It was supposed to be a financial revolution. Instead, crypto has become an environmentally disastrous gift to con artists, says academic David A Banks
Has intrinsic value due to scarcity, like a gold-standard currency (as opposed to today’s fiat currencies).
In other words, it’s designed to provide pay-off to those who jump-in early, as long as they convince more people to jump in, and assuming they get out early enough.
So it can’t be devalued or manipulated by a central bank.
Well, I don’t what we call a thing that manipulates them. Sure, it’s not called a “central bank”. But clearly cryptocurrencies can be manipulated:
Also, with cash you also also technically don’t need physical coins. Banknotes are a thing, you know. 😜
Can be send instantly anywhere in the world, without going through expensive money-transfer agents
Well, as long as you pay the exorbitant transaction/gas fees (which are there because the supply of particular cryptocurrency is capped, and so some form of rewarding miners is needed, apparently), and if you can afford to wait sometimes days for the transaction to be confirmed.
Money cannot be created out of nothing. If you want to loan somebody money, it has to really exist.
I mentioned Tether above, in that exact context. Consider the following:
Tether only holds a part (a “fraction”) of the actual hard cash they would need to back it 1:1 with USD. You know how much? A whole 2.9%, last time they produced any numbers on it, as far as I can see. Everything else is commercial paper, bonds, etc. They are literally gambling on the stock market with their supposed “backing cash”. This is basically what the Big Banks were doing before the 2008 crash, by the way.
Congratulations, you just invented (badly) fractional reserve banking. One of the core things cryptobros pinky-promised never to do. 🤣
If all this is not “creating money out of nothing”, I don’t know what is. Think about it: one of the biggest cryptocurrencies out there, and pretty damn important one, literally just goes “I promise, just trust me” on the whole “every USDT is backed 1:1 by USD” thing, and everyone is just, you know, fine with that.
There are multiple important benefits. They may not all be important for you right now, but saying it doesn’t solve any problems at all is just ridiculous.
So far you have not named a single problem that cryptocurrencies actually solve. You mentioned a bunch of features some claim they presumably have, but not a single actual solved problem. It’s like saying “cars are great, they have wheels, and you don’t need a bus, and they come in all sorts of colors, too!” in response to a question “what problem do cars solve?”
The people who say it’s a ponzi scheme are people who don’t know what ponzi schemes are.
Well, Financial Times might actually have a reasonably good understanding what a Ponzi scheme is. And so, here we are. The whole article is basically this scene from The Office, and it’s finger-lickin’ good.
The more I think of it, the more I come to the conclusion that cryptobros looked at the banking system and broader financial sector, correctly figured out there are a bunch of serious problems with them, and then misidentified the underlying problem as technology used instead of greed.
They are basically focusing implementation details instead of figuring out how to fix the actual source of the problem.
I guess part of the idea way taking the power away from the greedy people, which fixes one small part of the problem.
Part of it was fixing the implementation details, which solves another part of the problem. But yes a purely technical solution is not enough on its own. Bitcoin is not a magic bullet to solve greed. My answer below talks a bit about that.
It’s way worse than that. Cryptocurrencies are a way to supercharge greedy and corrupt people, by giving them a powerful unregulated tool to play with. And all at a tiny cost of emitting thousands of tons of CO2 at a time when parts of India are already starting to become uninhabitable.
How many emissions do you think millions of bank employees cause with their cars, flights, heated houses, and general consumption? Particularly as most banks are located in the U.S, which has the highest pollution levels in the world. Surely thats much worse than mining farms.
Look, cryptobros have been pushing cryptocurrencies using cherry-picked “arguments” for years. I don’t see why this can only work one way?
On a more serious note, I am quite tired of the moving of goalposts practiced by cryptocurrency shills. “Oh, no, that only applies to some coins, not all of them!”, “hey, that one also only affects some blockchains!”, “no no, you can’t say that, there’s this <edge case> coin out there that happens to not have this one specific problem”.
Somehow problems they point out with the financial sector are supposed to apply to the whole sector, but problems with cryptocurrencies are only ever relevant to one very specific coin and in no way should reflect on the whole scene.
Give me a break. 🙄
Also, nice evasion there, just ignoring the main part of my post, which was: the fact that some other industry happens to generate emissions doesn’t make it okay to create a completely new source of emissions.
Somehow problems they point out with the financial sector are supposed to apply to the whole sector, but problems with cryptocurrencies are only ever relevant to one very specific coin and in no way should reflect on the whole scene.
That’s what you were doing though. Cherry-picking faults from many different currencies.
Your original point was that crypto-currencies have no value and are ponzi schemes. Have you been convinced to change your mind about those two things? They are concrete statements, strong arguments. So they are easy to prove/disprove.
I’m afraid the discussion has gotten too broad now. You would need to start a new thread for each point. Otherwise it becomes circular. For example several or your points here I’ve already answered in another part of the thread.
Well, I don’t what we call a thing that manipulates them. Sure, it’s not called a “central bank”. But clearly cryptocurrencies can be manipulated:
on a blockchain level (example, another example, and [https://web3isgoinggreat.com/single/juno-accidentally-transfers-36-million-in-seized-funds-to-inaccessible-wallet-address](Juno is thinking of doing this a second time in a row))
on voting power level (here, for example);
on “we will block you from doing any business” level, blacklisted wallets are a thing.
and on monetary “create money out of thin air” level — Tether always claimed that it’s backed 1:1 with cash; well, it isn’t.
Yes there are risks when you invest money in cryptocurrency, just like there are risks in every investment. The market is also much more volatile than stocks, so I wouldnt recommend to put your life savings there. And to be honest, I have never seen anyone suggest that.
Well, as long as you pay the exorbitant transaction/gas fees (which are there because the supply of particular cryptocurrency is capped, and so some form of rewarding miners is needed, apparently), and if you can afford to wait sometimes days for the transaction to be confirmed.
Yes, Bitcoin isnt really usable as a currency (unless you are rich). Has been the case for many years. There are many other coins that can be used instead.
I mentioned Tether above, in that exact context. Consider the following:
Tether is not a real cryptocurrency, exactly because a single company has full control over the supply. Again, I wouldnt recommend you to invest your money in Tether.
Oh and by the way: Tether was in turn used to manipulate Bitcoin prices.
Of course crypto markets are manipulated, just like stock markets are manipulated. If you dont know that then you are really gullible.
So far you have not named a single problem that cryptocurrencies actually solve. You mentioned a bunch of features some claim they presumably have, but not a single actual solved problem. It’s like saying “cars are great, they have wheels, and you don’t need a bus, and they come in all sorts of colors, too!” in response to a question “what problem do cars solve?”
If it doesnt solve any problem for you, then you can simply ignore the topic. The rest of us will still discuss about it.
Lots of interesting links there. But the pieces of your arguments are so diverse, there is no single coherent answer. In the technological field so diverse, you can always find bad things, if you are looking for them.
I’ll just answer the first and the last point.
In other words, it’s designed to provide pay-off to those who jump-in early, as long as they convince more people to jump in, and assuming they get out early enough.
Here you really are describing a Ponzi scheme. By this logic, every currency (with the possible exceptions of gold and bitcoin) are ponzi schemes. Central banks print banknotes (or X tokens) which are worthless. They only have value because people start to believe they have value. And the central banks use this confidence trick to make money. They more tokens/banknotes they print, the more money they make.
Financial Times might actually have a reasonably good understanding what a Ponzi scheme is
This does not describe a Ponzi scheme. It describes a fiat currency. “Ponzi was paying earlier investors using the investments of later investors”. He created an investment fund, not a currency. There is no way you could confuse those two things. And a pyramid scheme is also an unrelated thing. But you’re just as capable of looking this up as I am.
In other words, it’s designed to provide pay-off to those who jump-in early, as long as they convince more people to jump in, and assuming they get out early enough.
Well, I don’t what we call a thing that manipulates them. Sure, it’s not called a “central bank”. But clearly cryptocurrencies can be manipulated:
Not to mention manipulation by dudebros like Elon Musk, whose one tweet can just send cryptocurrencies up or down like a roller-coaster.
And yet pleny of cryptocurrency people ask 3rd parties to store their assets for them. Which leads to pain.
Also, with cash you also also technically don’t need physical coins. Banknotes are a thing, you know. 😜
Well, as long as you pay the exorbitant transaction/gas fees (which are there because the supply of particular cryptocurrency is capped, and so some form of rewarding miners is needed, apparently), and if you can afford to wait sometimes days for the transaction to be confirmed.
I mentioned Tether above, in that exact context. Consider the following:
Tether only holds a part (a “fraction”) of the actual hard cash they would need to back it 1:1 with USD. You know how much? A whole 2.9%, last time they produced any numbers on it, as far as I can see. Everything else is commercial paper, bonds, etc. They are literally gambling on the stock market with their supposed “backing cash”. This is basically what the Big Banks were doing before the 2008 crash, by the way.
Congratulations, you just invented (badly) fractional reserve banking. One of the core things cryptobros pinky-promised never to do. 🤣
No wonder people lost their minds when Tether de-pegged by roughly 5% this week!
Oh and by the way: Tether was in turn used to manipulate Bitcoin prices.
If all this is not “creating money out of nothing”, I don’t know what is. Think about it: one of the biggest cryptocurrencies out there, and pretty damn important one, literally just goes “I promise, just trust me” on the whole “every USDT is backed 1:1 by USD” thing, and everyone is just, you know, fine with that.
So far you have not named a single problem that cryptocurrencies actually solve. You mentioned a bunch of features some claim they presumably have, but not a single actual solved problem. It’s like saying “cars are great, they have wheels, and you don’t need a bus, and they come in all sorts of colors, too!” in response to a question “what problem do cars solve?”
Well, Financial Times might actually have a reasonably good understanding what a Ponzi scheme is. And so, here we are. The whole article is basically this scene from The Office, and it’s finger-lickin’ good.
The more I think of it, the more I come to the conclusion that cryptobros looked at the banking system and broader financial sector, correctly figured out there are a bunch of serious problems with them, and then misidentified the underlying problem as technology used instead of greed.
They are basically focusing implementation details instead of figuring out how to fix the actual source of the problem.
That’s a good way of looking at it.
I guess part of the idea way taking the power away from the greedy people, which fixes one small part of the problem.
Part of it was fixing the implementation details, which solves another part of the problem. But yes a purely technical solution is not enough on its own. Bitcoin is not a magic bullet to solve greed. My answer below talks a bit about that.
It’s way worse than that. Cryptocurrencies are a way to supercharge greedy and corrupt people, by giving them a powerful unregulated tool to play with. And all at a tiny cost of emitting thousands of tons of CO2 at a time when parts of India are already starting to become uninhabitable.
How many emissions do you think millions of bank employees cause with their cars, flights, heated houses, and general consumption? Particularly as most banks are located in the U.S, which has the highest pollution levels in the world. Surely thats much worse than mining farms.
This is hardly a reason to add more to that, is it?
Seriously. 🙄
Plus, the financial sector can process thousands of transactions globally per second. Bitcoin, on the other hand, about (checks notes) seven.
Here you go again, taking a weakness of a single cryptocurrency, and pretending that it applies to all coins. No point arguing with this nonsense.
Look, cryptobros have been pushing cryptocurrencies using cherry-picked “arguments” for years. I don’t see why this can only work one way?
On a more serious note, I am quite tired of the moving of goalposts practiced by cryptocurrency shills. “Oh, no, that only applies to some coins, not all of them!”, “hey, that one also only affects some blockchains!”, “no no, you can’t say that, there’s this <edge case> coin out there that happens to not have this one specific problem”.
Somehow problems they point out with the financial sector are supposed to apply to the whole sector, but problems with cryptocurrencies are only ever relevant to one very specific coin and in no way should reflect on the whole scene.
Give me a break. 🙄
Also, nice evasion there, just ignoring the main part of my post, which was: the fact that some other industry happens to generate emissions doesn’t make it okay to create a completely new source of emissions.
That’s what you were doing though. Cherry-picking faults from many different currencies.
Your original point was that crypto-currencies have no value and are ponzi schemes. Have you been convinced to change your mind about those two things? They are concrete statements, strong arguments. So they are easy to prove/disprove.
I’m afraid the discussion has gotten too broad now. You would need to start a new thread for each point. Otherwise it becomes circular. For example several or your points here I’ve already answered in another part of the thread.
Yes there are risks when you invest money in cryptocurrency, just like there are risks in every investment. The market is also much more volatile than stocks, so I wouldnt recommend to put your life savings there. And to be honest, I have never seen anyone suggest that.
Yes, Bitcoin isnt really usable as a currency (unless you are rich). Has been the case for many years. There are many other coins that can be used instead.
Tether is not a real cryptocurrency, exactly because a single company has full control over the supply. Again, I wouldnt recommend you to invest your money in Tether.
Of course crypto markets are manipulated, just like stock markets are manipulated. If you dont know that then you are really gullible.
If it doesnt solve any problem for you, then you can simply ignore the topic. The rest of us will still discuss about it.
Lots of interesting links there. But the pieces of your arguments are so diverse, there is no single coherent answer. In the technological field so diverse, you can always find bad things, if you are looking for them.
I’ll just answer the first and the last point.
Here you really are describing a Ponzi scheme. By this logic, every currency (with the possible exceptions of gold and bitcoin) are ponzi schemes. Central banks print banknotes (or X tokens) which are worthless. They only have value because people start to believe they have value. And the central banks use this confidence trick to make money. They more tokens/banknotes they print, the more money they make.
This does not describe a Ponzi scheme. It describes a fiat currency. “Ponzi was paying earlier investors using the investments of later investors”. He created an investment fund, not a currency. There is no way you could confuse those two things. And a pyramid scheme is also an unrelated thing. But you’re just as capable of looking this up as I am.