Elon and influence on crypto currency markets

[Durzel]

I think the problem with them at the moment is that people aren’t honest about why they’re interested in it.

I know of a few crypto YouTubers, and a friend of mine is heavily invested in it, and in the main these videos seem to just talk about the money making opportunities, rather than the technology, why coin X is a better prospect than Y on a given day in terms of the future of financial transactions.

You need only look at the effect of Musk on it to see how prices go up or down massively based on sentiment, rather than fundamentals. This will change with institutional investment, but at the point that these things are “serious” I wonder if there will be as much interest in it. If Bitcoin and altcoins ended up going up and down by nominal percentages, like fiat, would people be as interested in it?

It feels like a gold rush at the moment and there’s plenty of opportunities to end up on the wrong side of naked pump and dumps. You have no protection from scams from the FSA, etc - which is a boon for criminals. I feel like there’s a lot of people losing sums of money they can’t afford to lose through a combination of modern deceptions (phishing, fake Twitter accounts, etc) and greed.

 

[rotor2k]

If Bitcoin and altcoins ended up going up and down by nominal percentages, like fiat, would people be as interested in it?

Of course they wouldn't.

 

[rotor2k]

There are a number of coins that need virtually zero energy to run (aside running servers with nodes on them).

Bitcoin is the oldest and the most "polluting" coin. It's popular because most people don't look into crypto beyond BTC and it has the first mover advantage.

There are 2 basic systems

1. Proof of work - doesn't have to be GPU/ASIC work, some coins use disk space. You can use anything in theory. Tesla could create a coin with miles driven as proof of work for example.

2. Proof of stake - basically your existing coins earn you interest. Which uses zero energy beyond running a node. You stake your coins to do "work" for you, you cant use those coins and they are used to validate the new coins.

To simulate scarcity both methods get "harder" the more people do it for any given algorithm. That's how ASICs kill off GPU mining, they are much faster so the algo adjusts and gets harder for everyone - GPU miners now get less.

There are exceptions - like XRP - which is mostly run by banks and the coins are generated when they need more to keep the price down - same as FIAT.



There is a lot more to it than that .... Every coin has different characteristics by design. For example Monero (XMR) is designed to be super private, so you can't trace transactions.

Bitcoin is just the first - and the least advanced out of all of these - the Atari of crypto. Ethereum is probably going to be the next big thing as it goes to proof of stake soon and all those environmental concerns go away...

Then there is Doge - which is basically a copy of BTC done for a joke... That's why Elon likes it. it also has 1% of BTC energy use per transaction - which is why Elon is thinking about accepting it as payment for Tesla.



Then there are Non Fungible Tokens...... That's next level madness...

But... What is it all for, though? What question do cryptocurrencies answer that can't be just as easily answered with "a database"? And "it's decentralised, man! We're taking the power away from the man, man!" is not a good answer, either.

 

[Fraank]

But... What is it all for, though? What question do cryptocurrencies answer that can't be just as easily answered with "a database"? And "it's decentralised, man! We're taking the power away from the man, man!" is not a good answer, either.

You just answered yourself, even though you said it's not a good answer. Blockchain let's you decentralise the network, that means whether it's Trust (such as in currency transactions), governance (such as a DAO), or the many other forms of emerging participation - these all become possible. A database does not make these possible, because a database must be owned by an actor, and therefore all participants have to trust that actor. How has that worked out with everyone trusting Facebook wouldn't abuse their data?

If after reading the 100s of articles you mention you cannot see the potential of decentralisation, in money, politics, manufacturing, trade, supply chains, collaboration, data economies, etc, then there is nothing I can do to help you with that my friend.

I would only ask you perhaps take a step back and realise that just because you can't see the potential, does not mean that there is no potential. I've given the last 3 years of my career to blockchain and I can only speak from my experience so far, the potential is world changing.

 

[Fraank]

As for the Topic at hand, Elon tweeted this morning:

His tweet was perfectly timed to manipulate price:
-BTC at expected support of $42.5k
-BTC chart making a double bottom
-BTC price at the lowest point of it's move
-Hourly candle about to close

 

[Durzel]

For all the purported benefits of decentralisation, and how different cryptos solve different problems, they all seem to be affected in a centralised way by the positive or negative sentiment of one man. Even Ethereum which was supposed to have "decoupled" from Bitcoin suffered yesterday, as did other "next big thing" coins like ADA, etc. When BTC gets pummeled pretty much all of the graphs end up looking about the same.

If cryptos can't shake off this retail investor double/triple digit percentage gains chasing and paper hands as soon as it dips, then I wonder how viable they're going to be long term, and I say that as someone who is substantially invested in blockchain.

Also - I don't know how much we should be giving Elon a pass for this market manipulation. You're talking about it like its no big deal there @Fraank but there will be people losing significant sums of money as a consequence of these flippant tweets. Yes, they should know better, "investments can go up or down", etc.. but the nature of cryptos at the moment, there's going to be a lot of people getting burned.

 

[Fraank]

For all the purported benefits of decentralisation, and how different cryptos solve different problems, they all seem to be affected in a centralised way by the positive or negative sentiment of one man. Even Ethereum which was supposed to have "decoupled" from Bitcoin suffered yesterday, as did other "next big thing" coins like ADA, etc. When BTC gets pummeled pretty much all of the graphs end up looking about the same.

If cryptos can't shake off this retail investor double/triple digit percentage gains chasing and paper hands as soon as it dips, then I wonder how viable they're going to be long term, and I say that as someone who is substantially invested in blockchain.

Also - I don't know how much we should be giving Elon a pass for this market manipulation. You're talking about it like its no big deal there @Fraank but there will be people losing significant sums of money as a consequence of these flippant tweets. Yes, they should know better, "investments can go up or down", etc.. but the nature of cryptos at the moment, there's going to be a lot of people getting burned.

Oh, I am not giving him a pass. I opened the thread saying it made me reconsider buying a Model Y next year. Plus you may not have seen the original thread title, which the mods perhaps wisely changed...

I absolutely detest market manipulation, he has lowered himself to the next John McAffee. I'm pretty sure I commented on how all of the social media Doge buyers would have been severely burnt. That's incredibly selfish and arrogant behaviour on his part.

Regarding the dip, BTC was due it - he just capitalised on it. I am not worried about future value, yes there will be market cycles and "bear markets", but I don't doubt BTC will be over 100k this year, if not 200k.

ETH won't decouple fully until it flips BTC...

Institutional money is only starting to increase, as this continues and adoption starts to progress - the volatility will decrease and so will the bear markets.

You have to look underneath the price and hype and see the tech that is slowly but surely being built - real lasting tech that will shape the future to come.

 

[Yev000]

For all the purported benefits of decentralisation, and how different cryptos solve different problems, they all seem to be affected in a centralised way by the positive or negative sentiment of one man. Even Ethereum which was supposed to have "decoupled" from Bitcoin suffered yesterday, as did other "next big thing" coins like ADA, etc. When BTC gets pummeled pretty much all of the graphs end up looking about the same.

If cryptos can't shake off this retail investor double/triple digit percentage gains chasing and paper hands as soon as it dips, then I wonder how viable they're going to be long term, and I say that as someone who is substantially invested in blockchain.

Also - I don't know how much we should be giving Elon a pass for this market manipulation. You're talking about it like its no big deal there @Fraank but there will be people losing significant sums of money as a consequence of these flippant tweets. Yes, they should know better, "investments can go up or down", etc.. but the nature of cryptos at the moment, there's going to be a lot of people getting burned.

That will never happen. Look at the stock market. All tech is down.... It is not rational. Nothing has changed for these companies in the last 3 months, they are all reporting record profits, but stocks are down 30% on average.

Crypto is the same....

Both are casinos.



The trick is to not do anything after the first purchase.... Leave it alone. Sell in 10 years. But obviously buy something that will be bigger in 10 years.

Any given crypto coin today is a massive risk, given 10 year horizon. Primarily because current top coins are going to be archaic by design (hard to branch to protect the network).

Is crypto the future? Probably
Are any of the current coins the future? Probably not

There are a bunch of really cheap coins that could be massive in 10 years, but its basically a lottery. A lot have very similar characteristics, waiting for the popularity vote.

One thing is for sure, if its going to be a PoW coin, it needs to be work as a waste by product of humanity - such as miles driven/flown or something like that. Something that does not encourage waste, but instead uses it to generate further wealth. So maybe miles not driven? Dunno...

 

[Yev000]

Actually to expand on that a bit more. If someone could come up with a PoW coin that encourages certain desired behaviours in society that could be a cool idea.

Problem is the "proof" part.

 

[ACarneiro]

But... What is it all for, though? What question do cryptocurrencies answer that can't be just as easily answered with "a database"? And "it's decentralised, man! We're taking the power away from the man, man!" is not a good answer, either.

I don't know.
When I went to my bank to make a transfer to Tesla to buy my M3 (had to go in branch, because my online banking wouldn't allow such a large sum of money to be transferred), I had to fill out pages and pages of stuff and show them the invoice to prove where the money was going.
And then they charged me a significant sum of money. For me to make a purchase with my money that they are keeping on my behalf. This was a cash purchase, no credit.
It felt like I had little control and they were doing me the favour.

When I transferred a significant sum of money to someone as a gift, again had to be done in branch, pages, declarations, questions (who is it for? What are they using it for?) which I found intrusive and quite frankly none of their damn business. And then a significant transfer fee again.

Call me old and grumpy but this is too much of other people meddling in my own financial affairs and I would hope that crypto would solve that problem and give control of my money back to me, for example.

And then also the matter of trust. My bank uses my money to invest and do stuff with, the money isn't there and it isn't safe. Bank goes bust, I lose my money (government guarantees had to be put in place for people to trust banks again, have we all forgot about that already?). I have no choice but to trust a large, monolithic, opaque corporation that does things with my money that I have no control or say over, and who have absolute control over my money.
Again, this is something hopefully mitigated by cryptocurrency.

I may be naive and not "get it", but the proposition of more control of my own finances is a powerful one.

 

[rotor2k]

I don't know.
When I went to my bank to make a transfer to Tesla to buy my M3 (had to go in branch, because my online banking wouldn't allow such a large sum of money to be transferred), I had to fill out pages and pages of stuff and show them the invoice to prove where the money was going.
And then they charged me a significant sum of money. For me to make a purchase with my money that they are keeping on my behalf. This was a cash purchase, no credit.
It felt like I had little control and they were doing me the favour.

When I transferred a significant sum of money to someone as a gift, again had to be done in branch, pages, declarations, questions (who is it for? What are they using it for?) which I found intrusive and quite frankly none of their damn business. And then a significant transfer fee again.

Call me old and grumpy but this is too much of other people meddling in my own financial affairs and I would hope that crypto would solve that problem and give control of my money back to me, for example.

And then also the matter of trust. My bank uses my money to invest and do stuff with, the money isn't there and it isn't safe. Bank goes bust, I lose my money (government guarantees had to be put in place for people to trust banks again, have we all forgot about that already?). I have no choice but to trust a large, monolithic, opaque corporation that does things with my money that I have no control or say over, and who have absolute control over my money.
Again, this is something hopefully mitigated by cryptocurrency.

I may be naive and not "get it", but the proposition of more control of my own finances is a powerful one.

It sounds like you need to switch banks, not move to cryptocurrency. I bank with Barclays (hardly the most modern) and I had none of those issues when I paid for my Tesla. Zero fees, instant over online banking.

 

[rotor2k]

You just answered yourself, even though you said it's not a good answer. Blockchain let's you decentralise the network, that means whether it's Trust (such as in currency transactions), governance (such as a DAO), or the many other forms of emerging participation - these all become possible. A database does not make these possible, because a database must be owned by an actor, and therefore all participants have to trust that actor. How has that worked out with everyone trusting Facebook wouldn't abuse their data?

If after reading the 100s of articles you mention you cannot see the potential of decentralisation, in money, politics, manufacturing, trade, supply chains, collaboration, data economies, etc, then there is nothing I can do to help you with that my friend.

I would only ask you perhaps take a step back and realise that just because you can't see the potential, does not mean that there is no potential. I've given the last 3 years of my career to blockchain and I can only speak from my experience so far, the potential is world changing.

I just don't see the decentralisation point as an answer to any real-world problems. Facebook? Give me a break, the only reason Facebook exists in its current form is because thousands of employees are paid to make it that way (i.e. it requires an enormous amount of effort that someone has to pay for). A decentralised Facebook wouldn't last five minutes. Who would host the petabytes of content?

And as far as *actually* being decentralised, see Elon's tweet about the Xinjiang mine flood that caused a 35% drop in BTC compute capacity. Laughable.

 

[ACarneiro]

It sounds like you need to switch banks, not move to cryptocurrency. I bank with Barclays (hardly the most modern) and I had none of those issues when I paid for my Tesla. Zero fees, instant over online banking.

You may be right, but from what I’ve seen of friends who bank with other “Big Guys” all of them are more or less the same.

 

[ACarneiro]

And as far as *actually* being decentralised, see Elon's tweet about the Xinjiang mine flood that caused a 35% drop in BTC compute capacity. Laughable.

It seems you may be conflating two separate issues.
Whilst the compute capacity and transaction speed did drop, the network never halted nor was its integrity jeopardised. Hence the advantage of decentralisation.
A similar issue with a “traditional” bank would bring it to its knees, much like what happened multiple times in the UK with TSB.

If you’re trying to say that too much compute is in the hands of a possibly adversarial player then I would probably tend to agree with you but that may be mitigated when Proof of Stake currencies start being more prevalent.

 

[rotor2k]

It seems you may be conflating two separate issues.
Whilst the compute capacity and transaction speed did drop, the network never halted nor was its integrity jeopardised. Hence the advantage of decentralisation.
A similar issue with a “traditional” bank would bring it to its knees, much like what happened multiple times in the UK with TSB.

If you’re trying to say that too much compute is in the hands of a possibly adversarial player then I would probably tend to agree with you but that may be mitigated when Proof of Stake currencies start being more prevalent.

35% isn't far off 50.1% (or whatever the BTC majority is). For anyone truly serious about this (i.e. not using it for gambling purposes) this should be an instant deal-breaker -- as in "I'm out". Satoshi had a super cool idea, I just don't see how thousands of years of society working out "centralisation" can be replaced overnight, and really, does it *need* to be replaced? (see my previous comment about "let's stick it to the man, man"). I've somehow managed to live my life in spite of all this centralised oppression that cryptocurrency supporters are so keen to free me from.

If you want to gamble and have fun, gamble and have fun. But please, don't pollute the planet with 100s of TWh of coal-generated power while you're doing it. Please don't enable billions of dollars of ransomware while you're doing it. Please don't enable criminals all over the world while you're doing it.

I feel there's very much a "it is difficult to get a man to understand something when his salary depends on his not understanding it" vibe to all cryptocurrency supporters.

 

[ACarneiro]

35% isn't far off 50.1% (or whatever the BTC majority is). For anyone truly serious about this (i.e. not using it for gambling purposes) this should be an instant deal-breaker -- as in "I'm out". Satoshi had a super cool idea, I just don't see how thousands of years of society working out "centralisation" can be replaced overnight, and really, does it *need* to be replaced? (see my previous comment about "let's stick it to the man, man"). I've somehow managed to live my life in spite of all this centralised oppression that cryptocurrency supporters are so keen to free me from.

If you want to gamble and have fun, gamble and have fun. But please, don't pollute the planet with 100s of TWh of coal-generated power while you're doing it. Please don't enable billions of dollars of ransomware while you're doing it. Please don't enable criminals all over the world while you're doing it.

I feel there's very much a "it is difficult to get a man to understand something when his salary depends on his not understanding it" vibe to all cryptocurrency supporters.

We shall see. You clearly seem to feel very strongly about it. Me, I'm a bit more on the fence.
I think there is definitely potential and the TWh of energy are a feature of Bitcoin and PoW implementations, not a feature of all crypto.

I shall look at developments with interest, and don't share your opinion that just because something worked before, it can't be improved on.
But I guess that's the intricate tapestry of life and all that: different people place different importance on different things

 

[Durzel]

There are interesting aspects to crypto, or rather the underpinnings of it - smart contracts, blockchain, DeFi, etc.

At the moment it feels like a Wild West gold rush though. There is a lot of retail interest from FOMO people who see the double/triple digit gains and just want to be told what to buy. These investors panic at the first sign of losses, which has a disproportionate effect on the markets, compared to fiat and stuff like gold etc.

There are a whole host of modern day scams emerging from this interest - including Discord members only groups that exist to pump up cryptos to attract retail interest, only for the organisers to pull the plug and leave them holding the bags. Then there’s groups even more privileged than those, using those groups as “feeder” communities.

I think if you’re going to get involved at all in this stuff you have to be on board with losing near 100% of your money. Valuations are almost entirely sentiment driven, with no fundamentals to speak of.

That’s not to say that I think you would lose all your money investing in cryptos, but it’s a higher probability than S&S.

 

[Yev000]

It sounds like you need to switch banks, not move to cryptocurrency. I bank with Barclays (hardly the most modern) and I had none of those issues when I paid for my Tesla. Zero fees, instant over online banking.

Not sure what you are disputing, transferring large sums? Barclays has a 50k daily limit (currently), other banks have less.

Do they invest your money - yes absolutely, all banks do this. That's the core business model of a bank. If it goes out of business you are guaranteed some money - yet to be tested.

If you have any large sums in a Bank you should probably invest it yourself.... Doesn't have to be crypto. Banks are fine for the daily grind, but not to store wealth.


As a side note, Barclays will absolutely screw you over as soon as your life changes in any meaningful way (i.e. divorce, death in the family, loss of work etc.). They do not give one iota about keeping you as a customer. All banks will.

 

[Yev000]

There are interesting aspects to crypto, or rather the underpinnings of it - smart contracts, blockchain, DeFi, etc.

At the moment it feels like a Wild West gold rush though. There is a lot of retail interest from FOMO people who see the double/triple digit gains and just want to be told what to buy. These investors panic at the first sign of losses, which has a disproportionate effect on the markets, compared to fiat and stuff like gold etc.

There are a whole host of modern day scams emerging from this interest - including Discord members only groups that exist to pump up cryptos to attract retail interest, only for the organisers to pull the plug and leave them holding the bags. Then there’s groups even more privileged than those, using those groups as “feeder” communities.

I think if you’re going to get involved at all in this stuff you have to be on board with losing near 100% of your money. Valuations are almost entirely sentiment driven, with no fundamentals to speak of.

That’s not to say that I think you would lose all your money investing in cryptos, but it’s a higher probability than S&S.

What would be "fundamentals" for a currency?

 

[Wol747]

If after reading the 100s of articles you mention you cannot see the potential of decentralisation, in money, politics, manufacturing, trade, supply chains, collaboration, data economies, etc, then there is nothing I can do to help you with that my friend.

Leaving aside the rather patronising tone, I would imagine most people can see at least some theoretical merit in blockchain for things like real estate ownership and the like.
What is very unclear is the merit of blockchain technology for currencies. There's an infinite number of crypto coins potentially available, each created out of thin air. They are not a viable medium of exchange, nor can they possibly be a store of value. Casino chips, yes - and a lot of folk have made a bomb over the last decade but only because of huge volatility. Musk is a case in point: there's been enough publicity these last few years about the huge energy expenditure of Bitcoin "mining" and someone with his savvy certainly was unaware of it. His tweeting, buying and selling was pure manipulation - and good luck to him playing the casino chips. Of course if he had lost a billion or two he's in a position to shrug it off, unlike thousands who are playing the same game with a big chunk of their savings, and without the financial muscle to change the price by the tweet.