Every bit of evidence is that the crypto boom has crashed to Earth. In tech it is basically a dirty word now and is overwhelmingly associated with the worst products, the worst teams and the worst get rich and quick sorts. In the rest of the market it has made little to no impact.
Yet somehow BTC is still trading at close to historic highs.
Now to be fair the market cap of all of BTC is 1/4 Apple, but if it were remotely a functioning market or were at all "real", it would be trading at a tiny fraction of that amount. The fact that it still holds is the best demonstration of how illusory the whole sham is.
As much as I would like to believe BTC's market is completely fake, there has to be some real liquidity there. The hashrate is ~421 EH/s which represents a tremendous amount of ongoing spending on mining equipment and energy. That spending has to be funded somehow and the only way that makes sense is by selling the mined BTC.
So there may be a lot of wash trading and games played with stablecoins trying to prop up the price, but there also must be enough real buyers to purchase the 6.25 BTC (~$175k) generated every 10 minutes. Otherwise the miners would not be able to pay their bills (surely owed in Real Money), would shut down, and we would see evidence of that in the network's hashrate plummeting.
You have to consider that mining has traditionally been gently and benignly disregarded by most of the media interest in crypto. This is not an accident, the miners are very aware that calling attention to themselves would reveal exactly how suspiciously the valuations in crypto are constructed, and they've done a fantastic job of deflecting attention (with enormous help from the unbelievably clownish behavior of certain exchange operators) and acting like the adults in the fun house.
Serious scrutiny of how exactly the hash rate in Bitcoin is generated would not reflect well on the ecosystem, because of the amount of outright corruption involved, as well as theft, that goes back a decade. A couple years ago an operation was uncovered in Thailand where something on the order of 100 million dollars worth of mining equipment had been found burning stolen electricity from government enterprises, IIRC primarily public schools, and one of the investigators involved speculated that this was likely less than 10% of the illegal mining that was happening in their country, let alone the recognized legal stuff.
Consider that similar things are happening all over the world, not just Thailand, and even entire countries (DPRK) participating due to total systemic corruption crossed with no questiins asked access to natural resources and national treasuries, to be spent in any way they choose, and an investment in destabilizing the world economy - or at least evading financial controls - is well worth the cost of subsidizing mining both within their borders and beyond. You've also got quasi crackpots in charge of places like the government of El Salvador who are also helping to support this ecosystem.
Miners, I will conjecture without offering any support on the bet that eventually this will be found out and publicized, have been sitting on a warchest of nearly free coins mined long ago, when almost nobody was looking for corruption or theft of resources, and when block rewards were multiples higher to boot. The argument that miners have barely made a profit because of the adjustable difficulty level has always been an open lie due to a willingness to completely disregard the mining done using off market access to electricity and facilities, which was rampant in the early days and is still a significant chunk of the hash rate even today.
Miners can continue to slow sell their coin bases because they have effectively paid for them for over a decade at a massive discount to "market," and since the only major source of downward price pressure are the miners themselves, they can prop the price up for as long as they like by simply selling fewer coins into the market whenever there is an adverse social signal that they need to counter with a " honey badger of money doesn't care" price signal.
Yes, thank you for your comment. Altcoins are terrible, NFTs are terrible, it was all a trend and I'm glad it's gone now. Bitcoin is different, always has been, always will be. Bitcoin is the digital gold. In my opinion it's not a currency and will not function like a currency but rather like gold. You don't buy your latte with gold, but you own gold stocks. Same thing with Bitcoin.
It's the safest, oldest, most tested blockchain out there. You can't beat that.
I'm not convinced that crypto is much worse than the rest of tech. Your average VC tech company is run as a pump and dump scheme. They take a crazy idea, get a ton of funding for it, go public and sell the shares to uninformed investors who are left holding the bag when it all comes crashing down.
I know you're exaggerating for effect but I'm having trouble threading the needle here. The "average VC tech company" gets nowhere near public market investors and, if indeed it is run "as a pump and dump scheme" would have a narrow impact on the LPs of the venture funds. Gotta imagine most LPs are sophisticated investors? Pension funds, that sort of thing.
Crypto, on the other hand, seems to be predicated on retail investors and consumers. So they do seem manifestly different as you have expressed them (maybe my issue is with the notion of the "average" VC-backed company?).
Crypto only has "Bitcoin has above market returns" in terms of success.
There was some neat smart contract stuff but some of that technically breaks trading rules (aka is questionable legality) and others are a coin flip as to whether a vulnerability will let someone drain the entire fund.
Your conclusion is pretty funny. In general, when reality doesn't match up with my sources of information, I assume that my sources of information are biased or wrong, not that reality itself is. I was genuinely expecting your last sentence to be something like: "The fact that it still holds is the best demonstration of how biased the tech echo chamber is."
The price of BTC reflects one incredibly narrow band of reality. BTC can quadruple tomorrow and the broad reality still is that crypto has not achieved any of the promises, and is less relevant today than it was 10 years ago. But BTC is "traded" in a largely unregulated market, has poor liquidity, and there is every indication that it is being held afloat by manipulation. BTC has close to zero barrier to entry, can be replaced in a second, and technically is just a giant bag of dogshit, so even if somehow crypto had actual value, it wouldn't be BTC.
A few years ago, virtually all of professional sports were sponsored by crypto companies. Since almost all of them have folded, usually under massive fraud, and have been replaced by gambling firms. So I guess nothing has changed.
Despite all the bad press, shady exchanges, bubbles and busts, a large amount of BTC owners don't sell, and that alone will drive it's price up. Other cryptos, I can't speak for.
It's not the asking price that determines market rates, nor is it the price that people who aren't currently selling believe their assets are worth. It's the price at which active buyers are willing to buy.
One of the challenges with price discovery in the BTC market, though, is that there's not really an effective mechanism to prevent wash trades in place. That means that all you need to do to create a bunch of fraudulent liquidity at a higher price is create a sock puppet account and start trading with yourself. Anyone sitting on a hoard of BTC is highly incentivized to do this to try and prevent their on-paper losses in the hope that it will mitigate their becoming real losses. And that can concievably become the bulk of BTC trading volume if there isn't a steady supply of new people who are willing to buy in to Bitcoin at any price.
BTC went from like 3-4k covid lows to 69k. BTC is a symptom of clown world economics money printing.
investing in BTC is a bet that people in power of money will continue to act in their own selfish interest. it's a bet on clown world continuity. i love that.
i think it has utility but is there good reason for it to be $30k and not $1k outside of money printing...i doubt it.
You can kind of calculate the value as (number of people invested)x(amount they hold in us$)/(number of bitcoins)
For the present price that is approx 48 mil x $10k / 16 mil = $30k
Early 2017 would have been 1.6 mil x $10k / 16 mil = $1k
It's rough and ready but kind of how things play out. Most of the growth in price over the years has come from more people buying in. Not sure where it ends. We might get another 10x and 500 million people at some point?
I know enough people now that have lost significant money through crypto scams that it's tainted its appeal to me.
As for the price of BTC - it's deflationary and its holders only have incentive to buy and hold as long as they can while they hype it to the world - it'll never go down in price until the majority of holders have to sell.
What's the mystery? Bitcoin doesn't need actual dollars to prop up the price. Unaudited virtual dollar IOUs like USDT that can be issued out of thin air will be sufficient.
At some point the crypto ecosystem hits the real economy and miners need to pay for power and datacenter space with real currency.
A lot of the people employed in the crypto space are also out there buying houses, cars, taking vacations, and buying the odd pizza. That all requires real currency.
It does until mining rewards go to zero right? unless there is a closed ecosystem whereby miners can pay their electricity bills and other expenses with crypto. Eventually actual money has to enter? Just sort of thinking out loud maybe missing something
Most of HN users live in US, where they have legalised weed, are banked and don't have to transfer large sums of money from one country to another — therefore, don't have any real reasons to use crypto and only see it as a sham.
Many other people around the world have no other choice but to use crypto when their local currency is spiralling down with inflation, when banks refuse to work with them, when they immigrate and have to transfer their life savings, or work for remotely with people from other countries, or simply when they want to buy a few grams of marijuana.
The fact that you don't see any personally don't have any legitimate uses for a product doesn't mean that there are none.
BTC was around $65,000 a couple years back, no? I wonder how much of the current price of $28,000 is propped up by lost thumb drives , or wallets seized by authorities - limited supply rather than continued speculation.
BTC isn't a stock, and the network continues to have significant transactional volume. Whatever the merits of the technical, its found a niche that continues to provide value.
I don’t get the reasoning behind saying that if the market would be real, the market cap would be a fraction of what it is now. Like, how do you determine that?
If cryptocurrency wasn't so volatile it would be better than worthless government paper because 1) cryptocurrency doesn't lose its value at rate of 2-13% per year 2) nobody will ban your cryptocurrency account if you use it for business 3) nobody will require to provide documentation and proof for every transaction that happened in last 6 months in your account.
Money laundering, gambling, flight capital from Russia and China, and scams are all very active niches that could be responsible for a lot of that liquidity.
What a bizarre bit of strawmanning. The crypto brigade has arrived so this has all gone very desperately defensive.
No, that isn't what I said. I said that clearly crypto in any rational sense has failed. Not just failed, overwhelmingly, catastrophically failed. It has zero relevance to the broader market. It has retreated from even where it was five years ago, that being a massively failed experiment.
BTC has held value because most of the people who hold it didn't "put a ton of money into it". BTC is the very definition of HODL behaviour, with negligible daily liquidity. It is a house of cards.
Why would anybody buy something that they can't sell for real money any more? Shouldn't that convince even the dumbest acolytes that there is no value to be had?
Cryptocurrency was (and still is to an extent) a really interesting idea that has a ton of real world utility, especially as government surveillance continues its march towards panopticon. It's a shame that the "get rich quick" grifters and speculators took ahold of it and have killed any chance of normal people adopting it as a regular form of payment.
Nearly 14 years in, where exactly is this “ton of real world utility”?
Surely someone somewhere would have a product providing this utility, even amidst the sea of fraud and grift. I still don’t see it.
Some utility? Okay, sure. A ton? Not even close. Consider that the web launched in 1993. By 2007 (14 years later), virtually the entire planet had changed dramatically as a result. That is a technology with a ton of real world utility.
Thanks to Ethereum (and specially now that there are L2s which have cheaper tx costs) I can distribute revenue from my business between different types of collaborators, without incurring in paying 120% in taxes for having "employees".
In Argentina if someone works for you more than 15/20 hours in a given month you are legally obliged to hire them for, at least, 3 months.
The legislation doesn't fit in tons of cases, and led the country to over 35% of working people outside the legal framework.
Crypto gives people living in dysfunctional democracies a chance to participate in the global economy, something that people living in Europe or North America cannot comprehend.
And don't even get me started on why ownership of your money is important but if you are willing to read take a look at this: https://en.wikipedia.org/wiki/Corralito
Yea same. Really still unclear what utility it provides that fiat currencies do not. Not theoretical utility, like real world utility.
I think crypto will go down in history as an amazing example of the importance of institutional knowledge and regulation. Like how did nobody see fraud coming in an unregulated financial instrument? Did folks genuinely think that "decentralization" was going to sidestep all of the typical problems that we've been using regulation to solve for the past several hundred years?
Blockchain tech isn't 14 years old, it's 30 years old, or even 40 if you want to go back to the '82 paper. Still no world-changing tech has come from it, aside from monopoly money.
>Nearly 14 years in, where exactly is this “ton of real world utility”?
People usually qualify this with "moral" or "legal" uses -- crypto currencies are absolutely useful for tax evasion and moving money across borders illegally -- it's why many people use them. It's these exact qualities that draw in the 'scammers' and 'get rich guys' as well. So it absolutely has real world uses just ones you don't like. The next question naturally then is why don't we shut them down? Now you can see how powerful they actually are because they're aren't fragile either and very persistent.
Sending money to other countries? You don't need to hold the coins long. Just buy some stable coins, send it, and other person sells them through a broker.
From what I understand sending money across counties is very expensive. Not to mention "bad countries"
Arpanet started at 1969 and it was not immediately labed with certain groups as a scam, like here for years. That literally blocks the perception. So 2007-1969 is 38 years and not 14.
It was pretty useful for sending money to people. If you regularly need to send money to friends in other countries, the current apps and bank account transfers are a pain.
Or look at much newer LLMs, or even Gaussian Splatting. Clear use cases, rapid innovation, certain impact.
Cryptocurrency has two main applications: illegal transactions, and speculation. It's high time to stop pretending it got popular for any other reason.
The utility is distributing the money – if you don't see it, then you are alright with the bank system, having a credit card and a bank account. You are probably lucky enough to be born in a country which is not hated by the whole world, so it is integrated in the global economics. So as national of such well-regulated and established country, for you letting money to flow free always sounds like fraud and grift, but to some it is a matter of buying food and clothes, and it is an only mean of international money transfer left because well they are in a different situation and the current world can not provide you with even basic economic rights without discriminating
The utility is on the name: cryptoCURRENCY. Before it became a speculative asset, crypto faced the issue of adoption, now that it is one, it faces the issue of not being useful as a way to facilitate transactions.
While it may be hard to see in first world countries, imagine being in a third world country and having a place you can store value that can't be debased by your crackpot dictator. That's huge.
Cryptocurrencies have a sort of value as a kind of collectable like art. Similarly to how people may like to buy paintings, have them appreciate in value and maybe trade them to other art collectors, other people may like to collect bitcoins or similar to likewise have them appreciate and maybe trade to other bitcoiners. You could say it's illusory but if it makes people happy does it matter? There's a lot of theoretical value there. I mean we'll all be gone in the end so if it helps you enjoy the journey.
I've conducted a handful of actual real transactions using it (over 10+ years) and I'm hardly a crypto advocate. I suspect that I'm the exception, and that even those who had the glowing eyes in their avatar and changed their username to "something.eth" rarely ever use it as an actual currency.
if presence of crypto accelerated various central banks towards faster digitization like India's UPI or very recent US FedNow then I'd consider that a success of crypto. you cannot claim otherwise just like you have to acknowledge role of Linux in us not be completely beholden and nickle & dimed to death by the likes of MS/Apple.
to be clear I still think crypto is completely take over by grifters & charlatans & the environmental footprint of proof-of-work is abysmal but still its good to have a decentralized alternative to central bank fractional reserve paper money. its as close to gold as we are ever gonna get now. if it were not so they (not just US but all around world) would not be trying to kill it that hard.
> Surely someone somewhere would have a product providing this utility
like tor escrow markets? monero is a great way for us to obtain things that haven't been legalized yet. cryptocurrency has already found quite the niche for transactions that don't want or need government meddling
Decentralized ledger tech is just starting to get there - blockchains are the first inefficient implementation, and newer technologies like Hedera Hashgraph can do it far more cheaply and efficiently. Services are dependent on network effects and independent contributors. As long as people are discouraged from using it we won't get solid examples of usage.
Wouldn't it be ideal if open source apps and platforms could go beyond the slow and risky traditional donation model, and not have to be entirely user-hosted or hosted by a paid company? Imagine social media platforms not susceptible to the pettiness of absolutist employees and owners, MMORPGs not debilitated by IP holders, cryptographically secured cloud software that follows the needs of its users. Perhaps like communes such projects are forever limited by the requirement of a modicum of participant interest and cost-sharing.
> Nearly 14 years in, where exactly is this “ton of real world utility”?
I don't think cryptocurrency has much value, but I think block chain has lots of potential for trading things that have unique ids and are owned by many people. I paid $1500 for research on a title claim and my lawyer came back with "It's looks solid, but I'd get the title insurance just in case". If property deeds were on the block chain then it'd be trivial.
Car deeds, property deeds, stocks, concert tickets, air line tickets, hotel reservations, all these would benefit from being frictionlessly traded on a block chain. That said, to be useful the entities have to be tangible and the owners don't really benefit (though hotels would benefit from the speculation since it'd even out their cash flow) or the owner is the government.
It strikes me as a bit silly to set the bar at the World Wide Web, which is easily one of the most transformative fast-moving technologies in human history.
There is literally only one kind of "utility" that matters in money and money-like instruments.
ONLY ONE.
"Do people believe it will retain or increase in value?"
That's IT. This goes for the things you think are scammy, and it also goes for the things that you perhaps expect to retire on.
There is nothing there besides "what people choose to believe."
So there it is, even for crypto. If enough people believe in crypto/the stock market/social security, then it will work and do the thing. If they don't, it won't.
NFTs. It's like Steam's marketplace, but without having to have one company have control to ban anyone. It lets you safely make trades without having to pass your items to sites for them to hold on to your items for you.
> Cryptocurrency was (and still is to an extent) a really interesting idea that has a ton of real world utility, especially as government surveillance continues its march towards panopticon.
Cryptocurrency not only doesn't help much, but even goes backwards there. You think the government is bad? Imagine life in NFT land. Your gym ticket is a NFT. Your movie ticket is a NFT. Your house deed is a NFT.
So everyone you interact with knows where you work, how much you earn, what you own, where's your house, what you buy, what groups you belong to... and they can keep tracking you forever if you tell them who you are just once.
They can treat you preferentially or charge you more or ban you depending on your past history.
Sure, there's Monero, but nobody seems to really care about that one.
> It's a shame that the "get rich quick" grifters and speculators took ahold of it and have killed any chance of normal people adopting it as a regular form of payment.
It's built into the system. The early makers like Satoshi wanted a deflationary system. A deflationary system is inherently undesirable for usage as a currency, and makes it just the thing for HODLing and speculation.
You could have inflation, but who controls it? There are no good answers.
There is a lot of crypto usage possibility without the need for NFT proliferation. The only necessary "NFT" may be licenses granting access to decentralized cloud software platforms on a perpetual or monthly subscription basis.
Wouldn't it be ideal if open source apps and platforms could go beyond the slow and risky traditional donation model, not have to be entirely user-hosted or hosted by a paid company, and fully accessible to non-technical users? Imagine social media platforms not susceptible to the pettiness of absolutist employees and owners, MMORPGs not debilitated by IP holders, cryptographically secured cloud software that follows the needs of its users. Perhaps like communes such projects are forever limited by the requirement of a modicum of participant interest and cost-sharing.
> So everyone you interact with knows where you work, how much you earn, what you own, where's your house, what you buy, what groups you belong to... and they can keep tracking you forever if you tell them who you are just once.
Granted public blockchain is a lot more discoverable, but a lot of this already is public. Property ownership is public (at least in the US), credit cards sell your data, facebook knows which groups you belong to, etc.
Normal people were never going to do well with a payment system where if you forget your password you've irretrievably lost access to your funds.
(I've heard all of the arguments about backup phrases and social recovery wallets and suchlike, and I have yet to see evidence that these will work for anyone other than the most technically sophisticated of users.)
> government surveillance continues its march towards panopticon
The entire notion of crypto is that you can track a block over every transaction and that the transaction history creates the whole. Most Exchanges are forced to report who opened a wallet.
Compared to cash/gift cards or many other payment forms, Crypto is the government surveillance DREAM.
Various law enforcement agencies around the world has even publicly states how pleased they are with the tracking blockchain technology allows them, without even requiring a warrant for much of the work.
It's at a point where you could easily read the original comment as blockchain should technology should be pushed by governments to help fight crime.
For the average person crypto-currency have all of the disadvantages of credit/debit- cards, cash and Zimbabwe dollars combined while providing none of the benefits.
The blockchain is a perfect tool of government surveillance. They can track the flows of money like never before, while most users think it is completely anonymous. It is the perfect weapon of state control.
There has been hundreds of stories about how blockchain technology has been a boon to investigators trying to track drug, terrorism and illegal porn money flows.
> and have killed any chance of normal people adopting it as a regular form of payment.
To be honest, it's not just the grifters that put me off using cryptocurrency as a regular form of payment. It's other considerations such as volatility, the inability to undo payments, etc.
Although it's true that the the fact the cryptocurrency tends to be used, or at least advocated, mostly by certain subcultures (not just criminals) is very off-putting to me as well.
Plus, at least for the sorts of commerce I engage in, cryptocurrency is very inconvenient and doesn't give me any benefits that justify the inconvenience.
It's still being used by normal people in really bad situations. It's just hn's typical demographic bubble that fails (or refuses) to see how it helps people. Of course, you're only experience with it is scams if you have easy access to USD and a more or less stable economy. Why on earth would you use something else!!
It really makes me happy that cryptocurrecy is here to stay despite the constant groaning and moaning. One day, even folks like hn will face the same issues that forced people to rely on it and they will be glad that it exists too :)
Relying on something volatile sounds like a contradiction to me and trust is the core of all currencies.
Every crypto "currency" was dead the moment they dropped stability for personal/miners gains.
Edit: Imagine a system where nodes would gain progressively less by dicovering new blocks but would prevent a timed decay of their wallets by doing so. A naive inverted incentive structure. Would this be a more long term relyable currency?
The blockchain is a perfect tool of government surveillance. They can track the flows of money like never before, while most users think it is completely anonymous.
There has been hundreds of stories about how blockchain technology has been a boon to investigators trying to track drug, terrorism and illegal porn money flows.
> especially as government surveillance continues its march towards panopticon
Pseudonymous is not anonymous. Pseudonymity is not privacy.
Cryptography is cool for certain kinds of privacy. Cryptocurrency has almost nothing to do with cryptography and does not provide privacy in the ways that counter a surveillance super-state. Pseudonymity makes transactions more traceable because unique identifiers are tied to each wallet and every single transaction with all metadata is recorded in plain view by design of the protocol. Mixers are an attempt to patch the failure of the protocol's design to actually implement any form of privacy, and even then, there are statistical tools that can plausibly tease out who's paying whom. At least enough to justify to the state, in its bureaucratic processes, more conventional forms of investigation. It's not perfect because the failures are systemic, i.e., inherent to the protocols.
I feel like a crazy person. Sometimes I feel like I'm hallucinating the life I'm living, and I'm really locked in a padded room repeating these things to myself day and night but no one will listen.
I'm well aware that cryptos like Bitcoin and Etherium are open ledger books that show everything. The privacy comment was more targeted at systems such as Monero.
> "get rich quick" grifters and speculators took ahold of it
Every single "feature" touted as a good thing by crypto boosters is exactly WHY grifters and conmen got into it.
The system doesn't even have a concept of a "fraudulent transaction" FFS. For a system built by people who claim to know so much about cryptography and computer security, they sure seem stumped by the very simple concept of "someone tricked me and I clicked on a link" which is still the number one problem in computer security.
The lack of transaction reversal is a god-send for crooks. The lack of a justice system is a boon for them. There's a reason they don't even have to be creative with their scams, and are just dusting off old play books from the 1920s.
Crypto isn't shitty because of bad luck, crypto is shitty because the people who built it are completely ignorant of the value of regulation because they are caught in their ideology that all regulation is bad.
> especially as government surveillance continues its march towards panopticon
I thought China loved crypto because you get absolute spy power over how every penny of your citizenry is spent, and can then control someone's access to their coins if they speak out against you. Seems like the opposite of what you're describing, no?
Unlikely on both counts. Realistically speaking, the problem with crypto is that you will always have to go against a nation state level entity's tax office. And that's not someone you can win a fight with unless you deal in real money.
When I was interested in trading a long time ago it was common to move shit around in Eth or BTC or whatever until you found your USD exchanger, typically coinbase. Why would this be news?
This (USD withdrawal) has been disabled in the app for US users for a while now. I have like $15 there (in BNB) and check it once-in-a-while just for curiosity.
I have had a little money stuck with them since they banned US customers to the original site. There has been absolutely no way to transfer the money out of my account, even to Binance US, and I eventually had to just call it a loss.
If only I had thought of that.. Unfortunately, you were only allowed to convert to the Binance coin. That option did not work for me, I can't recall what the specific issue was now but I am guessing had something to do with KYC.
As long as you can find a peer and cash out your hashes, we are good. Banks are scam, regulators are scammers. Someone who wants to truly own his money and move it around the world without barriers can only rely on crypto today. Same people who fear criminal use neglect those in real need of crypto to survive their day. Discrimination is everywhere, for as long as it is true – crypto stays as a firm monolyth.
This is just more evidence that exchanges are bad for cryptocoin. What crypto needs to be healthy is direct user to user transactions, with absolutely nothing in between. That was the original vision with bitcoin. Everything layered on top and in between the transactions fundamentally results in harming adoption.
there's a difference "healthy" as per the philosophy of $coin and "healthy" as it relates to a market.
P2P Bitcoin with no exchanges or ACH-based fiat offramps will reduce the number of coin holders to probably what it was in 2011. That in turn will reduce the credibility of the currency and overall market liquidity as there are so few holders that would be willing to accept it as a medium of exchange.
This is playing out right now in Russia, which accepts INR for oil exports, in a bid to limit the dollar's influence.The problem this has created is that Russian banks are flush with Indian rupees that aren't accepted by other vendors. Everyone takes dollars and euros and yen, but the INR isn't considered as portable.
Readit News
Yet somehow BTC is still trading at close to historic highs.
Now to be fair the market cap of all of BTC is 1/4 Apple, but if it were remotely a functioning market or were at all "real", it would be trading at a tiny fraction of that amount. The fact that it still holds is the best demonstration of how illusory the whole sham is.
So there may be a lot of wash trading and games played with stablecoins trying to prop up the price, but there also must be enough real buyers to purchase the 6.25 BTC (~$175k) generated every 10 minutes. Otherwise the miners would not be able to pay their bills (surely owed in Real Money), would shut down, and we would see evidence of that in the network's hashrate plummeting.
Serious scrutiny of how exactly the hash rate in Bitcoin is generated would not reflect well on the ecosystem, because of the amount of outright corruption involved, as well as theft, that goes back a decade. A couple years ago an operation was uncovered in Thailand where something on the order of 100 million dollars worth of mining equipment had been found burning stolen electricity from government enterprises, IIRC primarily public schools, and one of the investigators involved speculated that this was likely less than 10% of the illegal mining that was happening in their country, let alone the recognized legal stuff.
Consider that similar things are happening all over the world, not just Thailand, and even entire countries (DPRK) participating due to total systemic corruption crossed with no questiins asked access to natural resources and national treasuries, to be spent in any way they choose, and an investment in destabilizing the world economy - or at least evading financial controls - is well worth the cost of subsidizing mining both within their borders and beyond. You've also got quasi crackpots in charge of places like the government of El Salvador who are also helping to support this ecosystem.
Miners, I will conjecture without offering any support on the bet that eventually this will be found out and publicized, have been sitting on a warchest of nearly free coins mined long ago, when almost nobody was looking for corruption or theft of resources, and when block rewards were multiples higher to boot. The argument that miners have barely made a profit because of the adjustable difficulty level has always been an open lie due to a willingness to completely disregard the mining done using off market access to electricity and facilities, which was rampant in the early days and is still a significant chunk of the hash rate even today.
Miners can continue to slow sell their coin bases because they have effectively paid for them for over a decade at a massive discount to "market," and since the only major source of downward price pressure are the miners themselves, they can prop the price up for as long as they like by simply selling fewer coins into the market whenever there is an adverse social signal that they need to counter with a " honey badger of money doesn't care" price signal.
Still 4 transactions per second?
It's the safest, oldest, most tested blockchain out there. You can't beat that.
Crypto, on the other hand, seems to be predicated on retail investors and consumers. So they do seem manifestly different as you have expressed them (maybe my issue is with the notion of the "average" VC-backed company?).
Crypto only has "Bitcoin has above market returns" in terms of success.
There was some neat smart contract stuff but some of that technically breaks trading rules (aka is questionable legality) and others are a coin flip as to whether a vulnerability will let someone drain the entire fund.
To take it even further, what provides more value? Instagram or OpenSea (NFT marketplace)?
When you stop and think about it, it's the Spiderman meme. They are both pretty useless and are most likely a net negative to society.
A few years ago, virtually all of professional sports were sponsored by crypto companies. Since almost all of them have folded, usually under massive fraud, and have been replaced by gambling firms. So I guess nothing has changed.
Despite all the bad press, shady exchanges, bubbles and busts, a large amount of BTC owners don't sell, and that alone will drive it's price up. Other cryptos, I can't speak for.
One of the challenges with price discovery in the BTC market, though, is that there's not really an effective mechanism to prevent wash trades in place. That means that all you need to do to create a bunch of fraudulent liquidity at a higher price is create a sock puppet account and start trading with yourself. Anyone sitting on a hoard of BTC is highly incentivized to do this to try and prevent their on-paper losses in the hope that it will mitigate their becoming real losses. And that can concievably become the bulk of BTC trading volume if there isn't a steady supply of new people who are willing to buy in to Bitcoin at any price.
Wrong; you need people buying the roughly $25M worth of daily new bitcoins just to maintain the current price.
investing in BTC is a bet that people in power of money will continue to act in their own selfish interest. it's a bet on clown world continuity. i love that.
i think it has utility but is there good reason for it to be $30k and not $1k outside of money printing...i doubt it.
For the present price that is approx 48 mil x $10k / 16 mil = $30k
Early 2017 would have been 1.6 mil x $10k / 16 mil = $1k
It's rough and ready but kind of how things play out. Most of the growth in price over the years has come from more people buying in. Not sure where it ends. We might get another 10x and 500 million people at some point?
As for the price of BTC - it's deflationary and its holders only have incentive to buy and hold as long as they can while they hype it to the world - it'll never go down in price until the majority of holders have to sell.
A lot of the people employed in the crypto space are also out there buying houses, cars, taking vacations, and buying the odd pizza. That all requires real currency.
Many other people around the world have no other choice but to use crypto when their local currency is spiralling down with inflation, when banks refuse to work with them, when they immigrate and have to transfer their life savings, or work for remotely with people from other countries, or simply when they want to buy a few grams of marijuana.
The fact that you don't see any personally don't have any legitimate uses for a product doesn't mean that there are none.
It is illogical, but so are many, many things.
Your argument is: because a ton of people have put a ton of money into it, that proves that it's a scam?
So the stock market, which has a much bigger market cap is therefore MORE of a scam? What are you trying to do here?
No, that isn't what I said. I said that clearly crypto in any rational sense has failed. Not just failed, overwhelmingly, catastrophically failed. It has zero relevance to the broader market. It has retreated from even where it was five years ago, that being a massively failed experiment.
BTC has held value because most of the people who hold it didn't "put a ton of money into it". BTC is the very definition of HODL behaviour, with negligible daily liquidity. It is a house of cards.
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Surely someone somewhere would have a product providing this utility, even amidst the sea of fraud and grift. I still don’t see it.
Some utility? Okay, sure. A ton? Not even close. Consider that the web launched in 1993. By 2007 (14 years later), virtually the entire planet had changed dramatically as a result. That is a technology with a ton of real world utility.
In Argentina if someone works for you more than 15/20 hours in a given month you are legally obliged to hire them for, at least, 3 months. The legislation doesn't fit in tons of cases, and led the country to over 35% of working people outside the legal framework.
Crypto gives people living in dysfunctional democracies a chance to participate in the global economy, something that people living in Europe or North America cannot comprehend.
And don't even get me started on why ownership of your money is important but if you are willing to read take a look at this: https://en.wikipedia.org/wiki/Corralito
I think crypto will go down in history as an amazing example of the importance of institutional knowledge and regulation. Like how did nobody see fraud coming in an unregulated financial instrument? Did folks genuinely think that "decentralization" was going to sidestep all of the typical problems that we've been using regulation to solve for the past several hundred years?
People usually qualify this with "moral" or "legal" uses -- crypto currencies are absolutely useful for tax evasion and moving money across borders illegally -- it's why many people use them. It's these exact qualities that draw in the 'scammers' and 'get rich guys' as well. So it absolutely has real world uses just ones you don't like. The next question naturally then is why don't we shut them down? Now you can see how powerful they actually are because they're aren't fragile either and very persistent.
From what I understand sending money across counties is very expensive. Not to mention "bad countries"
Do people use it for this in real life?
Cryptocurrency has two main applications: illegal transactions, and speculation. It's high time to stop pretending it got popular for any other reason.
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to be clear I still think crypto is completely take over by grifters & charlatans & the environmental footprint of proof-of-work is abysmal but still its good to have a decentralized alternative to central bank fractional reserve paper money. its as close to gold as we are ever gonna get now. if it were not so they (not just US but all around world) would not be trying to kill it that hard.
PS: dont own crypto
like tor escrow markets? monero is a great way for us to obtain things that haven't been legalized yet. cryptocurrency has already found quite the niche for transactions that don't want or need government meddling
-vicuna
Wouldn't it be ideal if open source apps and platforms could go beyond the slow and risky traditional donation model, and not have to be entirely user-hosted or hosted by a paid company? Imagine social media platforms not susceptible to the pettiness of absolutist employees and owners, MMORPGs not debilitated by IP holders, cryptographically secured cloud software that follows the needs of its users. Perhaps like communes such projects are forever limited by the requirement of a modicum of participant interest and cost-sharing.
I don't think cryptocurrency has much value, but I think block chain has lots of potential for trading things that have unique ids and are owned by many people. I paid $1500 for research on a title claim and my lawyer came back with "It's looks solid, but I'd get the title insurance just in case". If property deeds were on the block chain then it'd be trivial.
Car deeds, property deeds, stocks, concert tickets, air line tickets, hotel reservations, all these would benefit from being frictionlessly traded on a block chain. That said, to be useful the entities have to be tangible and the owners don't really benefit (though hotels would benefit from the speculation since it'd even out their cash flow) or the owner is the government.
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You can exchange cryptocurrency for goods and services, even the ones governments and banks don't want you to buy.
ONLY ONE.
"Do people believe it will retain or increase in value?"
That's IT. This goes for the things you think are scammy, and it also goes for the things that you perhaps expect to retire on.
There is nothing there besides "what people choose to believe."
So there it is, even for crypto. If enough people believe in crypto/the stock market/social security, then it will work and do the thing. If they don't, it won't.
That's not a helpful comment, and you aren't even correct. the web was around in the 80s, 70s ... no wait the 1960s.
The number of years its been around is irrelevant to its current or future usefulness.
It's no web, but its a lot more impactful than say self driving cars (thus far), 3D-printing, or vegan meat.
Edit: This is not to discount those technologies, rather to emphasize that crypto is used by millions worldwide for real transactions.
Cryptocurrency not only doesn't help much, but even goes backwards there. You think the government is bad? Imagine life in NFT land. Your gym ticket is a NFT. Your movie ticket is a NFT. Your house deed is a NFT.
So everyone you interact with knows where you work, how much you earn, what you own, where's your house, what you buy, what groups you belong to... and they can keep tracking you forever if you tell them who you are just once.
They can treat you preferentially or charge you more or ban you depending on your past history.
Sure, there's Monero, but nobody seems to really care about that one.
> It's a shame that the "get rich quick" grifters and speculators took ahold of it and have killed any chance of normal people adopting it as a regular form of payment.
It's built into the system. The early makers like Satoshi wanted a deflationary system. A deflationary system is inherently undesirable for usage as a currency, and makes it just the thing for HODLing and speculation.
You could have inflation, but who controls it? There are no good answers.
Wouldn't it be ideal if open source apps and platforms could go beyond the slow and risky traditional donation model, not have to be entirely user-hosted or hosted by a paid company, and fully accessible to non-technical users? Imagine social media platforms not susceptible to the pettiness of absolutist employees and owners, MMORPGs not debilitated by IP holders, cryptographically secured cloud software that follows the needs of its users. Perhaps like communes such projects are forever limited by the requirement of a modicum of participant interest and cost-sharing.
Granted public blockchain is a lot more discoverable, but a lot of this already is public. Property ownership is public (at least in the US), credit cards sell your data, facebook knows which groups you belong to, etc.
(I've heard all of the arguments about backup phrases and social recovery wallets and suchlike, and I have yet to see evidence that these will work for anyone other than the most technically sophisticated of users.)
It's at a point where you could easily read the original comment as blockchain should technology should be pushed by governments to help fight crime.
For the average person crypto-currency have all of the disadvantages of credit/debit- cards, cash and Zimbabwe dollars combined while providing none of the benefits.
There has been hundreds of stories about how blockchain technology has been a boon to investigators trying to track drug, terrorism and illegal porn money flows.
https://www.wsj.com/articles/bitcoin-blockchain-hacking-arre...
To be honest, it's not just the grifters that put me off using cryptocurrency as a regular form of payment. It's other considerations such as volatility, the inability to undo payments, etc.
Although it's true that the the fact the cryptocurrency tends to be used, or at least advocated, mostly by certain subcultures (not just criminals) is very off-putting to me as well.
Plus, at least for the sorts of commerce I engage in, cryptocurrency is very inconvenient and doesn't give me any benefits that justify the inconvenience.
It really makes me happy that cryptocurrecy is here to stay despite the constant groaning and moaning. One day, even folks like hn will face the same issues that forced people to rely on it and they will be glad that it exists too :)
Edit: less downvoting, more useful discussion.
Every crypto "currency" was dead the moment they dropped stability for personal/miners gains.
Edit: Imagine a system where nodes would gain progressively less by dicovering new blocks but would prevent a timed decay of their wallets by doing so. A naive inverted incentive structure. Would this be a more long term relyable currency?
There has been hundreds of stories about how blockchain technology has been a boon to investigators trying to track drug, terrorism and illegal porn money flows.
https://www.wsj.com/articles/bitcoin-blockchain-hacking-arre...
Pseudonymous is not anonymous. Pseudonymity is not privacy.
Cryptography is cool for certain kinds of privacy. Cryptocurrency has almost nothing to do with cryptography and does not provide privacy in the ways that counter a surveillance super-state. Pseudonymity makes transactions more traceable because unique identifiers are tied to each wallet and every single transaction with all metadata is recorded in plain view by design of the protocol. Mixers are an attempt to patch the failure of the protocol's design to actually implement any form of privacy, and even then, there are statistical tools that can plausibly tease out who's paying whom. At least enough to justify to the state, in its bureaucratic processes, more conventional forms of investigation. It's not perfect because the failures are systemic, i.e., inherent to the protocols.
I feel like a crazy person. Sometimes I feel like I'm hallucinating the life I'm living, and I'm really locked in a padded room repeating these things to myself day and night but no one will listen.
All of these le sigh type retrospectives seem to completely skip over stuff like this.
I'm pretty sure cryptocurrency isn't the solution.
Every single "feature" touted as a good thing by crypto boosters is exactly WHY grifters and conmen got into it.
The system doesn't even have a concept of a "fraudulent transaction" FFS. For a system built by people who claim to know so much about cryptography and computer security, they sure seem stumped by the very simple concept of "someone tricked me and I clicked on a link" which is still the number one problem in computer security.
The lack of transaction reversal is a god-send for crooks. The lack of a justice system is a boon for them. There's a reason they don't even have to be creative with their scams, and are just dusting off old play books from the 1920s.
Crypto isn't shitty because of bad luck, crypto is shitty because the people who built it are completely ignorant of the value of regulation because they are caught in their ideology that all regulation is bad.
I thought China loved crypto because you get absolute spy power over how every penny of your citizenry is spent, and can then control someone's access to their coins if they speak out against you. Seems like the opposite of what you're describing, no?
Oh, right, HN no longer does anything about generic soapbox comments that have nothing to do with the article.
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P2P Bitcoin with no exchanges or ACH-based fiat offramps will reduce the number of coin holders to probably what it was in 2011. That in turn will reduce the credibility of the currency and overall market liquidity as there are so few holders that would be willing to accept it as a medium of exchange.
This is playing out right now in Russia, which accepts INR for oil exports, in a bid to limit the dollar's influence.The problem this has created is that Russian banks are flush with Indian rupees that aren't accepted by other vendors. Everyone takes dollars and euros and yen, but the INR isn't considered as portable.