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Crypto 'altcoins'. Will any change the future of finance?

Any other investment discussions eg. peer to peer lending
NotSure
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Crypto 'altcoins'. Will any change the future of finance?

#416227

Postby NotSure » May 30th, 2021, 1:09 pm

Blockchain, DeFi etc. are thought by some to be the future of finance - just like hardly anyone uses a library to seek information, why won't we use decentralised, inexpensive means to save and borrow money, for example? Even UK is examining the case for a national digital currency, and in particular in developing countries, digital currencies may allow access to financial service to many who do not currently have it. Another appeal to many is the lack of central control. Some folk have it into their heads that the global financial system has not been designed or run with their best interests at heart and seems rigged toward the 'haves' at the expense of the 'have nots'. (I can't think why? ;))

All the media attention has focussed on Bitcoin, but primarily as a speculative 'asset'. But most would not dream of using BTC to say lend or borrow money due to extreme volatility and environmental concerns. It is deflationary, hence tends to get hoarded, and seems of little practical use.

However, some projects attempt to be more useful. To get the ball rolling (partly on MCB's behalf), take Algorand (ALGO), (https://www.algorand.com/, though others I have found interesting include Cardano (ADA) and Stellar (LUMEN).

The founder of Algorand is an eminent MIT professor who holds the Turing prize for cyptography. It is already the official digital currency of the Republic of the Marshall Islands. It is also carbon nuetral and aims to be carbon negative. Algorand is an attempt to solve the blockchain 'trilemma'. How can security, scalability and decentralisation be simultaneously achieved?

https://community.algorand.org/blog/understanding-algorand-the-blockchain-which-claims-to-solve-the-trilemma/

A large collection of ‘sober’ articles on Algorand here https://medium.com/algorand. (Medium allows 3 free reads a month, or as many as you like if using ‘incognito’ mode)

Anyway, are any of these projects likely to succeed in disrupting the current global financial system? Is this a good thing? Is there money to made by investing in the more plausible ones?

Disclosure – I have £60’s worth of ALGO (least, it was £60 last time I looked, might be 60p by now ;))

supremetwo
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Re: Crypto 'altcoins'. Will any change the future of finance?

#416231

Postby supremetwo » May 30th, 2021, 1:50 pm

NotSure wrote: Anyway, are any of these projects likely to succeed in disrupting the current global financial system? Is this a good thing? Is there money to made by investing in the more plausible ones?

Disclosure – I have £60’s worth of ALGO (least, it was £60 last time I looked, might be 60p by now ;))


Very much doubt that Governments and Policing want any of the untraceable crypto currencies to succeed.

And without Government support, your last sentence says it all!

NotSure
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Re: Crypto 'altcoins'. Will any change the future of finance?

#416240

Postby NotSure » May 30th, 2021, 3:13 pm

supremetwo wrote:
NotSure wrote: Anyway, are any of these projects likely to succeed in disrupting the current global financial system? Is this a good thing? Is there money to made by investing in the more plausible ones?

Disclosure – I have £60’s worth of ALGO (least, it was £60 last time I looked, might be 60p by now ;))


Very much doubt that Governments and Policing want any of the untraceable crypto currencies to succeed.

And without Government support, your last sentence says it all!


:D

That is a common misconception about blockchain, and a reason why governments may actually be keen to 'grow their own' - every transaction is recorded for ever more, so if the transactions were traceable to an individual rather than a (somewhat) anonymous wallet, the opposite is true. Government sponsored token would be a different beast to BTC, but, were I an international organised criminal, I would not use Bitcoin - I suspect CIA/FBI could learn a lot from the publicly available ledger.

But for this thread, I'm more interested in views on whether blockchain could actually have real world uses, and if so, which are the best candidates. E.g. imagine a remorely located farmer in a developing country being able to obtain credit to buy seeds, and safely stash the proceeds of his farming, all for free, and no risk from corrupt bank officials or politicians - they'd just need access to a mobile device, in principal.

ReformedCharacter
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Re: Crypto 'altcoins'. Will any change the future of finance?

#416268

Postby ReformedCharacter » May 30th, 2021, 7:23 pm

NotSure wrote:
But for this thread, I'm more interested in views on whether blockchain could actually have real world uses, and if so, which are the best candidates. E.g. imagine a remorely located farmer in a developing country being able to obtain credit to buy seeds, and safely stash the proceeds of his farming, all for free, and no risk from corrupt bank officials or politicians - they'd just need access to a mobile device, in principal.

Doesn't use blockchain but M-Pesa does a lot of the rest:

M-Pesa (M for mobile, pesa is Swahili for money) is a mobile phone-based money transfer service, payments and micro-financing service, launched in 2007 by Vodafone Group plc and Safaricom, the largest mobile network operator in Kenya.[1] It has since expanded to Tanzania, Mozambique, DRC, Lesotho, Ghana, Egypt, Afghanistan and South Africa. Meanwhile, services in India, Romania, and Albania have been terminated amid low market uptake. M-Pesa allows users to deposit, withdraw, transfer money, pay for goods and services (Lipa na M-Pesa), access credit and savings, all with a mobile device.[2]

The service allows users to deposit money into an account stored on their cell phones, to send balances using PIN-secured SMS text messages to other users, including sellers of goods and services, and to redeem deposits for regular money. Users are charged a small fee for sending and withdrawing money using the service.


https://en.wikipedia.org/wiki/M-Pesa

RC

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Re: Crypto 'altcoins'. Will any change the future of finance?

#416281

Postby Urbandreamer » May 30th, 2021, 9:05 pm

NotSure wrote:But for this thread, I'm more interested in views on whether blockchain could actually have real world uses, and if so, which are the best candidates. E.g. imagine a remorely located farmer in a developing country being able to obtain credit to buy seeds, and safely stash the proceeds of his farming, all for free, and no risk from corrupt bank officials or politicians - they'd just need access to a mobile device, in principal.


It would be insane to think that the concept of blockchain could not have real world uses. Ok, bitcoin has other aspects that you clearly want to set on one side. However the blockchain concept is fantastic as a method of proving ownership.

From land registry to share ownership that requirement exists.

Personally I'm not sold on the concept of Non-Fungible_Tokens, but my doubts are more about the seperation of the object and the token. The concept does have value.

As you point out many established institutions are looking to use blockchain.

feder1
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Re: Crypto 'altcoins'. Will any change the future of finance?

#416304

Postby feder1 » May 31st, 2021, 5:38 am

This Chinese economist believes bitcoin will cause human societies to collapse:

https://news.bitcoin.com/chinese-econom ... ot-a-joke/

I can,t understand why governments are not taking this seriously.

NotSure
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Re: Crypto 'altcoins'. Will any change the future of finance?

#416340

Postby NotSure » May 31st, 2021, 10:51 am

Urbandreamer wrote:It would be insane to think that the concept of blockchain could not have real world uses. Ok, bitcoin has other aspects that you clearly want to set on one side. However the blockchain concept is fantastic as a method of proving ownership.....


A practical and useful example of this, Cardano (ADA) is working with the Ethiopian government to use their blockchain to give students proof of educational qualifications.

https://www.appsafrica.com/cardano-launches-blockchain-deployment-in-ethiopia-with-5m-students/

NotSure
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Re: Crypto 'altcoins'. Will any change the future of finance?

#416347

Postby NotSure » May 31st, 2021, 11:13 am

feder1 wrote:This Chinese economist believes bitcoin will cause human societies to collapse:

https://news.bitcoin.com/chinese-econom ... ot-a-joke/

I can,t understand why governments are not taking this seriously.


Bitcoin is of course deflationary - that is its main appeal to 'crypto-bugs' but I'm not sure many of then see the wider implications are their hoarding fetish (or hodling, as they like to call it - originally a typo on an early forum for 'holding' as in LTBH, now an acronym for 'Hold On for Dear Life'). But 'the death of us all''? Seems a bit dramatic, especially in China, where their form of government means they could eradicate bitcoin, should they choose. Property has long been hoarded for similar reasons - this makes life unnecessarily difficult for 'new entrants', but doesn't kill them.

I think governments are taking it serioulsy - China and many other governments are continually cracking down, and many (including China) are looking into creating their own 'digital currencies'. Some of the existing 'altcoins' may be good candidates for this, e.g. Algorand and Cardano.

I guess my interest is, would a genuinely decentralised global token (free of government control), but carbon neutral and (IMO) with controlled inflation, be a good thing? Is ‘DeFi’ going to seriously impact on the current global financial system? If so, in a good or a bad way? And finally, what altcoins are the best candidates?

Disclosure - I have £100 in crypto for 'a laugh' - it can double or halve in a day, so it's like a cheap form of bingo. I'm on TLF for conventional investment advice, not looking to get rich quick from crypto, but like MCB, I do believe it has a future and am interesting in the views of others here, who understand finance far more than I do. I suspect if crypto does have a future, the way to invest would be via 'platforms' in DeFi etc, not by betting on the fortunes of particular tokens.

Itsallaguess
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Re: Crypto 'altcoins'. Will any change the future of finance?

#418038

Postby Itsallaguess » June 8th, 2021, 7:51 am

An interesting story from the BBC this morning, where the US Justice Department have stated that they've now recovered most of the $4.4m Bitcoin ransom paid during the Colonial Pipeline hack/infiltration last month -

The US has recovered most of the $4.4m (£3.1m) ransom paid to a cyber-criminal gang responsible for taking the Colonial Pipeline offline last month.

DarkSide - which US authorities said operates from eastern Europe and possibly Russia - infiltrated the pipeline last month.

The attack disrupted supplies for several days causing fuel shortages.

According to the firm, the pipeline carries 45% of the East Coast's supply of diesel, petrol and jet fuel.

On Monday, Deputy Attorney-General Lisa Monaco said investigators had "found and recaptured" 63.7 Bitcoin worth $2.3m - "the majority" of the ransom paid. Since the ransom was paid the value of Bitcoin has fallen sharply.


From later in the article -

In America's ongoing fight against the scourge of ransomware, this is a major victory.

Stealing back a ransom is, to my knowledge, a first and it shows how far the US is willing to go to deter cyber-criminals. It sends a powerful message to the gangs who have been operating with impunity for years in states like Russia.

Perhaps deliberately, the DoJ are being vague about exactly how they did it. All they are saying is that the "private key" to the criminal's Bitcoin wallet is in the "possession of the FBI". With this key, which is effectively a password, agents were able to simply log in and send the digital coins to another wallet they control.

The cyber-security world is abuzz with rumours and theories about how they got hold of the password. Perhaps the key was found on seized servers, or gifted by an angry insider, or handed over by a cooperative company used as part of the criminal infrastructure.

Either way, it's a big moment and it is sending shockwaves.


https://www.bbc.co.uk/news/business-57394041

Cheers,

Itsallaguess

pje16
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Re: Crypto 'altcoins'. Will any change the future of finance?

#418041

Postby pje16 » June 8th, 2021, 8:31 am

Not for some considerable time
we can't even get rid of cash or cheques :roll:

Itsallaguess
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Re: Crypto 'altcoins'. Will any change the future of finance?

#418453

Postby Itsallaguess » June 9th, 2021, 6:20 pm

I suppose it's time to pull up a chair and see how this all works out then....

Bitcoin - El Salvador makes cryptocurrency legal tender -

El Salvador has become the first country in the world to officially classify Bitcoin as legal currency.

Congress approved President Nayib Bukele's proposal to embrace the cryptocurrency, with 62 out of 84 possible votes on Tuesday night.

The president said the government had made history, and that the move would make it easier for Salvadoreans living abroad to send money home.

Bitcoin will become legal tender, alongside the US dollar, in 90 days.

The new law means every business must accept Bitcoin as legal tender for goods or services, unless it is unable to provide the technology needed to do the transaction.

"It will bring financial inclusion, investment, tourism, innovation and economic development for our country," President Bukele said in a tweet shortly before the vote.


https://www.bbc.co.uk/news/world-latin-america-57398274

Cheers,

Itsallaguess

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Re: Crypto 'altcoins'. Will any change the future of finance?

#418461

Postby Mike4 » June 9th, 2021, 7:23 pm

NotSure wrote:Bitcoin is of course deflationary -


This I find intriguing. How or why would a currency (if you accept Bitcoin is one) be deflationary? Surely inflation/deflation is to do with supply/demand balance of goods and government policies, not the medium being used to replace the little coloured bits of paper.

Can you or anyone here expand on why Bitcoin is deflationary please? I'd imagine it is due to the absolute limit on the number of Bitcoins in 'circulation'. Sooner or later someone will figure out a way to breach the limit, I predict...

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Re: Crypto 'altcoins'. Will any change the future of finance?

#418468

Postby ursaminortaur » June 9th, 2021, 8:07 pm

Mike4 wrote:
NotSure wrote:Bitcoin is of course deflationary -


This I find intriguing. How or why would a currency (if you accept Bitcoin is one) be deflationary? Surely inflation/deflation is to do with supply/demand balance of goods and government policies, not the medium being used to replace the little coloured bits of paper.

Can you or anyone here expand on why Bitcoin is deflationary please? I'd imagine it is due to the absolute limit on the number of Bitcoins in 'circulation'.


It is a combination of that fixed limit and the fact that Bitcoins can be permanently lost.

https://www.skalex.io/deflationary-economics-bitcoin/

There’s a limit to the number of Bitcoin that will exist: 21 million. Once Bitcoin hits that amount, miners will no longer receive block rewards, and no new Bitcoins will enter the market. That might not seem like big news to you, but economists are up in arms over what will happen in a currency system that has a fixed supply.

In fact, the amount of available Bitcoin will decrease over the years. When someone forgets their private key, for instance, all the BTC that person owned are now lost and the system will never recover them. Over time, Bitcoins will continue to disappear from the system, meaning that the remaining BTC will rise in value as they become increasingly rare. However, this is not just true for Bitcoin. Most cryptocurrencies enforce an upper limit on their coin supply, after which no new coins will be mined.


Mike4 wrote:Sooner or later someone will figure out a way to breach the limit, I predict...


Only if Bitcoin is redesigned with a larger limit to allow further mining of Bitcoins after the current limit is reached. The main idea of cryptocurrencies like Bitcoin was that unlike Fiat currencies there was a fixed limit to the amount of currency in circulation - that idea is somewhat undermined if someone can just redesign it with a larger limit. It would raise a lot of questions. Who would have the authority to increase that limit ? If they did it once what is to stop them doing it again after that ?

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Re: Crypto 'altcoins'. Will any change the future of finance?

#418543

Postby absolutezero » June 10th, 2021, 9:44 am

Crypto 'altcoins'. Will any change the future of finance?

No.


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