## Cryptocurrency

• 2.6k
The part time mining of Ethereum at college on one GPU is up to about $20.00, I read that people are putting mining rigs in their cars and parking them at electric vehicle charging stations! Anywhere there's free or cheap electricity, mining is a win. Bootleg mining may be the biggest social trend of 2018. There are coins you can mine on your laptop. Why not plug in at work? Of course colleges are perfect. Free electricity and smart kids. Well there are plenty worse things kids could be doing at college. The paradox is that you have to be stupid enough to buy, and clever enough to sell before the balloon bursts, as it inevitably will. When everyone else is being irrational, it's irrational to be rational. You have to balance what you know is true, against the money to be made simply by joining the crowd. In fact this type of "investing" psychology has been promoted by the world's central banks, which have been printing money and inflating bubbles in every asset class. Every few years there's another bubble, a lot of people make a lot of money, some get out in time, the rest lose their money in the crash. Then a few years later it happens again. And this is not an accident, this is the deliberate policy of the central banks. Or worse, it's a consequence of the central banks and they don't even know it. These great banking geniuses keep blowing up the world. Is it rational to stand aside and feel superior? Or is it perfectly rational, depending on your situation, to plunge in and hope to be just smart enough to get out in time? That reminds me of the great story about Isaac Newton and the South Sea bubble. He was eminent and rich by then, and everyone in London was making tons of money. Newton (according to one article I read) got in early, made money, and got out. Then it kept going up so he got back in, eventually losing today's equivalent of millions of dollars in the crash. He said, "I can calculate the motion of heavenly bodies, but not the madness of people." If I would be a conspiracy theorist, I would think that the whole Bitcoin bubble has been produced by the banks to get rid of this new payment system that partly comes to compete with them.ssu Oh yes there is no question that there are credible theories. The NSA published a paper in 1996 describing electronic money that predicted many of bitcoin's features. The SHA-256 encryption algorithm used in bitcoin was invented and released by the NSA. Now what are the odds the NSA would release a crypto algorithm to the public without already having a backdoor? After all the NSA owns the state of the art in cryptographic number theory. What they know is probably decades ahead of the academic cryptographers. I'd say it's around 30% likely that Satoshi Nakamoto is the NSA. Another very plausible theory is that it's the Chinese. The top few Chinese miners already control well over half the hashing power of the bitcoin network. That means they can get together and mount a 51% attack and double-spend bitcoins at will. Maybe one day China will collect everyone's money then just take it. When this historical bubble bursts, the trust in cryptocurrencies will be shaken. Also, when you have basically bubbles in many markets, some Bitcoin bubble bursting would be the perfect culprit to blame first a market downturn and then for an economic downturn. People want culprits.ssu Yes yes! This is part two of the above conspiracy theories. There's a humongous bubble, the public loses a fortune. Everyone's angry and "the government must do something." People will demand strong government regulation and control of cryptocurrencies ... which is the government's evil plan all along. I view this as a likely scenario. If bitcoin goes to$40k or $100k amid a massive public hysteria, the crash will be terrible. The exchanges will lock up, nobody will be able to get their money out. The public will demand government regulation. And the government will be only too happy to oblige. So many theories. • 6.2k a global currency that is instant and doesn't require physical money. But Bitcoin isn't instant; it's ridiculously slow and I understand Litecoin and Ehterium are faster, but it's still slow compared to instant payments (coming to you in 2018 if you live in Europe). • 4.9k But Bitcoin isn't instant; it's ridiculously slow and I understand Litecoin and Ehterium are faster, but it's still slow compared to instant payments (coming to you in 2018 if you live in Europe). What do you mean by BitCoin isn't instant? The acquisition of the coin, the use of the coin or the cash out of the coin? I thought the use of the coin is instant and the value of the coin is time stamped locking in the value of the coin, the moment it was used. • 6.8k I view this as a likely scenario. If bitcoin goes to$40k or $100k amid a massive public hysteria, the crash will be terrible. The exchanges will lock up, nobody will be able to get their money out. The public will demand government regulation. And the government will be only too happy to oblige. I wouldn't bet on it going to those levels. And why? I've used some markers in my life to make the decision that some bubble is going to burst. First time I did it in 2000 when people that never ever had had the slightest interest in investing started investing in IT-funds (and asking me about it as they knew I did have an investment portfolio). One of my friend who did invest in an IT-fund a small amount has kept the fund as a reminder never to invest anymore in mutual funds. The next time when that bubble marker went off was when a financial advisor in the fall of 2007 confessed that he didn't see any stocks or markets to invest in. Never before that and never afterwards has any advisor said to me that. And what's the marker here? This exact thread. Now I've known a lot of people here from the old PF times, and I know that they are interested in philosophy and perhaps current topics. But not investing or currencies. The whole existence of this thread on a Philosophy Forum tells me that the hype is on. And reading the views here just reassures me. In the end it's something interesting. The Bitcoin bubble is something quite historical as it is the Tulip-bubble of our age. Now Benkei could confirm that even today tulip bulbs are worth something in the Netherlands... and that rarer types of Tulips are likely more expensive than more ordinary ones. So basically a new payment system for our digitalized World is obviously worth something, but not worth in my view to go into a speculative bubble that basically is now behaving as a Ponzi scheme ...with people already knowing it is one. Because one of the most stupid things is to think that if you spot a Ponzi scheme, you can still invest in it and then make a profit before it collapses. Why it is similar to Tulip mania and not the "ordinary" housing-bubble is that there is no reason why Bitcoin would have touched$20k, or go to $40k or$100k. It's a huge disadvantage for any currency to rise so much in price. Actual currencies ought to be somewhat stable. What kind of currency would cost nearly $20k? It's an awfull currency to use, if it would be an actual currency. • 6.2k What do you mean by BitCoin isn't instant? The acquisition of the coin, the use of the coin or the cash out of the coin? I thought the use of the coin is instant and the value of the coin is time stamped locking in the value of the coin, the moment it was used. Any payment done with bitcoin takes a while to be processed and it takes too long compared to the possibility for instant payments that we'll have soon. If I'm paying with my NFC debit card currently I can walk away because the vendor trusts my bank and his bank. If I'd pay with a bitcoin we'd have to wait for 10 to 60 minutes to ascertain he received the bitcoin. Next year, with regular payments both the vendor and I don't have to trust the bank for the payment as it will be immediately added to his account (he'll still need to trust his bank he can withdraw though). For international payments, of course, it would definitely be an improvement just not locally. What kind of currency would cost nearly$20k? It's an awfull currency to use, if it would be an actual currency.ssu

I think that's part of why it's considered a financial instrument in most countries.
• 4.9k
Any payment done with bitcoin takes a while to be processed and it takes too long compared to the possibility for instant payments that we'll have soon. If I'm paying with my NFC debit card currently I can walk away because the vendor trusts my bank and his bank. If I'd pay with a bitcoin we'd have to wait for 10 to 60 minutes to ascertain he received the bitcoin. Next year, with regular payments both the vendor and I don't have to trust the bank for the payment as it will be immediately added to his account (he'll still need to trust his bank he can withdraw though). For international payments, of course, it would definitely be an improvement just not locally.

That makes sense but I am left with the question of how the vendor would know you were using a bitcoin backed Visa card?
• 6.2k
That makes sense but I am left with the question of how the vendor would know you were using a bitcoin backed Visa card?

He doesn't care as VISA guarantees the settlement of the payment.
• 4.9k
He doesn't care as VISA guarantees the settlement of the payment.

Then why would VISA guarantee such a bubble prone currency?
• 6.2k
Then why would VISA guarantee such a bubble prone currency?

I suspect the balance of bitcoin transferred on the debit card gets a haircut that they feel comfortable with to cover any market risk they might run in addition to limits in the size of transactions.

EDIT: VISA doesn't transfer a bitcoin, it immediately enters into a bitcoin-USD trade and settles the USD in the account of the vendor. So it actually doesn't run any risk on price fluctuations of the bitcoin. It does run a settlement risk should the bubble burst, in which case their bitcoin-USD trade might not settle successfully.
• 1.2k
When everyone else is being irrational, it's irrational to be rational. You have to balance what you know is true, against the money to be made simply by joining the crowd

Maybe.
Do you think it is every worth considering the moral content of taking wealth out of the economy without working for it?
• 2.7k
The value of bitcoin increased...what?...over 33% within a month or two? This is where its use-value as a currency is severely lacking. If the value of the cryptocurrency can increase dramatically within so short a time-frame (or decrease, as has been observed in the past), why spend it? It is far more useful as a speculative, income-generating asset, as opposed to something I can, say, purchase groceries with.

Certainly there will be room for cryptocurrencies within the landscape of modern economies, but their volatility limits certain practical applications. The idea that cryptocurrencies will replace government-backed currencies is laughable. In fact, unless I am mistaken, that was the raison d'être of bitcoins creation.
• 6.2k
The idea that cryptocurrencies will replace government-backed currencies is laughable.Maw

But you do agree a government backed crypto currency is s possibility?
• 853
Wouldn't it be better in the long run to replace the "proof of work" performed in the creation of blocks with a social or economically useful task?

The idea of mining in the sense of being rewarded for performing pointless computing activity merely for the sake of affirming the consensus of the block-chain seems fishy to me - especially given the increasingly non-consensual centralisation of computational resource.

Wouldn't it be better to perform GPU work for a big-pharma block-chain where 'proof-of-work' involved performing calculations for drug-discovery, that after independent empirical confirmation rewarded the miner with actual currency?
• 2.7k

Sure, if it's regulated and stabilized, but that seems anathema to what cryptocurrencies supposedly represent. It would be better to adjust my statement as, the idea that non-government-backed crypto-currencies will replace government-backed currencies is laughable.
• 11.3k
I remember hearing similarly naive discussionsssu
When I read this, and then this:

What kind of currency would cost nearly $20k?ssu I know that you don't know what you're talking about - meaning that you don't understand the fundamentals at all. The rest of your post is really a reasoning by analogy, as if crypto was anything like social media. But before anything, let me explain to you how I know that you're speaking nonsense above, regarding the 20k. You can buy anything as small as 0.0001 BTCs. That's$2/unit at a price of $20K/BTC. Does that seem like a lot for a currency to you? Of course not. What's really relevant isn't the price per unit, as much as how much the currency should be worth to allow for a certain daily trading volume. There's$5 trillion that changes hands everyday in Forex. There will be a total of 21 million BTCs on the market, and no more. If BTC is to become a major currency, how much should 1 BTC be worth to allow the necessary daily trade volumes to happen? At the moment, there's about $300 billion worth of BTCs on the market. That's nowhere near enough. On another note, you seem to think I'm some kind of finance idiot who doesn't know that this is currently a bubble. So... Have you read this post? What about this one? Market crazes (& speculative bubbles) are always marked by people dogmatically sticking to one idea, and greedily chasing it, thinking that they too can earn. They are generally unable to provide even one single rational idea behind their actions. Funnily enough, in this thread, some reputable atheists are doing exactly this, backed by absolutely no rationale or reason, except that the price is going up, and they want in. They are behaving much like the crazed cultists who strap bombs to their chest and blow themselves up thinking that it's the will of God. Generally, market crazes are created. Those with money can buy strategically placed media assets to inseminate such ideas in people. They can also create the necessary fluctuations in price. And people bite the bait because of their greed (or fear). However, once created and on the way, like now, they're entirely irrational and uncontrollable. So one has to be careful when they cash out. It will never reach that high. By New Years' Eve or Christmas, it will have tanked, that's my prediction. Until then, it may reach 20-30K. Or it may tank sooner. The reason I'm saying that is that most people want to cash out for the holidays ;) - they don't want to be playing stocks on Christmas Eve. I remember hearing similarly naive discussions about the social media and it's positive effects couple of years ago. Especially that a) governments are too old fashioned and dumb to understand it and b) as social media is so decentralized they cannot control it and hence c) with the social media and new media, freedom will ensure and nation states cannot influence the discourse as they could do earlier. ssu Nope - social media was the exact opposite of this. In fact, with social media I said from the very beginning that it will be a goldmine for the government. You have a centrally controlled platform (for example Facebook) - all government has to do is go to Facebook and request access to any of their data and they will pretty much get it. So it's a way for the government to have access to databases containing almost everyone's personal information. That's not the same in this case. There is no centralised authority in the case of crypto-currencies. But yes, governments are old-fashioned and cannot deal well with social media very well even now. Just look what happened with the last US election. And I never claimed freedom would ensure either with regards to crypto, or social media. So that's just strawmanning. But you are. You are a citizen of some country, and if you get income, you have to report it to the government or otherwise you are avoiding taxes. Wouldn't matter if you made a fortune in barter trade and never would have taken actual money. The worth of the barter trade can be measured quite easily. And if it's a too big hassle to go at the user, you simply go after any merchant vendor accepting any cryptocurrency. After that it isn't so cryptic anymore.ssu Well, of course, they will be able to track if I pay my taxes, was that what you were thinking about? :s Bitcoin isn't anonymous. I think you also didn't know that. The owner of a certain wallet cannot be known, but when you cash out of that wallet, then your identity IS known. That's why many of the hackers who have stolen Bitcoins cannot get them out of their wallets currently. So I most certainly wasn't referring to that. I wouldn't bet on it going to those levels.ssu Why don't you short this then? Now I've known a lot of people here from the old PF times, and I know that they are interested in philosophy and perhaps current topics. But not investing or currencies.ssu That's not true, there are people interested in finance here, just not as many. I'm one of them, I would guess Benkei is also one of them, and so on so forth. ______________ Now there are problems with Bitcoin. As Maw said, one big problem is the volatility. You cannot adequately trade with a currency that drastically changes in value from day to day - well, you can, but you need to structure contracts accordingly, which represent significant additional costs. The idea is that as more people start using Bitcoin, it will stabilise at certain values. Another problem is what happens to Bitcoins that are lost? If you lose your private key, you lose access to the wallet, with no possibility to get it back. So if you're the one who has the key, for example, and you die, and nobody else knows about it, then those Bitcoins are essentially off the market forever. So that 21 million Bitcoins, will, over time, decrease. This means that there will be an inflationary pressure on the currency at all times, and we may even reach a stage where not enough Bitcoins are available to adequately trade (in very long term future I imagine) • 2.6k What do you mean by BitCoin isn't instant? The acquisition of the coin, the use of the coin or the cash out of the coin? I thought the use of the coin is instant and the value of the coin is time stamped locking in the value of the coin, the moment it was used. Even in the best of times it can take at least ten minutes to confirm a transaction because the system creates a new block of transactions only once every ten minutes or so. And the more subsequent blocks that are validated, the more statistically likely it is that an earlier block is valid. For a large transaction it's recommended to wait for at least six more blocks. So the actual transaction time is about an hour. But the recent huge increase in transactions is overwhelming the network, and the miners can't keep up. In order for the miners to even bother to put your transaction into the next block, you have to bribe them with a transaction fee. I've seen it reported that it costs$20 to spend $100 lately, and the settlement times can be several hours or more. Bitcoin has totally failed as a currency. Its enthusiasts don't care, they say it's not a currency, it's a "store of value." I don't believe that either but that's what some people think. And what's the marker here? This exact thread. Now I've known a lot of people here from the old PF times, and I know that they are interested in philosophy and perhaps current topics. But not investing or currencies. The whole existence of this thread on a Philosophy Forum tells me that the hype is on. And reading the views here just reassures me.ssu I'll take the other side of that proposition. What's going on is deep, important, and philosophical. When Descartes receives a letter from his friend, he might well ask: How do I know an evil demon working at the French post office hasn't altered the contents of this letter? Today we have an answer: The contents of the letter are cryptographically secure. There is a revolution in human affairs about to take place. The revolution is about trust. End-to-end trust between and among strangers on the Internet, without the need for intermediaries. Crypto is about certainty. About what is, and how we can know what is. Crypto-ontology and crypto-epistemology if you like. I hope some of the younger philosophers are looking at this. As an example of what I mean, there are proposals for prediction markets on the blockchain. That's like a gambling parlor on political events. Will Trump make it through his first term? Will Brexit actually happen? There are prediction markets right now run by companies, but on the blockchain you don't need a company, just a decentralized blockchain network. Now, how does a prediction market pay off? That is, how do they know for sure whether Trump is still president or whether Brexit has happened? In a centralized system, the people running the betting pool determine what's true. On a blockchain-based prediction market, the users say what's true and the system determines crypto-consensus. The blockchain determines truth. There's a crytpo already doing this, called Auger. Great name for this concept. https://en.wikipedia.org/wiki/Augur This is why I say the blockchain revolution is philosophically deep. Social revolutions are always the subject of philosophy. And this particular revolution is about trust and disintermediation. That's philosophy. What do you think? Why it is similar to Tulip mania and not the "ordinary" housing-bubble is that there is no reason why Bitcoin would have touched$20k, or go to $40k or$100k. It's a huge disadvantage for any currency to rise so much in price. Actual currencies ought to be somewhat stable. What kind of currency would cost nearly $20k? It's an awfull currency to use, if it would be an actual currency.ssu Of course, but look past bitcoin. Bitcoin's a proof-of-concept engineering experiment that's taught us a lot about how to build these kinds of networks. It's a tragedy that the public is allowed to bet on early-stage engineering experiments. That introduces distortion and inefficiency into the design process. If bitcoin was a project in an engineering lab it would be shut down and the designers would get to work on the next iteration of the idea. But that's how the world is so we have to accept it. The price rise of bitcoin makes no rational sense. But it's not tulips, because tulips were not the leading edge of a huge social revolution. Bitcoin is. That's my belief. Of course if one doesn't believe blockchain is going to profoundly change the world, then my thesis makes no sense and bitcoin is tulips. But I don't think so. Bitcoin stands in for the revolution to come. The public senses that. Or they're a bunch of greedy fools. Bit of both. EDIT: VISA doesn't transfer a bitcoin, it immediately enters into a bitcoin-USD trade and settles the USD in the account of the vendor. So it actually doesn't run any risk on price fluctuations of the bitcoin. It does run a settlement risk should the bubble burst, in which case their bitcoin-USD trade might not settle successfully. Yes and it's worth noting that the businesses that claim to "accept bitcoin" actually don't. Their customers want to pay in bitcoin so businesses accept bitcoin as a service. They immediately exchange bitcoin for the local legal currency and write off the transaction costs. Nobody actually accepts bitcoin for anything. As a currency the idea has already failed. But my thesis is that the failure of bitcoin is irrelevant to the coming blockchain revolution. Am I drinking too much blockchain Kool-Aid? I don't think so. Global trust without intermediaries. This is going to be big. Do you think it is every worth considering the moral content of taking wealth out of the economy without working for it? Interesting point of view. If you buy a house and a few years later it's worth more money because the central bank blew up a housing bubble, and you happen to sell your house for a profit, do you give the money to charity or what? It's the same house, four walls and a roof. Provides shelter for a family. Its value hasn't changed at all. Is it immoral to pocket your profit? How about stocks, bonds, jewelry? Are they morally compromised too? If you see the Fed about to print money so you buy stocks and the price of the stocks goes up, is that a problem? I am not clear about your moral orientation in asking this question but I'm curious to know. It's not like dealing weapons or dope. You're just buying low and selling high by paying attention to the world. Is that immoral? Even in the case of a speculative frenzy you are definitely "working for it." If you buy in you are making a judgment about mass psychology. You base your judgment on following the news, reading history, thinking, studying. If you are right AND you are smart enough to get out in time, you make money. How is that different than making money by being good at your day job? These are good questions, I'd agree! Not sure I know the answers myself. Marx predicted the conditions of late-stage capitalism and he was right about a lot of things But Marxist governments have been a disaster for the people forced to live under them. The idea that cryptocurrencies will replace government-backed currencies is laughable. In fact, unless I am mistaken, that was the raison d'être of bitcoins creation.Maw Yes that was the techno-libertarian reason for bitcoin, but it's the wrong reason! The crypto revolution is about much more. Cryptos-as-money can fail yet cryptos can still transform society. The crypto revolution is not primarily about money. IMO of course. The banks might still control the money. They are thousand-year incumbents after all, not that easy to dethrone. The disintermediation revolution is still huge. It's not necessarily about destroying the bankers. They're doing a pretty good job of that by themselves. • 11.3k But the recent huge increase in transactions is overwhelming the network, and the miners can't keep up. In order for the miners to even bother to put your transaction into the next block, you have to bribe them with a transaction fee. Yeah the market-based transaction fee was thought out to be there even when mining stops actually producing new bitcoins, so that the miners still do the work. There is a revolution in human affairs about to take place. The revolution is about trust. End-to-end trust between and among strangers on the Internet, without the need for intermediaries. Crypto is about certainty. About what is, and how we can know what is. Crypto-ontology and crypto-epistemology if you like. I hope some of the younger philosophers are looking at this. As an example of what I mean, there are proposals for prediction markets on the blockchain. That's like a gambling parlor on political events. Will Trump make it through his first term? Will Brexit actually happen? There are prediction markets right now run by companies, but on the blockchain you don't need a company, just a decentralized blockchain network. Now, how does a prediction market pay off? That is, how do they know for sure whether Trump is still president or whether Brexit has happened? In a centralized system, the people running the betting pool determine what's true. On a blockchain-based prediction market, the users say what's true and the system determines crypto-consensus. The blockchain determines truth. There's a crytpo already doing this, called Auger. Great name for this concept. https://en.wikipedia.org/wiki/Augur This is why I say the blockchain revolution is philosophically deep. Social revolutions are always the subject of philosophy. And this particular revolution is about trust and disintermediation. That's philosophy. What do you think? I agree with what you're saying except that I think much the opposite from you. Crypto ELIMINATES the need for trust, meaning people no longer need to trust each other to do transactions together. This will make getting out of line more difficult than ever, especially if we ever move over completely to crypto. You may be able to trick and get around people, but you cannot get around machines. So this is moving into the direction of a distopian society where the individual is at the mercy of society - meaning stronger social structures than ever before. So I am much opposed to all this, but I still don't think the technology can be stopped. Do you think it is every worth considering the moral content of taking wealth out of the economy without working for it? Yes, it's a good thing. If I don't take it out of there, others will. Then they spend it on useless crap, at least I'm a good money manager and will put it to good work. Even Engels loved playing the stock market and he was a Communist. I too am much against speculation, but while it's legal, I will do everything possible to profit from it, why not? Yes that was the techno-libertarian reason for bitcoin, but it's the wrong reason! The crypto revolution is about much more. Cryptos-as-money can fail yet cryptos can still transform society. The crypto revolution is not primarily about money. IMO of course. The banks might still control the money. They are thousand-year incumbents after all, not that easy to dethrone. The disintermediation revolution is still huge. It's not necessarily about destroying the bankers. They're doing a pretty good job of that by themselves. Agreed. • 11.3k Wouldn't it be better in the long run to replace the "proof of work" performed in the creation of blocks with a social or economically useful task?sime I think some cryptos are already doing this. There's lots of variation among them. The interesting thing is in trying to predict the big winners. I think Ethereum might be one, I think it's definitely an improvement over Bitcoin, though Bitcoin does have better brand recognition atm. • 1.2k Do you think it is every worth considering the moral content of taking wealth out of the economy without working for it? — charleton Interesting point of view. If you buy a house and a few years later it's worth more money because the central bank blew up a housing bubble, and you happen to sell your house for a profit, do you give the money to charity or what? It's the same house, four walls and a roof. Provides shelter for a family. Its value hasn't changed at all. Is it immoral to pocket your profit? Yes, you have located the source of all inequality and immorality in the economic system, well done. It is more healthy for our economy to incentivise work and wealth creation. Cryto-currency is the apogee of immorality in this respect. It does not create wealth, it is a mechanism for theft of wealth. • 6.8k I know that you don't know what you're talking about - meaning that you don't understand the fundamentals at all. It's you who is lacking in the fundamentals of economics money. But good that you admit Maw making the obsevation that such volatility isn't good for any currency. Of course I made the observation too... Far more better to talk about just a new payment system, not currency. Why don't you short this then? — Agustino I've just once in my life used a "hedge" at the market. In early 2008 I invested in a Bear-fund, meaning that it went higher if the markets went lower, but even if it paid then and performed well for, the timing even then was pretty hair raising... some time later I would have made serious losses. Betting on when a bubble bursts is a dumb gamble. • 2.6k This will make getting out of line more difficult than ever, especially if we ever move over completely to crypto. You may be able to trick and get around people, but you cannot get around machines. Yes I agree with your dystopian vision. This reminds me of the Chinese social credit system. Just like you have a credit score, Chinese citizens will have a social score. Everything you ever did, what your neighbors say about you and so forth. Pretty scary. The blockchain is the perfect technology for such a system. It wouldn't even have to be imposed by the government. We'll impose it on ourselves. The future will either be a techno-libertarian paradise or the cryptofascist prison of our nightmares. The eternal struggle between good and evil ... on the blockchain. I think you're right. It's dystopian and it's more likely to happen than not. • 6.8k I'll take the other side of that proposition. What's going on is deep, important, and philosophical. So it was during the IT bubble too. With all tech bubbles ever, have they been information technology or car making in the early 1900's, the underlying technology has been important. After all, aren't we here strangers discussing topics all because of the IT revolution? Yet the hype and the investment frenzy has created quite similar patterns and bubbles. In a centralized system, the people running the betting pool determine what's true. On a blockchain-based prediction market, the users say what's true and the system determines crypto-consensus. The blockchain determines truth. How do the people running a betting pool determine what's true? The only thing is that if they profess at least some normal capability in their profession, they will make money all the time. There's a crytpo already doing this, called Auger. Great name for this concept. https://en.wikipedia.org/wiki/Augur This is why I say the blockchain revolution is philosophically deep. Social revolutions are always the subject of philosophy. And this particular revolution is about trust and disintermediation. That's philosophy. What do you think? — fishfry I think already in the 1970's cryptography went quite a lot ahead with public key-enscription ( Diffie–Hellman key exchange) and asymmetric key algorithms. But cryptography isn't my strongest points. But have seen bubbles and crashes since I started investing from 1990 onwards. Remember the time when the P/E ratios of over 100 in the Japanese stock market were told to be so basically because of Japanese culture, so bubbles aren't anything new. The technology might be important ...for some things just as the automobile has been for us, but the speculative bubble is a different thing. Far more about social behaviour and the way bubbles are created in the financial system than anything about the object of the hype. And Augur? Well, will likely just show how important what we call "Black Swans" are in forcasting. And here the irony is that when some open and decentralized forcasting system (that minimizes the risk of an individual forecaster getting it wrong) still gets something totally wrong or misses it, it will claim the event to be a Black Swan. The truth is that "Black Swans" or fat tails or whatever you call them are integral part of basically the underlying logic connected to forcasting. • 11.3k It's you who is lacking in the fundamentals of economics money.ssu Right, until you show how this is the case, it's merely an empty assertion. And for beginners, I have no clue what the hell you're talking about with "economics money" :s . I showed how you were misunderstanding Bitcoin and the crypto technology when I said you don't know what you're talking about. So please, put some effort, otherwise it's a waste of time for both of us. Far more betterssu "more better" doesn't exist in the English language. But good that you admit Maw making the obsevation that such volatility isn't good for any currency. Of course I made the observation too...ssu The truth is that this observation in this thread originated neither with you nor with Maw, I just picked Maw since he happened to be the last one who clearly made it, and I can't remember who made it earlier. With regards to yourself, no, I didn't see this observation clearly made in your posts, I saw that you were more concerned about the high price per unit of Bitcoin, unaware that Bitcoin can trade in smaller units than 1 BTC. You would have been right if Bitcoin couldn't trade at lower values, but that's not the case - you're just misunderstanding it, and you don't know enough about it. Betting on when a bubble bursts is a dumb gamble.ssu Why? All you have to know is that it will burst - these aren't options that you're buying where if your timing is slightly off, you're screwed. So you short it, and then you wait. So long as you were right that it is a bubble, then it will eventually pay off, regardless of your timing. I've just once in my life used a "hedge" at the market.ssu This, by itself, isn't a hedge. It's a bet. • 6.8k I have no clue what the hell you're talking about with "economics money Let's start with things like the functions of money and why it's important for any government to have control of that money as legal tender. Being a "payment system" is just one function of money. I saw that you were more concerned about the high price per unit of Bitcoin, unaware that Bitcoin can trade in smaller units than 1 BTC. You would have been right if Bitcoin couldn't trade at lower values, but that's not the case - you're just misunderstanding it, and you don't know enough about it. Look. If you have a currency, you don't start it with one unit being in the tens of thousands, not even if you can divide it into a billion or whatever. The high price just tells how hugely the "currency" has gone up in price. The only reason a currency basically would rise up like that is when there's hyperinflation. I showed how you were misunderstanding Bitcoin and the crypto technology when I said you don't know what you're talking about. What you have said, quite puzzlingly, is: I don't see anything that nations can do to stop crypto. To begin with, politicians are too dumb to even understand what is really happening. I think it's a clear fact already that digital currency of the crypto kind is superior to our paper fiat currency though. It does make all transactions easier and significantly cheaper. So perhaps in the future, we'll be approaching a situation where everything is exchanged in crypto, not in fiat currencies - so this exchange of Bitcoin/USD becomes irrelevant. — "Agustino But then you state... I do think Bitcoin will collapse in value — Agustino Well, what I have had tried to explain is that a) it's a bubble and b) the technology is useful and likely will be used, just like tech that was underlying the IT-bubble. Where we disagree is in the ability of governments to control a cryptocurrency and in the role of currencies that are legal tender have. • 11.3k Where we disagree is in the ability of governments to control cryptocurrency and in the role of currencies that are legal tender.ssu To begin with, I think we have entirely different visions of what "controlling" crypto means. To you, it seems to me at least, that controlling crypto means following all transactions and knowing who made them, and what value was exchanged through crypto - such that governments can effectively tax people, keep track of who has what, and prevent tax evasion and money laundering. To me controlling crypto doesn't mean that. It means being able to stop the propagation of crypto through society - to prevent it from becoming the accepted payment system (as you call it). In addition, it means that government is able to control what the crypto permits and what it doesn't permit once it does become the accepted payment system. Let's start with things like the functions of money and why it's important for any government to have control of that money as legal tender.ssu I think I've outlined the last part (why it's important) above, when I discussed tax evasion, money laundering, and the like. As for the functions of money, the only functions I see when quickly thinking about it is regulating inflation, and having a recognised exchange/payment system. • 11.3k The blockchain is the perfect technology for such a system. It wouldn't even have to be imposed by the government. We'll impose it on ourselves. Yes, exactly! There was a video that I saw awhile ago, which I can't find :( . Finally I found it... @StreetlightX watch this video, it's the POMO stuff that you love. So take this as a Christmas gift >:O So crypto would be a way to create a SYSTEM which is no longer controllable by any one person or group once created - rather it controls what is possible or impossible for people. That's what I mean when I say that it cannot be controlled by the government. • 1.2k I know that you don't know what you're talking about - meaning that you don't understand the fundamentals at all. — Agustino It's you who is lacking in the fundamentals of economics money. But good that you admit Maw making the obsevation that such volatility isn't good for any currency. Of course I made the observation too... ssu This is quite a typical response from gusty. I'd not let him bait you! • 11.3k That ssu didn't understand the fundamentals of the technology of Bitcoin at that point in time - at least as it emerged out of his writing - was true. For example, it's undeniable that the fact that 1 Bitcoin is worth$20K isn't a problem by itself for the currency (unlike what ssu was suggesting) - because things can be traded in 0.0001 Bitcoins, unlike with regular currencies, where the least you can trade is 0.01 units.
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Where did I misquote?
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