Why is Crypto so . . . Cryptic?

[106459]

I keep converting my FRN's into real assets. I've been stacking PM's, ammo, hardware (nails, screws, bolts, etc.), tools and land in case I need to liquidate. Other than that, I try to put as much as I can towards improving the value of my properties.

It may not make me a millionaire, but feels like the best way to store the value I've created with the lowest risk. Maybe I'm just old school.

Dare I say this is a very measured approach . Yes, I'd be extremely skeptical of anyone who tried to say: 'crypto is the one solution'. In a SHTF situation: "Real wealth = Real things". Apparently, in a modern & abundant world: "Wealth = assets": whatever that means (and, it can mean quite literally anything).

Pretty sure all Texan's replies were accurate. "What happens in SHTF?" - "Depends on if internet is a thing" : yep, lol.

Maybe I should ponder on it more. Is it possible we could ever fully lose the internet? ...How much of this stuff is even hard-documented anymore, anyways? (Or: how feasible is it, to even delete all digital info...probably not).

Hard to see the internet not coming back. Same concept as gold in SHTF, no one cares about shiny jewelry material in the midst of starving. Only after.

[TheTexan]

Anyways - just wanted to toss this info in the thread -- those pools have been around some time, and certainly have been making people money thus far

Any money that has been "made" in crypto has largely been at others' expense. This is necessarily true of any asset that is valued based on pure speculation.

My point with what I said, is that 99.99999% of the valuation in crypto is exactly that - speculation. As there is virtually 0 productive use of crypto currently. (without going through the dollar)

Even the pools where you ostensibly earn interest by loaning crypto money, I would argue as not being worthwhile (relative to non-speculation based risk/return options available in non-crypto) at best, or simply a ponzi scheme at worst.

Crypto is certainly a viable instrument for making gains via speculation. It's also viable to a limited extent to storing and accessing money out of government control.

But any "productive" use in crypto, as you yourself have pointed out, is still tied to the dollar.

Crypto will not achieve it's full potential, until the ecosystem around crypto fully develops, and is no longer reliant on the dollar to be used productively and pragmatically. Crypto is still VERY far from that.

I do hope it gets there.

[106459]

^^

Reminding myself of Eric Cartman at the university: " I ain't arguin' " - lol.

I've seen enough that makes me sick. And in terms of speculation: what isn't speculation anymore? What about these stock market pump & dumps that I've come to believe is just crypto: on a more sophisticated level?

The dollar is speculation. Stocks are speculation. Crypto is speculation. At (arguably): various degrees.
( video on stocks: youtube.com/watch?v=uadi0JgpO7k )

In the speculative realm of crypto, the speculation has a use-case:
-Build decentralized finance. Central banks are a nightmare.
-As a result: I imagine things will start to look a lot different if the current monetary system is no longer feasible.

So: can a price be put on toppling the central banks? Trying?
-And what do rewards look like, for that? Vs trying to pick stocks that can also go down 70% & up 10x?

It is awful that people are blindly losing money. But on that thread:
-Who's pumping tens of thousands into something?
--What are they thinking??
-How do we ever expect to protect them to keep their money?

That's not intended to say it's acceptable. Just a part of my current "it is what it is" mentality. Crypto is a very real opportunity for me to make life changing money. And it won't go towards lambos. I want out of these $#@!ty cities, and $#@!ty suburbs. What if I had enough money to do what I wanted to do? Could afford to take up a real trade, learn real skills, teach other people? Give them independence?

Maybe I'm still an $#@!. Maybe my to-be-determined results will reflect that. Maybe it is what it is.
-And: it is. Regardless of the outcome: "I don't need $#@!." Maybe it's not to be. I'll have to pick myself up and do it another way.

On that note: where are these other non-crypto returns?
Currently (and I definitely have to fully research): Jarvis Network. Collateralized currencies.
-Remove an entire 50% exposure to USD by holding jCHF (swiss franc). Pair it in liquidity pool (LP) with USD. Make 10% a year. For holding money. 50% of which: Better money.

Also - I don't think it is, but none of this is at all meant to be combative. TX - you do great work on RPF lol

[ClaytonB]

Any money that has been "made" in crypto has largely been at others' expense. This is necessarily true of any asset that is valued based on pure speculation.

My point with what I said, is that 99.99999% of the valuation in crypto is exactly that - speculation. As there is virtually 0 productive use of crypto currently. (without going through the dollar)

Even the pools where you ostensibly earn interest by loaning crypto money, I would argue as not being worthwhile (relative to non-speculation based risk/return options available in non-crypto) at best, or simply a ponzi scheme at worst.

Crypto is certainly a viable instrument for making gains via speculation. It's also viable to a limited extent to storing and accessing money out of government control.

But any "productive" use in crypto, as you yourself have pointed out, is still tied to the dollar.

Crypto will not achieve it's full potential, until the ecosystem around crypto fully develops, and is no longer reliant on the dollar to be used productively and pragmatically. Crypto is still VERY far from that.

I do hope it gets there.

Speculators will buy/sell crypto for speculative purposes but just because there are crypto speculators doesn't mean that is the only way to make money in crypto. The idea is to simply replace fiat currencies outright by simply being better than them. A money is good or bad based on how widely accepted it is, and the stakes are pretty much all-or-nothing. Bitcoin is already widely used in Japan, El Salvador and many EU countries for hand-to-hand business. The fiat banking system has been cut out of the equation 100%. There is no way for a government to force people to convert their transactions into a fiat money as an intermediate step. I can just send you Bitcoin directly and nobody can stop that from happening. So, the Bitcoin economy is an emerging, global sub-economy that spans all borders and is based on people directly transacting, hand-to-hand, in Bitcoins. If I order a 3D printer with Bitcoins, buy the filament with Bitcoins, and sell my final product for Bitcoins and make a profit, I am earning money in crypto that has absolutely nothing to do with speculation. And yes, there are people out there doing exactly this.

[TheTexan]

If I order a 3D printer with Bitcoins, buy the filament with Bitcoins, and sell my final product for Bitcoins and make a profit, I am earning money in crypto that has absolutely nothing to do with speculation. And yes, there are people out there doing exactly this.

Is it done out of pragmatism or activism however. I doubt it's pragmatic. But I get your point.

[georgiaboy]

- So, the Bitcoin economy is an emerging, global sub-economy that spans all borders and is based on people directly transacting, hand-to-hand, in Bitcoins.

- If I order a 3D printer with Bitcoins,
- buy the filament with Bitcoins, and
- sell my final product for Bitcoins and make a profit,
- I am earning money in crypto that has absolutely nothing to do with speculation. And yes, there are people out there doing exactly this.

I expect this may have already been covered in detail - looking for a short answer if possible.

In a fully crypto new world order, how would taxation work - consumption, income, property, or otherwise? Does it become literally unenforceable/untraceable? Or do the exchanges and wallets just become the new banks & trackers for .gov?

[TheTexan]

I expect this may have already been covered in detail - looking for a short answer if possible.

In a fully crypto new world order, how would taxation work - consumption, income, property, or otherwise? Does it become literally unenforceable/untraceable? Or do the exchanges and wallets just become the new banks & trackers for .gov?

This is the ultimate crypto question. I hope it goes to the former. It seems to be going the way of the latter.

[ClaytonB]

In a fully crypto new world order,

Well, my hope is that Bitcoin will play some role in breaking us out of the Antichrist "new" world order. Maybe my optimism will be disappointed (nothing new), but that's my hope.

how would taxation work - consumption, income, property, or otherwise?

When used properly, Bitcoin is more or less like cash. So, how did taxation work in a cash economy? The government will always be able to tax things that can't move (real estate) and can't hide (commerce, shipping, etc.) But it's pretty easy to hide cash, so that makes it difficult for the government to tax. Which is why they hate cash, because cash creates a space for a thriving under-the-table economy. As we are learning in our hyper-technologized society, that under-the-table economy was the fuel of civilization. As we are eliminating it, we are simultaneously descending into a beastly condition in terms of human relations.

Does it become literally unenforceable/untraceable? Or do the exchanges and wallets just become the new banks & trackers for .gov?

"Literally unenforceable" is a very big word and I think that the more aggressive cyberpunk visions will never come about, and probably a good thing too. Open seas piracy really is horrific and nobody should desire to see an entire world comprised of that kind of activity.

I look at it in terms of cost/benefit analysis. The IRS has admitted that it just costs too much to audit rich people, so it doesn't bother, and it just targets middle-class people it can afford to audit. They can spend $3k-$5k turning a middle-class citizen upside down and shaking him to see what comes out of his pockets and probably pick up a nice $10k-$50k in spare change. So it's a net win for the agency. But spending $30k-$50k on legal action just to shake out the same $10k-$50k from a wealthy person is a net loss, or breakeven at best.

If you use Bitcoin to commit crimes that would get the attention of nation-state actors, I would just assume that they will be able to get you. Real-world hacking is 90% non-technical, and only 10% technical, meaning, most of the attack has to do with getting you to do something stupid, and only one piece or component of the attack requires any kind of technological wizardry. When they arrested Ulbricht, the FBI needed to catch him with his laptop open and Bitcoin wallets unlocked. He frequented public libraries and cafes while transacting to blend in with the crowd. So they had an agent online interacting with him to receive a payment (thus causing him to log in to the Silk Road website and unlock his Bitcoin wallet), and they deployed a team of FBI agents pretending to be patrons of the library around him. As soon as everything was unlocked and he was logged in to his website, they created a diversion causing him to turn his head, and the agent across the table then lightly slid the laptop from under his fingers quickly so he would not be able to slam the laptop shut and then he was tackled by the remaining agents, all in one motion. So when people say "Bitcoin is secure", they're not talking about this kind of thing -- nothing can protect you if you make yourself a big enough pain in the ass.

From Wiki:

To prevent Ulbricht from encrypting or deleting files on the laptop he was using to run the site as he was arrested, two agents pretended to be quarreling lovers. When they had sufficiently distracted him, according to Joshuah Bearman of Wired, the two agents then quickly moved in to arrest him while a third agent grabbed the laptop and handed it to agent Thomas Kiernan. Kiernan then inserted a flash drive in one of the laptop's USB ports, with software that copied key files.

The exchanges are control points where the government will doubtless try to prevent people from off-ramping from Funny Reserve Notes to Bitcoin. But they can't stop people from off-ramping in other ways, such as physical cash, PMs, or other assets directly exchanged hand-to-hand for crypto. A wallet can't really be "tracked" as long as you take appropriate precautions in creating it. The addresses associated with the wallet can be monitored but there's no way to "locate" anyone who interacts with that address because the Bitcoin network is spread all over the world. You could hop on a flight to Iceland, log in at a cafe, perform a transaction, and go back home, and there is simply no way for the US authorities to connect you to that transaction, unless they are actively surveilling you with agents. With some restrictions, the same is true of a VPN -- VPN over to Iceland, perform your Bitcoin transaction and then close the VPN. If your ISP is being monitored, there is some chance the activity could be "correlated" but it's not enough to prove legally. All in all, if you're doing something that is getting that much attention from the Feds, then you probably are doing something you shouldn't be doing. Trying to wriggle out of a few grand in taxes isn't going to bring that kind of heat down on you.

The danger of Bitcoin to the Establishment goes back to the cost-benefit equation... it breaks the cost-benefit of the Feds constantly targeting the middle class for no other reason than that they're easy prey.

Summary: Bitcoin creates some new ways that the Feds will be able to track people's transactions, but it creates many more ways for the ordinary person to keep their private financial activities private. This empowers the individual, especially the middle-class individual who may have some assets that he would like to keep private (and has every right to keep private). So Bitcoin is a massive win for ordinary people and this crap about how "the Blockchain is a public ledger and the Feds will use it to track every transaction!" is a bunch of disinformation and FUD.

[georgiaboy]

.

Sorry if I’m being dense. So if crypto is just like cash, in my world of corporate tax allowances and witholding on income, how will a company pay me and fellow employees in crypto? How will taxes be withheld? Will they link my employee data with my public key? Same for my Amazon account? Will public key just replace my credit card number and bank account ach info for purchases?

[ClaytonB]

Sorry if I’m being dense. So if crypto is just like cash, in my world of corporate tax allowances and witholding on income, how will a company pay me and fellow employees in crypto? How will taxes be withheld? Will they link my employee data with my public key? Same for my Amazon account? Will public key just replace my credit card number and bank account ach info for purchases?

Not being dense, but you are confusing separate concerns.

The primary attraction of Bitcoin is that it is sound, meaning, you can't just print up more Bitcoin. Even the government cannot print up more Bitcoin.

In addition, Bitcoin is pseudonymous or what I like to call "anonymity compatible". It's not anonymous out-of-the-box, but if you take some precautions, you can ensure a reasonable level of anonymity (thus, privacy.)

Bitcoin is also permissionless, meaning, there is no "gateway" through which transactions are authorized. For this reason, nobody can determine what transactions will or will not be processed by the network. The Bitcoin network will process any and all transactions which have an adequate fee attached.

---

Taxation is not an inherently financial thing. If you purchase a rural piece of property, sooner or later, the county tax assessor will swing by and he's going to "assess" your property. This "assessment" is just an imaginary number that he thinks up and slaps onto your property based on the idea that "if" you were to sell it now, then "this price" is what it would fetch in the market. And now you're liable to pay property tax at some percentage rate on that assessment. There's no way to get out of it -- you can't hide your property from the assessor, it's right there on the map. You can't move it, either, because it's terra. So, the act of purchasing the land is, ipso facto, an acquiescence to the reality that you are going to pay taxes on that property.

In the era of modern book-keeping, it became possible for the State to track and tax commercial transactions at an ever-increasingly fine-grained resolution. In previous eras, the State had to choose external "correlates" of wealth and income and tax those. In Paris, for example, houses were taxed based on the number and dimensions of windows, on the presumption that very wealthy estates would have lots of large windows, whereas the poor would tend to have windowless hovels or maybe have one window to the street. In response, builders began designing and erecting large houses with fewer and smaller windows. So this is the cat-and-mouse game that has always defined taxation.

So, when it comes to corporate employment, you will always be taxed because the State is the creator of all corporate entities, so it can order them to comply with its regulations and they will obey. Your employer is going to report your income to the State regardless of whether it is paid in USD, Bitcoin or cowrie shells. If you're paid in Bitcoin, you can sweep the Bitcoin out of the address your employer paid it to some other address which the State cannot prove you own. In other words, you can "spend" all your income and have "nothing remaining" so the State cannot come back later and double-dip in the form of wealth taxation, as they are wont to do. But the amount you are paid and the address it was paid to is absolutely reportable information and so I would just assume it will come under the same regulatory framework as USD payments.

As for spending, you can easily separate your spending wallets from your savings wallet(s) so that there is no way for the State to "backtrace" and find out your assets in the blockchain. If you have a $1M Bitcoin account and spend directly from that to Amazon, yes, you are putting that money at risk of being traced back to your IRL identity. So, you will need to split off a smaller amount into a dedicated spending wallet, and spend from that smaller wallet instead. Yes, you can legally and effectively separate them in such a way that there is no way to trace the funds back to their origin. And it's only common-sense to do so, especially in our modern world of Russian hackers, "civil asset forfeiture", power-mad bureaucrats and government agencies imbued with unlimited NatSec/anti-terror powers to seize anything and everything they can get their fingers on under the flimsiest of pretexts.

[CaptUSA]

Ok, Bitcoin was down over 8% yesterday.

This is what I've been saying. Bitcoin tracks with tech stocks. It doesn't track with a currency hedge. It gains value with tech speculation and loses value with speculative tech losses.

So, from what I can tell, it's being promised as an alternative currency, but in reality, it's a speculative tech tool. That's a problem.

[ClaytonB]

Ok, Bitcoin was down over 8% yesterday.

This is what I've been saying. Bitcoin tracks with tech stocks. It doesn't track with a currency hedge. It gains value with tech speculation and loses value with speculative tech losses.

So, from what I can tell, it's being promised as an alternative currency, but in reality, it's a speculative tech tool. That's a problem.

The problem with this analysis is that it's just "charting". Correlation is not causation.

There is a lot of institutional money that is using Bitcoin as yet another "growth/speculation" index. The amount of money in hedge funds dwarfs the total market-cap of Bitcoin, so yes, they have a disproportionate amount of influence over the fiat price of Bitcoin. The two factors that will stabilize the price of Bitcoin are scale (market-cap) and exchangeability (how many different kinds of things are priced in Bitcoin, and how widespread merchant acceptance is.) Basically, you're saying that Jesse Owens will never win the Olympics because he's 12 and he can't run as fast as a grown adult. Give it a little time to grow.

[CaptUSA]

The problem with this analysis is that it's just "charting". Correlation is not causation.

There is a lot of institutional money that is using Bitcoin as yet another "growth/speculation" index. The amount of money in hedge funds dwarfs the total market-cap of Bitcoin, so yes, they have a disproportionate amount of influence over the fiat price of Bitcoin. The two factors that will stabilize the price of Bitcoin are scale (market-cap) and exchangeability (how many different kinds of things are priced in Bitcoin, and how widespread merchant acceptance is.) Basically, you're saying that Jesse Owens will never win the Olympics because he's 12 and he can't run as fast as a grown adult. Give it a little time to grow.

Lol - the problem with this analysis is that it's just a rationalization for what you want to believe. In fact, you could use that same rationalization for just about anything.

Correlation is not causation - correct. But if Bitcoin is what you want it to be, the correlation would be that when prices go up, so does the value of Bitcoin.

I wish it existed that way, but it just doesn't. The correlation is with tech stocks. I mean, that's fine as an investment tool, but it's not an inflation hedge. And yeah, some people may use it as currency (just like some people may use milk as currency), but that doesn't appear to be its primary purpose.

[ClaytonB]

Lol - the problem with this analysis is that it's just a rationalization for what you want to believe.

I have a trivial position in Bitcoin, so no, this is not about what I "want to believe". I moved past that stage of immaturity a couple decades ago. If you have a better idea as to how the fiat money system is going to be stopped, please speak up. "Gold and silver" may one day play a role but if it was such an easy fix, gold and silver would have destroyed the central banking system eons ago. Instead, what has really happened is that the central bankers have engineered a price-control system for gold and silver and this system has proven to be completely effective. Please chart a convincing route out of the current predicament by trading gold and silver coins hand-to-hand. I own more PM than I do Bitcoin, so this isn't me throwing shade on PMs.... I'm not talking about markets, I'm talking about law and politics, because that is the real obstacle. The markets will do whatever they are permitted to do.

Correlation is not causation - correct. But if Bitcoin is what you want it to be, the correlation would be that when prices go up, so does the value of Bitcoin.

I wish it existed that way, but it just doesn't. The correlation is with tech stocks. I mean, that's fine as an investment tool, but it's not an inflation hedge. And yeah, some people may use it as currency (just like some people may use milk as currency), but that doesn't appear to be its primary purpose.

Well, that is its intended purpose, but it hasn't reached a sufficient scale to achieve that purpose in the way you are demanding -- that its purchasing power be free of external market influences. Even in the Forex, any national currency of a smaller nation will be susceptible to market influences and so you can find correlations between Forex charts and other markets. Bitcoin does not have a market-cap on par with any first-world nation's currency (~$688B atm), and so its price is much more susceptible to external influences. The reason that Bitcoin's price is moving with tech-stocks -- for now -- is that that is how the big institutional investors are treating it, and their combined market-cap is in the dozens of trillions, which swamps the market-cap of Bitcoin.

[CaptUSA]

...

Bitcoin is off nearly 55% from its November peak, and 40% of holders are now underwater on their investments, according to new data from Glassnode.

That percentage is even higher when you isolate for the short-term holders who got skin in the game in the last six months when the price of bitcoin peaked at around $69,000.

In the last month alone, 15.5% of all bitcoin wallets fell into an unrealized loss, as the world’s most popular cryptocurrency plunged to the $31,000 level, tracking tech stocks lower. Bitcoin’s close correlation to the Nasdaq challenges the argument that the cryptocurrency functions as an inflation hedge.

Analysts from Glassnode also noted an influx of “urgent transactions” amid this latest sell-off, in which investors paid higher fees, indicating they were willing to pay a premium in order to expedite transaction times. The total value of all on-chain transaction fees paid reached 3.07 bitcoin over the last week — the largest yet recorded in its dataset.

“The dominance of on-chain transaction fees associated with exchange deposits also signaled urgency,” continued the report, further supporting the case that bitcoin investors were seeking to de-risk, sell, or add collateral to their margin positions in response to recent market volatility.

During the sell-off this past week, more than $3.15 billion in value moved into or out of exchanges, the largest amount since the market hit its all-time high in November 2021.

https://www.cnbc.com/2022/05/09/40pe...node-data.html

[ClaytonB]

https://www.cnbc.com/2022/05/09/40pe...node-data.html

Gold-holders have spent a lot of time "underwater" according to these same idiotic Funny Reserve Note "analysts". If you think the dollar is a stable measure of anything, there's nothing I can do to help you...

[CaptUSA]

Gold-holders have spent a lot of time "underwater" according to these same idiotic Funny Reserve Note "analysts". If you think the dollar is a stable measure of anything, there's nothing I can do to help you...

Lol - nice non sequitur, but no one is saying that.

What I am saying is that crypto is not behaving as advertised. It's an investment tool, which is fine. But let's drop the pretense that its primary function is an alternative currency.

[ClaytonB]

Lol - nice non sequitur, but no one is saying that.

What I am saying is that crypto is not behaving as advertised.

No, you're repeating Fed/central-banker talking-points that I have been watching them lay the groundwork for, since at least 2017. So, your 'piercing insight' into the 'reality' of Bitcoin is being spoon-fed to you by the financial MSMBS and you are lapping it up without skepticism. Think about where you are getting your information from. Do you trust these people to tell the truth about politics? So why in the world do you trust them to tell you the truth about Bitcoin??

#1 Fed/central-banking propaganda talking-point about Bitcoin: "It's just a crypto"

No, Bitcoin is not "a" crypto, it is the crypto. You can argue that Ethereum and Litecoin are independent cryptos, but essentially all other crypto out there is just a derivative sitting on top of Bitcoin. They don't want to even mention its name which is how you know they truly hate it. Everything they hate is literally unmentionable. So it's "crypto", not Bitcoin, per them.

In a rare moment of candor, three of the biggest Deep State Establishment billionaires -- Bill Gates, Warren Buffet, Charlie Munger -- tell the truth about their view of Bitcoin:



Oh boy, these guys sure are known for telling the truth about the world!!

It's an investment tool, which is fine. But let's drop the pretense that its primary function is an alternative currency.

I posted this in the other thread. If you are truly the MSMBS skeptic you claim to be, then you would benefit from watching it:

[dannno]

Lol - nice non sequitur, but no one is saying that.

What I am saying is that crypto is not behaving as advertised. It's an investment tool, which is fine. But let's drop the pretense that its primary function is an alternative currency.

Bitcoin became a tech investment, but it's primary function is as an inflationary hedge. It is both of those things. Sort of like how gold is an inflationary hedge, but it's also used in technology. The price of gold can go up or down based on production needs for technology, it can also go up or down based on inflation.

[ClaytonB]

Bitcoin became a tech investment, but it's primary function is as an inflationary hedge. It is both of those things. Sort of like how gold is an inflationary hedge, but it's also used in technology. The price of gold can go up or down based on production needs for technology, it can also go up or down based on inflation.

Technically, its primary function is neither to be an investment, nor an inflation hedge, but simply to be hand-to-hand money. Can anyone guarantee that Bitcoin will actually achieve its stated goal? Of course not. So, early-adoption is an inherently speculative activity. Why you choose to be an early-adopter (or not) is up to you. Some are trying to use it for as many living expenses as possible, getting paid for work in Bitcoin, etc. in order to truly early-adopt. Some are trying to use it as an inflation hedge. Some are treating it as a speculative stock traded in "crypto-space" instead of fiat money. No one is right or wrong in how they approach it. But Bitcoin will only not be a failure if it is eventually widely adopted for direct, hand-to-hand payment for all kinds of goods and services.

The creators, devs, miners, promoters, etc. who can all loosely be referred to as "the Bitcoin community" have been virtually unanimous on this point. Bitcoin-as-Ponzi-scheme is a cheap and easy smear, but what sort of Ponzi scheme involuntarily tapers itself over time? In the first few years of Bitcoin, yes, it was hard to tell it apart from a Ponzi scheme. But the difference is long since obvious. So, all of this FUD-mud being flung around by the Fed/central-bankers and their mouthpieces in the "financial news" industry is like one of those giant poop-flinging machines used to fertilize grass fields with cow manure. It's just a bunch of bullsh!t. Watching even an hour or two of some good introductory videos on what Bitcoin is and how it works will suffice to put any misconceptions about it to rest.

[ClaytonB]

I don't share Luke Smith's view that Monero is "Bitcoin done right"... Bitcoin is Bitcoin done right... but it does seem that Monero has a valid place in the ecosystem. Anyway, most of the talk is about the general political situation and I highly recommend...

[ClaytonB]

Crypto is not hard to understand...

https://twitter.com/RunwithBitcoin/s...17286877167616

Here's another way to explain it. If you use a radio, no one can block your radio call (unless they use RF jamming or something extreme like that) because the radio simply uses physics to communicate point-to-point. When you use a telephone, however, the telecom can block or monitor your call if they have been ordered to do so. Bitcoin is like radio and the current banking system is like telephones -- there is always a middleman who has the power to decide whether you may or may not transact. In the case of Bitcoin, there is no individual or even group who can selectively block your transaction. Sure, access to the Bitcoin network could be blocked for a time or in a specific region but there is no way to selectively block transactions, and that's what makes it so powerful. In order to block you from transacting, the government essentially has to block everyone. That, in itself, does not guarantee freedom. It's not an automatic win. But it raises the bar for financial tyranny very high. Financial tyranny is far and away the favorite instrument of modern Western governments. It's how they do tyranny. Take that away, and you will have reduced them to almost nothing.

[ClaytonB]

"Bitcoin has no privacy!" ...

[ClaytonB]

[ClaytonB]

Even though cryptocurrency has long been part of the financial assets of many citizens, I still believe this is a big financial bubble. Assets can survive only by having a certain base under them, which cannot be said about cryptocurrency.

As with any currency, Bitcoin's "base" is not any particular good or service, it is the basket all the goods and services which are traded in Bitcoin (directly, not through exchanges). There have been signs of Bitcoin taking root here and there, but the news is incredibly censorious and it is not clear how completely the crypto "news" industry has been captured by the Establishment (that is, are we getting any real news at all?) Bitcoin's real value is directly proportional to the number of people exchanging it (not HODLing it), day-to-day. Right now, that's not a very big percentage, despite Bitcoin's growth over the last decade. We still have a long ways to go.

[Anti Federalist]

Yes, I can, and explain it in detail if needed.

Bitcoin is still a mystery to me, especially the "mining" of bitcoins.

That said:

Can anybody give a me a cogent thumbnail explanation of the FTX scandal?

Or explain, if crypto currency is so safe, how Sam Bankman, a barely literate swindler of the lowest sort, was able to shift billions of crypto "assets" out of FTX's portfolios into...well...we don't know where it went actually?

[CaptUSA]

Yes, I can, and explain it in detail if needed.

Bitcoin is still a mystery to me, especially the "mining" of bitcoins.

That said:

Can anybody give a me a cogent thumbnail explanation of the FTX scandal?

Or explain, if crypto currency is so safe, how Sam Bankman, a barely literate swindler of the lowest sort, was able to shift billions of crypto "assets" out of FTX's portfolios into...well...we don't know where it went actually?

I'll leave it to smarter people than me to explain the details of the scandal, but how was Bankman able to pull this off? His parents are both professors at Stanford Law School and are the preeminent compliance lawyers in the country. His mother was a law clerk under a Senior Judge of the US Court of Appeals. His dad went to Berkeley and Yale. His aunt is a leading epidemiologist at Columbia University. His brother traded on Wall Street before becoming the director of a non-profit, "Guardians Against Pandemics". All of them are well-connected and have given tons of money to politicians. They were marked "safe" from government oversight. If you were an investor interested in Crypto, but wanted assurances that your investments wouldn't be lost or seized, SBF seemed like the safest bet.

But, it seems mister SBF was taking the investments and funneling millions to politicians, media and other left-wing groups. In return, SBF gave the investors crypto-tokens. They appeared to be an asset until people started to request their money back and the whole thing came crashing down.

[dannno]

Yes, I can, and explain it in detail if needed.

Bitcoin is still a mystery to me, especially the "mining" of bitcoins.

That said:

Can anybody give a me a cogent thumbnail explanation of the FTX scandal?

Or explain, if crypto currency is so safe, how Sam Bankman, a barely literate swindler of the lowest sort, was able to shift billions of crypto "assets" out of FTX's portfolios into...well...we don't know where it went actually?

It's the same thing as centuries ago when banks would hold onto your gold and give you gold notes so you could trade the notes to other people for goods or services and then come trade the notes back for the gold if you wanted to. Except they printed more notes than they had gold. So when people start showing up with their notes for the gold, it all comes crashing down.

The cool thing about bitcoin is you can hold it like you would hold your gold at home in a safe. Except if the safe is stolen or broken into, you still own the gold and the thief gets nothing.

The reason it was so big is because, like CaptUSA said, they were well connected to politicians, celebrities and Ukraine who all had a lot of money to invest.

It is no surprise to me that by far the biggest crypto scam to date was run by the very people who are trying to convince us that crypto itself is a scam (crypto itself is not a scam, but like anything it can be used to run scams). The Democrats.

[ClaytonB]

Yes, I can, and explain it in detail if needed.

Therefore, you also understand how rare that ability is, since you often find yourself face-palming at the many absurdities that people believe about email. Obviously, some people understand email. But the vast majority don't, and they don't need to.

Those of us who do understand email also understand the many dastardly ways that the Fedgod snoops on people through their buddies at Gmail, Outlook, etc. The solution is not to destroy the email protocol, the solution is to stop the Federal government from blatantly breaking the law and violating the Constitution which is the only means by which it has authority in the first place. I hope the analogy to Bitcoin is clear. The problem is not the technology which, if properly built, is just a tool. The problem is the crooks in government and their lackies in the private sector.

Bitcoin is still a mystery to me, especially the "mining" of bitcoins.

In the year 2140, mining of new Bitcoins will cease. Mining itself will go on, but what they will be mining for is transaction fees only, not the "block subsidy" which is what we're usually talking about when we speak of mining. I am pointing this out in order to make it clear that mining is not fundamentally about the block subsidy, of which more than 90% has already been mined (the remaining 10% will be mined between now and 2140).

Mining can be thought of as a "decentralized lottery". Imagine you have 10 dice. Mining would be like saying to a group of people, "each of you, roll all 10 of your dice until you roll 7 or more 1's; the first one to roll 7 1's wins this round." We can make mining harder by saying, "roll all 10 dice until you roll 8 or more 1's" or easier by reducing the threshold. That explanation is notional... it just explains the goal of mining, not the means.

Obviously, we need the lottery to be secure, despite being decentralized. We need to make sure that a clever PhD can't finagle some way around the system and start faking his rolls of the dice. We need to be sure that every participant in the network is being forced to roll the dice fairly. And that's the role of the legendary "hash function". The hash function (SHA-256 in the case of Bitcoin) is how we ensure this. If you can figure out how to break SHA-256, then you can also figure out how to give yourself "free rolls of the die". But that's the only way you could do it. So, the security of Bitcoin is dependent on the security of SHA-256. There is a way to fallback to some other hash function, if needed, since it is possible that a clever cryptographer could figure out a break for SHA-256. But it's also really unlikely that that will happen, and the risks/implications wouldn't just affect Bitcoin, it would affect many secure communications systems, including military communications.

That said:

Can anybody give a me a cogent thumbnail explanation of the FTX scandal?

Or explain, if crypto currency is so safe, how Sam Bankman, a barely literate swindler of the lowest sort, was able to shift billions of crypto "assets" out of FTX's portfolios into...well...we don't know where it went actually?

I haven't looked into the scandal because I don't care. In the Bitcoin community, we call all of these coins "$#@!coins" for obvious reasons. If you want to throw your money at a JPEG of a monkey, well, "a fool and his money are soon parted". But comparing things like NFTs, FTX, and other obviously idiotic scams, to Bitcoin, is like comparing TikTok to email. Email can function in a secure, private and reliable manner if the government will only stop breaking the law and violating our constitutional rights. TikTok is evil in its very conception. They should not be conflated.

[kfarnan]

So much misinformation about what is real.