SloopJonB
Super Anarchist
I guess that answers the first question I had when I first heard about it;* besides for all that, the real purpose always seemed like a way for dope dealers and hit men to get paid
Why?
What purpose does it serve?
FTX
- Thread starter blunderfull
- Start date
Why?
What purpose does it serve?
billy backstay
Backstay, never bought a suit, never went to Vegas
Money is a medium for transactions and a store of value. Crypto fails utterly on both counts.
Anything that worked as money would not be an investment, wild swings in value either way do NOT make for good money, never mind the ephemeral and faddish nature of crypto.
* besides for all that, the real purpose always seemed like a way for dope dealers and hit men to get paid
I could never understand crypto. There is a NOVA episode that explains it, and my eyes and brain glazed over after 10 minutes; will have to try again. Maybe if I hadn't stopped drinking alcohol it might make sense??
giegs
Super Anarchist
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- 541
It is exchangeable for currency, there's just significantly less liquidity and more volatility than most fiat currencies. In that sense it's like trading foreign currencies. Price stability could be improved with more trading volume and more efficient market structures, but bitcoin isn't well suited to either of those developments.
The flip side of the issue with asset based money is that lending fiat increases currency supply, leading to inflation. The hard cap on crypto has a different flavor of the same issue, leading to fractionalization. Perfect ledgers limit growth potential, for better and worse. Network fee allocation is a core issue.
Whether or not a non-state actor could defend a peg is an interesting question. There are a few projects trying to maintain 1:1 exchange with USD, and one or two of those might not be scams... As far as I know the ones that have blown up did so in a way similar to FTX, not maintaining adequate reserves and misallocating held reserves.
I vastly prefer utility based implementations, but I also don't think the currency stuff is quite so clear cut.
Olsonist
Disgusting Liberal Elitist
That's been done. IBM's Hyperledger Fabric is open source. In fact, that's what Maersk was using. It doesn't use Proof Of Work. So it's pretty fast, or rather, it doesn't waste a shit ton of energy.
This is not my thing. But it's out in the marketplace and it seems reasonable; IBM is no joke at engineering. The question is whether the marketplace sees value. So far, that doesn't seem to be the case.
SloopJonB
Super Anarchist
For future reference, all currencies are "Fiat" currencies. Nixon ended convertibility half a century ago.
Using that term in any discussion of economics simply labels you as a right wing fanatic.
The proper term for it is "currency"
giegs
Super Anarchist
- 1,042
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For future reference, when discussing whether crypto can qualify as currency and what that might look like, no. I trust you understood the distinction made and are just being obtuse. Please feel free to insert "non convertible government backed currency" to your heart's content.
kent_island_sailor
Super Anarchist
Long story short:
Bitcoin uses the product of solving a complex equation as "money". The way it works is every coin is a bit harder to create than the one before and there is a finite limit to them.
Why the fuck anyone though this could be money is utterly beyond me.
It requires a mass hysteria where everyone decided this is the next big thing and "q-57-w9678234912-2254789w9086!!456679867096" is worth $100. It all works great until it doesn't and someone realizes they just sold their car for a computer file no one cares about anymore.
billy backstay
Backstay, never bought a suit, never went to Vegas
Sounds even worse than the stock market!! Thanks for 'splaining it Lucy!
Olsonist
Disgusting Liberal Elitist
And it's even worse because of course it's even worse. Whoever setup this Bitcoin ("Satoshi Nakamoto") pre-mined 1.1M BTC. I'm barely conversant in Bitcoin myself but one of my filters is that anyone who takes Bitcoin even slightly seriously (hi Tom!) is a bozo.
Steam Flyer
Sophisticated Yet Humble
I would agree to that, I would also agree that crypto currency would be as accurately termed "non convertible non government backed currency."
That's not how Bitcoin works.
A new token is released to the chain approximately every 1.6 minutes. The complexity of the calculations are based on the hashrates of the computers competing for the token. They don't get progressively harder with number of tokens released - they scale with hashrate.
When a bitcoin miner goes out of business, the remaining hashrate decreases and the difficult of the calculations scales down so that again, a token is still released every 1.6 minutes.
kent_island_sailor
Super Anarchist
This is what I recall:
However, because the rate of bitcoin "mined" is reduced over time, the final bitcoin won't be circulated until around the year 2140.
The mining machines are trying to randomly find unused hashes. The more coins there are in existence, the longer it takes to find a hash not already in use.
That is beside the point, it is still a ridiculous way to try and create a monetary system.
kent_island_sailor
Super Anarchist
* forgot to mention, as mining gets harder, the delta between buying the power to do it and the coins minted gets worse and worse. This is why it long ago ceased to be profitable to use an ordinary PC to do it and they miners bid up the price of high-end graphics cards. They use the CPUs on the cards for mining calculations.
With the recent crash of the crypto market, it could be mining is no longer even profitable at all.
With the recent crash of the crypto market, it could be mining is no longer even profitable at all.
The different crypto projects use different algorithms - some use graphic card processors, some don't. Some projects intentionally use both. Efficient miners now use dedicated rigs but there are some DIY types who still like video cards.
When I was teaching myself, I used some middling cards as space heaters in my basement in the winter. Figured if i was gonna burn electrons for comfort, I should make some money. Which I did - and it gave me a good reason to learn about the projects and how they worked. Made a few bucks but, more importantly, learned about the products and the marketplace.
Yes, there is definitely a cost of energy vs cost of calculation tradeoff and other that some remote areas, most of the energy costs in the USA are too high to make it make sense. There's a few that are ok... but not at this current price. Based on the coin creation rate compared to the selling rate, the miners are already burning their own stockpiles. Capitulation seems inevitable which is why the short interest on companies like MARA are now 'too the moon' to spin a phrase.
When I was teaching myself, I used some middling cards as space heaters in my basement in the winter. Figured if i was gonna burn electrons for comfort, I should make some money. Which I did - and it gave me a good reason to learn about the projects and how they worked. Made a few bucks but, more importantly, learned about the products and the marketplace.
Yes, there is definitely a cost of energy vs cost of calculation tradeoff and other that some remote areas, most of the energy costs in the USA are too high to make it make sense. There's a few that are ok... but not at this current price. Based on the coin creation rate compared to the selling rate, the miners are already burning their own stockpiles. Capitulation seems inevitable which is why the short interest on companies like MARA are now 'too the moon' to spin a phrase.
Olsonist
Disgusting Liberal Elitist
Yeah, every time you use Bitcoin to buy a toothbrush you have to mine that transaction into the distributed ledger which is expensive, miners expect to be paid, and slow, mining is slow.
Privacy? Hah! We ain’t got no privacy.
The more plebeian technology coming down the pike that I like is FedNow. It’s a copy of the Indian system meant to replace ACH which dates to the late 60s.
Privacy? Hah! We ain’t got no privacy.
The more plebeian technology coming down the pike that I like is FedNow. It’s a copy of the Indian system meant to replace ACH which dates to the late 60s.
SloopJonB
Super Anarchist
Fixed.
Olsonist
Disgusting Liberal Elitist
Last edited:
Is that VVV?
Olsonist
Disgusting Liberal Elitist
It's more like Phil Hartmann coming back from the dead.
Steam Flyer
Sophisticated Yet Humble
And you know what, they don't make 'em like those old amulite base plates and marzel bearings any more.
