Bitcoin, Cryptocurrency and Blockchain Discussion Thread

[daniel]

If you are so convinced of that it's a bubble, I challenge you to do what Spiegel had the courage to do. Short it!

Shorting anything is an extremely high-risk gamble. I'm not a gambler. And I advise others not to gamble either. The problem with short-selling is that you have to know two things: That a security will fall, and exactly when that will happen. Because if your timing is wrong, the brokerage will close out your contract. You lose the bet even though you were right that the security would eventually collapse.

But the ultimate demise of Bitcoin isn't even the real point. The real point is that speculation and crime are its only significant uses. Sure, you can buy some legitimate things with it. But that's an infinitesimally small part of its use.

Blockchain was programmed to fail: To paraphrase Karl Marx, blockchain contains the seeds of its own demise, because it must be maintained in its entirety, forever, in multiple locations, as it grows larger with every transaction, and the source of its funding (a limited number of unmined coins) shrinks.

 

[heltok]

Shorting anything is an extremely high-risk gamble. I'm not a gambler.

Then bet that it will be below x at time y on some futures market. You have limited downside. If you are so convinced that you are right it should be a nobrainer. It's good to have skin in the game, I want it to hurt when I am wrong, otherwise I will never learn. No need to risk 100%, but risk $100 or something at least.

I mean, you were just shown two different users explaining, in some detail, why that's the opposite of true for "just like Tesla".

But as lawyers say, when the law is on your side, pound the law... when the facts are on your side, pound the facts.

When neither is on your side, pound the table.

Good demo of that from you here.



Yes. That is LITERALLY what crypto "currency" is. There IS nothing behind it. It's valuable only because you hope to find a bigger fool to pay you more someday than you did. It has no physical presence or product, it produces nothing, it has nothing backing it as having value at all not even the things cryptobros mock as insufficient for real money (fractional reserves and an army).

The first thing it was supposedly useful for- money replacement- it's demonstrably worse at than actual money (no fraud protection at all, high transaction costs, low transaction speed and throughput, high volatility, etc).

The next thing it was supposedly useful for- inflation hedge- it was also demonstrably worse at- crashing just as inflation spiked.

Now we're down to 'Well, if you live in a muslim country it might be useful to order a bible on the dark web!'
(which also makes no sense- since if you can get to the dark web you can certainly use a VPN to get on the "regular" web and just order a bible with actual money.... not like EITHER won't need to ship to you physically so again crypto is like normal money with extra steps-- and worse results since you have no recourse if you never get your bible with it.


There's no "there" there.

Another great analogy is it's like owning stock in a company that doesn't actually exist.


Tesla in contrast actually physically exists, makes physical products that solve actual problems in the real world, sells those products for industry disrupting profit margins, had auditable financial records, and is scaling up those physical products and solutions and expanding into ever more areas solving ever more problems.

You'd be hard pressed to find any real company less like cryptocurrency than Tesla.

This is what people have been saying the whole time. Yet cryptos usage has gone up, number of transactions growing exponentially, gas used going up. Because people actually use it for stuff they find useful. People with those arguments has failed to predict the future of crypto the last 10 years, like people with the same arguments failed to predict the future of tesla the last 10 years. Because their mental model of the world is incorrect.

But like we failed to convince GoJo, I will fail to convince you. So I will give up, you keep believing what you believe. Make some falsifiable statements regarding what would happen if you are correct, come back in a few years and see what happened. That's the best way to improve your mental model of the world, you need backpropagation of errors.

 

[Knightshade]

This is what people have been saying the whole time. Yet cryptos usage has gone up, number of transactions growing exponentially, gas used going up. Because people actually use it for stuff they find useful.

I mean, lots of folks find "selling garbage to people more foolish than me" useful. That's WHY bubbles like crypto happen in the first place. Have for centuries. As I say the only 'innovation' here is they found a way to run the scam without even needing a physical product.

So far when asked for example of it being genuinely useful (rather than just "kind of useful like money but objectively worse") the best thing you've come up with is that insane bible example.

People with those arguments has failed to predict the future of crypto the last 10 years, like people with the same arguments failed to predict the future of tesla the last 10 years.

You keep using that comparison.

I do not think it means what you think it means.


That you don't see the many, deeply important, differences- especially despite them being literally spelled out for you in recent posts, is... telling.

But like we failed to convince GoJo, I will fail to convince you.

Ah, name calling, that's a compelling argument!

So I will give up

Sure you will.

Make some falsifiable statements regarding what would happen if you are correct

I already did.

Tesla, an actual thing that exists and makes things that actual exist, and solves actual problems, will outperform the inherently provides and is worth nothing BTC as an investment.

Oh, look, turns out I was right. Over the last year. Or 5 years. Or the entire history of either being publicly traded.

, come back in a few years and see what happened. That's the best way to improve your mental model of the world, you need backpropagation of errors.

Again, we have centuries of examples of "People create a bubble vastly inflating the price of an asset that is largely or nearly worthless, well beyond any rationality, often going years finding bigger fools to sell to at a profit"

The inability to recognize them might be a bit of your own mental model to work on.

 

[heltok]

Tesla, an actual thing that exists and makes things that actual exist, and solves actual problems, will outperform the inherently provides and is worth nothing BTC as an investment.

Oh, look, turns out I was right. Over the last year. Or 5 years. Or the entire history of either being publicly traded.

This is actually not true. Bitcoin XBT is up 9200% since its entire history of being publicly traded as an ETF, meanwhile TSLA is "only" up 1800% since then.

Fwiw, I used to hold Bitcoin XBT for a few years, nowadays I prefer to hold Bitcoin Zero. But I still use Ethereum XBT. For me holding crypto ETFs has a lot lower taxes compared to holding cryptos.

 

[Knightshade]

This is actually not true. Bitcoin XBT is up 9200% since its entire history of being publicly traded as an ETF, meanwhile TSLA is "only" up 1800% since then.

Uh... no.

I think your inability to accurately create and read financial charts might explain your support of crypto though!

Tesla is up over 24,000% since IPO.

 

[Xepa777]

Bitcoin is down 70% since last November. What a great alternative to cash!

You could’ve made this same argument for Tesla many times in history, which $TSLAQ has. What a shame you’re using that same logic of price in a point of time to determine quality. Sigh.

This thread is reflective of how Teslas I NBC editor base has shifted so much from the early days of when I first invested in 2013. From the disruptive innovation mindset to a more close minded traditional one.

I remember when people were saying “you can’t compare tesla to apple there’s a million things different” bla bla. Yes no analogy is perfect. But both are incredibly disruptive and if you do your research you can see that disruption. Same for crypto.

It’s fine though. Just gotta come back in 10 years and see what the scoreboard is.

 

[daniel]

Then bet that it will be below x at time y on some futures market. You have limited downside. If you are so convinced that you are right it should be a nobrainer. It's good to have skin in the game, I want it to hurt when I am wrong, otherwise I will never learn. No need to risk 100%, but risk $100 or something at least.

As I said, I don't gamble. Your telling me that I should gamble, to "have skin in the game," won't change my opinion that gambling is foolish. The real no-brainer is: Gambling is stupid. (And I'll say the same about day-trading stocks.)

And FWIW, the vast majority of those Bitcoin "transactions" are just people selling Bitcoin to each other in the speculative bubble.

And when someone does actually buy something with crypto, in 99.9% of cases, the merchant selling the item immediately exchanges the crypto for real money, because they know its value is unreliable, and retailers need a currency whose value is predictable so they can continue to restock their shelves. They cannot restock their shelves with Bitcoin. And you typically pay extra for the item because the merchant needs to cover the possibility that the coin you spent may lose value before they can turn it to real money, and has to cover the cost of that transaction.

 

[heltok]

Uh... no.

I think your inability to accurately create and read financial charts might explain your support of crypto though!

Tesla is up over 24,000% since IPO.

View attachment 854934

Tesla started trading publicly(June 29, 2010). In July 2010 Bitcoin started trading at US$0.0008. Since then Bitcoin is up 2674000000%. So compared to TSLA, Bitcoin has been a 100 000x better investment.

 

[daniel]

What specifically is Crypto disrupting ...

They call crypto "disruptive" because they imagine it taking over as the world's currency. Never mind that there are a myriad different cryptos and you have to pay to convert one to another and the reason nations have single currencies is that having multiple currencies is inefficient and chaotic. The promoters of crypto claim that it will displace "fiat" money and is therefore 'disruptive.

Of course it has proven to be useless as currency, but just like flat-earthers and creationists, they are oblivious when their arguments are disproven and they just keep parroting the old lines.

 

[daniel]

You have to admit, though, that convincing people to pay real money for a digital token that has no backing of any sort, has no protections of any sort, that cannot be recovered if you lose your password, is a work of true genius. They've made a virtual religion out of the bigger fool theory, and gained adherents who are as passionate as any sect of Bible-thumping fundamentalist end-times preppers.

 

[daniel]

I've gotten so many of my co-workers on Celsius. Seriously, 10.5% interest rate on cash like it's a total no-brainer.

I remember when this was being touted. I asked at the time how they could pay 10.5% interest on deposits when there is no real use case for Celsius (or any other crypto.) People pay to borrow money because they use that money for stuff: Houses or cars or vacations, or to start or operate businesses. But nobody is going to borrow Celsius to buy a car or a house or start or run a business. So who's paying to borrow it? How could they pay depositors?

I guess they were paying the interest out of new depositors' money. The definition of a pyramid scam! The only reason anybody would borrow crypto would be to short-sell it. Or as a way of buying on margin, which is high-risk, and in legitimate markets is regulated.

So it was actually a scam from the very start.

The no-brainer here is that when something sounds too good to be true, it isn't true. When the promised rewards are above market rates it's because there's risk. Legitimate borrowers state the risks up front. E.g. High-yield bonds have high yield because there's risk the issuer won't be able to pay back the money, and the bond's rating tells you the industry's assessment of the level of risk. Celsius claimed to be no-risk. Only a scammer claims that an investment has no risk!

 

[scubastevo80]

They call crypto "disruptive" because they imagine it taking over as the world's currency. Never mind that there are a myriad different cryptos and you have to pay to convert one to another and the reason nations have single currencies is that having multiple currencies is inefficient and chaotic. The promoters of crypto claim that it will displace "fiat" money and is therefore 'disruptive.

Of course it has proven to be useless as currency, but just like flat-earthers and creationists, they are oblivious when their arguments are disproven and they just keep parroting the old lines.

There's a myriad of different currencies in the world as well, but you won't see many people owning Iranian Reals or Ugandan Shillings. Just like the US Dollar is the world's reserve currency, believers in crypto as a "future" use case for transactions will argue you're in Bitcoin, maybe Ether, or nothing. Everything else is noise and a money grab (and I totally agree with your stablecoin / Madoff reference comments). I review monthly on-chain report data from a source I like, and adoption (framed from the investment perspective) continues to increase. One either takes a 10year speculative view on this or avoids it altogether. I personally have a 1% allocation to Bitcoin/GBTC as part of my alts exposure, but certainly wouldn't pound the table for others to do the same.

 

[Knightshade]

There's a myriad of different currencies in the world as well, but you won't see many people owning Iranian Reals or Ugandan Shillings. Just like the US Dollar is the world's reserve currency, believers in crypto as a "future" use case for transactions will argue you're in Bitcoin, maybe Ether, or nothing. Everything else is noise and a money grab (and I totally agree with your stablecoin / Madoff reference comments). I review monthly on-chain report data from a source I like, and adoption (framed from the investment perspective) continues to increase. One either takes a 10year speculative view on this or avoids it altogether. I personally have a 1% allocation to Bitcoin/GBTC as part of my alts exposure, but certainly wouldn't pound the table for others to do the same.

But an investment asset is kind of the OPPOSITE of money.

To be a useful currency it needs to widely and freely circulate.

If the only reason "adoption" is increasing is more fools are showing up to hold it in hopes they find a bigger fool later that's a terrible currency (on top of all the other things that make it terrible as a currency)

And more years go by without anyone being able to articulate any actual, practical, existing use for this stuff will make it harder to find bigger fools in the future.

 

[daniel]

There's a myriad of different currencies in the world as well, but you won't see many people owning Iranian Reals or Ugandan Shillings. Just like the US Dollar is the world's reserve currency, believers in crypto as a "future" use case for transactions will argue you're in Bitcoin, maybe Ether, or nothing. Everything else is noise and a money grab (and I totally agree with your stablecoin / Madoff reference comments). I review monthly on-chain report data from a source I like, and adoption (framed from the investment perspective) continues to increase. One either takes a 10year speculative view on this or avoids it altogether. I personally have a 1% allocation to Bitcoin/GBTC as part of my alts exposure, but certainly wouldn't pound the table for others to do the same.

I think a 1% allocation to a wildly-speculative gamble is reasonable if it tickles your fancy. 1% in something fun won't hurt you if/when it fails. Personally, I don't consider an enterprise that makes a significant contribution to climate change to be "fun," but that's just me.

You say that any crypto other than Bitcoin or Etherium is a money grab. In my view, Bitcoin and Etherium are nothing but money grabs. They just happen to be the first and second of their kind.

 

[Knightshade]

This thread is reflective of how Teslas I NBC editor base has shifted so much from the early days of when I first invested in 2013. From the disruptive innovation mindset to a more close minded traditional one....It’s fine though. Just gotta come back in 10 years and see what the scoreboard is.

If I recall the last time you cited an example of an awesome disruptive crypto company it was... Celsius.

We didn't need to wait 10 years on that one, it was bankrupt barely 10 weeks after you told us how it was awesome and you had convinced a bunch of co-workers to invest in it.

The only thing it disrupted was investors net worth--- the bankruptcy filing says that have 5.5 billion in outstanding obligations, 4.7 billion of that is their users...and barely more than 100 million in cash on hand. And the users are unsecured creditors so they're gonna get either nothing, or pennies on the dollar.


Tesla IS disruptive and has taken major market share from legacy companies, and forced them to spend many billions trying to compete and adapt.

What has crypto disrupted?

 

[Daniel in SD]

Looks like @Knightshade has once again underestimated the awesomeness of crypto.

Celsius has a Hail Mary bankruptcy plan: Turn its debt into a new cryptocurrency

In the leaked audio, Celsius’ leadership says that employees’ funds will be subject to the same rules and timeline as customer assets.

www.cnbc.com

 

[Knightshade]

Wow... beyond just how ridiculous the premise is there's some real comedy gold in there... like:

Celsius, which said it managed billions of dollars in customer assets, never had sophisticated software to properly manage and track its assets, according to sources familiar with the company. These sources, who asked not to be named because of confidentiality restraints, also said the data was being tracked manually, on a simple Excel spreadsheet.

Manual spreadsheets. How disruptive!

I don’t know if we go to jail…but it’s not good

and

employees should only rely on information provided in court documents

Well there's a sure sign you wanna be working there!

 

[Daniel in SD]

Wow... beyond just how ridiculous the premise is there's some real comedy gold in there... like:

My favorite:

In an interview there last year and another at the Bitcoin 2021 conference in Miami, Mashinsky told Bloomberg Businessweek that Celsius is able to pay such high yields because it passes along most of its earnings to its users.

He said it’s the traditional financial system that’s ripping people off by taking their deposits, using them to make money, and then claiming it can only pay tiny interest rates. “Somebody is lying,” Mashinsky said. “Either the bank is lying or Celsius is lying.”

I guess people can't claim they weren't warned!

 

[dm28997]

Just reading that Fidelity is offering ETH fund but only to accredited investors. Perhaps this is another reason why crypto is rising

 

[daniel]

I think it was on the Slate Money podcast that I heard a report that half of all Bitcoin transactions are fake: People selling to themselves in order to give the impression that the trade volume is greater than it is. In stocks and other securities this is illegal. But since crypto is unregulated there's nothing to stop malicious actors from manipulating the markets.

I would presume that if it's happening with Bitcoin, it's probably happening with all of them.