bitcoin would have no claim on those who bought early and sold.

In its cashflow, bitcoin resembles a penny-stock pump-and-dump scheme more than a Ponzi scheme. In a pump-and-dump scheme, traders acquire basically worthless stock, talk it up and perhaps trade it among themselves at rising prices before unloading it on to those drawn in by the chatter and the price action. Like the pump-and-dump scheme, bitcoin taps into the pure desire for capital gains. Buyers cannot stand the sight of friends getting rich overnight: they suffer an acute fear of missing out (FOMO). In any case, bitcoin makes no promises and cannot end as a Ponzi scheme ends. 

On the second count, another big difference between bitcoin and a Ponzi scheme is that the former is, from an aggregate or social standpoint, a negative sum game. To the extent that real resources are used up to make bitcoin run, it is costly in a way that Madoff’s two- or three-man operation was not. From the social standpoint, what Madoff took out of his scheme and finally consumed is a redistribution in a zero-sum game (the trustee sold his penthouse). Stolfi’s fourth observation above that “the operators take away a large portion of the money” lumps together Madoff’s take and bitcoin miners’ revenues, but these are very different in economic terms. 

With bitcoin and other cryptocurrencies, the game is to name the country whose electricity consumption equals that of all the puzzle-solvers (miners) who get to effect transactions and receive bitcoin in reward. Even if the electricity were priced to include its contribution to global warming (its “environmental externality”)—which presumably it mostly is not—this represents a real cost. 

How big a cost? At the beginning of 2021, Stolfi put the cumulative payments to bitcoin’s miners since 2009 at $15bn. At the then price of bitcoin, he put the increase in this sum at about $30m per day, which mostly pays for electricity.

At today’s higher bitcoin prices, the hole is growing faster. About 900 new bitcoin a day require most of $45m a day in electricity. Thus, the negative sum in the bitcoin game is in tens of billions of dollars and rising at over a billion dollars per month. If the price of bitcoin collapses to zero, the gains of those who sold would fall short of the losses of holders by this growing sum. To liken bitcoin to a Ponzi scheme or a pump-and-dump scheme, both basically redistributive, is to flatter the cryptocurrency system.

To conclude, an economic analysis of bitcoin must recognise its uniqueness in the history of manias. As an object of speculation, bitcoin is unprecedented in the degree to which there is no there there. This post-modern mania features big prices for entries on nobody’s spreadsheet. A zero-coupon perpetual has arrived not as a joke but as a trillion dollar asset. Unlike a Ponzi scheme, bitcoin cannot end in a run. 

In a crash, the holders of bitcoin will collectively have lost what they have paid the miners for their bitcoin. This sum may be not far from the sum originally invested with Madoff, after accounting for inflation. But bitcoin holders will have no one to pursue to recover this sum: it will simply have gone up in smoke, a social loss. The holders of bitcoin would then only wish it had been a Ponzi scheme.
 

[Kapowzer]

Bitcoin is one of the few exceptions in this space that it has been going for a while and it's a known quantity. As Gaz5 has conveyed in the past the technologies here that are in their infancy will probably be adopted in the years ahead for real world transactions and moving funds about. Think of it like the VHS/Betamax fight for dominance, 10 years later DVD's surface and 10 years after that Netflix show up at the party. All allow you to watch something on demand, the most recent is by far the most convenient and seamless.

But countless are meme coins, NFT's and one started by those banned from normal business' for being grifters have shown up in this space because in an unregulated environment it really is the WIld West prospecting and gold rush era. Add in human greed which has been part of the human species from infancy and you've got a great recipe. A large swathe of this is a Ponzi as it needs people joining at the bottom to fuel those who got in earlier. Many will try to dress it up as something else such as "we have a different model where we ........"

There's what 13,500 coins in circulation at present, you go past the top 1,000 and the market caps are paltry. People are hoping they'll be the next one Elon Musk will take a shine to for nothing more than a laugh. I've got a friend who goes on about Axie Infinity and how there must be another due. You have to remind him before Axie blew up it was probably languishing about #4,000 in the MCap list and would have been off most people's radars. (£0.12 to $164 at peak to $14 presently).

One thing is constant, all these people with insights and "I've made millions" all seem to want you to contribute small amounts of real world money, $15 per month sub for access to a trading platform or £10 to join their patreon. Most developers are also constantly siphoning off their rewards for real money from the launch of that coin. Not many are altruistic considering they've made all this money and are self proclaimed retirees.

It's like anything in life, you do your homework your knowledge increases, your risk in theory diminishes. It doesn't take account for pure nefarious behaviour but you'd got a better chance than following dumb luck. I am involved in this space because there's few other options to give me the security and lifestyle I aspire to as the returns can be excellent but you need to treat your trades with zero emotion and know there will always be another coin mooning, the skill is finding it and getting on board early enough and getting off.

[topcat(The most tip top)]

36 minutes ago, Kapowzer said:

Bitcoin is one of the few exceptions in this space that it has been going for a while and it's a known quantity.

If it was actually a "known quantity" it wouldn't fluctuate in price so dramatically.

 

 

[topcat(The most tip top)]

If you're one of those people who've enjoyed watching people lose their money through greed and ignorance then I'm not judging you but I am recommending this book by the great Canadian Economist John Kenneth Galbraith where you can read about all the other times it's happened.

https://www.amazon.co.uk/History-Financial-Euphoria-Penguin-business/dp/0140238565

If you did invest heavily in crypto then I suggest waiting till the inevitable paperback rerelease because it's a bit pricy at the moment

Edited June 14, 2022 by topcat(The most tip top)

[Kapowzer]

19 minutes ago, topcat(The most tip top) said:

If it was actually a "known quantity" it wouldn't fluctuate in price so dramatically.

 

 

Just asking, what's your endgame here? Is it just to gloat? Convey wisdom and foresight? Stick the knife in? or just a plain cunty behaviour?

[topcat(The most tip top)]

5 minutes ago, Kapowzer said:

Just asking, what's your endgame here? Is it just to gloat? Convey wisdom and foresight? Stick the knife in? or just a plain cunty behaviour?

I've a long standing interest in Economics and Computing Science and I find this whole thing fascinating and while there are probably people better qualified I hope that my contributions can be informative even if they're not authoritative 

As for "cunty behaviour"

I've never sold you or anybody else any crypto

I'm the good guy here

Edited June 14, 2022 by topcat(The most tip top)

[DiegoDiego]

You're technically correct, at least  in the narrow sense of the term.
Correct in the same manner as statements such as "He's not a serial killer because the 3rd victim survived" and "He's not a paedophile as the illegally trafficked girls he took advantage of at those parties were post pubescent " 
And while Ponzi was Italian the ponzi scheme was American so using different pronunciations is  entirely appropriate.

None of us get to determine what is or isn't appropriate, but I don't think it is. The scheme is named after him and pronunciation of your name doesn't change because you cross a border. If they can say pizza correctly they should be able to say Ponzi correctly.

[vikingTON]

1 hour ago, Kapowzer said:

Just asking, what's your endgame here? Is it just to gloat? Convey wisdom and foresight? Stick the knife in? or just a plain cunty behaviour?

Sign me in under all four please!

[Lex]

$64,400 in November and $22,024 in June? And this is the meant to be a known quantity? My word. That table is crazy because clearly no one has any idea what it's worth. If they did it wouldn't fluctuate half as much as that. 

[Kapowzer]

Talk about fixating on a the term used rather than the concept.

I was referring to it being around for over ten years, being widely adopted as a form of payment, invested in by large traditional investors and one country using it as an official currency.

I was not referring to the current monetary value.

To jump from that to graphs is quite a bit of heavy lifting.

[welshbairn]

I'm guessing most of "Buy the dip!" pleas are coming from people who didn't get out in time.

[Satoshi]

It seems those most worried about the assets volatility are the ones who never invested in the first place.

If you've been in it for a few years you're fairly non plussed. There have been bigger crashes than this.

Edited June 14, 2022 by Satoshi

[Kapowzer]

6 minutes ago, welshbairn said:

I'm guessing most of "Buy the dip!" pleas are coming from people who didn't get out in time.

Undoubtedly some are. A percentage will be those following the stock market mantra of buy during fear and sell during greed. Some will be preaching "it'll come good" and some hoping to avoid the inevitable and praying for a kickstart.

With an impending global recession on the horizon for a number of factors such as inflation rampant, supply chain issues, covid aftermath, limited fossil fuel availability and pertinent to us here in the UK, Brexit then certain things in life will take priority.

They are the same things we valued primarily before civilisation. Shelter, Sustenance, Water and Heat. Holding £1,000 in a grinning Monkey NFT will be jettisoned for funds to what a household sees as more immediate needs.

Of course the whales who manipulate the market won't be affected, someone who had £300m 6 months ago who now £30m which doesn't really bring with it any real hardship.