Cyber Greed and Hubris. How $120 Billion in Crypto vanished

[Phil1111 908]

8 hours ago, billvon said:

Not much different than any other currency, then.

You could say that old Roman gold coins have held their value well. But for their deceased original owners. They would still have the value of a confederate dollar.

[wmw999 2,116]

1 hour ago, Phil1111 said:

You could say that old Roman gold coins have held their value well. But for their deceased original owners. They would still have the value of a confederate dollar.

Kinda hard to look at a crypto whatever as a future antique

Wendy P.

[gowlerk 1,903]

9 hours ago, billvon said:

Not much different than any other currency, then.

Except one is on a time scale of centuries, the other less than a single lifetime. I repeat, is it a currency or is it an investment? Currencies don't go through wild swings in value driven by nothing but pure speculation. It is not a currency it is a casino like  gambling scheme. It is all shiny and new because it is tech driven and has captured the zeitgeist. 

[ryoder 1,381]

6 minutes ago, gowlerk said:

Except one is on a time scale of centuries, the other less than a single lifetime. I repeat, is it a currency or is it an investment?

A Ponzi scheme is neither a currency nor an investment.

[gowlerk 1,903]

2 minutes ago, ryoder said:

A Ponzi scheme is neither a currency nor an investment.

It is not a Ponzi scheme either, although FTX has turned out to be one. It lacks a central figure directing it. It is a new and different thing. It isn't tulips either. The closest thing I can think of is that it's a little like holding gold with the key difference being that you can actually physically hold the gold if you want to. The one thing good about it is that it lacks any government control over the supply of it. It is risky to hold because you can lose your key easily so exchanges get set up to make it easier. But that destroys the very essence of what it was supposed to be. "Crypto exchange" is just another way of saying "poorly regulated bank". It has become a horrible waste of resources in the form of energy for mining it. People try to say that it represents a new way for people of limited means to become wealthy. Where in the F-ck is the wealth supposed to come from if not other suckers? Give me a break.

[ryoder 1,381]

4 minutes ago, gowlerk said:

It is not a Ponzi scheme either, although FTX has turned out to be one. It lacks a central figure directing it.

OK, it is a de-centralized Ponzi scheme.

JPMorgan chief calls crypto a ‘decentralised Ponzi scheme’

I don't think the creator intended it to be, but in practice that is all it is.

[gowlerk 1,903]

6 minutes ago, ryoder said:

OK, it is a de-centralized Ponzi scheme.

JPMorgan chief calls crypto a ‘decentralised Ponzi scheme’

I don't think the creator intended it to be, but in practice that is all it is.

The other thing it reminds me of is chain letters. 30 years or so ago they were a thing in my life. I had several intense young men, all peers of mine trying to convince me that if I would only get into their chain I would make a ton of money and so would everyone else. It was impossible to make them see that they were not only illegal, but immoral as well. I believe they were sincere, but I don't really understand why they were so easily willing to be blind to the truth. 

Edited December 24, 2022 by gowlerk

[wmw999 2,116]

1 hour ago, gowlerk said:

I believe they were sincere, but I don't really understand why they were so easily willing to be blind to the truth.

Most everyone thinks of themselves as being “the little guy, out against the world.” Putting one over on that world is a dream when you just can’t see yourself getting far, far, ahead (the way TV ads portray) the usual way

Wendy P. 

[billvon 2,381]

2 hours ago, gowlerk said:

Except one is on a time scale of centuries, the other less than a single lifetime. 

In some cases, yes.  Given that a great many countries (and their currencies) have lasted less than a single lifetime, that's more a similarity than a difference.

Quote

Currencies don't go through wild swings in value driven by nothing but pure speculation.

They actually do.  The smaller the country/currency the wilder those swings are.  Ireland saw a deflation rate of 25% for a few years, and Austria saw an inflation rate of over 1400% back in the 1920s.

ANY currency - whether cyber, specie, representative, fiat or even barter - goes through the same thing.  If no one thinks gold is valuable, its value is zero.  If no one thinks the US dollar will be worth anything in a year - you get a similar result.

Crypto currency has a lot of problems, and it remains to be seen whether it will be popular.  But its inherent value will not drive people's acceptance of it as a currency - indeed, the exact opposite is true.

 

[kallend 1,621]

2 hours ago, gowlerk said:

  It isn't tulips either.  

Correct.  With tulip bulbs you can grow actual flowers.

[gowlerk 1,903]

2 minutes ago, billvon said:

They actually do.  The smaller the country/currency the wilder those swings are.  Ireland saw a deflation rate of 25% for a few years, and Austria saw an inflation rate of over 1400% back in the 1920s.

And when they do they are considered junk. 

[Coreece 189]

1 hour ago, gowlerk said:

It has become a horrible waste of resources in the form of energy for mining it. People try to say that it represents a new way for people of limited means to become wealthy.

We already talked about all this in the crypto mining thread, about how the energy issues are being resolved, and that for many people it's not necessarily the "investment" in crypto where they find value but through the practical use of blockchain technology for a variety of applications.

 

 

[billvon 2,381]

6 minutes ago, gowlerk said:

And when they do they are considered junk. 

That's exactly right.  That can happen to any currency.  Minted metals have a slight resistance to that, since (for example) gold has some actual commercial use - but even then, most of their value comes from their scarcity AND their aesthetic desirability.

[gowlerk 1,903]

1 hour ago, billvon said:

That's exactly right.  That can happen to any currency.

Fiat currencies can and do crash and lose value when the fiscal policies of the nation issuing them cause them to be unable to meet their obligations. This has no real equivalent in an crypto. There is no underlying floor or rational for them. They crash or boom for no reason other than gaining or losing believers. There is no way to predict or prepare for these movements. There are no fundamentals to look at.  

 

[JerryBaumchen 1,046]

3 hours ago, gowlerk said:

The other thing it reminds me of is chain letters. 30 years or so ago they were a thing in my life. I had several intense young men, all peers of mine trying to convince me that if I would only get into their chain I would make a ton of money and so would everyone else. It was impossible to make them see that they were not only illegal, but immoral as well. I believe they were sincere, but I don't really understand why they were so easily willing to be blind to the truth. 

Hi Ken,

How about around 70 yrs ago.  I remember that I had an aunt that was all over chain letters.  I was about 12-13 then & thought she was nutz even then.

She was not the brightest bulb on the family Xmas tree.

I think it is:  A fool and their money are soon parted.

Some things never change.

Jerry Baumchen

Edited December 24, 2022 by JerryBaumchen

[gowlerk 1,903]

1 minute ago, JerryBaumchen said:

Hi Ken,

How about around 70 yrs ago.  I remember that I had an aunt that was all over chain letters.  I was about 12-13 then & thought she was nutz even then.

She was not the brightest bulb on the family Xmas tree.

I think it is:  A fool and their money are soon separated.

Some things never change.

Jerry Baumchen

The thing about chain letters is that some people make out like bandits. Basically because they are bandits.

[SkyDekker 1,121]

On 12/24/2022 at 11:13 AM, gowlerk said:

Fiat currencies can and do crash and lose value when the fiscal policies of the nation issuing them cause them to be unable to meet their obligations. This has no real equivalent in an crypto. There is no underlying floor or rational for them. They crash or boom for no reason other than gaining or losing believers. There is no way to predict or prepare for these movements. There are no fundamentals to look at.  

 

So like Tesla stock. Or AMT or GME or BB....

[gowlerk 1,903]

13 minutes ago, SkyDekker said:

So like Tesla stock. Or AMT or GME or BB....

Yes, those are other examples of irrational valuations. Although Tesla has many real assets.

[kallend 1,621]

On 12/24/2022 at 1:17 PM, JerryBaumchen said:

Hi Ken,

How about around 70 yrs ago.  I remember that I had an aunt that was all over chain letters.  I was about 12-13 then & thought she was nutz even then.

She was not the brightest bulb on the family Xmas tree.

I think it is:  A fool and their money are soon parted.

Some things never change.

Jerry Baumchen

Geometric progression is such a hard concept.

 

But remember, even a stable genius can bankrupt a casino.

[ryoder 1,381]

It's reaching the point where a grifter can't even make a living anymore! :-(

ABC News: Sam Bankman-Fried found guilty on all counts at fraud trial over crypto exchange FTX

The only thing left to do is file to run for president in 2024.

[lippy 765]

1 hour ago, ryoder said:

It's reaching the point where a grifter can't even make a living anymore! :-(

ABC News: Sam Bankman-Fried found guilty on all counts at fraud trial over crypto exchange FTX

The only thing left to do is file to run for president in 2024.

I'd give him about a 5% chance 

[Phil1111 908]

10 hours ago, lippy said:

I'd give him about a 5% chance 

Why not trump as president and Bankman-Fried as the VP for the GOP ticket. For republicans it would be a dream team. If they won it would save on secret service costs if they had adjoining cells.