With inflation at 7.5%, you lose half your money in 9 years. The only way to outperform that consistently, that I have found, is crypto. Just this year I’ve already lost half my money.
If I had 10 bitcoin I could use it to have someone steal your gun. I wouldn’t but you get the point. Or even better I could buy it off you for half a bitcoin
If nobody buys it for long periods of time people will see the hump and freakout and this will trigger the firesale. I am sure this happens for at least SOME products.
Bitcoin doesn’t even do the job of decentralization very well either. The blockchain is controlled by the wealthy miners with warehouses full of asic miners. Monero is a better cryptocurrency for that reason.
Miners do not control the blockchain though.They just offer to verify transactions and maintain the blockchain. They have no control over the price, the algorithm, the supply etc. not saying Monero is not a good choice too.
That does not make it bad though. Bitcoin is not able to solve all monetary issues nor was it designed to. No monetary system right now solves that issue. This is like saying an EV is bad as it still can speed and kill people without recognizing all the other benefits over gas cars.
They just offer to verify transactions and maintain the blockchain.
Unfortunately that’s the issue. Only a small amount of miners are the ones making a significant dent in mining. Consumer hardware cannot compete with the corporations with large asic mining warehouses, especially ones run by governments and large corporations. This leads to further centralization due to the high barrier of entry and makes the blockchain susceptible to manipulation and things like a 51 percent attack.
Lemmy being decentralized is a solution to a problem that exists: media companies start nice and then fuck their users when they have enough of them. Decentralization means that acquiring that much power to rug pull is way harder.
Bitcoin has been forever a solution without a problem. The concept of Bitcoin doesn’t make sense, the execution of it even less. So the only use it has is taking advantage of techbros’ hopium that one day an actual problem will be solved by Bitcoin.
The thing is that we don’t want decentralisation when it comes to money.
Money used to be completely decentralised in the past, there is a reason why we moved away from it.
We are now re-encountering the same issues with cryto as we had in past with real money.
For example our current system allows us to undo human mistakes, like accidentally sending money to the wrong address. With crypto, that just isn’t possible.
It is the same reason why so many crypto exchanges popped up, they are essentially the banks of crypto, who have control over the different transactions of their users.
But because it is less regulated, tons of those exchanges are basically scams.
To know how scummy they are, visit: web3isgoinggreat.com
This is generally my take as well, though I think there may be a place for it, as another layer or for localised systems… I don’t really know, I am not much of a financial person. I think it just needs to marinate a bit to find its niche, though. Monero seems cool for transactional stuff and I have played around with it a bit. It definitely has very limited use cases, though. I have a good friend who is an anarchist (defo not ancap, though) who is interested in this stuff, and I have chatted with her quite a bit about it, but I think she sometimes does not see the tech side clearly and I frankly think we need the somewhat fluid nature of our current systems as you mentioned more than we think. It’s a cool idea anyway.
Now, I admit I am stupid on this stuff and may be missing something (please correct me), but I am quite interested in ideas about regulating power and data aspects of cloud computing with it, however, maybe as a way to earn something for crunching while idle like Gridcoin; maybe for environmental reasons (less local hardware) too… Remember SETI, those old screensavers that looked for alien life in the 90s? That’s where they are now. The projects that they have whitelisted are super interesting: gridcoin.us/guides/whitelist.htm I think that there are others like this too, but I have not gone down that rabbit hole. Even for just a closed circuit like universities, government-wide public services (large-scale GIS and flood modelling in underfunded areas!), NGOs, etc… I am less convinced about how people are trying to implement it with AI stuff or any kind of daily retail, currently anyway. Anyway, that is where my brain has gone with that one. I played with Gridcoin, and it was a fun little experiment, but I didn’t want to fiddle around fixing it after something broke. It isn’t monetarily really worth anything, anyway.
I once bought 0.0167 BTC at close to 1 BTC = 30k USD evaluation, I was able to sell it for double the value in late 2021, bought some really nice groceries that month. Looking at the 5 year chart it looks like I couldn’t have sold at a better time, lmao.
Ah, because bitcoin is up 130% for the year October of this years inflation is contextually necessary for inflation from February of 2022.
Wait, no, now I'm confused. This image is old. It is not current. It is not going to reference current events. Or even events of a couple months ago. It's going to reference events from two years ago or older.
Not really, bitcoin was trending sideways before the banking crisis. If anything bitcoin solidified its reversal when this happened. So it did the opposite of what would normally cause poor general economic conditions
Do you see Bitcoin more as a currency (like, something that will revolutionize how you pay for groceries) or as a security (as in “hodl”?)
If as a currency, how do you foresee it overcoming its scalability problems? If as a security, how do you think people will continue to have faith in it such that its price won’t go in the next few years to (roughly) zero?
“Security” is kind of a loaded term, implying that you’re relying on the efforts of a company to make the value go up, “Digital asset” is probably more accurate. IMO the “store of wealth” value proposition does make some sense, so long as Bitcoin retains the #1 spot in terms of name recognition. It’s like gold, it doesn’t have to be very useful in itself, it just has to be an effective and popular way to hoard wealth, and it has a lot of useful properties for that despite its flaws.
If we’re talking about its price relative to other cryptocurrencies I would say mostly yes. Its price relative to other wealth assets also reflects the utility for that purpose cryptocurrencies generally have. Like, a lot more liquid than real estate, a lot easier to store, confirm authenticity, and transfer internationally than gold, easier to hide and smuggle than stocks, etc.
Well, I would say the utility value of those qualities is well offset by its problems, such as way less market sized than pretty much every main asset class (it’s only more liquid than realestate for fast in-and-out trading of smaller values, but less liquid than even realestate for large trades - because large trades that would barelly move the realestate market can massivelly move the crypto market - or even things with much smaller market sizes than realestate, such as most individual corporate stocks and the latter are actually faster to trade than Bitcoin because the stock exchange systems are way faster ) as well as its ridiculous gamma - i.e. volatily - (worse than stocks and almost at the level of derivatives such as Futures) and hence horrible risk profile for holding wealth (but wonderful for day-trading) and any professional trader will take that price risk into account when calculating the value of such an investment (and in my experience in the Industry and in derivative pricing, stuff with high gamma needs to yield massive returns to be worth the risk of holding over longer than a few days unless you can find something else with a negative price movement correlation to offset that risk)
In summary, as a Financial Asset for holding wealth, its only “reliable” value is its price’s positive correlation to brand recognition, though it’s a wonderful asset for speculative trading thanks to that massive volatility and all the wonderfull possibilities to make money from the movement itself on both the long and the short side (the people I know who reliably make money from crypto currencies without actually setting up crypto scams, do it exactly via speculative trading of it in short time frames).
I think it is reasonable to expect those two issues (volatility, market depth) to resolve themselves over time as crypto becomes more established. The trend has already been consistently in that direction. The only thing stopping deep pocketed market makers from mostly resolving the latter right now is the current regulatory hostility.
I think it’s a little more nuanced, but that is the biggest concern I personally have about crypto; once it engulfs more of the financial system it could potentially make it harder to use redistribution to resolve the problems of wealth inequality, by being somewhat beyond the reach and control of the state. That said, our system of debt based fiat currency is itself an engine driving wealth inequality and the worst abuses of capitalism. Just about every dollar in existence is owed by someone somewhere back to the federal reserve, and they and everyone they have employed with their borrowed capital is obligated to claw it back and more by any means. Monetary policy is often explicitly intended to do things like suppress wages. Cryptocurrency poses a clear threat to the dollar, which could possibly do more good than harm, but I’m on the fence about it in that respect.
I treat it like a security for now. I’d like to use it as a currency at some point in the future after it has more widespread adoption. I see it kind of like the internet in the late 80’s/early 90’s right now.
I’m not an expert on the technical hurdles, but I think the lightning network can resolve most scalability problems.
I can’t speak for everyone, but I have faith it won’t go to zero because I think it solves a real problem and that people find it useful. As a crypto it is unique because it has first mover advantage and is completely decentralized. And the longer it’s around, the less likely it is to go to zero.
It’s secure and it’s decentralized. No other currency offers both. If you don’t mind trusting banks and governments to manage the money system its not a big deal. But when they fuck it up, it’s the average person that suffers. Taking that power away from them is good for humanity in my opinion.
And decentralisation is not something you want from a currency. All money used to be decentralised. Now we are encountering the same issues with crypto as we have had in the past with real money.
It is basically reinventing the wheel while claiming wood is the better material for the spokes.
Now let’s talk about how good for humanity its carbon footprint is.
Bitcoin—the world’s oldest and most popular form of cryptocurrency, with a total market value that topped $1.3 trillion—now eats up half a percentage point of all the electricity consumed in the world. That puts it on par with the usage of the entire country of Sweden. In fact, Google could power all of its global operations on that amount of energy, seven times over. In comparison with more traditional online banking, a single bitcoin has the same carbon footprint as 330,000 credit card transactions.
I mean you gotta be realistic: investing in crypto is either gambling or getting scammed. Bitcoin is probably more stable than most other coins but that doesn’t mean it’s not a gamble. And volatile = gambling assuming you’re not an omnipotent being.
If I’m being realistic, I’m not all-in on bitcoin. I have a variety of investments. But bitcoin is beating them all, by a lot. If you plan to invest in bitcoin and cash out in a few months for a profit? Yeah, that’s a gamble. But long term I think it’s a safe bet.
Long enough term, it’s guaranteed 100% loss though, you just feel like you’ll know when to pull the trigger. I divested everything when I 10x’ed my money… when Bitcoin were $1k each. I realized that that ride is a fucking roller coaster and I didn’t want on it. Do I wish I had $500k worth of bitcoin right now? Hell yeah, but fuck me if it couldn’t have gone the other way.
I know they’re not comparable but bitcoin has increased in value around 70 000%. There’s no centralised money printer so supply can’t be diluted and its other feature is its transparency. The funny part is how much value you can attribute to the transparency. It’s so easy for any system to have transparency but when it’s centralised it’s always a conscious decision by the designers to make it closed which will always attract suspicion and erode trust, as it should.
As long as there are bitcoin believers the trend will continue, it doesn’t matter if you personally think bitcoin is stupid or not. I personally think it’s ok but there’s probably better ways to preserve wealth transparently. The only question that matters is will everyone think bitcoin is stupid? As long as price goes up long term answer will be no. Keep in mind in 100 years from now the US dollars value will probably drop another 97% on top of what it’s worth now.
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