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Crypto Bubble

How to buy, profit and invest in crypto currencies or NFTs
Bubblesofearth
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Re: Crypto Bubble

#402663

Postby Bubblesofearth » April 8th, 2021, 4:56 pm

justfisk wrote:
In the World of "Crypto", Bitcoin stands alone as the Store of Value. There are not many alternatives. In the list you shared, Ethereum is more a platform for smart contracts and even its founders do not market it as a store of value.
Tether and Binancecoin are Stablecoins not stores of value . XRP is a centralized token run by Ripple labs battling lawsuits by the SEC, even "Bitcoin Cash" which is a fork off Bitcoin is designed to be a cup of coffee payment token, not a store of value. Dogecoin was created as a joke.
In addition, do not forget the importance of "Network effects". For example, even if we come up "LemonfoolBook" as a marginally better designed "Facebook", network effects almost doom it to fail. Moving all friends, family and value already stored in Facebook to Lemonfoolbook would prove quite challenging. In the Technology space, Network effects dictate only 1 winner.

Suffice to say all other altcoins trade around the orbit of Bitcoin and its 4 year halving cycle.
The same way I expect tiny online retailers to trade around the orbit of Amazon.


JF


Seriously, Bitcoin a store of value? For what, a couple of years? I think something needs to have been around a bit longer than that for it to be recognised as a store of value.

Very few people have a significant amount of money in Bitcoin and I cannot see any problem with a better cryptocurrency taking it's place. How about one that didn't need to be mined with all the consequent energy requirements? Just dump X million of the new cryptocurrency into the World and let the market find a price. Bitcoin is a test case for cryptocurrency and carries with it all the flaws that test cases exhibit. It is unlikely IMO to be the final version.

Corporate analogies fail thanks to the huge number of dominant businesses that have gone on to be outcompeted by newcomers. I have plenty of painful share price memories that bear testament to that!

BoE

justfisk
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Re: Crypto Bubble

#402869

Postby justfisk » April 9th, 2021, 11:57 am

Boe, I have held the same concerns as you in the past.

Seriously, Bitcoin a store of value? For what, a couple of years? I think something needs to have been around a bit longer than that for it to be recognised as a store of value.


One advantage Gold has is the length of time it has lasted as a store of value. The new upstart called Bitcoin has only been around for over 12 years. Each day that passes, does validate Bitcoin though. Infection caused by bacteria had been around for thousands of years too, but once Penicillin was invented, each day that passed by, validated Penicillin. For thousands of years we crossed the oceans in wooden ships. Once Steel was invented , each day that passed by validated Steel as superior technology. If more and more people are using Steel ships, at what point do you reconsider that better wooden ships might not be able to compete with the Steel Ships in crossing the Oceans despite the larger energy use in constructing Steel ships?

Just dump X million of the new cryptocurrency into the World and let the market find a price. Bitcoin is a test case for cryptocurrency and carries with it all the flaws that test cases exhibit. It is unlikely IMO to be the final version.

Check the thread below, someone already posted a link to a list of about 5k coins currently competing with Bitcoin. Keep in mind those 5K coins are the ones that have survived, not the total of coins that actually competed with Bitcoin which has been much more. Since its inception , Bitcoin has always been the dominant "Cryptocurrency". The market appears to have clearly chosen its leader with value rising over 200% a year. At what point do you throw in the towel that Namecoin or Akoin may not be a viable alternative to Bitcoin? Bitcoin's marketcap is currently over a Trillion dollars. At what marketcap does Bitcoin reach before it is clear that lovecoin is not a competitor?
The competition of interest to me now is that of Bitcoin's competition with Gold, and Fiat and other assets. (Its been winning that too over 1 year, 5 year and 10 year horizons)

Its now a 1 Trillion dollar 12 year test Case as you suggest. Fiat itself is a 40year "temporary" test case. It was clearly declared to be a temporary measure at inception by Nixon. That particular experiment has led to loss of Real Purchasing value for the world over time. Not only that, but the energy cost and environmental impact of using Fiat currency based on the Petrodollar has been atrocious. I doubt any sane person here can defend the Petrodollars environmental impact.

Corporate analogies fail thanks to the huge number of dominant businesses that have gone on to be outcompeted by newcomers. I have plenty of painful share price memories that bear testament to that!

Of course you are right that Companies/Shares are not the same thing as Money.
What I meant here is more on how Markets trade. My point was one more of market behaviour than the actual example I used. To use another hard asset as an analogy, I could have used the Gold-Silver ratio to describe a similar behaviour. It is not new that constituents of a peer group may trade relative to each other.


It's interesting to see how all this plays out. :-)

JF

feder1
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Cryptoscamology

#409447

Postby feder1 » May 5th, 2021, 5:49 am

There seems to be some faint realization by "authorities" that this is becoming a problem.

Or have the authorities let it rip in case they can better trace the travel path of crypto movements?

What about Dog e-coin? Aka dogecoin.

Clitheroekid
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Re: Cryptoscamology

#410139

Postby Clitheroekid » May 7th, 2021, 7:42 pm

feder1 wrote:What about Dog e-coin? Aka dogecoin.

This article sums up perfectly the insanity that seems to have been largely inspired by the US Government sending $1,400 a week to everyone, whether they need it or not - https://www.theguardian.com/technology/ ... GTUK_email

A `currency' that was designed as a joke, and is now worth more than Ford, BP or Tesco, and the `value' of which is more than Sri Lanka's GDP.

If someone had written a novel with such a scenario they'd have been a laughing stock.

It's impossible to envisage how it will all pan out, but I rather doubt it'll be painless.

Lootman
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Re: Cryptoscamology

#410146

Postby Lootman » May 7th, 2021, 8:23 pm

Clitheroekid wrote:the US Government sending $1,400 a week to everyone, whether they need it or not

No, it wasn't $1,400 a week. That really would have been generous. There was a one-off payment of $1,400 this year, on top of one-off payments by Trump last year for $1,200 and $600. So $3,200 per person over the last year.

Not quite "whether they need it or not" either, as payments were only made to those earning less than $100,000 a year, or so.

This was in addition to increased unemployment benefits as well however and there is no doubt that some of this largesse found its ways into the markets, including crypto.

NotSure
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Re: Crypto Bubble

#411782

Postby NotSure » May 13th, 2021, 10:01 pm

BTC's Achilles heel?

https://moguldom.com/346700/fact-check-can-china-bitcoin-mining-destroy-51-attack/

The academic paper referenced in the above article:

https://arxiv.org/pdf/1810.02466.pdf

Of couse it's all just 'FUD'!

torata
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Re: Cryptoscamology

#412043

Postby torata » May 15th, 2021, 6:42 am

Clitheroekid wrote:
feder1 wrote:What about Dog e-coin? Aka dogecoin.

This article sums up perfectly the insanity that seems to have been largely inspired by the US Government sending $1,400 a week to everyone, whether they need it or not - https://www.theguardian.com/technology/ ... GTUK_email

A `currency' that was designed as a joke, and is now worth more than Ford, BP or Tesco, and the `value' of which is more than Sri Lanka's GDP.

If someone had written a novel with such a scenario they'd have been a laughing stock.

It's impossible to envisage how it will all pan out, but I rather doubt it'll be painless.


And this song brilliantly sums up the insanity...
https://www.youtube.com/watch?v=cbI31x3FpS0

torata

GoSeigen
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Re: Cryptoscamology

#412131

Postby GoSeigen » May 15th, 2021, 12:47 pm

Clitheroekid wrote:
feder1 wrote:What about Dog e-coin? Aka dogecoin.


Dodgy coin?
Clitheroekid wrote:A `currency' that was designed as a joke, and is now worth more than Ford, BP or Tesco, and the `value' of which is more than Sri Lanka's GDP.




I think this is a common misconception. The price is set by a few people trading on the margins. The value of the whole lot is probably pretty close to zero though. Like other pyramid schemes it is only a few early sellers who will be able to realise close to current prices. Most latecomers will lose practically everything because they will be unable to liquidate their positions.


GS

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Re: Cryptoscamology

#412594

Postby DiamondEcho » May 17th, 2021, 12:29 am

torata wrote:And this song brilliantly sums up the insanity...
https://www.youtube.com/watch?v=cbI31x3FpS0
torata


Wait until it all blows up; which of course it will hehehe ;)

ps. I mean you know it's inevitable, it's not, 'different this time' right?

absolutezero
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Re: Cryptoscamology

#412683

Postby absolutezero » May 17th, 2021, 11:31 am

DiamondEcho wrote:
torata wrote:And this song brilliantly sums up the insanity...
https://www.youtube.com/watch?v=cbI31x3FpS0
torata


Wait until it all blows up; which of course it will hehehe ;)

ps. I mean you know it's inevitable, it's not, 'different this time' right?

Oh. It sure will.
Things never really are different. This time or any other.

Fluke
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Re: Cryptoscamology

#413055

Postby Fluke » May 18th, 2021, 7:28 pm

absolutezero wrote:
DiamondEcho wrote:
torata wrote:And this song brilliantly sums up the insanity...
https://www.youtube.com/watch?v=cbI31x3FpS0
torata


Wait until it all blows up; which of course it will hehehe ;)

ps. I mean you know it's inevitable, it's not, 'different this time' right?

Oh. It sure will.
Things never really are different. This time or any other.


Rather brilliantly summed up here too.

https://www.youtube.com/watch?v=HaJpYjO136o

absolutezero
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Re: Cryptoscamology

#413063

Postby absolutezero » May 18th, 2021, 8:04 pm

Fluke wrote:
absolutezero wrote:
DiamondEcho wrote:
Wait until it all blows up; which of course it will hehehe ;)

ps. I mean you know it's inevitable, it's not, 'different this time' right?

Oh. It sure will.
Things never really are different. This time or any other.


Rather brilliantly summed up here too.

https://www.youtube.com/watch?v=HaJpYjO136o

Good video, that.

NotSure
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Re: Crypto Bubble

#413076

Postby NotSure » May 18th, 2021, 9:10 pm

"It's like Tinkerbell's light...." :D

Urbandreamer
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Re: Cryptoscamology

#413085

Postby Urbandreamer » May 18th, 2021, 10:00 pm

Fluke wrote:Rather brilliantly summed up here too.

https://www.youtube.com/watch?v=HaJpYjO136o


I VERY strongly disagree. The presenter hasn't even got the link between Dogecoin and a BLOODY dog. At least the rap made that clear. As it happens I'm on the other side. While I have no crypto, I think that it has value. I have no gold, make of that what you will.

Seriously the rap was a lot more informative. Both were intended as a joke, but IMO the honesty sits with the rap.

IF, bitcoin was entirely mined using renewable energy, would that be a problem? Apparently so. How much is? Well that's the problem isn't it. We guess what energy is used, based upon the cost of electicity. Then we guess the CO2 produced based upon the mix of power in a given country.

So many guesses! Ok we have to guess, I'll give that. But to state those guesses as fact!

Can I do the !!!! thing?

PeterGray
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Re: Crypto Bubble

#413147

Postby PeterGray » May 19th, 2021, 8:48 am

Even if, in an unlikely world, all BTC was mined with renewable energy there would still be environmental costs.
- Given the current state of development of renewable energy sources, it would be diverting other uses to non renewables
- The energy and environmental costs of producing and maintaining the turbines/solar panels or whatever are non zero.
BTC is fundamentally flawed from an environmental perspective.

NotSure
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Re: Crypto Bubble

#413162

Postby NotSure » May 19th, 2021, 9:19 am

NotSure wrote:BTC's Achilles heel?

https://moguldom.com/346700/fact-check-can-china-bitcoin-mining-destroy-51-attack/

The academic paper referenced in the above article:

https://arxiv.org/pdf/1810.02466.pdf

Of couse it's all just 'FUD'!


Quoting myself, which is poor form, but a comment from Chinese officials was enough to tank BTC (and everything else crypto):
https://www.marketwatch.com/story/bitcoin-tumbles-below-40-000-after-china-issues-crypto-warning-11621411944?mod=mw_latestnews

absolutezero
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Re: Cryptoscamology

#413192

Postby absolutezero » May 19th, 2021, 11:09 am

Urbandreamer wrote:
Fluke wrote:Rather brilliantly summed up here too.

https://www.youtube.com/watch?v=HaJpYjO136o


I VERY strongly disagree. The presenter hasn't even got the link between Dogecoin and a BLOODY dog. At least the rap made that clear. As it happens I'm on the other side. While I have no crypto, I think that it has value. I have no gold, make of that what you will.

Seriously the rap was a lot more informative. Both were intended as a joke, but IMO the honesty sits with the rap.

IF, bitcoin was entirely mined using renewable energy, would that be a problem? Apparently so. How much is? Well that's the problem isn't it. We guess what energy is used, based upon the cost of electicity. Then we guess the CO2 produced based upon the mix of power in a given country.

So many guesses! Ok we have to guess, I'll give that. But to state those guesses as fact!

Can I do the !!!! thing?

One of the points in the video is that crypto is backed by nothing but the idea that a greater fool will buy it from you for more than you paid.

They aren't backed by anything and have no intrinsic value.

Currencies have value because the State that issued them backs them up.
Commodities have value because they are used for industrial processes.
Shares have value because the companies that issue them have value.
Even gold has value because it is a tangible object that you can hold.

What are crypto currencies backed by? What gives them value?
Other than someone else being (temporarily) willing to pay you more than you paid?

And don't say 'proof of work' or 'the energy used to mine them'.
The old plastic tat that was cluttering up the house took a large amount of energy to make.
Their value? Worthless. I took them down the tip last week.
My first car (battered VW) took a lot of energy and raw materials to make. Plenty work and energy went into that.
Value of it? Scrap. Nil.

Urbandreamer
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Re: Cryptoscamology

#413203

Postby Urbandreamer » May 19th, 2021, 12:14 pm

absolutezero wrote:Currencies have value because the State that issued them backs them up.
Commodities have value because they are used for industrial processes.
....
What are crypto currencies backed by? What gives them value?
Other than someone else being (temporarily) willing to pay you more than you paid?


Sure.
https://en.wikipedia.org/wiki/Venezuelan_bol%C3%ADvar
2008, devalued
2018. devalued
Does that currency have value because the state backs it?

Unfortunately people don't really want that currency.
They want a currency that doesn't devalue because the/a state prints lots of it.

Value is what people attribute. This is true of everything from postage stamps to dogecoin. Price is a value expressed in a currency. The only value that art has is what people attribute. It's certainly backed by nothing. Hence by your argument its "value" (I think that you mean price) depends upon a greater fool.

I would argue that rising price often indicates an issue. The rise in house prices is either due to demand exceeding supply, excessive supply of credit or a fall in the value of the currency.

I think that it might be worth while to question why the price of cryptocurrencies is rising, especially given the title of the thread.

Alternatively you might like to speculate on why the price of comodeties (since you mentioned them) is rising.
Iron, Aluminium, Copper have all doubled in price over the last 12 months. Is that also because of "someone else being (temporarily) willing to pay you more than you"?

After all money printing can't possibly have anything to do with price rises can it?

Ps, I'm not a fan of the fact that the supply of dogecoin does not have a fixed limit like bitcoin. Simply a limited rate of inflation. Ie the supply increase is supposedly limited to doubling every 20 years. That said, it's far better than the increase in the supply of £'s at 10-15%, or the increase in bolivars at around 1300%.
https://www.ceicdata.com/en/indicator/u ... /m2-growth

murraypaul
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Re: Cryptoscamology

#413205

Postby murraypaul » May 19th, 2021, 12:25 pm

Urbandreamer wrote:I think that it might be worth while to question why the price of cryptocurrencies is rising


The price of crypto was rising because the price of crypto was rising.
People see that others are making money, and want to get in on the action.
So the price keeps going up and up ... until it doesn't.
Because those people had no real idea why they were buying crypto in the first place, they will also be likely to dump it and flee at the first sign of trouble, which is why Bitcoin is down about a third in a week or so.
So now the price of crypto is falling because the price of crypto is falling.
For the most part, no real analysis or understanding, just FOMO.

absolutezero
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Re: Cryptoscamology

#413214

Postby absolutezero » May 19th, 2021, 1:09 pm

Urbandreamer wrote:
absolutezero wrote:Currencies have value because the State that issued them backs them up.
Commodities have value because they are used for industrial processes.
....
What are crypto currencies backed by? What gives them value?
Other than someone else being (temporarily) willing to pay you more than you paid?


Sure.
https://en.wikipedia.org/wiki/Venezuelan_bol%C3%ADvar
2008, devalued
2018. devalued
Does that currency have value because the state backs it?

Excellent. Pick a failed state as an example.
How about Weimar Germany or Zimbabwe next?
Let's use proper countries, thanks.
Unfortunately people don't really want that currency.
They want a currency that doesn't devalue because the/a state prints lots of it.

No. They want currencies backed by proper countries that aren't run by Marxists.
Value is what people attribute. This is true of everything from postage stamps to dogecoin. Price is a value expressed in a currency. The only value that art has is what people attribute. It's certainly backed by nothing. Hence by your argument its "value" (I think that you mean price) depends upon a greater fool.

I would argue that rising price often indicates an issue. The rise in house prices is either due to demand exceeding supply, excessive supply of credit or a fall in the value of the currency.

I think that it might be worth while to question why the price of cryptocurrencies is rising, especially given the title of the thread.

Lockdown boredom, stimulus cheques and young folk who haven't seen it all before.
It's a get rich quick scheme. Until it isn't. Oops.
Alternatively you might like to speculate on why the price of comodeties (since you mentioned them) is rising.
Iron, Aluminium, Copper have all doubled in price over the last 12 months. Is that also because of "someone else being (temporarily) willing to pay you more than you"?

Green tech accounts for a large chunk of it.
That's politically driven.
After all money printing can't possibly have anything to do with price rises can it?

Yes. It can.
But choosing to stick your money into something that has a practical use (commodities) or generates a profit (businesses) is very different from TulipCoin.


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