# Why should I invest into cryptocurrencies?



## Silent_Gunner (Nov 21, 2020)

Now, that might be a clickbait as hell topic title, but hear me out:

I've been hearing about cryptocurrencies being the future and this and that for a good part of the last decade going into today. And while what I've heard about it sounds all nice and rosy, the part that I don't get is where does Bitcoin, Dogecoin, Ethereum, Pepecoin, XRP, and probably others I'm not aware of derive their value from?

For example, the currency we have here in the US is Fiat-based, meaning it's not based on a gold or silver standard. I get that resources such as cash, coinage, gold, silver, precious metals, etc. are valuable and stuff like that. But those are items that societies have agreed upon to use for a very long time, and you still need those first two aforementioned things for if one wants to get items from vending machines that don't get card readers or any support for stuff like Samsung, Apple, or Google Pay. If people were trading these things in society right now, they at least would have a use for it.

The thing I don't personally get about cryptocurrencies that has me all confused is that there is no physical good being traded; it's all digital, and supposedly, "private, and free from someone breaking into your bank account, etc.," even though I've heard of cases where these claims simply don't hold up. But even then, I still don't understand what makes it so valuable. I know Bitcoin only has so many coins in the digital wild, which, OK, fine, but what about the other ones like Ethereum, XRP, Brave Rewards (which IDK if that's a cryptocurrency, but I know Chris Titus Tech apparently said he earned money from it or something), and the others? If I was to pay my Dad in one of these cryptocurrencies for, say, a couch in the living room, given his age and his relative lack of understanding of how to operate even a computer and smartphone at times, it would be of no use to him. I'd have to pay him in cash, or write him a check. Now, if I was trading with someone who understood and has utility for that kind of transaction, then there should be no problem afaik.



This post is all over the place, but I guess I just don't understand what crypto derives its value from right now, and I'm kind of looking to discuss this with those more in the know.


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## jimbo13 (Nov 21, 2020)

Silent_Gunner said:


> Now, that might be a clickbait as hell topic title, but hear me out:
> 
> I've been hearing about cryptocurrencies being the future and this and that for a good part of the last decade going into today. And while what I've heard about it sounds all nice and rosy, the part that I don't get is where does Bitcoin, Dogecoin, Ethereum, Pepecoin, XRP, and probably others I'm not aware of derive their value from?
> 
> ...




You shouldn't IMO,  I'd put a little in Crypto as in a little more than I'd spend on lottery.  Crypto is gambling still, it's volatile.  High risk high reward and institutional banking/governments are getting ready to attack and get their cut.

Top two: Real estate > Precious metals (silver imo).

There is a fine line between gambling and investing imo.  If you like the high risk/reward and can dig deep to make good choices enjoy the rush when it hits.


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## FAST6191 (Nov 21, 2020)

Gold, silver, and such are not especially valuable either. Just valuable because human like shiny and shiny thing not common to dig out of ground/pan in river. Give me enough gold to build bricks for my house and I will still pick other things as superior materials, not much use for eating, not much use as a catalyst (platinum is I guess), not bad a conductor coating and possibly for oxidation prevention...
That is also before we cover how diamonds are, relatively speaking, common as dirt and it is only because the main sources of such things are kept in tight check by a cartel that sticks things in a vault to keep supply low, not to mention we can grow them these days for potentially about as much in energy cost as the cartel prices.

US currency is then mostly valuable because it is what the US government accepts for tax purposes. Try not paying taxes in the US and boys with guns turn up, enough that you will have a hard time outgunning or outrunning. A few million people then having to pay taxes mean they need what the taxers accept, which these days just so happens to be US Dollars (that they also control, manipulate and constantly raise* the rates on). Said might also goes out to the world as well, along with a lot of tech and cool stuff that others want to buy, and US currency is useful in that too, also for reasons unknown is what oil is largely priced in and oil is kind of a big deal.

* so your tax brackets changed and now you get to earn $15000 rather than $14000 before you pay 20% of whatever you make above that or whatever the numbers actually are. If you calculated the raise and compared it to what the rate of inflation (which your job hopefully kept up with) then that is going to mean you are paying more taxes. No country ever wants to see deflation either (nobody will spend more than the minimum in that scenario) so they will keep inflation high.

As far as very long time. Most currency around today is relatively new as these things go (hard for me to spend shillings and tuppence around here, this despite me being able to speak to people that remember it well).
Also most conventional currency is not a physical thing and has not been for years -- see fractional reserve banking.

Your dad would presumably also struggle to accept land deeds, bearer bonds, a stock portfolio, stock in general. Still count as valuable assets to your divorce lawyer, estate lawyer, tax man in those places that tax you on owned items rather than income...

Crypto can't necessarily be stolen in the same ways that people steal credit cards. Things you hear about are either key loggers on computers, traditional pay us or we end you, those leaving it with other services (see exchanges) and them being hacked and general not what we said it was scams. They do also have some perks that those operating in the normal banking system don't have -- transfer varies depending upon type but it is very fast indeed compared to traditional transfers, cost of transfer is also often minimal (bitcoin did take a rake a while back compared to once being free), transfers are hard to track as well (they are not necessarily anonymous and there is also the tumbling thing) which makes them good for buying drugs and gambling and illegal services and evading tax, or transferring funds when your government (not all are nice after all, and some might try to tax you on it**) would rather you didn't.
There are "legit" things to use it on as well (just as you can barter or accept foreign currency then you can accept crypto), though even without that underground economies are still economies and can be measured.

**when countries and companies/banks run low some might take "haircut" on simple withdrawals. If you are instead buying crypto then you can dodge that, or even better if you kept it in it to begin with.

The other side of why you were probably told to invest by some is because the rate of exchange change is insane. A swing of a normal currency to 2:1 what it was at some point in the previous year (that is to say you converted 100 USD into 100 EUR a year ago but today you can convert it back to 200USD) is an insanely good return and super rare (normally only massive wars, government collapse or gamechanger technologies that cause such spikes). 2:1 in crypto is nothing, depending upon your timeline then it is thousands to 1.
https://en.bitcoinwiki.org/wiki/Bitcoin_history#Bitcoin_price_chart_since_2009_to_2017_and_2018
Or if you prefer in early 2011 it hit 1 USD per bitcoin (was messing around sub 10 cents for a long time before it).
Today it varies a bit and many are waiting to see it hit $20000 USD ( https://www.coinwarz.com/prices/bitcoin/chart says  $18,656.796600 though), or 100 USD and forget about it back in 2011 would today be 1.8 million, even more back at the previous peak. No investment portfolio, stock or wall street fund has come even within sniffing distance of that kind of return, never mind something that mere mortals can buy in for $100. Its falls however are equally considerable.
We can cover mining as well if you want -- the way these things work is a so called distributed ledger. Here every previous round of transactions (varies between types but 15 minutes is on the high end) gets added and then the new round begins, however as the network should theoretically consist of several thousand computers all working against each other then nobody can disagree with the distribution of the coins in given addresses and nobody can take over. To get this group of computers burning bandwidth and electricity they are rewarded for participating in a basically lottery wherein the solver of a problem that is pretty much brute force computing power gets a few coins of their own and a cut from the transactions that happened. People can pool resources, design better solvers, move places with cheap electricity (to both run and cool the things) and so on.

There are other crypto methods that do other things. Smart contracts being one of the more notable. Here if I promised to build a shed for you down the pub then it is a word between gentlemen (which nobody has ever confused me for). We could get lawyers or notaries to sign it and whatnot but that is effort. Smart contract does much the same thing so when you drag me to court you can point at the thing saying his key signed this agreement and the judge would then have to be all "so it is, pay the man" and that is just the tip of the iceberg for that one.


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## WiiCurious (Nov 21, 2020)

> There are other crypto methods that do other things. Smart contracts being one of the more notable. Here if I promised to build a shed for you down the pub then it is a word between gentlemen (which nobody has ever confused me for). We could get lawyers or notaries to sign it and whatnot but that is effort. Smart contract does much the same thing so when you drag me to court you can point at the thing saying his key signed this agreement and the judge would then have to be all "so it is, pay the man" and that is just the tip of the iceberg for that one.



Cryptocurrency is so fucking stupid.
I have no doubt that there is money to be made, but stop pretending the technology is worthwhile.

The idea that smart contracts would ever be upheld in a court of law is horrifying.
Some downsides:
Somebody gets access to your phone/computer and signs your private key to a contract that gives them all your assets.
A bug is discovered that makes the smart contract pay out without services being provided. (This happens all the time now. If smart contracts were widespread, it would be happening daily)
Widespread grid failure that makes internet or electricity scarce would mean you don't have to fulfill any obligations of a smart contract.

The current system might not be great, but at least contracts aren't controlled by neckbeards.

Also consider assets stored on the blockchain. I have a title for my car in a safe. As long as I have the title, I own the car. Now imagine my title in on The Blockchain. The Chinese miners that control the blockchain can conspire and transfer the title to themselves. Or somebody could compromise my computers and accounts and transfer the title to anybody. Same for the deed to property.
I would never put my assets in the position to be taken away by the Chinese government or some teenage hacker.
Banks are great because there's fraud protection and deposit guarantee. FDIC and NCUA in the US protect your money from malicious actions.

Cryptocurrencies are also an environmental disaster where the system rewards more and more waste. By design, the math necessary to 'mine' bitcoins cannot be productive. It will always just be computers jerking themselves off until they find a number with enough zeros.

Also, smart contracts and other aspects of the blockchain can be utilized using tiny fractions of a bitcoin. The idea that one bitcoin is worth more than 1/1000 of a bitcoin is strange, as the fraction has exactly the same functionality as the whole in terms of technology. Why is 1 bitcoin worth $18,000 USD when .000001 bitcoin can be used to do all the same things on the blockchain? Bitcoin only makes sense as a token without value.

In summary, the technology behind bitcoin is stupid, the valuation of bitcoin is being propped up by billions of unbacked tether, and we should continue to mock british people behind their backs.

You can probably make money by daytrading in crypto, but you are gambling and the house always wins.
Exchanges are unregulated and super shady. They can see sell order, buy orders, and shorts. They have the ability to manipulate the price to break shorts or raise the price of bitcoin as they see fit. They cannot lose.

Bitcoin went above $1000 for the first time because Mt. Gox was wash trading bitcoin. It cost them less than 5 bitcoin to rocket the price to those levels.
This is still going on. No laws are in place to prevent it.


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## Deleted User (Nov 21, 2020)

on the topic, currencies that one could profit from mining with a single 1060?


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## jimbo13 (Nov 21, 2020)

Azerus_Kun said:


> on the topic, currencies that one could profit from mining with a single 1060?



Nothing anymore, a 1060 is garden shovel in a world of industrial farming.   You can join a with others and get a cut they basically slave you in too their server farm.

True story, my Warcraft guild back in the day buddy hopes on Ventrillo:    Hey guys you want to do this Bitcoin thing with me?  If you get one there worth a few dollars and we all have the rigs.

Nah fuck that, sounds like a scam and I don't want to stress my hardware.


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## Silent_Gunner (Nov 21, 2020)

jimbo13 said:


> Nothing anymore, a 1060 is garden shovel in a world of industrial farming.   You can join a with others and get a cut they basically slave you in too their server farm.
> 
> True story, my Warcraft guild back in the day buddy hopes on Ventrillo:    Hey guys you want to do this Bitcoin thing with me?  If you get one there worth a few dollars and we all have the rigs.
> 
> Nah fuck that, sounds like a scam and I don't want to stress my hardware.



Usually, people have separate rigs for mining as far as I understand.


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## kosterix (Nov 21, 2020)

Right now investing in btc or derivs is a bad idea. Last time it hit 20k it plumbed. Save some money from today onward, to invest in btc later when it has dropped.

US currency is 99% debt, and if you expect currencies to hyper inflate buy things that hold their value, such as limited edition video games, or board games. 

Gold is too volatile, but it takes up less space under your bed, if you can sleep allright.

I sell when btc rises and buy when it drops below a certain point. In the end I win, but it's at most 400 dollar per year, more for fun than actually make a living.

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WiiCurious said:


> Cryptocurrency is so fucking stupid.
> Somebody gets access to your phone/computer and signs your private key to a contract that gives them all your assets..


You have never heard of 2FA?


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## Silent_Gunner (Nov 21, 2020)

kosterix said:


> Right now investing in btc or derivs is a bad idea. Last time it hit 20k it plumbed. Save some money from today onward, to invest in btc later when it has dropped.
> 
> US currency is 99% debt, and if you expect currencies to hyper inflate buy things that hold their value, such as limited edition video games, or board games.
> 
> ...



I mean, that strategy could also be applied to the stock market too, right?

Also, I know it's not a good idea to invest atm. The US election being contested like it is and the implications of either candidate winning is going to affect the market in a big way. I'm going to be doing a lot of saving going forward after I get out of the debt hole!

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kosterix said:


> --------------------- MERGED ---------------------------
> 
> 
> You have never heard of 2FA?



2FA, like all locks, can be picked.


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## FAST6191 (Nov 21, 2020)

WiiCurious said:


> Cryptocurrency is so fucking stupid.
> I have no doubt that there is money to be made, but stop pretending the technology is worthwhile.
> 
> The idea that smart contracts would ever be upheld in a court of law is horrifying.
> ...



Are any of those not already problems with currently done computing (we have had digital signatures of various forms for years, now, indeed PDF has such functionality)?
Grid and internet failure would grind things to a halt regardless. Not sure why I would plan for that or particularly care.

Contracts may or may not be controlled by neckbeards, but I can't say I care for lawyers any more than them. At least neckbeards are famously awful salesmen.

"that control the blockchain"
Possible, but so is you deciding one morning to gift it (or sell for a dollar if gift tax is a thing). Both seem about as likely.

I am not following with the fractional thing. If the network only understands transactions then you initiate a transaction to note it within it, not entirely unlike sending an email to yourself, whether for bare minimum or more will vary with what you want. 

As far as market manipulation. Sure. Same as everywhere else.


Silent_Gunner said:


> 2FA, like all locks, can be picked.


Ease of use and security afforded. Most things are a trade off between the two, usually tempered by how much you have to lose.
Bits of paper work until your house burns down, floods, gets stolen and you also have to go fetch it if you need it.


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## WiiCurious (Nov 23, 2020)

FAST6191 said:


> I am not following with the fractional thing. If the network only understands transactions then you initiate a transaction to note it within it, not entirely unlike sending an email to yourself, whether for bare minimum or more will vary with what you want.



Say you write a contract. The only way to make this contract valid and binding it to email it to the other party. By emailing it, the contract becomes a smart contract.

If the contract is 100 pages long, it can still fit in one email. If the contract is 1 page long, you can still fit it in an email.
No matter how complex the contract, it only takes one email to make it enforceable.

You can make a contract with one shitoshi. That's all it takes to get your smart contract on the blockchain. If the only value in bitcoin is its ability to act in smart contracts, there's no need to own more than 10 or so shitoshis. How many contracts does the average person enter into? Not very many. 

The desire to own thousands of shitoshis is nonsensical. One bitcoin has the same function as 1/1000000 of a bitcoin.

Going back to my first paragraph, it would be like sending hundreds of emails when you were trying to create an important contract. If it only takes that one email to make the contract legit, why send more than one?


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## FAST6191 (Nov 23, 2020)

But the only value in bitcoin (or an altcoin with an actual focus on smart contracts) is not in contracts, there is the store of wealth/investment, means of payment, other perks of the same means of payment...

"How many contracts does the average person enter into?"
World changing affairs that determine the course of not only their lives but those around them? Probably not so many. Reduce it to the level of transactions (say using a taxi in the thing above, simple purchase of an item) or for work done, both of which are possible as cost is arguably less than the paper the average receipt is on, and that is a different matter entirely.


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## mariopepper (Nov 23, 2020)

Probably because it's 21st century and most people think it's the currency of the future. Moreover I agree. I also have some btc which I've bought back in 2012 and now you see the final price. Profit. Don't forget that you might need additional equipment for investing.  First of all it's trusted bitcoin wallet. Personally I use https://bitcoinofficial.org/ since my first cryptocurrency purchasing. Secondly you should analyze the market and predict its next positions and prices.


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## ClancyDaEnlightened (Nov 29, 2020)

Crypto is an investment, it's also decentralized, there is no central bank or authority, its a financial system based around cryptography and peer to peer networking, it can be difficult to track who and where  and what is being purchased


IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability


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## FAST6191 (Nov 29, 2020)

aadz93 said:


> IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability



A value (potentially overinflated as it is) or as much value?
There are still plenty of entirely legitimate uses and problems it solves, lessens or negates -- speed and ease of high value transfer being but one of them (a while back my friend wanted to transfer £20k or so to their partner, was easier and cheaper to get a briefcase of cash in 2 days time, walk it 50m up the road to the other bank and pay it in, this is in the UK and both of them are well versed in finance). 15 minutes and did not have to leave the sofa should it have been done via crypto, though I guess it did not come with a sweet briefcase.

Did not having to do awkward arrangements on private invite only forums act as the equivalent of porn in the VHS-betamax wars and online credit card purchases and video streaming a few years down the line? I would not bet against it. Almost certainly boosted its prominence.


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## mariopepper (Nov 29, 2020)

aadz93 said:


> Crypto is an investment, it's also decentralized, there is no central bank or authority, its a financial system based around cryptography and peer to peer networking, it can be difficult to track who and where  and what is being purchased
> 
> 
> IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability


I don't think so. Probably crypto is just a bigger and more valuable method of payment. There is no alternative of crypti which you can take in your hand. It's absolutely "imaginable" coin which you can't lose in the street etc. I also can mention bit IT-companies who use crypto more often every year. It's the currency of the future


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## ClancyDaEnlightened (Nov 29, 2020)

It's also a perfect way of sending money instantly, without a bank, there are plenty of legitimate uses....

But if people couldn't use crypto to clean (dirty/stolen) money, and to get illicit things, I don't think it would be at almost 20 grand us dollar valuable


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## WiiCurious (Nov 29, 2020)

aadz93 said:


> It's also a perfect way of sending money instantly, without a bank, there are plenty of legitimate uses....
> 
> But if people couldn't use crypto to clean (dirty/stolen) money, and to get illicit things, I don't think it would be at almost 20 grand us dollar valuable



Instantly? Can't it take days to get a transaction in a block if you're not willing to pay $20+ USD transaction fees?


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## ClancyDaEnlightened (Nov 29, 2020)

Depends on network load, my transactions usually confirm within an hour, I use between 30-60 satoshi/byte 

So about 2-3$ for it to confirm 1-2 times in about an hour or so depends on how many confirmations you need


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## notimp (Nov 30, 2020)

What a load of half knowledge and halftruths.. 

Value is based on demand, currently largely driven by two factors. Capital flight from regions where exchange rates are horrible or governments want people to invest into generating a local goods market instead of exporting - and financial speculation.

Also the need for anonymizeable online transactions (crypto in itself is not anonymous, but as with amazon gift certificates, you can 'wash' it for a fee (no state regulator)), but to a much, much lower extent.

So you add up taxfraud to darknet deals to pump and dump schemes (a few players coordinating buying and selling large quantities, getting people excited that 'with those value gains, there is money to be maid', then dumping their shares within one day - crashing value, but getting new suckers investments), to fraud, and you've got the appeal. Add some bogus story about 'truly libertarian and free', and start grifting.

This is not the way most of it was initially imagined, but the way it turned out.

On 'libertarian and free' and 'anonymous' if you have the more than 2/3 of 'transaction validation capacity' split between 5 players - none of the above.

On 'money' - if your transaction capacity is 10.000 transactions per second, and your claim is 'for worldwide use' - none of the above (you are waiting days for your transactions to be verified, during which there is risk of doublespending, so nothing moves until verified). 'Pay more to get faster' also only works to an extent.

On 'so safe!' - if you can scam people into handing over their wallet keys to large aggregators - because they dont understand what they are doing. Chance of 'one day aggregator owner heads for Bali and tries to fake his death' is 1:10.

On 'gift to the world' no - its all about being the middleman, or (in the facebook case) even being allowed to change the contract of what the stuff is, mid use.

On 'the future, because more easy' - there are businesses around aggregating and selling purchase histories, there is an interest in being able to inflate the value of currency currently in circulation, which is only used for daily transactions and not for structural investments. (Meaning negative interest, that doest ruin businesses, only private people.)

On 'smart contracts' - there are very few scenarios, where a company would want to be more transparent towards a business partner or customer, and would forgo being 'the one in charge of managing a transaction' if it could. (Example, you are a logging company. You've scammed your customers for years, youve created quasi monopolies, you've lost delivery slips. You've backdated. You've split hauls, when the customer wasnt looking. Now you want to make your business end to end transparent? Why? Example. You are a banking firm, you've managed transactions, you've sold yourself as 'the intermediary people can trust' now you want your business model to end? Why?

On 'inter back exchange systems' sure, why not. Transactions can be made more efficient.

On 'every transaction is public' - you are a country. Are you sure you want that?

On 'no state intervention in principle' - you are a country. Are you sure you want that?

On 'digital transactions' in crypto - you lose your phone, you never remembered number, you lose your money, are you sure people understand?

On 'solving the low transaction per second problem' (and the energy consumption problem). Any solution always (?) seems to move towards more centralization on the verification front. Verification is where people generating currency make money. Great?

The answer is - there is something there. Currently its very much a solution in search of a more lucrative problem. The problems its currently solving arent big enough for any of the big players to be interested in 'established solutions'. Coming up with your own solutions? Sure - when that means, that you can be the intermediary for other peoples transactions. Do nothing, get paid. Still, there is something there and at one point Facebook (Libra) or your state mint will 'ram it down your throat', because they see in it the opportunity to 'jump the competition in evolutionary terms' (Late to the party and no idea whats going on? Look for the next hot thing, while trying to replicate alipay!). But whatever 'that' is, is bound to have little to do with Bitcoin or derivates in the first place.

If that all sounds horrible to you - most peoples deliberation process goes exactly as far as: IT HAS DOUBLED IN VALUE IN LESS THAN A YEAR? WHAT ELSE HAS DONE THAT THAT I CAN INVEST IN. IN MY LIFETIME. NOTHING? WELL, I THINK I MIGHT BE INTERESTED. WHAT IS BEST?

And this thread is no exception.


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## Silent_Gunner (Nov 21, 2020)

Now, that might be a clickbait as hell topic title, but hear me out:

I've been hearing about cryptocurrencies being the future and this and that for a good part of the last decade going into today. And while what I've heard about it sounds all nice and rosy, the part that I don't get is where does Bitcoin, Dogecoin, Ethereum, Pepecoin, XRP, and probably others I'm not aware of derive their value from?

For example, the currency we have here in the US is Fiat-based, meaning it's not based on a gold or silver standard. I get that resources such as cash, coinage, gold, silver, precious metals, etc. are valuable and stuff like that. But those are items that societies have agreed upon to use for a very long time, and you still need those first two aforementioned things for if one wants to get items from vending machines that don't get card readers or any support for stuff like Samsung, Apple, or Google Pay. If people were trading these things in society right now, they at least would have a use for it.

The thing I don't personally get about cryptocurrencies that has me all confused is that there is no physical good being traded; it's all digital, and supposedly, "private, and free from someone breaking into your bank account, etc.," even though I've heard of cases where these claims simply don't hold up. But even then, I still don't understand what makes it so valuable. I know Bitcoin only has so many coins in the digital wild, which, OK, fine, but what about the other ones like Ethereum, XRP, Brave Rewards (which IDK if that's a cryptocurrency, but I know Chris Titus Tech apparently said he earned money from it or something), and the others? If I was to pay my Dad in one of these cryptocurrencies for, say, a couch in the living room, given his age and his relative lack of understanding of how to operate even a computer and smartphone at times, it would be of no use to him. I'd have to pay him in cash, or write him a check. Now, if I was trading with someone who understood and has utility for that kind of transaction, then there should be no problem afaik.



This post is all over the place, but I guess I just don't understand what crypto derives its value from right now, and I'm kind of looking to discuss this with those more in the know.


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## jimbo13 (Nov 21, 2020)

Silent_Gunner said:


> Now, that might be a clickbait as hell topic title, but hear me out:
> 
> I've been hearing about cryptocurrencies being the future and this and that for a good part of the last decade going into today. And while what I've heard about it sounds all nice and rosy, the part that I don't get is where does Bitcoin, Dogecoin, Ethereum, Pepecoin, XRP, and probably others I'm not aware of derive their value from?
> 
> ...




You shouldn't IMO,  I'd put a little in Crypto as in a little more than I'd spend on lottery.  Crypto is gambling still, it's volatile.  High risk high reward and institutional banking/governments are getting ready to attack and get their cut.

Top two: Real estate > Precious metals (silver imo).

There is a fine line between gambling and investing imo.  If you like the high risk/reward and can dig deep to make good choices enjoy the rush when it hits.


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## FAST6191 (Nov 21, 2020)

Gold, silver, and such are not especially valuable either. Just valuable because human like shiny and shiny thing not common to dig out of ground/pan in river. Give me enough gold to build bricks for my house and I will still pick other things as superior materials, not much use for eating, not much use as a catalyst (platinum is I guess), not bad a conductor coating and possibly for oxidation prevention...
That is also before we cover how diamonds are, relatively speaking, common as dirt and it is only because the main sources of such things are kept in tight check by a cartel that sticks things in a vault to keep supply low, not to mention we can grow them these days for potentially about as much in energy cost as the cartel prices.

US currency is then mostly valuable because it is what the US government accepts for tax purposes. Try not paying taxes in the US and boys with guns turn up, enough that you will have a hard time outgunning or outrunning. A few million people then having to pay taxes mean they need what the taxers accept, which these days just so happens to be US Dollars (that they also control, manipulate and constantly raise* the rates on). Said might also goes out to the world as well, along with a lot of tech and cool stuff that others want to buy, and US currency is useful in that too, also for reasons unknown is what oil is largely priced in and oil is kind of a big deal.

* so your tax brackets changed and now you get to earn $15000 rather than $14000 before you pay 20% of whatever you make above that or whatever the numbers actually are. If you calculated the raise and compared it to what the rate of inflation (which your job hopefully kept up with) then that is going to mean you are paying more taxes. No country ever wants to see deflation either (nobody will spend more than the minimum in that scenario) so they will keep inflation high.

As far as very long time. Most currency around today is relatively new as these things go (hard for me to spend shillings and tuppence around here, this despite me being able to speak to people that remember it well).
Also most conventional currency is not a physical thing and has not been for years -- see fractional reserve banking.

Your dad would presumably also struggle to accept land deeds, bearer bonds, a stock portfolio, stock in general. Still count as valuable assets to your divorce lawyer, estate lawyer, tax man in those places that tax you on owned items rather than income...

Crypto can't necessarily be stolen in the same ways that people steal credit cards. Things you hear about are either key loggers on computers, traditional pay us or we end you, those leaving it with other services (see exchanges) and them being hacked and general not what we said it was scams. They do also have some perks that those operating in the normal banking system don't have -- transfer varies depending upon type but it is very fast indeed compared to traditional transfers, cost of transfer is also often minimal (bitcoin did take a rake a while back compared to once being free), transfers are hard to track as well (they are not necessarily anonymous and there is also the tumbling thing) which makes them good for buying drugs and gambling and illegal services and evading tax, or transferring funds when your government (not all are nice after all, and some might try to tax you on it**) would rather you didn't.
There are "legit" things to use it on as well (just as you can barter or accept foreign currency then you can accept crypto), though even without that underground economies are still economies and can be measured.

**when countries and companies/banks run low some might take "haircut" on simple withdrawals. If you are instead buying crypto then you can dodge that, or even better if you kept it in it to begin with.

The other side of why you were probably told to invest by some is because the rate of exchange change is insane. A swing of a normal currency to 2:1 what it was at some point in the previous year (that is to say you converted 100 USD into 100 EUR a year ago but today you can convert it back to 200USD) is an insanely good return and super rare (normally only massive wars, government collapse or gamechanger technologies that cause such spikes). 2:1 in crypto is nothing, depending upon your timeline then it is thousands to 1.
https://en.bitcoinwiki.org/wiki/Bitcoin_history#Bitcoin_price_chart_since_2009_to_2017_and_2018
Or if you prefer in early 2011 it hit 1 USD per bitcoin (was messing around sub 10 cents for a long time before it).
Today it varies a bit and many are waiting to see it hit $20000 USD ( https://www.coinwarz.com/prices/bitcoin/chart says  $18,656.796600 though), or 100 USD and forget about it back in 2011 would today be 1.8 million, even more back at the previous peak. No investment portfolio, stock or wall street fund has come even within sniffing distance of that kind of return, never mind something that mere mortals can buy in for $100. Its falls however are equally considerable.
We can cover mining as well if you want -- the way these things work is a so called distributed ledger. Here every previous round of transactions (varies between types but 15 minutes is on the high end) gets added and then the new round begins, however as the network should theoretically consist of several thousand computers all working against each other then nobody can disagree with the distribution of the coins in given addresses and nobody can take over. To get this group of computers burning bandwidth and electricity they are rewarded for participating in a basically lottery wherein the solver of a problem that is pretty much brute force computing power gets a few coins of their own and a cut from the transactions that happened. People can pool resources, design better solvers, move places with cheap electricity (to both run and cool the things) and so on.

There are other crypto methods that do other things. Smart contracts being one of the more notable. Here if I promised to build a shed for you down the pub then it is a word between gentlemen (which nobody has ever confused me for). We could get lawyers or notaries to sign it and whatnot but that is effort. Smart contract does much the same thing so when you drag me to court you can point at the thing saying his key signed this agreement and the judge would then have to be all "so it is, pay the man" and that is just the tip of the iceberg for that one.


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## WiiCurious (Nov 21, 2020)

> There are other crypto methods that do other things. Smart contracts being one of the more notable. Here if I promised to build a shed for you down the pub then it is a word between gentlemen (which nobody has ever confused me for). We could get lawyers or notaries to sign it and whatnot but that is effort. Smart contract does much the same thing so when you drag me to court you can point at the thing saying his key signed this agreement and the judge would then have to be all "so it is, pay the man" and that is just the tip of the iceberg for that one.



Cryptocurrency is so fucking stupid.
I have no doubt that there is money to be made, but stop pretending the technology is worthwhile.

The idea that smart contracts would ever be upheld in a court of law is horrifying.
Some downsides:
Somebody gets access to your phone/computer and signs your private key to a contract that gives them all your assets.
A bug is discovered that makes the smart contract pay out without services being provided. (This happens all the time now. If smart contracts were widespread, it would be happening daily)
Widespread grid failure that makes internet or electricity scarce would mean you don't have to fulfill any obligations of a smart contract.

The current system might not be great, but at least contracts aren't controlled by neckbeards.

Also consider assets stored on the blockchain. I have a title for my car in a safe. As long as I have the title, I own the car. Now imagine my title in on The Blockchain. The Chinese miners that control the blockchain can conspire and transfer the title to themselves. Or somebody could compromise my computers and accounts and transfer the title to anybody. Same for the deed to property.
I would never put my assets in the position to be taken away by the Chinese government or some teenage hacker.
Banks are great because there's fraud protection and deposit guarantee. FDIC and NCUA in the US protect your money from malicious actions.

Cryptocurrencies are also an environmental disaster where the system rewards more and more waste. By design, the math necessary to 'mine' bitcoins cannot be productive. It will always just be computers jerking themselves off until they find a number with enough zeros.

Also, smart contracts and other aspects of the blockchain can be utilized using tiny fractions of a bitcoin. The idea that one bitcoin is worth more than 1/1000 of a bitcoin is strange, as the fraction has exactly the same functionality as the whole in terms of technology. Why is 1 bitcoin worth $18,000 USD when .000001 bitcoin can be used to do all the same things on the blockchain? Bitcoin only makes sense as a token without value.

In summary, the technology behind bitcoin is stupid, the valuation of bitcoin is being propped up by billions of unbacked tether, and we should continue to mock british people behind their backs.

You can probably make money by daytrading in crypto, but you are gambling and the house always wins.
Exchanges are unregulated and super shady. They can see sell order, buy orders, and shorts. They have the ability to manipulate the price to break shorts or raise the price of bitcoin as they see fit. They cannot lose.

Bitcoin went above $1000 for the first time because Mt. Gox was wash trading bitcoin. It cost them less than 5 bitcoin to rocket the price to those levels.
This is still going on. No laws are in place to prevent it.


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## Deleted User (Nov 21, 2020)

on the topic, currencies that one could profit from mining with a single 1060?


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## jimbo13 (Nov 21, 2020)

Azerus_Kun said:


> on the topic, currencies that one could profit from mining with a single 1060?



Nothing anymore, a 1060 is garden shovel in a world of industrial farming.   You can join a with others and get a cut they basically slave you in too their server farm.

True story, my Warcraft guild back in the day buddy hopes on Ventrillo:    Hey guys you want to do this Bitcoin thing with me?  If you get one there worth a few dollars and we all have the rigs.

Nah fuck that, sounds like a scam and I don't want to stress my hardware.


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## Silent_Gunner (Nov 21, 2020)

jimbo13 said:


> Nothing anymore, a 1060 is garden shovel in a world of industrial farming.   You can join a with others and get a cut they basically slave you in too their server farm.
> 
> True story, my Warcraft guild back in the day buddy hopes on Ventrillo:    Hey guys you want to do this Bitcoin thing with me?  If you get one there worth a few dollars and we all have the rigs.
> 
> Nah fuck that, sounds like a scam and I don't want to stress my hardware.



Usually, people have separate rigs for mining as far as I understand.


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## kosterix (Nov 21, 2020)

Right now investing in btc or derivs is a bad idea. Last time it hit 20k it plumbed. Save some money from today onward, to invest in btc later when it has dropped.

US currency is 99% debt, and if you expect currencies to hyper inflate buy things that hold their value, such as limited edition video games, or board games. 

Gold is too volatile, but it takes up less space under your bed, if you can sleep allright.

I sell when btc rises and buy when it drops below a certain point. In the end I win, but it's at most 400 dollar per year, more for fun than actually make a living.

--------------------- MERGED ---------------------------



WiiCurious said:


> Cryptocurrency is so fucking stupid.
> Somebody gets access to your phone/computer and signs your private key to a contract that gives them all your assets..


You have never heard of 2FA?


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## Silent_Gunner (Nov 21, 2020)

kosterix said:


> Right now investing in btc or derivs is a bad idea. Last time it hit 20k it plumbed. Save some money from today onward, to invest in btc later when it has dropped.
> 
> US currency is 99% debt, and if you expect currencies to hyper inflate buy things that hold their value, such as limited edition video games, or board games.
> 
> ...



I mean, that strategy could also be applied to the stock market too, right?

Also, I know it's not a good idea to invest atm. The US election being contested like it is and the implications of either candidate winning is going to affect the market in a big way. I'm going to be doing a lot of saving going forward after I get out of the debt hole!

--------------------- MERGED ---------------------------



kosterix said:


> --------------------- MERGED ---------------------------
> 
> 
> You have never heard of 2FA?



2FA, like all locks, can be picked.


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## FAST6191 (Nov 21, 2020)

WiiCurious said:


> Cryptocurrency is so fucking stupid.
> I have no doubt that there is money to be made, but stop pretending the technology is worthwhile.
> 
> The idea that smart contracts would ever be upheld in a court of law is horrifying.
> ...



Are any of those not already problems with currently done computing (we have had digital signatures of various forms for years, now, indeed PDF has such functionality)?
Grid and internet failure would grind things to a halt regardless. Not sure why I would plan for that or particularly care.

Contracts may or may not be controlled by neckbeards, but I can't say I care for lawyers any more than them. At least neckbeards are famously awful salesmen.

"that control the blockchain"
Possible, but so is you deciding one morning to gift it (or sell for a dollar if gift tax is a thing). Both seem about as likely.

I am not following with the fractional thing. If the network only understands transactions then you initiate a transaction to note it within it, not entirely unlike sending an email to yourself, whether for bare minimum or more will vary with what you want. 

As far as market manipulation. Sure. Same as everywhere else.


Silent_Gunner said:


> 2FA, like all locks, can be picked.


Ease of use and security afforded. Most things are a trade off between the two, usually tempered by how much you have to lose.
Bits of paper work until your house burns down, floods, gets stolen and you also have to go fetch it if you need it.


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## WiiCurious (Nov 23, 2020)

FAST6191 said:


> I am not following with the fractional thing. If the network only understands transactions then you initiate a transaction to note it within it, not entirely unlike sending an email to yourself, whether for bare minimum or more will vary with what you want.



Say you write a contract. The only way to make this contract valid and binding it to email it to the other party. By emailing it, the contract becomes a smart contract.

If the contract is 100 pages long, it can still fit in one email. If the contract is 1 page long, you can still fit it in an email.
No matter how complex the contract, it only takes one email to make it enforceable.

You can make a contract with one shitoshi. That's all it takes to get your smart contract on the blockchain. If the only value in bitcoin is its ability to act in smart contracts, there's no need to own more than 10 or so shitoshis. How many contracts does the average person enter into? Not very many. 

The desire to own thousands of shitoshis is nonsensical. One bitcoin has the same function as 1/1000000 of a bitcoin.

Going back to my first paragraph, it would be like sending hundreds of emails when you were trying to create an important contract. If it only takes that one email to make the contract legit, why send more than one?


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## FAST6191 (Nov 23, 2020)

But the only value in bitcoin (or an altcoin with an actual focus on smart contracts) is not in contracts, there is the store of wealth/investment, means of payment, other perks of the same means of payment...

"How many contracts does the average person enter into?"
World changing affairs that determine the course of not only their lives but those around them? Probably not so many. Reduce it to the level of transactions (say using a taxi in the thing above, simple purchase of an item) or for work done, both of which are possible as cost is arguably less than the paper the average receipt is on, and that is a different matter entirely.


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## mariopepper (Nov 23, 2020)

Probably because it's 21st century and most people think it's the currency of the future. Moreover I agree. I also have some btc which I've bought back in 2012 and now you see the final price. Profit. Don't forget that you might need additional equipment for investing.  First of all it's trusted bitcoin wallet. Personally I use https://bitcoinofficial.org/ since my first cryptocurrency purchasing. Secondly you should analyze the market and predict its next positions and prices.


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## ClancyDaEnlightened (Nov 29, 2020)

Crypto is an investment, it's also decentralized, there is no central bank or authority, its a financial system based around cryptography and peer to peer networking, it can be difficult to track who and where  and what is being purchased


IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability


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## FAST6191 (Nov 29, 2020)

aadz93 said:


> IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability



A value (potentially overinflated as it is) or as much value?
There are still plenty of entirely legitimate uses and problems it solves, lessens or negates -- speed and ease of high value transfer being but one of them (a while back my friend wanted to transfer £20k or so to their partner, was easier and cheaper to get a briefcase of cash in 2 days time, walk it 50m up the road to the other bank and pay it in, this is in the UK and both of them are well versed in finance). 15 minutes and did not have to leave the sofa should it have been done via crypto, though I guess it did not come with a sweet briefcase.

Did not having to do awkward arrangements on private invite only forums act as the equivalent of porn in the VHS-betamax wars and online credit card purchases and video streaming a few years down the line? I would not bet against it. Almost certainly boosted its prominence.


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## mariopepper (Nov 29, 2020)

aadz93 said:


> Crypto is an investment, it's also decentralized, there is no central bank or authority, its a financial system based around cryptography and peer to peer networking, it can be difficult to track who and where  and what is being purchased
> 
> 
> IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability


I don't think so. Probably crypto is just a bigger and more valuable method of payment. There is no alternative of crypti which you can take in your hand. It's absolutely "imaginable" coin which you can't lose in the street etc. I also can mention bit IT-companies who use crypto more often every year. It's the currency of the future


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## ClancyDaEnlightened (Nov 29, 2020)

It's also a perfect way of sending money instantly, without a bank, there are plenty of legitimate uses....

But if people couldn't use crypto to clean (dirty/stolen) money, and to get illicit things, I don't think it would be at almost 20 grand us dollar valuable


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## WiiCurious (Nov 29, 2020)

aadz93 said:


> It's also a perfect way of sending money instantly, without a bank, there are plenty of legitimate uses....
> 
> But if people couldn't use crypto to clean (dirty/stolen) money, and to get illicit things, I don't think it would be at almost 20 grand us dollar valuable



Instantly? Can't it take days to get a transaction in a block if you're not willing to pay $20+ USD transaction fees?


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## ClancyDaEnlightened (Nov 29, 2020)

Depends on network load, my transactions usually confirm within an hour, I use between 30-60 satoshi/byte 

So about 2-3$ for it to confirm 1-2 times in about an hour or so depends on how many confirmations you need


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## notimp (Nov 30, 2020)

What a load of half knowledge and halftruths.. 

Value is based on demand, currently largely driven by two factors. Capital flight from regions where exchange rates are horrible or governments want people to invest into generating a local goods market instead of exporting - and financial speculation.

Also the need for anonymizeable online transactions (crypto in itself is not anonymous, but as with amazon gift certificates, you can 'wash' it for a fee (no state regulator)), but to a much, much lower extent.

So you add up taxfraud to darknet deals to pump and dump schemes (a few players coordinating buying and selling large quantities, getting people excited that 'with those value gains, there is money to be maid', then dumping their shares within one day - crashing value, but getting new suckers investments), to fraud, and you've got the appeal. Add some bogus story about 'truly libertarian and free', and start grifting.

This is not the way most of it was initially imagined, but the way it turned out.

On 'libertarian and free' and 'anonymous' if you have the more than 2/3 of 'transaction validation capacity' split between 5 players - none of the above.

On 'money' - if your transaction capacity is 10.000 transactions per second, and your claim is 'for worldwide use' - none of the above (you are waiting days for your transactions to be verified, during which there is risk of doublespending, so nothing moves until verified). 'Pay more to get faster' also only works to an extent.

On 'so safe!' - if you can scam people into handing over their wallet keys to large aggregators - because they dont understand what they are doing. Chance of 'one day aggregator owner heads for Bali and tries to fake his death' is 1:10.

On 'gift to the world' no - its all about being the middleman, or (in the facebook case) even being allowed to change the contract of what the stuff is, mid use.

On 'the future, because more easy' - there are businesses around aggregating and selling purchase histories, there is an interest in being able to inflate the value of currency currently in circulation, which is only used for daily transactions and not for structural investments. (Meaning negative interest, that doest ruin businesses, only private people.)

On 'smart contracts' - there are very few scenarios, where a company would want to be more transparent towards a business partner or customer, and would forgo being 'the one in charge of managing a transaction' if it could. (Example, you are a logging company. You've scammed your customers for years, youve created quasi monopolies, you've lost delivery slips. You've backdated. You've split hauls, when the customer wasnt looking. Now you want to make your business end to end transparent? Why? Example. You are a banking firm, you've managed transactions, you've sold yourself as 'the intermediary people can trust' now you want your business model to end? Why?

On 'inter back exchange systems' sure, why not. Transactions can be made more efficient.

On 'every transaction is public' - you are a country. Are you sure you want that?

On 'no state intervention in principle' - you are a country. Are you sure you want that?

On 'digital transactions' in crypto - you lose your phone, you never remembered number, you lose your money, are you sure people understand?

On 'solving the low transaction per second problem' (and the energy consumption problem). Any solution always (?) seems to move towards more centralization on the verification front. Verification is where people generating currency make money. Great?

The answer is - there is something there. Currently its very much a solution in search of a more lucrative problem. The problems its currently solving arent big enough for any of the big players to be interested in 'established solutions'. Coming up with your own solutions? Sure - when that means, that you can be the intermediary for other peoples transactions. Do nothing, get paid. Still, there is something there and at one point Facebook (Libra) or your state mint will 'ram it down your throat', because they see in it the opportunity to 'jump the competition in evolutionary terms' (Late to the party and no idea whats going on? Look for the next hot thing, while trying to replicate alipay!). But whatever 'that' is, is bound to have little to do with Bitcoin or derivates in the first place.

If that all sounds horrible to you - most peoples deliberation process goes exactly as far as: IT HAS DOUBLED IN VALUE IN LESS THAN A YEAR? WHAT ELSE HAS DONE THAT THAT I CAN INVEST IN. IN MY LIFETIME. NOTHING? WELL, I THINK I MIGHT BE INTERESTED. WHAT IS BEST?

And this thread is no exception.


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## Silent_Gunner (Nov 21, 2020)

Now, that might be a clickbait as hell topic title, but hear me out:

I've been hearing about cryptocurrencies being the future and this and that for a good part of the last decade going into today. And while what I've heard about it sounds all nice and rosy, the part that I don't get is where does Bitcoin, Dogecoin, Ethereum, Pepecoin, XRP, and probably others I'm not aware of derive their value from?

For example, the currency we have here in the US is Fiat-based, meaning it's not based on a gold or silver standard. I get that resources such as cash, coinage, gold, silver, precious metals, etc. are valuable and stuff like that. But those are items that societies have agreed upon to use for a very long time, and you still need those first two aforementioned things for if one wants to get items from vending machines that don't get card readers or any support for stuff like Samsung, Apple, or Google Pay. If people were trading these things in society right now, they at least would have a use for it.

The thing I don't personally get about cryptocurrencies that has me all confused is that there is no physical good being traded; it's all digital, and supposedly, "private, and free from someone breaking into your bank account, etc.," even though I've heard of cases where these claims simply don't hold up. But even then, I still don't understand what makes it so valuable. I know Bitcoin only has so many coins in the digital wild, which, OK, fine, but what about the other ones like Ethereum, XRP, Brave Rewards (which IDK if that's a cryptocurrency, but I know Chris Titus Tech apparently said he earned money from it or something), and the others? If I was to pay my Dad in one of these cryptocurrencies for, say, a couch in the living room, given his age and his relative lack of understanding of how to operate even a computer and smartphone at times, it would be of no use to him. I'd have to pay him in cash, or write him a check. Now, if I was trading with someone who understood and has utility for that kind of transaction, then there should be no problem afaik.



This post is all over the place, but I guess I just don't understand what crypto derives its value from right now, and I'm kind of looking to discuss this with those more in the know.


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## jimbo13 (Nov 21, 2020)

Silent_Gunner said:


> Now, that might be a clickbait as hell topic title, but hear me out:
> 
> I've been hearing about cryptocurrencies being the future and this and that for a good part of the last decade going into today. And while what I've heard about it sounds all nice and rosy, the part that I don't get is where does Bitcoin, Dogecoin, Ethereum, Pepecoin, XRP, and probably others I'm not aware of derive their value from?
> 
> ...




You shouldn't IMO,  I'd put a little in Crypto as in a little more than I'd spend on lottery.  Crypto is gambling still, it's volatile.  High risk high reward and institutional banking/governments are getting ready to attack and get their cut.

Top two: Real estate > Precious metals (silver imo).

There is a fine line between gambling and investing imo.  If you like the high risk/reward and can dig deep to make good choices enjoy the rush when it hits.


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## FAST6191 (Nov 21, 2020)

Gold, silver, and such are not especially valuable either. Just valuable because human like shiny and shiny thing not common to dig out of ground/pan in river. Give me enough gold to build bricks for my house and I will still pick other things as superior materials, not much use for eating, not much use as a catalyst (platinum is I guess), not bad a conductor coating and possibly for oxidation prevention...
That is also before we cover how diamonds are, relatively speaking, common as dirt and it is only because the main sources of such things are kept in tight check by a cartel that sticks things in a vault to keep supply low, not to mention we can grow them these days for potentially about as much in energy cost as the cartel prices.

US currency is then mostly valuable because it is what the US government accepts for tax purposes. Try not paying taxes in the US and boys with guns turn up, enough that you will have a hard time outgunning or outrunning. A few million people then having to pay taxes mean they need what the taxers accept, which these days just so happens to be US Dollars (that they also control, manipulate and constantly raise* the rates on). Said might also goes out to the world as well, along with a lot of tech and cool stuff that others want to buy, and US currency is useful in that too, also for reasons unknown is what oil is largely priced in and oil is kind of a big deal.

* so your tax brackets changed and now you get to earn $15000 rather than $14000 before you pay 20% of whatever you make above that or whatever the numbers actually are. If you calculated the raise and compared it to what the rate of inflation (which your job hopefully kept up with) then that is going to mean you are paying more taxes. No country ever wants to see deflation either (nobody will spend more than the minimum in that scenario) so they will keep inflation high.

As far as very long time. Most currency around today is relatively new as these things go (hard for me to spend shillings and tuppence around here, this despite me being able to speak to people that remember it well).
Also most conventional currency is not a physical thing and has not been for years -- see fractional reserve banking.

Your dad would presumably also struggle to accept land deeds, bearer bonds, a stock portfolio, stock in general. Still count as valuable assets to your divorce lawyer, estate lawyer, tax man in those places that tax you on owned items rather than income...

Crypto can't necessarily be stolen in the same ways that people steal credit cards. Things you hear about are either key loggers on computers, traditional pay us or we end you, those leaving it with other services (see exchanges) and them being hacked and general not what we said it was scams. They do also have some perks that those operating in the normal banking system don't have -- transfer varies depending upon type but it is very fast indeed compared to traditional transfers, cost of transfer is also often minimal (bitcoin did take a rake a while back compared to once being free), transfers are hard to track as well (they are not necessarily anonymous and there is also the tumbling thing) which makes them good for buying drugs and gambling and illegal services and evading tax, or transferring funds when your government (not all are nice after all, and some might try to tax you on it**) would rather you didn't.
There are "legit" things to use it on as well (just as you can barter or accept foreign currency then you can accept crypto), though even without that underground economies are still economies and can be measured.

**when countries and companies/banks run low some might take "haircut" on simple withdrawals. If you are instead buying crypto then you can dodge that, or even better if you kept it in it to begin with.

The other side of why you were probably told to invest by some is because the rate of exchange change is insane. A swing of a normal currency to 2:1 what it was at some point in the previous year (that is to say you converted 100 USD into 100 EUR a year ago but today you can convert it back to 200USD) is an insanely good return and super rare (normally only massive wars, government collapse or gamechanger technologies that cause such spikes). 2:1 in crypto is nothing, depending upon your timeline then it is thousands to 1.
https://en.bitcoinwiki.org/wiki/Bitcoin_history#Bitcoin_price_chart_since_2009_to_2017_and_2018
Or if you prefer in early 2011 it hit 1 USD per bitcoin (was messing around sub 10 cents for a long time before it).
Today it varies a bit and many are waiting to see it hit $20000 USD ( https://www.coinwarz.com/prices/bitcoin/chart says  $18,656.796600 though), or 100 USD and forget about it back in 2011 would today be 1.8 million, even more back at the previous peak. No investment portfolio, stock or wall street fund has come even within sniffing distance of that kind of return, never mind something that mere mortals can buy in for $100. Its falls however are equally considerable.
We can cover mining as well if you want -- the way these things work is a so called distributed ledger. Here every previous round of transactions (varies between types but 15 minutes is on the high end) gets added and then the new round begins, however as the network should theoretically consist of several thousand computers all working against each other then nobody can disagree with the distribution of the coins in given addresses and nobody can take over. To get this group of computers burning bandwidth and electricity they are rewarded for participating in a basically lottery wherein the solver of a problem that is pretty much brute force computing power gets a few coins of their own and a cut from the transactions that happened. People can pool resources, design better solvers, move places with cheap electricity (to both run and cool the things) and so on.

There are other crypto methods that do other things. Smart contracts being one of the more notable. Here if I promised to build a shed for you down the pub then it is a word between gentlemen (which nobody has ever confused me for). We could get lawyers or notaries to sign it and whatnot but that is effort. Smart contract does much the same thing so when you drag me to court you can point at the thing saying his key signed this agreement and the judge would then have to be all "so it is, pay the man" and that is just the tip of the iceberg for that one.


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## WiiCurious (Nov 21, 2020)

> There are other crypto methods that do other things. Smart contracts being one of the more notable. Here if I promised to build a shed for you down the pub then it is a word between gentlemen (which nobody has ever confused me for). We could get lawyers or notaries to sign it and whatnot but that is effort. Smart contract does much the same thing so when you drag me to court you can point at the thing saying his key signed this agreement and the judge would then have to be all "so it is, pay the man" and that is just the tip of the iceberg for that one.



Cryptocurrency is so fucking stupid.
I have no doubt that there is money to be made, but stop pretending the technology is worthwhile.

The idea that smart contracts would ever be upheld in a court of law is horrifying.
Some downsides:
Somebody gets access to your phone/computer and signs your private key to a contract that gives them all your assets.
A bug is discovered that makes the smart contract pay out without services being provided. (This happens all the time now. If smart contracts were widespread, it would be happening daily)
Widespread grid failure that makes internet or electricity scarce would mean you don't have to fulfill any obligations of a smart contract.

The current system might not be great, but at least contracts aren't controlled by neckbeards.

Also consider assets stored on the blockchain. I have a title for my car in a safe. As long as I have the title, I own the car. Now imagine my title in on The Blockchain. The Chinese miners that control the blockchain can conspire and transfer the title to themselves. Or somebody could compromise my computers and accounts and transfer the title to anybody. Same for the deed to property.
I would never put my assets in the position to be taken away by the Chinese government or some teenage hacker.
Banks are great because there's fraud protection and deposit guarantee. FDIC and NCUA in the US protect your money from malicious actions.

Cryptocurrencies are also an environmental disaster where the system rewards more and more waste. By design, the math necessary to 'mine' bitcoins cannot be productive. It will always just be computers jerking themselves off until they find a number with enough zeros.

Also, smart contracts and other aspects of the blockchain can be utilized using tiny fractions of a bitcoin. The idea that one bitcoin is worth more than 1/1000 of a bitcoin is strange, as the fraction has exactly the same functionality as the whole in terms of technology. Why is 1 bitcoin worth $18,000 USD when .000001 bitcoin can be used to do all the same things on the blockchain? Bitcoin only makes sense as a token without value.

In summary, the technology behind bitcoin is stupid, the valuation of bitcoin is being propped up by billions of unbacked tether, and we should continue to mock british people behind their backs.

You can probably make money by daytrading in crypto, but you are gambling and the house always wins.
Exchanges are unregulated and super shady. They can see sell order, buy orders, and shorts. They have the ability to manipulate the price to break shorts or raise the price of bitcoin as they see fit. They cannot lose.

Bitcoin went above $1000 for the first time because Mt. Gox was wash trading bitcoin. It cost them less than 5 bitcoin to rocket the price to those levels.
This is still going on. No laws are in place to prevent it.


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## Deleted User (Nov 21, 2020)

on the topic, currencies that one could profit from mining with a single 1060?


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## jimbo13 (Nov 21, 2020)

Azerus_Kun said:


> on the topic, currencies that one could profit from mining with a single 1060?



Nothing anymore, a 1060 is garden shovel in a world of industrial farming.   You can join a with others and get a cut they basically slave you in too their server farm.

True story, my Warcraft guild back in the day buddy hopes on Ventrillo:    Hey guys you want to do this Bitcoin thing with me?  If you get one there worth a few dollars and we all have the rigs.

Nah fuck that, sounds like a scam and I don't want to stress my hardware.


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## Silent_Gunner (Nov 21, 2020)

jimbo13 said:


> Nothing anymore, a 1060 is garden shovel in a world of industrial farming.   You can join a with others and get a cut they basically slave you in too their server farm.
> 
> True story, my Warcraft guild back in the day buddy hopes on Ventrillo:    Hey guys you want to do this Bitcoin thing with me?  If you get one there worth a few dollars and we all have the rigs.
> 
> Nah fuck that, sounds like a scam and I don't want to stress my hardware.



Usually, people have separate rigs for mining as far as I understand.


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## kosterix (Nov 21, 2020)

Right now investing in btc or derivs is a bad idea. Last time it hit 20k it plumbed. Save some money from today onward, to invest in btc later when it has dropped.

US currency is 99% debt, and if you expect currencies to hyper inflate buy things that hold their value, such as limited edition video games, or board games. 

Gold is too volatile, but it takes up less space under your bed, if you can sleep allright.

I sell when btc rises and buy when it drops below a certain point. In the end I win, but it's at most 400 dollar per year, more for fun than actually make a living.

--------------------- MERGED ---------------------------



WiiCurious said:


> Cryptocurrency is so fucking stupid.
> Somebody gets access to your phone/computer and signs your private key to a contract that gives them all your assets..


You have never heard of 2FA?


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## Silent_Gunner (Nov 21, 2020)

kosterix said:


> Right now investing in btc or derivs is a bad idea. Last time it hit 20k it plumbed. Save some money from today onward, to invest in btc later when it has dropped.
> 
> US currency is 99% debt, and if you expect currencies to hyper inflate buy things that hold their value, such as limited edition video games, or board games.
> 
> ...



I mean, that strategy could also be applied to the stock market too, right?

Also, I know it's not a good idea to invest atm. The US election being contested like it is and the implications of either candidate winning is going to affect the market in a big way. I'm going to be doing a lot of saving going forward after I get out of the debt hole!

--------------------- MERGED ---------------------------



kosterix said:


> --------------------- MERGED ---------------------------
> 
> 
> You have never heard of 2FA?



2FA, like all locks, can be picked.


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## FAST6191 (Nov 21, 2020)

WiiCurious said:


> Cryptocurrency is so fucking stupid.
> I have no doubt that there is money to be made, but stop pretending the technology is worthwhile.
> 
> The idea that smart contracts would ever be upheld in a court of law is horrifying.
> ...



Are any of those not already problems with currently done computing (we have had digital signatures of various forms for years, now, indeed PDF has such functionality)?
Grid and internet failure would grind things to a halt regardless. Not sure why I would plan for that or particularly care.

Contracts may or may not be controlled by neckbeards, but I can't say I care for lawyers any more than them. At least neckbeards are famously awful salesmen.

"that control the blockchain"
Possible, but so is you deciding one morning to gift it (or sell for a dollar if gift tax is a thing). Both seem about as likely.

I am not following with the fractional thing. If the network only understands transactions then you initiate a transaction to note it within it, not entirely unlike sending an email to yourself, whether for bare minimum or more will vary with what you want. 

As far as market manipulation. Sure. Same as everywhere else.


Silent_Gunner said:


> 2FA, like all locks, can be picked.


Ease of use and security afforded. Most things are a trade off between the two, usually tempered by how much you have to lose.
Bits of paper work until your house burns down, floods, gets stolen and you also have to go fetch it if you need it.


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## WiiCurious (Nov 23, 2020)

FAST6191 said:


> I am not following with the fractional thing. If the network only understands transactions then you initiate a transaction to note it within it, not entirely unlike sending an email to yourself, whether for bare minimum or more will vary with what you want.



Say you write a contract. The only way to make this contract valid and binding it to email it to the other party. By emailing it, the contract becomes a smart contract.

If the contract is 100 pages long, it can still fit in one email. If the contract is 1 page long, you can still fit it in an email.
No matter how complex the contract, it only takes one email to make it enforceable.

You can make a contract with one shitoshi. That's all it takes to get your smart contract on the blockchain. If the only value in bitcoin is its ability to act in smart contracts, there's no need to own more than 10 or so shitoshis. How many contracts does the average person enter into? Not very many. 

The desire to own thousands of shitoshis is nonsensical. One bitcoin has the same function as 1/1000000 of a bitcoin.

Going back to my first paragraph, it would be like sending hundreds of emails when you were trying to create an important contract. If it only takes that one email to make the contract legit, why send more than one?


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## FAST6191 (Nov 23, 2020)

But the only value in bitcoin (or an altcoin with an actual focus on smart contracts) is not in contracts, there is the store of wealth/investment, means of payment, other perks of the same means of payment...

"How many contracts does the average person enter into?"
World changing affairs that determine the course of not only their lives but those around them? Probably not so many. Reduce it to the level of transactions (say using a taxi in the thing above, simple purchase of an item) or for work done, both of which are possible as cost is arguably less than the paper the average receipt is on, and that is a different matter entirely.


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## mariopepper (Nov 23, 2020)

Probably because it's 21st century and most people think it's the currency of the future. Moreover I agree. I also have some btc which I've bought back in 2012 and now you see the final price. Profit. Don't forget that you might need additional equipment for investing.  First of all it's trusted bitcoin wallet. Personally I use https://bitcoinofficial.org/ since my first cryptocurrency purchasing. Secondly you should analyze the market and predict its next positions and prices.


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## ClancyDaEnlightened (Nov 29, 2020)

Crypto is an investment, it's also decentralized, there is no central bank or authority, its a financial system based around cryptography and peer to peer networking, it can be difficult to track who and where  and what is being purchased


IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability


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## FAST6191 (Nov 29, 2020)

aadz93 said:


> IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability



A value (potentially overinflated as it is) or as much value?
There are still plenty of entirely legitimate uses and problems it solves, lessens or negates -- speed and ease of high value transfer being but one of them (a while back my friend wanted to transfer £20k or so to their partner, was easier and cheaper to get a briefcase of cash in 2 days time, walk it 50m up the road to the other bank and pay it in, this is in the UK and both of them are well versed in finance). 15 minutes and did not have to leave the sofa should it have been done via crypto, though I guess it did not come with a sweet briefcase.

Did not having to do awkward arrangements on private invite only forums act as the equivalent of porn in the VHS-betamax wars and online credit card purchases and video streaming a few years down the line? I would not bet against it. Almost certainly boosted its prominence.


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## mariopepper (Nov 29, 2020)

aadz93 said:


> Crypto is an investment, it's also decentralized, there is no central bank or authority, its a financial system based around cryptography and peer to peer networking, it can be difficult to track who and where  and what is being purchased
> 
> 
> IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability


I don't think so. Probably crypto is just a bigger and more valuable method of payment. There is no alternative of crypti which you can take in your hand. It's absolutely "imaginable" coin which you can't lose in the street etc. I also can mention bit IT-companies who use crypto more often every year. It's the currency of the future


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## ClancyDaEnlightened (Nov 29, 2020)

It's also a perfect way of sending money instantly, without a bank, there are plenty of legitimate uses....

But if people couldn't use crypto to clean (dirty/stolen) money, and to get illicit things, I don't think it would be at almost 20 grand us dollar valuable


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## WiiCurious (Nov 29, 2020)

aadz93 said:


> It's also a perfect way of sending money instantly, without a bank, there are plenty of legitimate uses....
> 
> But if people couldn't use crypto to clean (dirty/stolen) money, and to get illicit things, I don't think it would be at almost 20 grand us dollar valuable



Instantly? Can't it take days to get a transaction in a block if you're not willing to pay $20+ USD transaction fees?


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## ClancyDaEnlightened (Nov 29, 2020)

Depends on network load, my transactions usually confirm within an hour, I use between 30-60 satoshi/byte 

So about 2-3$ for it to confirm 1-2 times in about an hour or so depends on how many confirmations you need


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## notimp (Nov 30, 2020)

What a load of half knowledge and halftruths.. 

Value is based on demand, currently largely driven by two factors. Capital flight from regions where exchange rates are horrible or governments want people to invest into generating a local goods market instead of exporting - and financial speculation.

Also the need for anonymizeable online transactions (crypto in itself is not anonymous, but as with amazon gift certificates, you can 'wash' it for a fee (no state regulator)), but to a much, much lower extent.

So you add up taxfraud to darknet deals to pump and dump schemes (a few players coordinating buying and selling large quantities, getting people excited that 'with those value gains, there is money to be maid', then dumping their shares within one day - crashing value, but getting new suckers investments), to fraud, and you've got the appeal. Add some bogus story about 'truly libertarian and free', and start grifting.

This is not the way most of it was initially imagined, but the way it turned out.

On 'libertarian and free' and 'anonymous' if you have the more than 2/3 of 'transaction validation capacity' split between 5 players - none of the above.

On 'money' - if your transaction capacity is 10.000 transactions per second, and your claim is 'for worldwide use' - none of the above (you are waiting days for your transactions to be verified, during which there is risk of doublespending, so nothing moves until verified). 'Pay more to get faster' also only works to an extent.

On 'so safe!' - if you can scam people into handing over their wallet keys to large aggregators - because they dont understand what they are doing. Chance of 'one day aggregator owner heads for Bali and tries to fake his death' is 1:10.

On 'gift to the world' no - its all about being the middleman, or (in the facebook case) even being allowed to change the contract of what the stuff is, mid use.

On 'the future, because more easy' - there are businesses around aggregating and selling purchase histories, there is an interest in being able to inflate the value of currency currently in circulation, which is only used for daily transactions and not for structural investments. (Meaning negative interest, that doest ruin businesses, only private people.)

On 'smart contracts' - there are very few scenarios, where a company would want to be more transparent towards a business partner or customer, and would forgo being 'the one in charge of managing a transaction' if it could. (Example, you are a logging company. You've scammed your customers for years, youve created quasi monopolies, you've lost delivery slips. You've backdated. You've split hauls, when the customer wasnt looking. Now you want to make your business end to end transparent? Why? Example. You are a banking firm, you've managed transactions, you've sold yourself as 'the intermediary people can trust' now you want your business model to end? Why?

On 'inter back exchange systems' sure, why not. Transactions can be made more efficient.

On 'every transaction is public' - you are a country. Are you sure you want that?

On 'no state intervention in principle' - you are a country. Are you sure you want that?

On 'digital transactions' in crypto - you lose your phone, you never remembered number, you lose your money, are you sure people understand?

On 'solving the low transaction per second problem' (and the energy consumption problem). Any solution always (?) seems to move towards more centralization on the verification front. Verification is where people generating currency make money. Great?

The answer is - there is something there. Currently its very much a solution in search of a more lucrative problem. The problems its currently solving arent big enough for any of the big players to be interested in 'established solutions'. Coming up with your own solutions? Sure - when that means, that you can be the intermediary for other peoples transactions. Do nothing, get paid. Still, there is something there and at one point Facebook (Libra) or your state mint will 'ram it down your throat', because they see in it the opportunity to 'jump the competition in evolutionary terms' (Late to the party and no idea whats going on? Look for the next hot thing, while trying to replicate alipay!). But whatever 'that' is, is bound to have little to do with Bitcoin or derivates in the first place.

If that all sounds horrible to you - most peoples deliberation process goes exactly as far as: IT HAS DOUBLED IN VALUE IN LESS THAN A YEAR? WHAT ELSE HAS DONE THAT THAT I CAN INVEST IN. IN MY LIFETIME. NOTHING? WELL, I THINK I MIGHT BE INTERESTED. WHAT IS BEST?

And this thread is no exception.


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## Silent_Gunner (Nov 21, 2020)

Now, that might be a clickbait as hell topic title, but hear me out:

I've been hearing about cryptocurrencies being the future and this and that for a good part of the last decade going into today. And while what I've heard about it sounds all nice and rosy, the part that I don't get is where does Bitcoin, Dogecoin, Ethereum, Pepecoin, XRP, and probably others I'm not aware of derive their value from?

For example, the currency we have here in the US is Fiat-based, meaning it's not based on a gold or silver standard. I get that resources such as cash, coinage, gold, silver, precious metals, etc. are valuable and stuff like that. But those are items that societies have agreed upon to use for a very long time, and you still need those first two aforementioned things for if one wants to get items from vending machines that don't get card readers or any support for stuff like Samsung, Apple, or Google Pay. If people were trading these things in society right now, they at least would have a use for it.

The thing I don't personally get about cryptocurrencies that has me all confused is that there is no physical good being traded; it's all digital, and supposedly, "private, and free from someone breaking into your bank account, etc.," even though I've heard of cases where these claims simply don't hold up. But even then, I still don't understand what makes it so valuable. I know Bitcoin only has so many coins in the digital wild, which, OK, fine, but what about the other ones like Ethereum, XRP, Brave Rewards (which IDK if that's a cryptocurrency, but I know Chris Titus Tech apparently said he earned money from it or something), and the others? If I was to pay my Dad in one of these cryptocurrencies for, say, a couch in the living room, given his age and his relative lack of understanding of how to operate even a computer and smartphone at times, it would be of no use to him. I'd have to pay him in cash, or write him a check. Now, if I was trading with someone who understood and has utility for that kind of transaction, then there should be no problem afaik.



This post is all over the place, but I guess I just don't understand what crypto derives its value from right now, and I'm kind of looking to discuss this with those more in the know.


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## jimbo13 (Nov 21, 2020)

Silent_Gunner said:


> Now, that might be a clickbait as hell topic title, but hear me out:
> 
> I've been hearing about cryptocurrencies being the future and this and that for a good part of the last decade going into today. And while what I've heard about it sounds all nice and rosy, the part that I don't get is where does Bitcoin, Dogecoin, Ethereum, Pepecoin, XRP, and probably others I'm not aware of derive their value from?
> 
> ...




You shouldn't IMO,  I'd put a little in Crypto as in a little more than I'd spend on lottery.  Crypto is gambling still, it's volatile.  High risk high reward and institutional banking/governments are getting ready to attack and get their cut.

Top two: Real estate > Precious metals (silver imo).

There is a fine line between gambling and investing imo.  If you like the high risk/reward and can dig deep to make good choices enjoy the rush when it hits.


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## FAST6191 (Nov 21, 2020)

Gold, silver, and such are not especially valuable either. Just valuable because human like shiny and shiny thing not common to dig out of ground/pan in river. Give me enough gold to build bricks for my house and I will still pick other things as superior materials, not much use for eating, not much use as a catalyst (platinum is I guess), not bad a conductor coating and possibly for oxidation prevention...
That is also before we cover how diamonds are, relatively speaking, common as dirt and it is only because the main sources of such things are kept in tight check by a cartel that sticks things in a vault to keep supply low, not to mention we can grow them these days for potentially about as much in energy cost as the cartel prices.

US currency is then mostly valuable because it is what the US government accepts for tax purposes. Try not paying taxes in the US and boys with guns turn up, enough that you will have a hard time outgunning or outrunning. A few million people then having to pay taxes mean they need what the taxers accept, which these days just so happens to be US Dollars (that they also control, manipulate and constantly raise* the rates on). Said might also goes out to the world as well, along with a lot of tech and cool stuff that others want to buy, and US currency is useful in that too, also for reasons unknown is what oil is largely priced in and oil is kind of a big deal.

* so your tax brackets changed and now you get to earn $15000 rather than $14000 before you pay 20% of whatever you make above that or whatever the numbers actually are. If you calculated the raise and compared it to what the rate of inflation (which your job hopefully kept up with) then that is going to mean you are paying more taxes. No country ever wants to see deflation either (nobody will spend more than the minimum in that scenario) so they will keep inflation high.

As far as very long time. Most currency around today is relatively new as these things go (hard for me to spend shillings and tuppence around here, this despite me being able to speak to people that remember it well).
Also most conventional currency is not a physical thing and has not been for years -- see fractional reserve banking.

Your dad would presumably also struggle to accept land deeds, bearer bonds, a stock portfolio, stock in general. Still count as valuable assets to your divorce lawyer, estate lawyer, tax man in those places that tax you on owned items rather than income...

Crypto can't necessarily be stolen in the same ways that people steal credit cards. Things you hear about are either key loggers on computers, traditional pay us or we end you, those leaving it with other services (see exchanges) and them being hacked and general not what we said it was scams. They do also have some perks that those operating in the normal banking system don't have -- transfer varies depending upon type but it is very fast indeed compared to traditional transfers, cost of transfer is also often minimal (bitcoin did take a rake a while back compared to once being free), transfers are hard to track as well (they are not necessarily anonymous and there is also the tumbling thing) which makes them good for buying drugs and gambling and illegal services and evading tax, or transferring funds when your government (not all are nice after all, and some might try to tax you on it**) would rather you didn't.
There are "legit" things to use it on as well (just as you can barter or accept foreign currency then you can accept crypto), though even without that underground economies are still economies and can be measured.

**when countries and companies/banks run low some might take "haircut" on simple withdrawals. If you are instead buying crypto then you can dodge that, or even better if you kept it in it to begin with.

The other side of why you were probably told to invest by some is because the rate of exchange change is insane. A swing of a normal currency to 2:1 what it was at some point in the previous year (that is to say you converted 100 USD into 100 EUR a year ago but today you can convert it back to 200USD) is an insanely good return and super rare (normally only massive wars, government collapse or gamechanger technologies that cause such spikes). 2:1 in crypto is nothing, depending upon your timeline then it is thousands to 1.
https://en.bitcoinwiki.org/wiki/Bitcoin_history#Bitcoin_price_chart_since_2009_to_2017_and_2018
Or if you prefer in early 2011 it hit 1 USD per bitcoin (was messing around sub 10 cents for a long time before it).
Today it varies a bit and many are waiting to see it hit $20000 USD ( https://www.coinwarz.com/prices/bitcoin/chart says  $18,656.796600 though), or 100 USD and forget about it back in 2011 would today be 1.8 million, even more back at the previous peak. No investment portfolio, stock or wall street fund has come even within sniffing distance of that kind of return, never mind something that mere mortals can buy in for $100. Its falls however are equally considerable.
We can cover mining as well if you want -- the way these things work is a so called distributed ledger. Here every previous round of transactions (varies between types but 15 minutes is on the high end) gets added and then the new round begins, however as the network should theoretically consist of several thousand computers all working against each other then nobody can disagree with the distribution of the coins in given addresses and nobody can take over. To get this group of computers burning bandwidth and electricity they are rewarded for participating in a basically lottery wherein the solver of a problem that is pretty much brute force computing power gets a few coins of their own and a cut from the transactions that happened. People can pool resources, design better solvers, move places with cheap electricity (to both run and cool the things) and so on.

There are other crypto methods that do other things. Smart contracts being one of the more notable. Here if I promised to build a shed for you down the pub then it is a word between gentlemen (which nobody has ever confused me for). We could get lawyers or notaries to sign it and whatnot but that is effort. Smart contract does much the same thing so when you drag me to court you can point at the thing saying his key signed this agreement and the judge would then have to be all "so it is, pay the man" and that is just the tip of the iceberg for that one.


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## WiiCurious (Nov 21, 2020)

> There are other crypto methods that do other things. Smart contracts being one of the more notable. Here if I promised to build a shed for you down the pub then it is a word between gentlemen (which nobody has ever confused me for). We could get lawyers or notaries to sign it and whatnot but that is effort. Smart contract does much the same thing so when you drag me to court you can point at the thing saying his key signed this agreement and the judge would then have to be all "so it is, pay the man" and that is just the tip of the iceberg for that one.



Cryptocurrency is so fucking stupid.
I have no doubt that there is money to be made, but stop pretending the technology is worthwhile.

The idea that smart contracts would ever be upheld in a court of law is horrifying.
Some downsides:
Somebody gets access to your phone/computer and signs your private key to a contract that gives them all your assets.
A bug is discovered that makes the smart contract pay out without services being provided. (This happens all the time now. If smart contracts were widespread, it would be happening daily)
Widespread grid failure that makes internet or electricity scarce would mean you don't have to fulfill any obligations of a smart contract.

The current system might not be great, but at least contracts aren't controlled by neckbeards.

Also consider assets stored on the blockchain. I have a title for my car in a safe. As long as I have the title, I own the car. Now imagine my title in on The Blockchain. The Chinese miners that control the blockchain can conspire and transfer the title to themselves. Or somebody could compromise my computers and accounts and transfer the title to anybody. Same for the deed to property.
I would never put my assets in the position to be taken away by the Chinese government or some teenage hacker.
Banks are great because there's fraud protection and deposit guarantee. FDIC and NCUA in the US protect your money from malicious actions.

Cryptocurrencies are also an environmental disaster where the system rewards more and more waste. By design, the math necessary to 'mine' bitcoins cannot be productive. It will always just be computers jerking themselves off until they find a number with enough zeros.

Also, smart contracts and other aspects of the blockchain can be utilized using tiny fractions of a bitcoin. The idea that one bitcoin is worth more than 1/1000 of a bitcoin is strange, as the fraction has exactly the same functionality as the whole in terms of technology. Why is 1 bitcoin worth $18,000 USD when .000001 bitcoin can be used to do all the same things on the blockchain? Bitcoin only makes sense as a token without value.

In summary, the technology behind bitcoin is stupid, the valuation of bitcoin is being propped up by billions of unbacked tether, and we should continue to mock british people behind their backs.

You can probably make money by daytrading in crypto, but you are gambling and the house always wins.
Exchanges are unregulated and super shady. They can see sell order, buy orders, and shorts. They have the ability to manipulate the price to break shorts or raise the price of bitcoin as they see fit. They cannot lose.

Bitcoin went above $1000 for the first time because Mt. Gox was wash trading bitcoin. It cost them less than 5 bitcoin to rocket the price to those levels.
This is still going on. No laws are in place to prevent it.


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## Deleted User (Nov 21, 2020)

on the topic, currencies that one could profit from mining with a single 1060?


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## jimbo13 (Nov 21, 2020)

Azerus_Kun said:


> on the topic, currencies that one could profit from mining with a single 1060?



Nothing anymore, a 1060 is garden shovel in a world of industrial farming.   You can join a with others and get a cut they basically slave you in too their server farm.

True story, my Warcraft guild back in the day buddy hopes on Ventrillo:    Hey guys you want to do this Bitcoin thing with me?  If you get one there worth a few dollars and we all have the rigs.

Nah fuck that, sounds like a scam and I don't want to stress my hardware.


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## Silent_Gunner (Nov 21, 2020)

jimbo13 said:


> Nothing anymore, a 1060 is garden shovel in a world of industrial farming.   You can join a with others and get a cut they basically slave you in too their server farm.
> 
> True story, my Warcraft guild back in the day buddy hopes on Ventrillo:    Hey guys you want to do this Bitcoin thing with me?  If you get one there worth a few dollars and we all have the rigs.
> 
> Nah fuck that, sounds like a scam and I don't want to stress my hardware.



Usually, people have separate rigs for mining as far as I understand.


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## kosterix (Nov 21, 2020)

Right now investing in btc or derivs is a bad idea. Last time it hit 20k it plumbed. Save some money from today onward, to invest in btc later when it has dropped.

US currency is 99% debt, and if you expect currencies to hyper inflate buy things that hold their value, such as limited edition video games, or board games. 

Gold is too volatile, but it takes up less space under your bed, if you can sleep allright.

I sell when btc rises and buy when it drops below a certain point. In the end I win, but it's at most 400 dollar per year, more for fun than actually make a living.

--------------------- MERGED ---------------------------



WiiCurious said:


> Cryptocurrency is so fucking stupid.
> Somebody gets access to your phone/computer and signs your private key to a contract that gives them all your assets..


You have never heard of 2FA?


----------



## Silent_Gunner (Nov 21, 2020)

kosterix said:


> Right now investing in btc or derivs is a bad idea. Last time it hit 20k it plumbed. Save some money from today onward, to invest in btc later when it has dropped.
> 
> US currency is 99% debt, and if you expect currencies to hyper inflate buy things that hold their value, such as limited edition video games, or board games.
> 
> ...



I mean, that strategy could also be applied to the stock market too, right?

Also, I know it's not a good idea to invest atm. The US election being contested like it is and the implications of either candidate winning is going to affect the market in a big way. I'm going to be doing a lot of saving going forward after I get out of the debt hole!

--------------------- MERGED ---------------------------



kosterix said:


> --------------------- MERGED ---------------------------
> 
> 
> You have never heard of 2FA?



2FA, like all locks, can be picked.


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## FAST6191 (Nov 21, 2020)

WiiCurious said:


> Cryptocurrency is so fucking stupid.
> I have no doubt that there is money to be made, but stop pretending the technology is worthwhile.
> 
> The idea that smart contracts would ever be upheld in a court of law is horrifying.
> ...



Are any of those not already problems with currently done computing (we have had digital signatures of various forms for years, now, indeed PDF has such functionality)?
Grid and internet failure would grind things to a halt regardless. Not sure why I would plan for that or particularly care.

Contracts may or may not be controlled by neckbeards, but I can't say I care for lawyers any more than them. At least neckbeards are famously awful salesmen.

"that control the blockchain"
Possible, but so is you deciding one morning to gift it (or sell for a dollar if gift tax is a thing). Both seem about as likely.

I am not following with the fractional thing. If the network only understands transactions then you initiate a transaction to note it within it, not entirely unlike sending an email to yourself, whether for bare minimum or more will vary with what you want. 

As far as market manipulation. Sure. Same as everywhere else.


Silent_Gunner said:


> 2FA, like all locks, can be picked.


Ease of use and security afforded. Most things are a trade off between the two, usually tempered by how much you have to lose.
Bits of paper work until your house burns down, floods, gets stolen and you also have to go fetch it if you need it.


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## WiiCurious (Nov 23, 2020)

FAST6191 said:


> I am not following with the fractional thing. If the network only understands transactions then you initiate a transaction to note it within it, not entirely unlike sending an email to yourself, whether for bare minimum or more will vary with what you want.



Say you write a contract. The only way to make this contract valid and binding it to email it to the other party. By emailing it, the contract becomes a smart contract.

If the contract is 100 pages long, it can still fit in one email. If the contract is 1 page long, you can still fit it in an email.
No matter how complex the contract, it only takes one email to make it enforceable.

You can make a contract with one shitoshi. That's all it takes to get your smart contract on the blockchain. If the only value in bitcoin is its ability to act in smart contracts, there's no need to own more than 10 or so shitoshis. How many contracts does the average person enter into? Not very many. 

The desire to own thousands of shitoshis is nonsensical. One bitcoin has the same function as 1/1000000 of a bitcoin.

Going back to my first paragraph, it would be like sending hundreds of emails when you were trying to create an important contract. If it only takes that one email to make the contract legit, why send more than one?


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## FAST6191 (Nov 23, 2020)

But the only value in bitcoin (or an altcoin with an actual focus on smart contracts) is not in contracts, there is the store of wealth/investment, means of payment, other perks of the same means of payment...

"How many contracts does the average person enter into?"
World changing affairs that determine the course of not only their lives but those around them? Probably not so many. Reduce it to the level of transactions (say using a taxi in the thing above, simple purchase of an item) or for work done, both of which are possible as cost is arguably less than the paper the average receipt is on, and that is a different matter entirely.


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## mariopepper (Nov 23, 2020)

Probably because it's 21st century and most people think it's the currency of the future. Moreover I agree. I also have some btc which I've bought back in 2012 and now you see the final price. Profit. Don't forget that you might need additional equipment for investing.  First of all it's trusted bitcoin wallet. Personally I use https://bitcoinofficial.org/ since my first cryptocurrency purchasing. Secondly you should analyze the market and predict its next positions and prices.


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## ClancyDaEnlightened (Nov 29, 2020)

Crypto is an investment, it's also decentralized, there is no central bank or authority, its a financial system based around cryptography and peer to peer networking, it can be difficult to track who and where  and what is being purchased


IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability


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## FAST6191 (Nov 29, 2020)

aadz93 said:


> IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability



A value (potentially overinflated as it is) or as much value?
There are still plenty of entirely legitimate uses and problems it solves, lessens or negates -- speed and ease of high value transfer being but one of them (a while back my friend wanted to transfer £20k or so to their partner, was easier and cheaper to get a briefcase of cash in 2 days time, walk it 50m up the road to the other bank and pay it in, this is in the UK and both of them are well versed in finance). 15 minutes and did not have to leave the sofa should it have been done via crypto, though I guess it did not come with a sweet briefcase.

Did not having to do awkward arrangements on private invite only forums act as the equivalent of porn in the VHS-betamax wars and online credit card purchases and video streaming a few years down the line? I would not bet against it. Almost certainly boosted its prominence.


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## mariopepper (Nov 29, 2020)

aadz93 said:


> Crypto is an investment, it's also decentralized, there is no central bank or authority, its a financial system based around cryptography and peer to peer networking, it can be difficult to track who and where  and what is being purchased
> 
> 
> IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability


I don't think so. Probably crypto is just a bigger and more valuable method of payment. There is no alternative of crypti which you can take in your hand. It's absolutely "imaginable" coin which you can't lose in the street etc. I also can mention bit IT-companies who use crypto more often every year. It's the currency of the future


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## ClancyDaEnlightened (Nov 29, 2020)

It's also a perfect way of sending money instantly, without a bank, there are plenty of legitimate uses....

But if people couldn't use crypto to clean (dirty/stolen) money, and to get illicit things, I don't think it would be at almost 20 grand us dollar valuable


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## WiiCurious (Nov 29, 2020)

aadz93 said:


> It's also a perfect way of sending money instantly, without a bank, there are plenty of legitimate uses....
> 
> But if people couldn't use crypto to clean (dirty/stolen) money, and to get illicit things, I don't think it would be at almost 20 grand us dollar valuable



Instantly? Can't it take days to get a transaction in a block if you're not willing to pay $20+ USD transaction fees?


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## ClancyDaEnlightened (Nov 29, 2020)

Depends on network load, my transactions usually confirm within an hour, I use between 30-60 satoshi/byte 

So about 2-3$ for it to confirm 1-2 times in about an hour or so depends on how many confirmations you need


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## notimp (Nov 30, 2020)

What a load of half knowledge and halftruths.. 

Value is based on demand, currently largely driven by two factors. Capital flight from regions where exchange rates are horrible or governments want people to invest into generating a local goods market instead of exporting - and financial speculation.

Also the need for anonymizeable online transactions (crypto in itself is not anonymous, but as with amazon gift certificates, you can 'wash' it for a fee (no state regulator)), but to a much, much lower extent.

So you add up taxfraud to darknet deals to pump and dump schemes (a few players coordinating buying and selling large quantities, getting people excited that 'with those value gains, there is money to be maid', then dumping their shares within one day - crashing value, but getting new suckers investments), to fraud, and you've got the appeal. Add some bogus story about 'truly libertarian and free', and start grifting.

This is not the way most of it was initially imagined, but the way it turned out.

On 'libertarian and free' and 'anonymous' if you have the more than 2/3 of 'transaction validation capacity' split between 5 players - none of the above.

On 'money' - if your transaction capacity is 10.000 transactions per second, and your claim is 'for worldwide use' - none of the above (you are waiting days for your transactions to be verified, during which there is risk of doublespending, so nothing moves until verified). 'Pay more to get faster' also only works to an extent.

On 'so safe!' - if you can scam people into handing over their wallet keys to large aggregators - because they dont understand what they are doing. Chance of 'one day aggregator owner heads for Bali and tries to fake his death' is 1:10.

On 'gift to the world' no - its all about being the middleman, or (in the facebook case) even being allowed to change the contract of what the stuff is, mid use.

On 'the future, because more easy' - there are businesses around aggregating and selling purchase histories, there is an interest in being able to inflate the value of currency currently in circulation, which is only used for daily transactions and not for structural investments. (Meaning negative interest, that doest ruin businesses, only private people.)

On 'smart contracts' - there are very few scenarios, where a company would want to be more transparent towards a business partner or customer, and would forgo being 'the one in charge of managing a transaction' if it could. (Example, you are a logging company. You've scammed your customers for years, youve created quasi monopolies, you've lost delivery slips. You've backdated. You've split hauls, when the customer wasnt looking. Now you want to make your business end to end transparent? Why? Example. You are a banking firm, you've managed transactions, you've sold yourself as 'the intermediary people can trust' now you want your business model to end? Why?

On 'inter back exchange systems' sure, why not. Transactions can be made more efficient.

On 'every transaction is public' - you are a country. Are you sure you want that?

On 'no state intervention in principle' - you are a country. Are you sure you want that?

On 'digital transactions' in crypto - you lose your phone, you never remembered number, you lose your money, are you sure people understand?

On 'solving the low transaction per second problem' (and the energy consumption problem). Any solution always (?) seems to move towards more centralization on the verification front. Verification is where people generating currency make money. Great?

The answer is - there is something there. Currently its very much a solution in search of a more lucrative problem. The problems its currently solving arent big enough for any of the big players to be interested in 'established solutions'. Coming up with your own solutions? Sure - when that means, that you can be the intermediary for other peoples transactions. Do nothing, get paid. Still, there is something there and at one point Facebook (Libra) or your state mint will 'ram it down your throat', because they see in it the opportunity to 'jump the competition in evolutionary terms' (Late to the party and no idea whats going on? Look for the next hot thing, while trying to replicate alipay!). But whatever 'that' is, is bound to have little to do with Bitcoin or derivates in the first place.

If that all sounds horrible to you - most peoples deliberation process goes exactly as far as: IT HAS DOUBLED IN VALUE IN LESS THAN A YEAR? WHAT ELSE HAS DONE THAT THAT I CAN INVEST IN. IN MY LIFETIME. NOTHING? WELL, I THINK I MIGHT BE INTERESTED. WHAT IS BEST?

And this thread is no exception.


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## Silent_Gunner (Nov 21, 2020)

Now, that might be a clickbait as hell topic title, but hear me out:

I've been hearing about cryptocurrencies being the future and this and that for a good part of the last decade going into today. And while what I've heard about it sounds all nice and rosy, the part that I don't get is where does Bitcoin, Dogecoin, Ethereum, Pepecoin, XRP, and probably others I'm not aware of derive their value from?

For example, the currency we have here in the US is Fiat-based, meaning it's not based on a gold or silver standard. I get that resources such as cash, coinage, gold, silver, precious metals, etc. are valuable and stuff like that. But those are items that societies have agreed upon to use for a very long time, and you still need those first two aforementioned things for if one wants to get items from vending machines that don't get card readers or any support for stuff like Samsung, Apple, or Google Pay. If people were trading these things in society right now, they at least would have a use for it.

The thing I don't personally get about cryptocurrencies that has me all confused is that there is no physical good being traded; it's all digital, and supposedly, "private, and free from someone breaking into your bank account, etc.," even though I've heard of cases where these claims simply don't hold up. But even then, I still don't understand what makes it so valuable. I know Bitcoin only has so many coins in the digital wild, which, OK, fine, but what about the other ones like Ethereum, XRP, Brave Rewards (which IDK if that's a cryptocurrency, but I know Chris Titus Tech apparently said he earned money from it or something), and the others? If I was to pay my Dad in one of these cryptocurrencies for, say, a couch in the living room, given his age and his relative lack of understanding of how to operate even a computer and smartphone at times, it would be of no use to him. I'd have to pay him in cash, or write him a check. Now, if I was trading with someone who understood and has utility for that kind of transaction, then there should be no problem afaik.



This post is all over the place, but I guess I just don't understand what crypto derives its value from right now, and I'm kind of looking to discuss this with those more in the know.


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## jimbo13 (Nov 21, 2020)

Silent_Gunner said:


> Now, that might be a clickbait as hell topic title, but hear me out:
> 
> I've been hearing about cryptocurrencies being the future and this and that for a good part of the last decade going into today. And while what I've heard about it sounds all nice and rosy, the part that I don't get is where does Bitcoin, Dogecoin, Ethereum, Pepecoin, XRP, and probably others I'm not aware of derive their value from?
> 
> ...




You shouldn't IMO,  I'd put a little in Crypto as in a little more than I'd spend on lottery.  Crypto is gambling still, it's volatile.  High risk high reward and institutional banking/governments are getting ready to attack and get their cut.

Top two: Real estate > Precious metals (silver imo).

There is a fine line between gambling and investing imo.  If you like the high risk/reward and can dig deep to make good choices enjoy the rush when it hits.


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## FAST6191 (Nov 21, 2020)

Gold, silver, and such are not especially valuable either. Just valuable because human like shiny and shiny thing not common to dig out of ground/pan in river. Give me enough gold to build bricks for my house and I will still pick other things as superior materials, not much use for eating, not much use as a catalyst (platinum is I guess), not bad a conductor coating and possibly for oxidation prevention...
That is also before we cover how diamonds are, relatively speaking, common as dirt and it is only because the main sources of such things are kept in tight check by a cartel that sticks things in a vault to keep supply low, not to mention we can grow them these days for potentially about as much in energy cost as the cartel prices.

US currency is then mostly valuable because it is what the US government accepts for tax purposes. Try not paying taxes in the US and boys with guns turn up, enough that you will have a hard time outgunning or outrunning. A few million people then having to pay taxes mean they need what the taxers accept, which these days just so happens to be US Dollars (that they also control, manipulate and constantly raise* the rates on). Said might also goes out to the world as well, along with a lot of tech and cool stuff that others want to buy, and US currency is useful in that too, also for reasons unknown is what oil is largely priced in and oil is kind of a big deal.

* so your tax brackets changed and now you get to earn $15000 rather than $14000 before you pay 20% of whatever you make above that or whatever the numbers actually are. If you calculated the raise and compared it to what the rate of inflation (which your job hopefully kept up with) then that is going to mean you are paying more taxes. No country ever wants to see deflation either (nobody will spend more than the minimum in that scenario) so they will keep inflation high.

As far as very long time. Most currency around today is relatively new as these things go (hard for me to spend shillings and tuppence around here, this despite me being able to speak to people that remember it well).
Also most conventional currency is not a physical thing and has not been for years -- see fractional reserve banking.

Your dad would presumably also struggle to accept land deeds, bearer bonds, a stock portfolio, stock in general. Still count as valuable assets to your divorce lawyer, estate lawyer, tax man in those places that tax you on owned items rather than income...

Crypto can't necessarily be stolen in the same ways that people steal credit cards. Things you hear about are either key loggers on computers, traditional pay us or we end you, those leaving it with other services (see exchanges) and them being hacked and general not what we said it was scams. They do also have some perks that those operating in the normal banking system don't have -- transfer varies depending upon type but it is very fast indeed compared to traditional transfers, cost of transfer is also often minimal (bitcoin did take a rake a while back compared to once being free), transfers are hard to track as well (they are not necessarily anonymous and there is also the tumbling thing) which makes them good for buying drugs and gambling and illegal services and evading tax, or transferring funds when your government (not all are nice after all, and some might try to tax you on it**) would rather you didn't.
There are "legit" things to use it on as well (just as you can barter or accept foreign currency then you can accept crypto), though even without that underground economies are still economies and can be measured.

**when countries and companies/banks run low some might take "haircut" on simple withdrawals. If you are instead buying crypto then you can dodge that, or even better if you kept it in it to begin with.

The other side of why you were probably told to invest by some is because the rate of exchange change is insane. A swing of a normal currency to 2:1 what it was at some point in the previous year (that is to say you converted 100 USD into 100 EUR a year ago but today you can convert it back to 200USD) is an insanely good return and super rare (normally only massive wars, government collapse or gamechanger technologies that cause such spikes). 2:1 in crypto is nothing, depending upon your timeline then it is thousands to 1.
https://en.bitcoinwiki.org/wiki/Bitcoin_history#Bitcoin_price_chart_since_2009_to_2017_and_2018
Or if you prefer in early 2011 it hit 1 USD per bitcoin (was messing around sub 10 cents for a long time before it).
Today it varies a bit and many are waiting to see it hit $20000 USD ( https://www.coinwarz.com/prices/bitcoin/chart says  $18,656.796600 though), or 100 USD and forget about it back in 2011 would today be 1.8 million, even more back at the previous peak. No investment portfolio, stock or wall street fund has come even within sniffing distance of that kind of return, never mind something that mere mortals can buy in for $100. Its falls however are equally considerable.
We can cover mining as well if you want -- the way these things work is a so called distributed ledger. Here every previous round of transactions (varies between types but 15 minutes is on the high end) gets added and then the new round begins, however as the network should theoretically consist of several thousand computers all working against each other then nobody can disagree with the distribution of the coins in given addresses and nobody can take over. To get this group of computers burning bandwidth and electricity they are rewarded for participating in a basically lottery wherein the solver of a problem that is pretty much brute force computing power gets a few coins of their own and a cut from the transactions that happened. People can pool resources, design better solvers, move places with cheap electricity (to both run and cool the things) and so on.

There are other crypto methods that do other things. Smart contracts being one of the more notable. Here if I promised to build a shed for you down the pub then it is a word between gentlemen (which nobody has ever confused me for). We could get lawyers or notaries to sign it and whatnot but that is effort. Smart contract does much the same thing so when you drag me to court you can point at the thing saying his key signed this agreement and the judge would then have to be all "so it is, pay the man" and that is just the tip of the iceberg for that one.


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## WiiCurious (Nov 21, 2020)

> There are other crypto methods that do other things. Smart contracts being one of the more notable. Here if I promised to build a shed for you down the pub then it is a word between gentlemen (which nobody has ever confused me for). We could get lawyers or notaries to sign it and whatnot but that is effort. Smart contract does much the same thing so when you drag me to court you can point at the thing saying his key signed this agreement and the judge would then have to be all "so it is, pay the man" and that is just the tip of the iceberg for that one.



Cryptocurrency is so fucking stupid.
I have no doubt that there is money to be made, but stop pretending the technology is worthwhile.

The idea that smart contracts would ever be upheld in a court of law is horrifying.
Some downsides:
Somebody gets access to your phone/computer and signs your private key to a contract that gives them all your assets.
A bug is discovered that makes the smart contract pay out without services being provided. (This happens all the time now. If smart contracts were widespread, it would be happening daily)
Widespread grid failure that makes internet or electricity scarce would mean you don't have to fulfill any obligations of a smart contract.

The current system might not be great, but at least contracts aren't controlled by neckbeards.

Also consider assets stored on the blockchain. I have a title for my car in a safe. As long as I have the title, I own the car. Now imagine my title in on The Blockchain. The Chinese miners that control the blockchain can conspire and transfer the title to themselves. Or somebody could compromise my computers and accounts and transfer the title to anybody. Same for the deed to property.
I would never put my assets in the position to be taken away by the Chinese government or some teenage hacker.
Banks are great because there's fraud protection and deposit guarantee. FDIC and NCUA in the US protect your money from malicious actions.

Cryptocurrencies are also an environmental disaster where the system rewards more and more waste. By design, the math necessary to 'mine' bitcoins cannot be productive. It will always just be computers jerking themselves off until they find a number with enough zeros.

Also, smart contracts and other aspects of the blockchain can be utilized using tiny fractions of a bitcoin. The idea that one bitcoin is worth more than 1/1000 of a bitcoin is strange, as the fraction has exactly the same functionality as the whole in terms of technology. Why is 1 bitcoin worth $18,000 USD when .000001 bitcoin can be used to do all the same things on the blockchain? Bitcoin only makes sense as a token without value.

In summary, the technology behind bitcoin is stupid, the valuation of bitcoin is being propped up by billions of unbacked tether, and we should continue to mock british people behind their backs.

You can probably make money by daytrading in crypto, but you are gambling and the house always wins.
Exchanges are unregulated and super shady. They can see sell order, buy orders, and shorts. They have the ability to manipulate the price to break shorts or raise the price of bitcoin as they see fit. They cannot lose.

Bitcoin went above $1000 for the first time because Mt. Gox was wash trading bitcoin. It cost them less than 5 bitcoin to rocket the price to those levels.
This is still going on. No laws are in place to prevent it.


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## Deleted User (Nov 21, 2020)

on the topic, currencies that one could profit from mining with a single 1060?


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## jimbo13 (Nov 21, 2020)

Azerus_Kun said:


> on the topic, currencies that one could profit from mining with a single 1060?



Nothing anymore, a 1060 is garden shovel in a world of industrial farming.   You can join a with others and get a cut they basically slave you in too their server farm.

True story, my Warcraft guild back in the day buddy hopes on Ventrillo:    Hey guys you want to do this Bitcoin thing with me?  If you get one there worth a few dollars and we all have the rigs.

Nah fuck that, sounds like a scam and I don't want to stress my hardware.


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## Silent_Gunner (Nov 21, 2020)

jimbo13 said:


> Nothing anymore, a 1060 is garden shovel in a world of industrial farming.   You can join a with others and get a cut they basically slave you in too their server farm.
> 
> True story, my Warcraft guild back in the day buddy hopes on Ventrillo:    Hey guys you want to do this Bitcoin thing with me?  If you get one there worth a few dollars and we all have the rigs.
> 
> Nah fuck that, sounds like a scam and I don't want to stress my hardware.



Usually, people have separate rigs for mining as far as I understand.


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## kosterix (Nov 21, 2020)

Right now investing in btc or derivs is a bad idea. Last time it hit 20k it plumbed. Save some money from today onward, to invest in btc later when it has dropped.

US currency is 99% debt, and if you expect currencies to hyper inflate buy things that hold their value, such as limited edition video games, or board games. 

Gold is too volatile, but it takes up less space under your bed, if you can sleep allright.

I sell when btc rises and buy when it drops below a certain point. In the end I win, but it's at most 400 dollar per year, more for fun than actually make a living.

--------------------- MERGED ---------------------------



WiiCurious said:


> Cryptocurrency is so fucking stupid.
> Somebody gets access to your phone/computer and signs your private key to a contract that gives them all your assets..


You have never heard of 2FA?


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## Silent_Gunner (Nov 21, 2020)

kosterix said:


> Right now investing in btc or derivs is a bad idea. Last time it hit 20k it plumbed. Save some money from today onward, to invest in btc later when it has dropped.
> 
> US currency is 99% debt, and if you expect currencies to hyper inflate buy things that hold their value, such as limited edition video games, or board games.
> 
> ...



I mean, that strategy could also be applied to the stock market too, right?

Also, I know it's not a good idea to invest atm. The US election being contested like it is and the implications of either candidate winning is going to affect the market in a big way. I'm going to be doing a lot of saving going forward after I get out of the debt hole!

--------------------- MERGED ---------------------------



kosterix said:


> --------------------- MERGED ---------------------------
> 
> 
> You have never heard of 2FA?



2FA, like all locks, can be picked.


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## FAST6191 (Nov 21, 2020)

WiiCurious said:


> Cryptocurrency is so fucking stupid.
> I have no doubt that there is money to be made, but stop pretending the technology is worthwhile.
> 
> The idea that smart contracts would ever be upheld in a court of law is horrifying.
> ...



Are any of those not already problems with currently done computing (we have had digital signatures of various forms for years, now, indeed PDF has such functionality)?
Grid and internet failure would grind things to a halt regardless. Not sure why I would plan for that or particularly care.

Contracts may or may not be controlled by neckbeards, but I can't say I care for lawyers any more than them. At least neckbeards are famously awful salesmen.

"that control the blockchain"
Possible, but so is you deciding one morning to gift it (or sell for a dollar if gift tax is a thing). Both seem about as likely.

I am not following with the fractional thing. If the network only understands transactions then you initiate a transaction to note it within it, not entirely unlike sending an email to yourself, whether for bare minimum or more will vary with what you want. 

As far as market manipulation. Sure. Same as everywhere else.


Silent_Gunner said:


> 2FA, like all locks, can be picked.


Ease of use and security afforded. Most things are a trade off between the two, usually tempered by how much you have to lose.
Bits of paper work until your house burns down, floods, gets stolen and you also have to go fetch it if you need it.


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## WiiCurious (Nov 23, 2020)

FAST6191 said:


> I am not following with the fractional thing. If the network only understands transactions then you initiate a transaction to note it within it, not entirely unlike sending an email to yourself, whether for bare minimum or more will vary with what you want.



Say you write a contract. The only way to make this contract valid and binding it to email it to the other party. By emailing it, the contract becomes a smart contract.

If the contract is 100 pages long, it can still fit in one email. If the contract is 1 page long, you can still fit it in an email.
No matter how complex the contract, it only takes one email to make it enforceable.

You can make a contract with one shitoshi. That's all it takes to get your smart contract on the blockchain. If the only value in bitcoin is its ability to act in smart contracts, there's no need to own more than 10 or so shitoshis. How many contracts does the average person enter into? Not very many. 

The desire to own thousands of shitoshis is nonsensical. One bitcoin has the same function as 1/1000000 of a bitcoin.

Going back to my first paragraph, it would be like sending hundreds of emails when you were trying to create an important contract. If it only takes that one email to make the contract legit, why send more than one?


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## FAST6191 (Nov 23, 2020)

But the only value in bitcoin (or an altcoin with an actual focus on smart contracts) is not in contracts, there is the store of wealth/investment, means of payment, other perks of the same means of payment...

"How many contracts does the average person enter into?"
World changing affairs that determine the course of not only their lives but those around them? Probably not so many. Reduce it to the level of transactions (say using a taxi in the thing above, simple purchase of an item) or for work done, both of which are possible as cost is arguably less than the paper the average receipt is on, and that is a different matter entirely.


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## mariopepper (Nov 23, 2020)

Probably because it's 21st century and most people think it's the currency of the future. Moreover I agree. I also have some btc which I've bought back in 2012 and now you see the final price. Profit. Don't forget that you might need additional equipment for investing.  First of all it's trusted bitcoin wallet. Personally I use https://bitcoinofficial.org/ since my first cryptocurrency purchasing. Secondly you should analyze the market and predict its next positions and prices.


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## ClancyDaEnlightened (Nov 29, 2020)

Crypto is an investment, it's also decentralized, there is no central bank or authority, its a financial system based around cryptography and peer to peer networking, it can be difficult to track who and where  and what is being purchased


IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability


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## FAST6191 (Nov 29, 2020)

aadz93 said:


> IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability



A value (potentially overinflated as it is) or as much value?
There are still plenty of entirely legitimate uses and problems it solves, lessens or negates -- speed and ease of high value transfer being but one of them (a while back my friend wanted to transfer £20k or so to their partner, was easier and cheaper to get a briefcase of cash in 2 days time, walk it 50m up the road to the other bank and pay it in, this is in the UK and both of them are well versed in finance). 15 minutes and did not have to leave the sofa should it have been done via crypto, though I guess it did not come with a sweet briefcase.

Did not having to do awkward arrangements on private invite only forums act as the equivalent of porn in the VHS-betamax wars and online credit card purchases and video streaming a few years down the line? I would not bet against it. Almost certainly boosted its prominence.


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## mariopepper (Nov 29, 2020)

aadz93 said:


> Crypto is an investment, it's also decentralized, there is no central bank or authority, its a financial system based around cryptography and peer to peer networking, it can be difficult to track who and where  and what is being purchased
> 
> 
> IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability


I don't think so. Probably crypto is just a bigger and more valuable method of payment. There is no alternative of crypti which you can take in your hand. It's absolutely "imaginable" coin which you can't lose in the street etc. I also can mention bit IT-companies who use crypto more often every year. It's the currency of the future


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## ClancyDaEnlightened (Nov 29, 2020)

It's also a perfect way of sending money instantly, without a bank, there are plenty of legitimate uses....

But if people couldn't use crypto to clean (dirty/stolen) money, and to get illicit things, I don't think it would be at almost 20 grand us dollar valuable


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## WiiCurious (Nov 29, 2020)

aadz93 said:


> It's also a perfect way of sending money instantly, without a bank, there are plenty of legitimate uses....
> 
> But if people couldn't use crypto to clean (dirty/stolen) money, and to get illicit things, I don't think it would be at almost 20 grand us dollar valuable



Instantly? Can't it take days to get a transaction in a block if you're not willing to pay $20+ USD transaction fees?


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## ClancyDaEnlightened (Nov 29, 2020)

Depends on network load, my transactions usually confirm within an hour, I use between 30-60 satoshi/byte 

So about 2-3$ for it to confirm 1-2 times in about an hour or so depends on how many confirmations you need


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## notimp (Nov 30, 2020)

What a load of half knowledge and halftruths.. 

Value is based on demand, currently largely driven by two factors. Capital flight from regions where exchange rates are horrible or governments want people to invest into generating a local goods market instead of exporting - and financial speculation.

Also the need for anonymizeable online transactions (crypto in itself is not anonymous, but as with amazon gift certificates, you can 'wash' it for a fee (no state regulator)), but to a much, much lower extent.

So you add up taxfraud to darknet deals to pump and dump schemes (a few players coordinating buying and selling large quantities, getting people excited that 'with those value gains, there is money to be maid', then dumping their shares within one day - crashing value, but getting new suckers investments), to fraud, and you've got the appeal. Add some bogus story about 'truly libertarian and free', and start grifting.

This is not the way most of it was initially imagined, but the way it turned out.

On 'libertarian and free' and 'anonymous' if you have the more than 2/3 of 'transaction validation capacity' split between 5 players - none of the above.

On 'money' - if your transaction capacity is 10.000 transactions per second, and your claim is 'for worldwide use' - none of the above (you are waiting days for your transactions to be verified, during which there is risk of doublespending, so nothing moves until verified). 'Pay more to get faster' also only works to an extent.

On 'so safe!' - if you can scam people into handing over their wallet keys to large aggregators - because they dont understand what they are doing. Chance of 'one day aggregator owner heads for Bali and tries to fake his death' is 1:10.

On 'gift to the world' no - its all about being the middleman, or (in the facebook case) even being allowed to change the contract of what the stuff is, mid use.

On 'the future, because more easy' - there are businesses around aggregating and selling purchase histories, there is an interest in being able to inflate the value of currency currently in circulation, which is only used for daily transactions and not for structural investments. (Meaning negative interest, that doest ruin businesses, only private people.)

On 'smart contracts' - there are very few scenarios, where a company would want to be more transparent towards a business partner or customer, and would forgo being 'the one in charge of managing a transaction' if it could. (Example, you are a logging company. You've scammed your customers for years, youve created quasi monopolies, you've lost delivery slips. You've backdated. You've split hauls, when the customer wasnt looking. Now you want to make your business end to end transparent? Why? Example. You are a banking firm, you've managed transactions, you've sold yourself as 'the intermediary people can trust' now you want your business model to end? Why?

On 'inter back exchange systems' sure, why not. Transactions can be made more efficient.

On 'every transaction is public' - you are a country. Are you sure you want that?

On 'no state intervention in principle' - you are a country. Are you sure you want that?

On 'digital transactions' in crypto - you lose your phone, you never remembered number, you lose your money, are you sure people understand?

On 'solving the low transaction per second problem' (and the energy consumption problem). Any solution always (?) seems to move towards more centralization on the verification front. Verification is where people generating currency make money. Great?

The answer is - there is something there. Currently its very much a solution in search of a more lucrative problem. The problems its currently solving arent big enough for any of the big players to be interested in 'established solutions'. Coming up with your own solutions? Sure - when that means, that you can be the intermediary for other peoples transactions. Do nothing, get paid. Still, there is something there and at one point Facebook (Libra) or your state mint will 'ram it down your throat', because they see in it the opportunity to 'jump the competition in evolutionary terms' (Late to the party and no idea whats going on? Look for the next hot thing, while trying to replicate alipay!). But whatever 'that' is, is bound to have little to do with Bitcoin or derivates in the first place.

If that all sounds horrible to you - most peoples deliberation process goes exactly as far as: IT HAS DOUBLED IN VALUE IN LESS THAN A YEAR? WHAT ELSE HAS DONE THAT THAT I CAN INVEST IN. IN MY LIFETIME. NOTHING? WELL, I THINK I MIGHT BE INTERESTED. WHAT IS BEST?

And this thread is no exception.


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## Silent_Gunner (Nov 21, 2020)

Now, that might be a clickbait as hell topic title, but hear me out:

I've been hearing about cryptocurrencies being the future and this and that for a good part of the last decade going into today. And while what I've heard about it sounds all nice and rosy, the part that I don't get is where does Bitcoin, Dogecoin, Ethereum, Pepecoin, XRP, and probably others I'm not aware of derive their value from?

For example, the currency we have here in the US is Fiat-based, meaning it's not based on a gold or silver standard. I get that resources such as cash, coinage, gold, silver, precious metals, etc. are valuable and stuff like that. But those are items that societies have agreed upon to use for a very long time, and you still need those first two aforementioned things for if one wants to get items from vending machines that don't get card readers or any support for stuff like Samsung, Apple, or Google Pay. If people were trading these things in society right now, they at least would have a use for it.

The thing I don't personally get about cryptocurrencies that has me all confused is that there is no physical good being traded; it's all digital, and supposedly, "private, and free from someone breaking into your bank account, etc.," even though I've heard of cases where these claims simply don't hold up. But even then, I still don't understand what makes it so valuable. I know Bitcoin only has so many coins in the digital wild, which, OK, fine, but what about the other ones like Ethereum, XRP, Brave Rewards (which IDK if that's a cryptocurrency, but I know Chris Titus Tech apparently said he earned money from it or something), and the others? If I was to pay my Dad in one of these cryptocurrencies for, say, a couch in the living room, given his age and his relative lack of understanding of how to operate even a computer and smartphone at times, it would be of no use to him. I'd have to pay him in cash, or write him a check. Now, if I was trading with someone who understood and has utility for that kind of transaction, then there should be no problem afaik.



This post is all over the place, but I guess I just don't understand what crypto derives its value from right now, and I'm kind of looking to discuss this with those more in the know.


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## jimbo13 (Nov 21, 2020)

Silent_Gunner said:


> Now, that might be a clickbait as hell topic title, but hear me out:
> 
> I've been hearing about cryptocurrencies being the future and this and that for a good part of the last decade going into today. And while what I've heard about it sounds all nice and rosy, the part that I don't get is where does Bitcoin, Dogecoin, Ethereum, Pepecoin, XRP, and probably others I'm not aware of derive their value from?
> 
> ...




You shouldn't IMO,  I'd put a little in Crypto as in a little more than I'd spend on lottery.  Crypto is gambling still, it's volatile.  High risk high reward and institutional banking/governments are getting ready to attack and get their cut.

Top two: Real estate > Precious metals (silver imo).

There is a fine line between gambling and investing imo.  If you like the high risk/reward and can dig deep to make good choices enjoy the rush when it hits.


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## FAST6191 (Nov 21, 2020)

Gold, silver, and such are not especially valuable either. Just valuable because human like shiny and shiny thing not common to dig out of ground/pan in river. Give me enough gold to build bricks for my house and I will still pick other things as superior materials, not much use for eating, not much use as a catalyst (platinum is I guess), not bad a conductor coating and possibly for oxidation prevention...
That is also before we cover how diamonds are, relatively speaking, common as dirt and it is only because the main sources of such things are kept in tight check by a cartel that sticks things in a vault to keep supply low, not to mention we can grow them these days for potentially about as much in energy cost as the cartel prices.

US currency is then mostly valuable because it is what the US government accepts for tax purposes. Try not paying taxes in the US and boys with guns turn up, enough that you will have a hard time outgunning or outrunning. A few million people then having to pay taxes mean they need what the taxers accept, which these days just so happens to be US Dollars (that they also control, manipulate and constantly raise* the rates on). Said might also goes out to the world as well, along with a lot of tech and cool stuff that others want to buy, and US currency is useful in that too, also for reasons unknown is what oil is largely priced in and oil is kind of a big deal.

* so your tax brackets changed and now you get to earn $15000 rather than $14000 before you pay 20% of whatever you make above that or whatever the numbers actually are. If you calculated the raise and compared it to what the rate of inflation (which your job hopefully kept up with) then that is going to mean you are paying more taxes. No country ever wants to see deflation either (nobody will spend more than the minimum in that scenario) so they will keep inflation high.

As far as very long time. Most currency around today is relatively new as these things go (hard for me to spend shillings and tuppence around here, this despite me being able to speak to people that remember it well).
Also most conventional currency is not a physical thing and has not been for years -- see fractional reserve banking.

Your dad would presumably also struggle to accept land deeds, bearer bonds, a stock portfolio, stock in general. Still count as valuable assets to your divorce lawyer, estate lawyer, tax man in those places that tax you on owned items rather than income...

Crypto can't necessarily be stolen in the same ways that people steal credit cards. Things you hear about are either key loggers on computers, traditional pay us or we end you, those leaving it with other services (see exchanges) and them being hacked and general not what we said it was scams. They do also have some perks that those operating in the normal banking system don't have -- transfer varies depending upon type but it is very fast indeed compared to traditional transfers, cost of transfer is also often minimal (bitcoin did take a rake a while back compared to once being free), transfers are hard to track as well (they are not necessarily anonymous and there is also the tumbling thing) which makes them good for buying drugs and gambling and illegal services and evading tax, or transferring funds when your government (not all are nice after all, and some might try to tax you on it**) would rather you didn't.
There are "legit" things to use it on as well (just as you can barter or accept foreign currency then you can accept crypto), though even without that underground economies are still economies and can be measured.

**when countries and companies/banks run low some might take "haircut" on simple withdrawals. If you are instead buying crypto then you can dodge that, or even better if you kept it in it to begin with.

The other side of why you were probably told to invest by some is because the rate of exchange change is insane. A swing of a normal currency to 2:1 what it was at some point in the previous year (that is to say you converted 100 USD into 100 EUR a year ago but today you can convert it back to 200USD) is an insanely good return and super rare (normally only massive wars, government collapse or gamechanger technologies that cause such spikes). 2:1 in crypto is nothing, depending upon your timeline then it is thousands to 1.
https://en.bitcoinwiki.org/wiki/Bitcoin_history#Bitcoin_price_chart_since_2009_to_2017_and_2018
Or if you prefer in early 2011 it hit 1 USD per bitcoin (was messing around sub 10 cents for a long time before it).
Today it varies a bit and many are waiting to see it hit $20000 USD ( https://www.coinwarz.com/prices/bitcoin/chart says  $18,656.796600 though), or 100 USD and forget about it back in 2011 would today be 1.8 million, even more back at the previous peak. No investment portfolio, stock or wall street fund has come even within sniffing distance of that kind of return, never mind something that mere mortals can buy in for $100. Its falls however are equally considerable.
We can cover mining as well if you want -- the way these things work is a so called distributed ledger. Here every previous round of transactions (varies between types but 15 minutes is on the high end) gets added and then the new round begins, however as the network should theoretically consist of several thousand computers all working against each other then nobody can disagree with the distribution of the coins in given addresses and nobody can take over. To get this group of computers burning bandwidth and electricity they are rewarded for participating in a basically lottery wherein the solver of a problem that is pretty much brute force computing power gets a few coins of their own and a cut from the transactions that happened. People can pool resources, design better solvers, move places with cheap electricity (to both run and cool the things) and so on.

There are other crypto methods that do other things. Smart contracts being one of the more notable. Here if I promised to build a shed for you down the pub then it is a word between gentlemen (which nobody has ever confused me for). We could get lawyers or notaries to sign it and whatnot but that is effort. Smart contract does much the same thing so when you drag me to court you can point at the thing saying his key signed this agreement and the judge would then have to be all "so it is, pay the man" and that is just the tip of the iceberg for that one.


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## WiiCurious (Nov 21, 2020)

> There are other crypto methods that do other things. Smart contracts being one of the more notable. Here if I promised to build a shed for you down the pub then it is a word between gentlemen (which nobody has ever confused me for). We could get lawyers or notaries to sign it and whatnot but that is effort. Smart contract does much the same thing so when you drag me to court you can point at the thing saying his key signed this agreement and the judge would then have to be all "so it is, pay the man" and that is just the tip of the iceberg for that one.



Cryptocurrency is so fucking stupid.
I have no doubt that there is money to be made, but stop pretending the technology is worthwhile.

The idea that smart contracts would ever be upheld in a court of law is horrifying.
Some downsides:
Somebody gets access to your phone/computer and signs your private key to a contract that gives them all your assets.
A bug is discovered that makes the smart contract pay out without services being provided. (This happens all the time now. If smart contracts were widespread, it would be happening daily)
Widespread grid failure that makes internet or electricity scarce would mean you don't have to fulfill any obligations of a smart contract.

The current system might not be great, but at least contracts aren't controlled by neckbeards.

Also consider assets stored on the blockchain. I have a title for my car in a safe. As long as I have the title, I own the car. Now imagine my title in on The Blockchain. The Chinese miners that control the blockchain can conspire and transfer the title to themselves. Or somebody could compromise my computers and accounts and transfer the title to anybody. Same for the deed to property.
I would never put my assets in the position to be taken away by the Chinese government or some teenage hacker.
Banks are great because there's fraud protection and deposit guarantee. FDIC and NCUA in the US protect your money from malicious actions.

Cryptocurrencies are also an environmental disaster where the system rewards more and more waste. By design, the math necessary to 'mine' bitcoins cannot be productive. It will always just be computers jerking themselves off until they find a number with enough zeros.

Also, smart contracts and other aspects of the blockchain can be utilized using tiny fractions of a bitcoin. The idea that one bitcoin is worth more than 1/1000 of a bitcoin is strange, as the fraction has exactly the same functionality as the whole in terms of technology. Why is 1 bitcoin worth $18,000 USD when .000001 bitcoin can be used to do all the same things on the blockchain? Bitcoin only makes sense as a token without value.

In summary, the technology behind bitcoin is stupid, the valuation of bitcoin is being propped up by billions of unbacked tether, and we should continue to mock british people behind their backs.

You can probably make money by daytrading in crypto, but you are gambling and the house always wins.
Exchanges are unregulated and super shady. They can see sell order, buy orders, and shorts. They have the ability to manipulate the price to break shorts or raise the price of bitcoin as they see fit. They cannot lose.

Bitcoin went above $1000 for the first time because Mt. Gox was wash trading bitcoin. It cost them less than 5 bitcoin to rocket the price to those levels.
This is still going on. No laws are in place to prevent it.


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## Deleted User (Nov 21, 2020)

on the topic, currencies that one could profit from mining with a single 1060?


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## jimbo13 (Nov 21, 2020)

Azerus_Kun said:


> on the topic, currencies that one could profit from mining with a single 1060?



Nothing anymore, a 1060 is garden shovel in a world of industrial farming.   You can join a with others and get a cut they basically slave you in too their server farm.

True story, my Warcraft guild back in the day buddy hopes on Ventrillo:    Hey guys you want to do this Bitcoin thing with me?  If you get one there worth a few dollars and we all have the rigs.

Nah fuck that, sounds like a scam and I don't want to stress my hardware.


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## Silent_Gunner (Nov 21, 2020)

jimbo13 said:


> Nothing anymore, a 1060 is garden shovel in a world of industrial farming.   You can join a with others and get a cut they basically slave you in too their server farm.
> 
> True story, my Warcraft guild back in the day buddy hopes on Ventrillo:    Hey guys you want to do this Bitcoin thing with me?  If you get one there worth a few dollars and we all have the rigs.
> 
> Nah fuck that, sounds like a scam and I don't want to stress my hardware.



Usually, people have separate rigs for mining as far as I understand.


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## kosterix (Nov 21, 2020)

Right now investing in btc or derivs is a bad idea. Last time it hit 20k it plumbed. Save some money from today onward, to invest in btc later when it has dropped.

US currency is 99% debt, and if you expect currencies to hyper inflate buy things that hold their value, such as limited edition video games, or board games. 

Gold is too volatile, but it takes up less space under your bed, if you can sleep allright.

I sell when btc rises and buy when it drops below a certain point. In the end I win, but it's at most 400 dollar per year, more for fun than actually make a living.

--------------------- MERGED ---------------------------



WiiCurious said:


> Cryptocurrency is so fucking stupid.
> Somebody gets access to your phone/computer and signs your private key to a contract that gives them all your assets..


You have never heard of 2FA?


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## Silent_Gunner (Nov 21, 2020)

kosterix said:


> Right now investing in btc or derivs is a bad idea. Last time it hit 20k it plumbed. Save some money from today onward, to invest in btc later when it has dropped.
> 
> US currency is 99% debt, and if you expect currencies to hyper inflate buy things that hold their value, such as limited edition video games, or board games.
> 
> ...



I mean, that strategy could also be applied to the stock market too, right?

Also, I know it's not a good idea to invest atm. The US election being contested like it is and the implications of either candidate winning is going to affect the market in a big way. I'm going to be doing a lot of saving going forward after I get out of the debt hole!

--------------------- MERGED ---------------------------



kosterix said:


> --------------------- MERGED ---------------------------
> 
> 
> You have never heard of 2FA?



2FA, like all locks, can be picked.


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## FAST6191 (Nov 21, 2020)

WiiCurious said:


> Cryptocurrency is so fucking stupid.
> I have no doubt that there is money to be made, but stop pretending the technology is worthwhile.
> 
> The idea that smart contracts would ever be upheld in a court of law is horrifying.
> ...



Are any of those not already problems with currently done computing (we have had digital signatures of various forms for years, now, indeed PDF has such functionality)?
Grid and internet failure would grind things to a halt regardless. Not sure why I would plan for that or particularly care.

Contracts may or may not be controlled by neckbeards, but I can't say I care for lawyers any more than them. At least neckbeards are famously awful salesmen.

"that control the blockchain"
Possible, but so is you deciding one morning to gift it (or sell for a dollar if gift tax is a thing). Both seem about as likely.

I am not following with the fractional thing. If the network only understands transactions then you initiate a transaction to note it within it, not entirely unlike sending an email to yourself, whether for bare minimum or more will vary with what you want. 

As far as market manipulation. Sure. Same as everywhere else.


Silent_Gunner said:


> 2FA, like all locks, can be picked.


Ease of use and security afforded. Most things are a trade off between the two, usually tempered by how much you have to lose.
Bits of paper work until your house burns down, floods, gets stolen and you also have to go fetch it if you need it.


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## WiiCurious (Nov 23, 2020)

FAST6191 said:


> I am not following with the fractional thing. If the network only understands transactions then you initiate a transaction to note it within it, not entirely unlike sending an email to yourself, whether for bare minimum or more will vary with what you want.



Say you write a contract. The only way to make this contract valid and binding it to email it to the other party. By emailing it, the contract becomes a smart contract.

If the contract is 100 pages long, it can still fit in one email. If the contract is 1 page long, you can still fit it in an email.
No matter how complex the contract, it only takes one email to make it enforceable.

You can make a contract with one shitoshi. That's all it takes to get your smart contract on the blockchain. If the only value in bitcoin is its ability to act in smart contracts, there's no need to own more than 10 or so shitoshis. How many contracts does the average person enter into? Not very many. 

The desire to own thousands of shitoshis is nonsensical. One bitcoin has the same function as 1/1000000 of a bitcoin.

Going back to my first paragraph, it would be like sending hundreds of emails when you were trying to create an important contract. If it only takes that one email to make the contract legit, why send more than one?


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## FAST6191 (Nov 23, 2020)

But the only value in bitcoin (or an altcoin with an actual focus on smart contracts) is not in contracts, there is the store of wealth/investment, means of payment, other perks of the same means of payment...

"How many contracts does the average person enter into?"
World changing affairs that determine the course of not only their lives but those around them? Probably not so many. Reduce it to the level of transactions (say using a taxi in the thing above, simple purchase of an item) or for work done, both of which are possible as cost is arguably less than the paper the average receipt is on, and that is a different matter entirely.


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## mariopepper (Nov 23, 2020)

Probably because it's 21st century and most people think it's the currency of the future. Moreover I agree. I also have some btc which I've bought back in 2012 and now you see the final price. Profit. Don't forget that you might need additional equipment for investing.  First of all it's trusted bitcoin wallet. Personally I use https://bitcoinofficial.org/ since my first cryptocurrency purchasing. Secondly you should analyze the market and predict its next positions and prices.


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## ClancyDaEnlightened (Nov 29, 2020)

Crypto is an investment, it's also decentralized, there is no central bank or authority, its a financial system based around cryptography and peer to peer networking, it can be difficult to track who and where  and what is being purchased


IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability


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## FAST6191 (Nov 29, 2020)

aadz93 said:


> IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability



A value (potentially overinflated as it is) or as much value?
There are still plenty of entirely legitimate uses and problems it solves, lessens or negates -- speed and ease of high value transfer being but one of them (a while back my friend wanted to transfer £20k or so to their partner, was easier and cheaper to get a briefcase of cash in 2 days time, walk it 50m up the road to the other bank and pay it in, this is in the UK and both of them are well versed in finance). 15 minutes and did not have to leave the sofa should it have been done via crypto, though I guess it did not come with a sweet briefcase.

Did not having to do awkward arrangements on private invite only forums act as the equivalent of porn in the VHS-betamax wars and online credit card purchases and video streaming a few years down the line? I would not bet against it. Almost certainly boosted its prominence.


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## mariopepper (Nov 29, 2020)

aadz93 said:


> Crypto is an investment, it's also decentralized, there is no central bank or authority, its a financial system based around cryptography and peer to peer networking, it can be difficult to track who and where  and what is being purchased
> 
> 
> IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability


I don't think so. Probably crypto is just a bigger and more valuable method of payment. There is no alternative of crypti which you can take in your hand. It's absolutely "imaginable" coin which you can't lose in the street etc. I also can mention bit IT-companies who use crypto more often every year. It's the currency of the future


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## ClancyDaEnlightened (Nov 29, 2020)

It's also a perfect way of sending money instantly, without a bank, there are plenty of legitimate uses....

But if people couldn't use crypto to clean (dirty/stolen) money, and to get illicit things, I don't think it would be at almost 20 grand us dollar valuable


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## WiiCurious (Nov 29, 2020)

aadz93 said:


> It's also a perfect way of sending money instantly, without a bank, there are plenty of legitimate uses....
> 
> But if people couldn't use crypto to clean (dirty/stolen) money, and to get illicit things, I don't think it would be at almost 20 grand us dollar valuable



Instantly? Can't it take days to get a transaction in a block if you're not willing to pay $20+ USD transaction fees?


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## ClancyDaEnlightened (Nov 29, 2020)

Depends on network load, my transactions usually confirm within an hour, I use between 30-60 satoshi/byte 

So about 2-3$ for it to confirm 1-2 times in about an hour or so depends on how many confirmations you need


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## notimp (Nov 30, 2020)

What a load of half knowledge and halftruths.. 

Value is based on demand, currently largely driven by two factors. Capital flight from regions where exchange rates are horrible or governments want people to invest into generating a local goods market instead of exporting - and financial speculation.

Also the need for anonymizeable online transactions (crypto in itself is not anonymous, but as with amazon gift certificates, you can 'wash' it for a fee (no state regulator)), but to a much, much lower extent.

So you add up taxfraud to darknet deals to pump and dump schemes (a few players coordinating buying and selling large quantities, getting people excited that 'with those value gains, there is money to be maid', then dumping their shares within one day - crashing value, but getting new suckers investments), to fraud, and you've got the appeal. Add some bogus story about 'truly libertarian and free', and start grifting.

This is not the way most of it was initially imagined, but the way it turned out.

On 'libertarian and free' and 'anonymous' if you have the more than 2/3 of 'transaction validation capacity' split between 5 players - none of the above.

On 'money' - if your transaction capacity is 10.000 transactions per second, and your claim is 'for worldwide use' - none of the above (you are waiting days for your transactions to be verified, during which there is risk of doublespending, so nothing moves until verified). 'Pay more to get faster' also only works to an extent.

On 'so safe!' - if you can scam people into handing over their wallet keys to large aggregators - because they dont understand what they are doing. Chance of 'one day aggregator owner heads for Bali and tries to fake his death' is 1:10.

On 'gift to the world' no - its all about being the middleman, or (in the facebook case) even being allowed to change the contract of what the stuff is, mid use.

On 'the future, because more easy' - there are businesses around aggregating and selling purchase histories, there is an interest in being able to inflate the value of currency currently in circulation, which is only used for daily transactions and not for structural investments. (Meaning negative interest, that doest ruin businesses, only private people.)

On 'smart contracts' - there are very few scenarios, where a company would want to be more transparent towards a business partner or customer, and would forgo being 'the one in charge of managing a transaction' if it could. (Example, you are a logging company. You've scammed your customers for years, youve created quasi monopolies, you've lost delivery slips. You've backdated. You've split hauls, when the customer wasnt looking. Now you want to make your business end to end transparent? Why? Example. You are a banking firm, you've managed transactions, you've sold yourself as 'the intermediary people can trust' now you want your business model to end? Why?

On 'inter back exchange systems' sure, why not. Transactions can be made more efficient.

On 'every transaction is public' - you are a country. Are you sure you want that?

On 'no state intervention in principle' - you are a country. Are you sure you want that?

On 'digital transactions' in crypto - you lose your phone, you never remembered number, you lose your money, are you sure people understand?

On 'solving the low transaction per second problem' (and the energy consumption problem). Any solution always (?) seems to move towards more centralization on the verification front. Verification is where people generating currency make money. Great?

The answer is - there is something there. Currently its very much a solution in search of a more lucrative problem. The problems its currently solving arent big enough for any of the big players to be interested in 'established solutions'. Coming up with your own solutions? Sure - when that means, that you can be the intermediary for other peoples transactions. Do nothing, get paid. Still, there is something there and at one point Facebook (Libra) or your state mint will 'ram it down your throat', because they see in it the opportunity to 'jump the competition in evolutionary terms' (Late to the party and no idea whats going on? Look for the next hot thing, while trying to replicate alipay!). But whatever 'that' is, is bound to have little to do with Bitcoin or derivates in the first place.

If that all sounds horrible to you - most peoples deliberation process goes exactly as far as: IT HAS DOUBLED IN VALUE IN LESS THAN A YEAR? WHAT ELSE HAS DONE THAT THAT I CAN INVEST IN. IN MY LIFETIME. NOTHING? WELL, I THINK I MIGHT BE INTERESTED. WHAT IS BEST?

And this thread is no exception.


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## Silent_Gunner (Nov 21, 2020)

Now, that might be a clickbait as hell topic title, but hear me out:

I've been hearing about cryptocurrencies being the future and this and that for a good part of the last decade going into today. And while what I've heard about it sounds all nice and rosy, the part that I don't get is where does Bitcoin, Dogecoin, Ethereum, Pepecoin, XRP, and probably others I'm not aware of derive their value from?

For example, the currency we have here in the US is Fiat-based, meaning it's not based on a gold or silver standard. I get that resources such as cash, coinage, gold, silver, precious metals, etc. are valuable and stuff like that. But those are items that societies have agreed upon to use for a very long time, and you still need those first two aforementioned things for if one wants to get items from vending machines that don't get card readers or any support for stuff like Samsung, Apple, or Google Pay. If people were trading these things in society right now, they at least would have a use for it.

The thing I don't personally get about cryptocurrencies that has me all confused is that there is no physical good being traded; it's all digital, and supposedly, "private, and free from someone breaking into your bank account, etc.," even though I've heard of cases where these claims simply don't hold up. But even then, I still don't understand what makes it so valuable. I know Bitcoin only has so many coins in the digital wild, which, OK, fine, but what about the other ones like Ethereum, XRP, Brave Rewards (which IDK if that's a cryptocurrency, but I know Chris Titus Tech apparently said he earned money from it or something), and the others? If I was to pay my Dad in one of these cryptocurrencies for, say, a couch in the living room, given his age and his relative lack of understanding of how to operate even a computer and smartphone at times, it would be of no use to him. I'd have to pay him in cash, or write him a check. Now, if I was trading with someone who understood and has utility for that kind of transaction, then there should be no problem afaik.



This post is all over the place, but I guess I just don't understand what crypto derives its value from right now, and I'm kind of looking to discuss this with those more in the know.


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## jimbo13 (Nov 21, 2020)

Silent_Gunner said:


> Now, that might be a clickbait as hell topic title, but hear me out:
> 
> I've been hearing about cryptocurrencies being the future and this and that for a good part of the last decade going into today. And while what I've heard about it sounds all nice and rosy, the part that I don't get is where does Bitcoin, Dogecoin, Ethereum, Pepecoin, XRP, and probably others I'm not aware of derive their value from?
> 
> ...




You shouldn't IMO,  I'd put a little in Crypto as in a little more than I'd spend on lottery.  Crypto is gambling still, it's volatile.  High risk high reward and institutional banking/governments are getting ready to attack and get their cut.

Top two: Real estate > Precious metals (silver imo).

There is a fine line between gambling and investing imo.  If you like the high risk/reward and can dig deep to make good choices enjoy the rush when it hits.


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## FAST6191 (Nov 21, 2020)

Gold, silver, and such are not especially valuable either. Just valuable because human like shiny and shiny thing not common to dig out of ground/pan in river. Give me enough gold to build bricks for my house and I will still pick other things as superior materials, not much use for eating, not much use as a catalyst (platinum is I guess), not bad a conductor coating and possibly for oxidation prevention...
That is also before we cover how diamonds are, relatively speaking, common as dirt and it is only because the main sources of such things are kept in tight check by a cartel that sticks things in a vault to keep supply low, not to mention we can grow them these days for potentially about as much in energy cost as the cartel prices.

US currency is then mostly valuable because it is what the US government accepts for tax purposes. Try not paying taxes in the US and boys with guns turn up, enough that you will have a hard time outgunning or outrunning. A few million people then having to pay taxes mean they need what the taxers accept, which these days just so happens to be US Dollars (that they also control, manipulate and constantly raise* the rates on). Said might also goes out to the world as well, along with a lot of tech and cool stuff that others want to buy, and US currency is useful in that too, also for reasons unknown is what oil is largely priced in and oil is kind of a big deal.

* so your tax brackets changed and now you get to earn $15000 rather than $14000 before you pay 20% of whatever you make above that or whatever the numbers actually are. If you calculated the raise and compared it to what the rate of inflation (which your job hopefully kept up with) then that is going to mean you are paying more taxes. No country ever wants to see deflation either (nobody will spend more than the minimum in that scenario) so they will keep inflation high.

As far as very long time. Most currency around today is relatively new as these things go (hard for me to spend shillings and tuppence around here, this despite me being able to speak to people that remember it well).
Also most conventional currency is not a physical thing and has not been for years -- see fractional reserve banking.

Your dad would presumably also struggle to accept land deeds, bearer bonds, a stock portfolio, stock in general. Still count as valuable assets to your divorce lawyer, estate lawyer, tax man in those places that tax you on owned items rather than income...

Crypto can't necessarily be stolen in the same ways that people steal credit cards. Things you hear about are either key loggers on computers, traditional pay us or we end you, those leaving it with other services (see exchanges) and them being hacked and general not what we said it was scams. They do also have some perks that those operating in the normal banking system don't have -- transfer varies depending upon type but it is very fast indeed compared to traditional transfers, cost of transfer is also often minimal (bitcoin did take a rake a while back compared to once being free), transfers are hard to track as well (they are not necessarily anonymous and there is also the tumbling thing) which makes them good for buying drugs and gambling and illegal services and evading tax, or transferring funds when your government (not all are nice after all, and some might try to tax you on it**) would rather you didn't.
There are "legit" things to use it on as well (just as you can barter or accept foreign currency then you can accept crypto), though even without that underground economies are still economies and can be measured.

**when countries and companies/banks run low some might take "haircut" on simple withdrawals. If you are instead buying crypto then you can dodge that, or even better if you kept it in it to begin with.

The other side of why you were probably told to invest by some is because the rate of exchange change is insane. A swing of a normal currency to 2:1 what it was at some point in the previous year (that is to say you converted 100 USD into 100 EUR a year ago but today you can convert it back to 200USD) is an insanely good return and super rare (normally only massive wars, government collapse or gamechanger technologies that cause such spikes). 2:1 in crypto is nothing, depending upon your timeline then it is thousands to 1.
https://en.bitcoinwiki.org/wiki/Bitcoin_history#Bitcoin_price_chart_since_2009_to_2017_and_2018
Or if you prefer in early 2011 it hit 1 USD per bitcoin (was messing around sub 10 cents for a long time before it).
Today it varies a bit and many are waiting to see it hit $20000 USD ( https://www.coinwarz.com/prices/bitcoin/chart says  $18,656.796600 though), or 100 USD and forget about it back in 2011 would today be 1.8 million, even more back at the previous peak. No investment portfolio, stock or wall street fund has come even within sniffing distance of that kind of return, never mind something that mere mortals can buy in for $100. Its falls however are equally considerable.
We can cover mining as well if you want -- the way these things work is a so called distributed ledger. Here every previous round of transactions (varies between types but 15 minutes is on the high end) gets added and then the new round begins, however as the network should theoretically consist of several thousand computers all working against each other then nobody can disagree with the distribution of the coins in given addresses and nobody can take over. To get this group of computers burning bandwidth and electricity they are rewarded for participating in a basically lottery wherein the solver of a problem that is pretty much brute force computing power gets a few coins of their own and a cut from the transactions that happened. People can pool resources, design better solvers, move places with cheap electricity (to both run and cool the things) and so on.

There are other crypto methods that do other things. Smart contracts being one of the more notable. Here if I promised to build a shed for you down the pub then it is a word between gentlemen (which nobody has ever confused me for). We could get lawyers or notaries to sign it and whatnot but that is effort. Smart contract does much the same thing so when you drag me to court you can point at the thing saying his key signed this agreement and the judge would then have to be all "so it is, pay the man" and that is just the tip of the iceberg for that one.


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## WiiCurious (Nov 21, 2020)

> There are other crypto methods that do other things. Smart contracts being one of the more notable. Here if I promised to build a shed for you down the pub then it is a word between gentlemen (which nobody has ever confused me for). We could get lawyers or notaries to sign it and whatnot but that is effort. Smart contract does much the same thing so when you drag me to court you can point at the thing saying his key signed this agreement and the judge would then have to be all "so it is, pay the man" and that is just the tip of the iceberg for that one.



Cryptocurrency is so fucking stupid.
I have no doubt that there is money to be made, but stop pretending the technology is worthwhile.

The idea that smart contracts would ever be upheld in a court of law is horrifying.
Some downsides:
Somebody gets access to your phone/computer and signs your private key to a contract that gives them all your assets.
A bug is discovered that makes the smart contract pay out without services being provided. (This happens all the time now. If smart contracts were widespread, it would be happening daily)
Widespread grid failure that makes internet or electricity scarce would mean you don't have to fulfill any obligations of a smart contract.

The current system might not be great, but at least contracts aren't controlled by neckbeards.

Also consider assets stored on the blockchain. I have a title for my car in a safe. As long as I have the title, I own the car. Now imagine my title in on The Blockchain. The Chinese miners that control the blockchain can conspire and transfer the title to themselves. Or somebody could compromise my computers and accounts and transfer the title to anybody. Same for the deed to property.
I would never put my assets in the position to be taken away by the Chinese government or some teenage hacker.
Banks are great because there's fraud protection and deposit guarantee. FDIC and NCUA in the US protect your money from malicious actions.

Cryptocurrencies are also an environmental disaster where the system rewards more and more waste. By design, the math necessary to 'mine' bitcoins cannot be productive. It will always just be computers jerking themselves off until they find a number with enough zeros.

Also, smart contracts and other aspects of the blockchain can be utilized using tiny fractions of a bitcoin. The idea that one bitcoin is worth more than 1/1000 of a bitcoin is strange, as the fraction has exactly the same functionality as the whole in terms of technology. Why is 1 bitcoin worth $18,000 USD when .000001 bitcoin can be used to do all the same things on the blockchain? Bitcoin only makes sense as a token without value.

In summary, the technology behind bitcoin is stupid, the valuation of bitcoin is being propped up by billions of unbacked tether, and we should continue to mock british people behind their backs.

You can probably make money by daytrading in crypto, but you are gambling and the house always wins.
Exchanges are unregulated and super shady. They can see sell order, buy orders, and shorts. They have the ability to manipulate the price to break shorts or raise the price of bitcoin as they see fit. They cannot lose.

Bitcoin went above $1000 for the first time because Mt. Gox was wash trading bitcoin. It cost them less than 5 bitcoin to rocket the price to those levels.
This is still going on. No laws are in place to prevent it.


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## Deleted User (Nov 21, 2020)

on the topic, currencies that one could profit from mining with a single 1060?


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## jimbo13 (Nov 21, 2020)

Azerus_Kun said:


> on the topic, currencies that one could profit from mining with a single 1060?



Nothing anymore, a 1060 is garden shovel in a world of industrial farming.   You can join a with others and get a cut they basically slave you in too their server farm.

True story, my Warcraft guild back in the day buddy hopes on Ventrillo:    Hey guys you want to do this Bitcoin thing with me?  If you get one there worth a few dollars and we all have the rigs.

Nah fuck that, sounds like a scam and I don't want to stress my hardware.


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## Silent_Gunner (Nov 21, 2020)

jimbo13 said:


> Nothing anymore, a 1060 is garden shovel in a world of industrial farming.   You can join a with others and get a cut they basically slave you in too their server farm.
> 
> True story, my Warcraft guild back in the day buddy hopes on Ventrillo:    Hey guys you want to do this Bitcoin thing with me?  If you get one there worth a few dollars and we all have the rigs.
> 
> Nah fuck that, sounds like a scam and I don't want to stress my hardware.



Usually, people have separate rigs for mining as far as I understand.


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## kosterix (Nov 21, 2020)

Right now investing in btc or derivs is a bad idea. Last time it hit 20k it plumbed. Save some money from today onward, to invest in btc later when it has dropped.

US currency is 99% debt, and if you expect currencies to hyper inflate buy things that hold their value, such as limited edition video games, or board games. 

Gold is too volatile, but it takes up less space under your bed, if you can sleep allright.

I sell when btc rises and buy when it drops below a certain point. In the end I win, but it's at most 400 dollar per year, more for fun than actually make a living.

--------------------- MERGED ---------------------------



WiiCurious said:


> Cryptocurrency is so fucking stupid.
> Somebody gets access to your phone/computer and signs your private key to a contract that gives them all your assets..


You have never heard of 2FA?


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## Silent_Gunner (Nov 21, 2020)

kosterix said:


> Right now investing in btc or derivs is a bad idea. Last time it hit 20k it plumbed. Save some money from today onward, to invest in btc later when it has dropped.
> 
> US currency is 99% debt, and if you expect currencies to hyper inflate buy things that hold their value, such as limited edition video games, or board games.
> 
> ...



I mean, that strategy could also be applied to the stock market too, right?

Also, I know it's not a good idea to invest atm. The US election being contested like it is and the implications of either candidate winning is going to affect the market in a big way. I'm going to be doing a lot of saving going forward after I get out of the debt hole!

--------------------- MERGED ---------------------------



kosterix said:


> --------------------- MERGED ---------------------------
> 
> 
> You have never heard of 2FA?



2FA, like all locks, can be picked.


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## FAST6191 (Nov 21, 2020)

WiiCurious said:


> Cryptocurrency is so fucking stupid.
> I have no doubt that there is money to be made, but stop pretending the technology is worthwhile.
> 
> The idea that smart contracts would ever be upheld in a court of law is horrifying.
> ...



Are any of those not already problems with currently done computing (we have had digital signatures of various forms for years, now, indeed PDF has such functionality)?
Grid and internet failure would grind things to a halt regardless. Not sure why I would plan for that or particularly care.

Contracts may or may not be controlled by neckbeards, but I can't say I care for lawyers any more than them. At least neckbeards are famously awful salesmen.

"that control the blockchain"
Possible, but so is you deciding one morning to gift it (or sell for a dollar if gift tax is a thing). Both seem about as likely.

I am not following with the fractional thing. If the network only understands transactions then you initiate a transaction to note it within it, not entirely unlike sending an email to yourself, whether for bare minimum or more will vary with what you want. 

As far as market manipulation. Sure. Same as everywhere else.


Silent_Gunner said:


> 2FA, like all locks, can be picked.


Ease of use and security afforded. Most things are a trade off between the two, usually tempered by how much you have to lose.
Bits of paper work until your house burns down, floods, gets stolen and you also have to go fetch it if you need it.


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## WiiCurious (Nov 23, 2020)

FAST6191 said:


> I am not following with the fractional thing. If the network only understands transactions then you initiate a transaction to note it within it, not entirely unlike sending an email to yourself, whether for bare minimum or more will vary with what you want.



Say you write a contract. The only way to make this contract valid and binding it to email it to the other party. By emailing it, the contract becomes a smart contract.

If the contract is 100 pages long, it can still fit in one email. If the contract is 1 page long, you can still fit it in an email.
No matter how complex the contract, it only takes one email to make it enforceable.

You can make a contract with one shitoshi. That's all it takes to get your smart contract on the blockchain. If the only value in bitcoin is its ability to act in smart contracts, there's no need to own more than 10 or so shitoshis. How many contracts does the average person enter into? Not very many. 

The desire to own thousands of shitoshis is nonsensical. One bitcoin has the same function as 1/1000000 of a bitcoin.

Going back to my first paragraph, it would be like sending hundreds of emails when you were trying to create an important contract. If it only takes that one email to make the contract legit, why send more than one?


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## FAST6191 (Nov 23, 2020)

But the only value in bitcoin (or an altcoin with an actual focus on smart contracts) is not in contracts, there is the store of wealth/investment, means of payment, other perks of the same means of payment...

"How many contracts does the average person enter into?"
World changing affairs that determine the course of not only their lives but those around them? Probably not so many. Reduce it to the level of transactions (say using a taxi in the thing above, simple purchase of an item) or for work done, both of which are possible as cost is arguably less than the paper the average receipt is on, and that is a different matter entirely.


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## mariopepper (Nov 23, 2020)

Probably because it's 21st century and most people think it's the currency of the future. Moreover I agree. I also have some btc which I've bought back in 2012 and now you see the final price. Profit. Don't forget that you might need additional equipment for investing.  First of all it's trusted bitcoin wallet. Personally I use https://bitcoinofficial.org/ since my first cryptocurrency purchasing. Secondly you should analyze the market and predict its next positions and prices.


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## ClancyDaEnlightened (Nov 29, 2020)

Crypto is an investment, it's also decentralized, there is no central bank or authority, its a financial system based around cryptography and peer to peer networking, it can be difficult to track who and where  and what is being purchased


IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability


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## FAST6191 (Nov 29, 2020)

aadz93 said:


> IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability



A value (potentially overinflated as it is) or as much value?
There are still plenty of entirely legitimate uses and problems it solves, lessens or negates -- speed and ease of high value transfer being but one of them (a while back my friend wanted to transfer £20k or so to their partner, was easier and cheaper to get a briefcase of cash in 2 days time, walk it 50m up the road to the other bank and pay it in, this is in the UK and both of them are well versed in finance). 15 minutes and did not have to leave the sofa should it have been done via crypto, though I guess it did not come with a sweet briefcase.

Did not having to do awkward arrangements on private invite only forums act as the equivalent of porn in the VHS-betamax wars and online credit card purchases and video streaming a few years down the line? I would not bet against it. Almost certainly boosted its prominence.


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## mariopepper (Nov 29, 2020)

aadz93 said:


> Crypto is an investment, it's also decentralized, there is no central bank or authority, its a financial system based around cryptography and peer to peer networking, it can be difficult to track who and where  and what is being purchased
> 
> 
> IMHO Crypto took off because people can use  it to buy cheap (quality) drugs and conduct other illicit business anonymously........ I don't think Crypto would have it's value without the laundering ability


I don't think so. Probably crypto is just a bigger and more valuable method of payment. There is no alternative of crypti which you can take in your hand. It's absolutely "imaginable" coin which you can't lose in the street etc. I also can mention bit IT-companies who use crypto more often every year. It's the currency of the future


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## ClancyDaEnlightened (Nov 29, 2020)

It's also a perfect way of sending money instantly, without a bank, there are plenty of legitimate uses....

But if people couldn't use crypto to clean (dirty/stolen) money, and to get illicit things, I don't think it would be at almost 20 grand us dollar valuable


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## WiiCurious (Nov 29, 2020)

aadz93 said:


> It's also a perfect way of sending money instantly, without a bank, there are plenty of legitimate uses....
> 
> But if people couldn't use crypto to clean (dirty/stolen) money, and to get illicit things, I don't think it would be at almost 20 grand us dollar valuable



Instantly? Can't it take days to get a transaction in a block if you're not willing to pay $20+ USD transaction fees?


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## ClancyDaEnlightened (Nov 29, 2020)

Depends on network load, my transactions usually confirm within an hour, I use between 30-60 satoshi/byte 

So about 2-3$ for it to confirm 1-2 times in about an hour or so depends on how many confirmations you need


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## notimp (Nov 30, 2020)

What a load of half knowledge and halftruths.. 

Value is based on demand, currently largely driven by two factors. Capital flight from regions where exchange rates are horrible or governments want people to invest into generating a local goods market instead of exporting - and financial speculation.

Also the need for anonymizeable online transactions (crypto in itself is not anonymous, but as with amazon gift certificates, you can 'wash' it for a fee (no state regulator)), but to a much, much lower extent.

So you add up taxfraud to darknet deals to pump and dump schemes (a few players coordinating buying and selling large quantities, getting people excited that 'with those value gains, there is money to be maid', then dumping their shares within one day - crashing value, but getting new suckers investments), to fraud, and you've got the appeal. Add some bogus story about 'truly libertarian and free', and start grifting.

This is not the way most of it was initially imagined, but the way it turned out.

On 'libertarian and free' and 'anonymous' if you have the more than 2/3 of 'transaction validation capacity' split between 5 players - none of the above.

On 'money' - if your transaction capacity is 10.000 transactions per second, and your claim is 'for worldwide use' - none of the above (you are waiting days for your transactions to be verified, during which there is risk of doublespending, so nothing moves until verified). 'Pay more to get faster' also only works to an extent.

On 'so safe!' - if you can scam people into handing over their wallet keys to large aggregators - because they dont understand what they are doing. Chance of 'one day aggregator owner heads for Bali and tries to fake his death' is 1:10.

On 'gift to the world' no - its all about being the middleman, or (in the facebook case) even being allowed to change the contract of what the stuff is, mid use.

On 'the future, because more easy' - there are businesses around aggregating and selling purchase histories, there is an interest in being able to inflate the value of currency currently in circulation, which is only used for daily transactions and not for structural investments. (Meaning negative interest, that doest ruin businesses, only private people.)

On 'smart contracts' - there are very few scenarios, where a company would want to be more transparent towards a business partner or customer, and would forgo being 'the one in charge of managing a transaction' if it could. (Example, you are a logging company. You've scammed your customers for years, youve created quasi monopolies, you've lost delivery slips. You've backdated. You've split hauls, when the customer wasnt looking. Now you want to make your business end to end transparent? Why? Example. You are a banking firm, you've managed transactions, you've sold yourself as 'the intermediary people can trust' now you want your business model to end? Why?

On 'inter back exchange systems' sure, why not. Transactions can be made more efficient.

On 'every transaction is public' - you are a country. Are you sure you want that?

On 'no state intervention in principle' - you are a country. Are you sure you want that?

On 'digital transactions' in crypto - you lose your phone, you never remembered number, you lose your money, are you sure people understand?

On 'solving the low transaction per second problem' (and the energy consumption problem). Any solution always (?) seems to move towards more centralization on the verification front. Verification is where people generating currency make money. Great?

The answer is - there is something there. Currently its very much a solution in search of a more lucrative problem. The problems its currently solving arent big enough for any of the big players to be interested in 'established solutions'. Coming up with your own solutions? Sure - when that means, that you can be the intermediary for other peoples transactions. Do nothing, get paid. Still, there is something there and at one point Facebook (Libra) or your state mint will 'ram it down your throat', because they see in it the opportunity to 'jump the competition in evolutionary terms' (Late to the party and no idea whats going on? Look for the next hot thing, while trying to replicate alipay!). But whatever 'that' is, is bound to have little to do with Bitcoin or derivates in the first place.

If that all sounds horrible to you - most peoples deliberation process goes exactly as far as: IT HAS DOUBLED IN VALUE IN LESS THAN A YEAR? WHAT ELSE HAS DONE THAT THAT I CAN INVEST IN. IN MY LIFETIME. NOTHING? WELL, I THINK I MIGHT BE INTERESTED. WHAT IS BEST?

And this thread is no exception.


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