Crypto: The World’s Greatest Scam

[_Robert_Participant]

What a libertarian dystopia the whole “web3”, crypto, NFT scam has become. Bitcoin serves no purpose other than provide money laundering while burning up energy. Always a wave of new get-rich losers ready to be taken. Still waiting for all the legitimate use-cases for crypto but I guess without regulation, it just isn’t going to happen.

https://web3isgoinggreat.com/

[RichRaelianParticipant]

Hi! Digital currency like paper or metal currency can be chains for humanities enslavement your just replacing one slave master for another.

[UnseenParticipant]

There’s always another side to the story:

[UnseenParticipant]

What gives an asset a permanent, if fluctuating, value? It’s the asset’s scarcity. What assets have scarcity built-in? High-end collectible assets such as a baseball that won a World Series, a Vermeer or Rembrandt, a dress worn by a movie star in a famous movie…and Bitcoin. The thing about Bitcoin is that there will be only 21 million Bitcoins ever produced (“mined”).

You can mine more gold, silver, or diamonds. Real estate is NOT safe because it can burn down, be rezoned, have a homeless camp or prison built nearby, OR it can be destroyed in a storm and good luck getting full value back from an insurance policy if they don’t invoke an “act of God” clause.

While Bitcoin’s value fluctuates wildly, it has one advantage over all the others: there will never be more of it. There is still more of the crypto that can be bought, but once that is gone, there will be no more Bitcoin produced. Following is financial expert Cathie Wood on crypto, what’s happening now, and what’s next:

Also, here’s Bitcoin’s #1 cheerleader for Bitcoin, Michael Saylor, who touts this crypto as the best asset in the history of mankind:

BTW, I think that the IRS did Bitcoin a big favor when it ruled that Bitcoin (and crypto in general) is not money in any form, it’s an asset.

 

[UnseenParticipant]

BTW, the original video by James Jani spends way too much time on NFTs (non-fungible tokens) when most people—perhaps most people here—have no clear idea what an NFT is or, more importantly, what they do that nothing else can.

Now, what is fungibility? It’s a fancy-ass word for interchangeability. The opposite of uniqueness.

There is a problem in art of credible fakery. A well-done fake of a Vermeer can fetch as much as the real thing and yet be almost worthless, though somebody would probably pay a few hundred bucks for a known fake simply because it’s pretty. The problem is really bad when the original product is digital, like a digital photo or the code behind a video game. This is because digital objects can be copied 100% exactly, which makes establishing ownership potentially difficult.

What NFT’s do is put the artwork in digitized form out on an Ethereum (not Bitcoin) blockchain in digitized form with a provable date and time that can’t be hacked. It’s intended to establish who owns what, and it generally, though imperfectly, does so. It has also resulted in a lot of ridiculosity as well as skullduggery .

Don’t confuse NFT’s with Bitcoin.

[_Robert_Participant]

Sure glad I didn’t invest in Cathie Wood’s flagship ARKK ETF. Down over 40% year-over-year when the S&P is down 13% and her ETF is down 75% from its peak. I scalped it day trading on its way up a few times. As for bitcoin, Warren Buffet summed it up pretty well. He wouldn’t buy “all of the bitcoin in the world for $25: ‘It doesn’t produce anything” and it will “come to a bad ending”.

A lot of worthless things are scarce. Bitcoin is only worth whatever the next sucker will pay for it. I even day-traded it for fun once in a while back in 2021 because it is very volatile on the news and easy to scalp. In and out in less than 3 minutes, 10 times a day. To manage that, I held some “USDC stablecoin” in a stock brokerage for 8% interest for 6 months, but I knew that was temporary and as soon as bitcoin started tanking, I got out.  I don’t hold bitcoin long term because I have yet to see utility other than laundering, scamming or speculating. NFTs were going to be the ‘use case’ for Ethereum and that’s gone poorly.

Bitcoin could make another big run when interest rates pivot but I’ll stick with safer traditional investments. Hell, my dividends and bond yields alone pay our bills. I even grabbed a fixed annuity at 5.5%. This is something I thought I would never do. Turns out my State insures them, and most insurance companies are less leveraged and safer than banks.

 

[UnseenParticipant]

@robert

Your argument—and Buffet’s—that Bitcoin prod9uces nothing could be applied to any of many sorts of nonfungible assets, could it not? A Rembrandt sketch, a Babe Ruth home run ball, diamonds, gold, etc.

People want to get away from fiat currencies, currencies published by governments. So far—except for the ones functioning now and produced by reasonably functional governments—they have all failed, except for the ones minted on precious metal. But paper money someday won’t be worth the paper it’s printed on.

Speculating on Bitcoin is a fool’s errand, as you say. It’s something to hold onto for the long term. Eventually the Bitcoin market will calm down. And like any other investment, it’s unwise to have all of your eggs in one basket.

And, yes, Cathie Wood’s funds are not for the faint of heart. LOL

[_Robert_Participant]

How many bitcoins does a gallon of milk cost? You don’t know. And I don’t want your bitcoin if I’m selling a grilled cheese. It’s been decades and it’s still just a dream. I certainly trust the US government will pay its debts to me over some blockchain ledger that can get hacked or made to be illegal like China did. Like all this decentralization stuff, you are depending on the hope that people will not be corrupt since there is no rule of law protecting you or the value of a bitcoin. In fact, a few big fish own a lot of it.

That FTX clown fooled everybody. If you are an American rooting for Bitcoin against the US dollar you are really hurting yourself. If all that investment money coming in goes away. When companies start paying you in bitcoin then it could work. What government is gonna allow that? It’s not legal tender.

Yeah, diversification is the way to go. When this yield inversion disappears, I expect at least a mild recession and layoffs. Probably within 3 months to a year. It’s a shame labor has to make up for all the excess leveraging and slow Fed decisions. Trump put pressure on Powell who was starting to raise rates years ago and he simply caved-in. Stocks and crypto will be on sale. If you are gonna buy either, that will be the time because they will lead the recovery.

We have stock index funds, bonds, CDs, cash, and a rental house but I am light on stocks right now. I have some vintage guitars that have steadily gone up in value, but I think their value is subject to change. At some point people may not care about what year and model guitar Jimmi Hendrix played.

[UnseenParticipant]

@robert

“I’d like that gallon of milk. Do you have change for this gold ingot?” More seriously, if things get really bad gold will become worthless. Having an AK-47 would be more useful.

As far as the American economy and the dollar, many feel it’s clear we’ve already gone past the economic event horizon. We got there by overspending on the military, giving rich people tax breaks unavailable to you and me, and funding entitlements people wouldn’t need if we made sure they had enough personal wealth and were kept healthy.

There is one way out if we toss our national values out the window. We can use our military to take whatever it takes to keep things going our way even if it belongs to another country. We could then get our oil, lithium, uranium, and titanium at below market prices.

[jakelafortParticipant]

I was considering opening an overseas wagering account and they take bitcoin and give incentives to bitcoin payments.

[TheEncogitationerParticipant]

Robert and Fellow Unbelievers,

Some libertarians were evangelists for crypto currency, but I told them and tell you that I don’t fully trust any currency that is not backed by Gold, Silver, Platinum, or other precious metal, including the Federal Reserve Notes we play with now. Precious metal transactions done with encryption would be great, but not anything that is pure bits and bytes.

By the bye, Sam Bankman-Fried was big on Effective Altruism and ESG, so take your ire there.

[TheEncogitationerParticipant]

Unseen,

Gold and precious metals are not just a medium of exchange, but a store of value. It goes up in price when paper currencies become worthless. And Gold is even more valuable in the Information Age, since it is a superconductor used in electronic chips. In fact, Gold is such a good conductor, you can’t wire a house with it because the resulting heat would burn it down.

I’m sure if ChatGPT were more than just an augmented Magic 8-Ball, it would have these songs in it’s shuffle. 😁:

[UnseenParticipant]

@Enco

Having a store of value only matters when there’s at least a semblance of political order.

Like I said a few posts above, “…if things get really bad gold will become worthless. Having an AK-47 would be more useful.”

[RichRaelianParticipant]

Hi! Digital money can’t possibly make you feel freer its exchanging one form of slavery for another or like John Trudell put it,”We know the difference between the reality of freedom and the illusion of freedom.”

[_Robert_Participant]

Ten years of gold ownership would have netted you less than a 30% return, so barely keeping up with inflation, while the S&P500 index netted a 160% gain. I would still be employed if I bought a bunch of gold instead of stocks. However, the way things are going lately I have been considering a 10% allocation to gold. I believe we will have some sort of mild recession or a slow-down within the next year or so.

After the bad debts and excesses are resolved, stocks could take off again. What is crazy about them, if you are not risking money in the market, you will miss those few big days where you get huge returns. I expect that when the market believes the Fed will flip from raising rates to lowering rates there will be some really big days. Trouble is I have too many fixed income investments that are hard to get out of (but they pay pretty well @5%), so this time I will miss out some.

[Author]

Posts