What the Heck’s Going on With Cryptocurrencies?

[BeerParticipant 11832]

Mr. Smith wrote:

Imagine a guy like Bernie Sanders becomes president, changes the USA into a socialist state.

You mean, makes the socialist state a little more socialist?

Mr. Smith wrote:

All a government can do against cryptocurrencies is to outlaw it. The problem with this, the cryptocurrency is still there and works everywhere else. It even works within the country, only the use of it would be outlawed. It is technological and therefor judicial impossible to seize peoples money stored in cryptocurrencies.

Wrong. The government has been capable of and has been seizing bitcoin for years.

http://www.businessinsider.com/can-the-government-seize-bitcoins-2014-2

Mr. Smith wrote:

Even nobody can out rule a major flaw in Bitcoin, it has a much more solid foundation than any other currency.

Bitcoin has a solid foundation? Uh…you do realize cryptocurrencies are literally the most fiat of all currencies, don’t you? Besides, the value of bitcoin has changed what…3,000,000% in the last 5 years? Its a volatile ponzi scheme…its not a solid currency.

If you like bitcoin and own it, ideally more people would buy into it which would drive the price per coin up. Problem is you’ve just created (more) hyper deflation. Nobody is going to want to use bitcoin as a currency when you think next week your currency might be 10% more valuable. As much as people bitch about inflation at least people still spend and keep the economy rolling with inflation(which really isn’t a problem as long as its kept at a reasonable rate). Deflation on the other hand would absolutely crush the economy. Nobody would want to spend their money if you knew the bitcoin needed to buy a 2 liter of coke could buy you a house in a few years.

So in the end are people buying bitcoin to use as a currency, or for an “investment” and/or a way perceived to be more safe(for now) to participate in illegal activities? I literally don’t even have any stores near me that accept it, and if I want to make a purchase online I might as well just use my credit card rather than buy bitcoin(which I’m assuming has some sort of fee involved) just to turn around and make the purchase in bitcoin…wtf is the point? I’ve yet to stumble upon someone touting bitcoin because its so much easier to use than existing currencies…its always just people buying bitcoin based upon hype that its value will continue to increase because existing fiat currencies are bad, yet at the same time they seem to be completely oblivious that cryptocurrencies are as fiat as you can get.

[BritGHOWParticipant 2566]

Personally I see two massive issues with cryptocurrencies

First, the liquidity side of things, let’s say that at the end of 2015 you decided that this Etherium thing was worth a punt and threw a spare grand you had at it, you would have bought 1,111 units of the stuff which now on paper is worth a little over 100k more than you paid for it, assuming of course that you can now find the greater fool to buy it off of you given that by any measure it is obviously overpriced.

Second the value argument, yes you can argue fixed volume, yes you can argue math but what you can’t argue is that ultimately these things are nothing more than ones and zeros in the internet and in the event of a proper SHTF scenario there’s no guarantee there will even be an internet anymore and all your ones and zeros are going to be worth the sum total of jack s~~~.

[Back in BlackParticipant 1732]

I just sold another $1k at $125. Still have $2k riding. If it drops back under 100 I may pick up some more. Either that or dip into Litecoin. So far I have invested 1500.00 (since March of this year). I have sold 2500 worth and still holding 2000.00 worth.

I get why men are hung up on this being Ponzi or fiat. The same argument could be made for the US dollar though. There is nothing backing the US dollar either, since it was taken off the gold standard back in the early ’70’s.

"Women are directly adapted to act as the nurses and educators of our early childhood, for the simple reason that they themselves are childish, foolish, and short-sighted—in a word, are big children all their lives, something intermediate between the child and the man, who is a man in the strict sense of the word. Consider how a young girl will toy day after day with a child, dance with it and sing to it; and then consider what a man, with the very best intentions in the world, could do in her place.” Quote from Arthur Shopenhauer, 17th century philosopher

[Y_Participant 4591]

Back in Black wrote:

I get why men are hung up on this being Ponzi or fiat. The same argument could be made for the US dollar though. There is nothing backing the US dollar either, since it was taken off the gold standard back in the early ’70’s.

In both cases the trade is for those who know how and who understand the risks, plus hopefully being able to lose the currency value of the trade without financial hardship.

The problem nowdays is too many people are coming into trading and cryptocurrencies not knowing about the risks and being promised huge rewards by racketeers (these include banks and financial institutions).

[BeerParticipant 11832]

Back in Black wrote:

I get why men are hung up on this being Ponzi or fiat. The same argument could be made for the US dollar though. There is nothing backing the US dollar either, since it was taken off the gold standard back in the early ’70’s.

Problem is if the dollar is going to seriously implode and cryptocurrencies become more mainstream the government is just going to crack down on them hard to get people back into dollars. You have to understand, the collapse of the dollar means the collapse of the US government and they aren’t going to let that happen without doing everything they can to stop it.

Besides that though…serious question…do you even know what a ponzi scheme is? Its when an investment pays gains to existing investors through new investors money and not from any sort of actual sustainable income stream.

So let’s compare. With cryptocurrencies profits are entirely driven by Person A buying today and Person B being willing to buy for more tomorrow. Person A profits off Person B. Person C buys in next week at an even higher price, and A and B both win. Person D says LOL! I’m not buying that garbage, people start to panic and sell out because when they finally start to realize what it truly is, its not worth what they paid for it, and its a rush to the door with a lot of people getting caught with their pants down, losing a ton of money, and screaming it was a bigger scam than Bernie Madoff and nobody is even going to jail from it.

The dollar on the other hand…its more like well you give me a dollar today and I’ll give you 97 cents next year because although you’ll still have 1 dollar inflation chips away at the buying power of it. I’m not saying we have a perfect system by any means but its far from a ponzi scheme.

[Author]

Posts