# Crypto. Ponzi Scheme?



## LoveTrees (14 Apr 2021)

Can someone explain to me how any cryptocurrency can be given value please? Different companies can produce bitcoins etc and i don't see central regulators counting the bitcoins etc available in the World. To me this is a clear Ponzi Scheme or am I missing something?


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## Steven Barrett (14 Apr 2021)

There's a 30 page thread below which is a good starting point 





__





						Bitcoin in a hyperbolic bubble
					

Do you have any thoughts on a solution?   Yes, do what I do, buy what can be afforded.  I may not ever obtain my desired target - 1BTC, but I am a long way from not being able to obtain additional bitcoin. Liquidity is not an issue.



					www.askaboutmoney.com


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## DazedInPontoon (14 Apr 2021)

LoveTrees said:


> Different companies can produce bitcoins etc


Companies can't produce bitcoins. bitcoins must be earned through mining or bought. Anyone can create their own alternatvie cryptocurrency if they like, but without a substantial network of users it's of no consequence.


LoveTrees said:


> and i don't see central regulators counting the bitcoins etc available in the World.


We don't need regulators to count them because the blockchain that contains the history of all transactions and thus balances of all bitcoin address is public. Right now there is exactly 18,682,542 bitcoin in circulation. 


LoveTrees said:


> To me this is a clear Ponzi Scheme or am I missing something?


Some cryptocurrencies are scams, but bitcoin isn't. What you're missing is even a basic understanding of how it works.


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## LoveTrees (14 Apr 2021)

DazedInPontoon said:


> Companies can't produce bitcoins. [...]  {1}
> 
> We don't need regulators to count them [...] {2}
> 
> Some cryptocurrencies are scams, but bitcoin isn't. What you're missing is even a basic understanding of how it works. [...] {3}


Point {1}. Yes they can and it costs environmentally. I read an article in an italian newspaper that to produce a bitcoin it takes cpu-power and time

Point {2}. Why? Then let's all produce tulips like in Holland just a few centuries ago and forget about history

Point {3}. Don't offend please. I know you need to protect your investment.

I propose we re-read this thread in 30 years from now to check if it was ironic that the day in which Bernie Madoff died and Coinbase got into the Nasdaq was the same. Thank you.

@Steven Barrett thank you. 30 pages-thread (still being updated at present) to try and answer my same query? I notice many opinions and few certainties then


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## NotMyRealName (14 Apr 2021)

Coinbase hit the Nasdaq today, Tesla on the S+P 500, ........ we're all in bitcoin now by proxy. 
Nothing wrong with a good old-fashioned pyramid scheme (think public sector pensions) as long as they're not short lived. Just ask an Irish bartender in Queens or the Bronx in '87...
The trick is to accept you've made a certain amount of return and then withdraw from the arena. There's no compounding in Pyramid schemes.


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## noproblem (14 Apr 2021)

If you've a few thousand you can afford to lose, then have a punt. A far smarter person that myself told me that Bitcoin's going to €200k. Someone said the Bossman of this Ask About Money website is into it in a big way?


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## LoveTrees (14 Apr 2021)

Personally I don't care about crypto as long as it's not another growing Ponzi Scheme like the subprime crisis we all suffered in 2008/9... That's my view and I prefer to stick to Warren Buffett and Charlie Munger instead thank you... I understand we all lost confidence in Banks when subprime went astray but giving too confidence on value creation in the hands of other few people that don't clearly show their cards is so bad... The creator of bitcoin is unnamed not by chance still to my opinion... Again: just my view


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## jim (14 Apr 2021)

DazedInPontoon said:


> Some cryptocurrencies are scams


@DazedInPontoon which ones?


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## DazedInPontoon (14 Apr 2021)

jim said:


> @DazedInPontoon which ones?


You can wade through about 1000 pages of alt-coin announcements here https://bitcointalk.org/index.php?board=159.0 I presume the vast majority of them are pre-mined trash. It's a fairly simple concept - create a coin, award some to yourself up front, launch it, hype it, dump your bags. Repeat.

There are also bigger scams like Onecoin (https://www.bbc.com/news/technology-50509299) though I doubt that was even a cryptocurrency at all, just a straight up ponzi.

There are so many people who are both looking for the 'next bitcoin' but don't understand enough about it that it's a no brainer for scammers to find targets.


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## Sarenco (8 Jan 2022)

Interesting article by David McWilliams on crypto -








						David McWilliams: Cryptocurrency is patently not real money
					

The history of private money isn’t too sparkling, so why would it be any different now?




					www.irishtimes.com
				




_“When something claims to be money but patently isn’t, is backed by nothing, generates no income, and promises you the sun, moon and stars, it sounds like a quick way to destroy wealth not create it.”_


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## Duke of Marmalade (8 Jan 2022)

LoveTrees said:


> Can someone explain to me how any cryptocurrency can be given value please?


You will get many armchair punters like myself to go on and on about this subject. In many ways its supporters resemble a cult. I recommend you refer to professional experts like Professor Roubini or Robert McAuley writing in the FT:


			
				Robert McAuley in the FT said:
			
		

> At today’s higher bitcoin prices, the hole is growing faster. About 900 new bitcoin a day require most of $45m a day in electricity. Thus, the negative sum in the bitcoin game is in tens of billions of dollars and rising at over a billion dollars per month. If the price of bitcoin collapses to zero, the gains of those who sold would fall short of the losses of holders by this growing sum. *To liken bitcoin to a Ponzi scheme or a pump-and-dump scheme, both basically redistributive, is to flatter the cryptocurrency system*.
> To conclude, an economic analysis of bitcoin must recognise its uniqueness in the history of manias. As an object of speculation, bitcoin is unprecedented in the degree to which there is no there there. This post-modern mania features big prices for entries on nobody’s spreadsheet. A zero-coupon perpetual has arrived not as a joke but as a trillion dollar asset. Unlike a Ponzi scheme, bitcoin cannot end in a run. In a crash, the holders of bitcoin will collectively have lost what they have paid the miners for their bitcoin. This sum may be not far from the sum originally invested with Madoff, after accounting for inflation. But bitcoin holders will have no one to pursue to recover this sum: it will simply have gone up in smoke, a social loss. The holders of bitcoin would then only wish it had been a Ponzi scheme.





LoveTrees said:


> Different companies can produce bitcoins etc and i don't see central regulators counting the bitcoins etc available in the World.


There are 21m bitcoins and to all intents there will never be any more.  The "system" releases these every 10 minutes and at this stage has released about 19m of them.  Note that these are released on schedule by the system and are not somehow “mined” like precious metals.  Cultists make a big deal of this scheduled limited supply. But if the experts are right and bitcoins are worth nothing, what does it matter how limited the supply is?


LoveTrees said:


> To me this is a clear Ponzi Scheme or am I missing something?


See the bit that I have highlighted in Robert McAuley's article above.  It is actually much worse than a Ponzi scheme, in his opinion and who am I to disagree with him.

You seem to be safe from this mania (McAuley's description) but just to affirm you in that view, it has fallen 40% in price over the last month or so.


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## Brendan Burgess (8 Jan 2022)

I really hate the very rare occasions when McWilliams actually gets something right.



Brendan


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## LoveTrees (13 Jan 2022)

Thank you @Duke of Marmalade for the feedback!


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## Marc (13 Jan 2022)

yes most likely


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## Gervan (14 Jan 2022)

I went to the cinema last week (hurrah) and saw an advert I hadn't seen before. It was quite long, and pictured someone (maybe famous, I'm no good at faces) walking through a display of all the exciting things that humans have done in the past that would have been thought fools for, from space exploration downwards. It was quite stirring to watch.
The final message was that anyone daring would ignore those critics who said a venture was too risky... and buy cryptocurrency !!

I was horrified by the way that this is being presented to people who may have very little money to lose. I think it speaks of desperation and seeking for "more minnows" to prop up the "investment".


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## LoveTrees (14 Jan 2022)

My point is: why giving value to a currency when you can give value to teams/certain visions/certain balance sheets by investing on them? I just don't see the sense sorry...


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## newirishman (14 Jan 2022)

That is an interesting move, but appropriate IMO.

London Mayor urged to implement promised ban on gambling adverts on TfL – and to extend it to crypto companies.








						Cryptocurrency ads reach record levels on London transport
					

Mayor urged to implement promised ban on gambling adverts on TfL – and to extend it to crypto companies




					www.theguardian.com


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## Ciru75 (14 Jan 2022)

Gervan said:


> I went to the cinema last week (hurrah) and saw an advert I hadn't seen before. It was quite long, and pictured someone (maybe famous, I'm no good at faces) walking through a display of all the exciting things that humans have done in the past that would have been thought fools for, from space exploration downwards. It was quite stirring to watch.
> The final message was that anyone daring would ignore those critics who said a venture was too risky... and buy cryptocurrency !!
> 
> I was horrified by the way that this is being presented to people who may have very little money to lose. I think it speaks of desperation and seeking for "more minnows" to prop up the "investment".


The Galileo fallacy. 

People laughed at Galileo for thinking the earth goes around the sun. 
People laugh at me for thinking x. 
The earth goes around the sun. 
Therefore x is correct.


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## DublinHead54 (14 Jan 2022)

The Cryptocurrency and underlying technology as a whole is not a Ponzi Scheme or a scam.

Are there Ponzi Schemes and Scams that run within the market....Yes there are, just like there are scams and ponzi schemes in cash markets.


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## DublinHead54 (14 Jan 2022)

newirishman said:


> That is an interesting move, but appropriate IMO.
> 
> London Mayor urged to implement promised ban on gambling adverts on TfL – and to extend it to crypto companies.
> 
> ...



I've seen FLOKI adds on the side of some Dublin buses!


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## ClubMan (14 Jan 2022)

Dublinbay12 said:


> I've seen FLOKI adds on the side of some Dublin buses!


For several weeks the big LCD ad panel on the Drumcondra rail bridge had an ad for it. I had to ask my teenage son what it was all about...


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## DublinHead54 (15 Jan 2022)

The Crypto Market is not solely Bitcoin and the sole purpose of the market is not to produce investable assets or mimic traditional currencies. 

In simple terms the purpose of each 'cryptocurrency' is not the same. Bitcoin use is as a currency / store of value. Is it successful? Debatable hence the hundreds of pages on this forum debating it. 

Ethereum or Polkadot purpose is not to replace fiat currencies. the currencies are the native tokens for those platforms and it is these platforms that most of the other currencies are built on. 

A lot of these projects that are built on Ethereum aim to implement some form of solution on the Blockchain, for example selling digital art or decentralised finance. The 'cryptocurrencoes' are in reality digital tokens and should be considered more like individual stocks than a currency. Its here that a lot of speculation happens. 

The way I rationalise some of this is to the dot com boom of the late 90s. thousands of websites popped up with ideas only to go bust a few years later. Some of the crypto market is like that as in they are tryig to implement some product or solution and of it fails the company / project will end. 

The way I look at Bitcoin is the evolution of the Car. The first ford was a great invention for the time but we don't still drive around in that same version today. In the same way Bitcoin will evolve and change, and maybe it evolves to the point it's no longer relevant. 

The underlying crypto market is very exciting at the minute but it is definitely in its infancy. 

I know it's easy to look at Bitcoin and see it was $100 6 years ago and hit $60k last year and start dreaming about riches. Unfortunately that boat has passed.


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## newirishman (15 Jan 2022)

Dublinbay12 said:


> The Crypto Market is not solely Bitcoin and the sole purpose of the market is not to produce investable assets or mimic traditional currencies.
> 
> In simple terms the purpose of each 'cryptocurrency' is not the same. Bitcoin use is as a currency / store of value. Is it successful? Debatable hence the hundreds of pages on this forum debating it.
> 
> ...


So what then /is/ the purpose of cryptocurrencies?

I have a solid background in computer science and systems engineering, so I can see some useful applications for blockchains (usually in the general space of digital signature / digital trust).
But cryptocurrencies? Apart from the ponzi-scheme aspects? Can’t see the point beyond “get rich quick” schemes.
Store of value usage or usage as currency is from a practical perspective pointless given the volatility.


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## DublinHead54 (15 Jan 2022)

newirishman said:


> So what then /is/ the purpose of cryptocurrencies?
> 
> I have a solid background in computer science and systems engineering, so I can see some useful applications for blockchains (usually in the general space of digital signature / digital trust).
> But cryptocurrencies? Apart from the ponzi-scheme aspects? Can’t see the point beyond “get rich quick” schemes.
> Store of value usage or usage as currency is from a practical perspective pointless given the volatility.



There are hundreds if not thousands of purposes of 'cryptocurrencies' but that doesn't translate to value. they all don't intend to be currencies, which is confusing given the name. Those can only be evaluated on a case by case basis hence my comparison to the dot com boom. For those types of 'tpkens' I view them more as stocks and you're buying an interest in the company succeeding. Whilst not exactly stocks I think they are fundamentally closer to stocks than currencies.

Bitcoin is the main crypto trying to be a currency and I agree with you, it's too volatile to be a currency and I very much doubt governments are going to give up their control of the economy to a decentralised currency. 

So perhaps it becomes a store of value, perhaps it fails. Right now for the vast majority Bitcoin is held as an investment and not a currency. 

The platform I have been following lately is Polkadot which is trying to create a Web3, some kind of decentralised web and has then applications (finance, messaging, data etc) being built on top of it. It is an interesting concept and I am following it from the product perspective rather than because it has a token which might be worth X. 

So in summary I'd split crypto in two buckets

1. Currencies - speculative investment e.g. Bitcoin
2. Tokens - specific applications or platforms and you are investing in the idea/product and receiving a token which may appreciate or depreciate. 

Obviously that's a simplified view, and not doesn't answer the question of what the underlying value is.


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## newirishman (15 Jan 2022)

Dublinbay12 said:


> 2. Tokens - specific applications or platforms and you are investing in the idea/product and receiving a token which may appreciate or depreciate


Congratulations, you have invented shares and the stock market!

Of course, a tongue-in-cheek comment. But you are only solidifying my point: cryptocurrencies are a solution for a problem that HAS been solved already at least adequately well.

(edit: has - Not hasn’t)


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## ClubMan (15 Jan 2022)

newirishman said:


> cryptocurrencies are a solution for a problem that hasn’t been solved already at least adequately well.


I presume that you meant "has been solved"?


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## DublinHead54 (15 Jan 2022)

newirishman said:


> Congratulations, you have invented shares and the stock market!
> 
> Of course, a tongue-in-cheek comment. But you are only solidifying my point: cryptocurrencies are a solution for a problem that hasn’t been solved already at least adequately well.



Only it's better than the stock market because it's a Blockchain solution! (Very much a tongue in cheek comment.) In all seriousness that's why the SEC views many cryptos as "investment securities" and not currencies. So it's a fairly sensible but simple comparison to the shares

I 100% agree that many are offering solutions for which perfectly adequate solutions already exist. 

It is a bit of a minefield and very susceptible to scams, just Google onecoin. 

However, and this has nothing to do with the value there are some very interesting projects out there (web3, decentralised finance etc). There is rapid development and release to public of products we'd traditionally have to go through intermediary such as banks for. Again nothing to do with the value or purpose, but it is interesting.


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## Duke of Marmalade (15 Jan 2022)

Dublinbay12 said:


> So in summary I'd split crypto in two buckets
> 
> 1. Currencies - speculative investment e.g. Bitcoin
> 2. Tokens - specific applications or platforms and you are investing in the idea/product and receiving a token which may appreciate or depreciate.


Trying to get my head around this.
As per Professor Roubini, crypto currencies have no assets, have no revenue, produce no goods or services.
Are you telling us that tokens, like shares, have assets, do supply some service and do have revenue, or at least potentially so? If so then this is something of a red herring as I presume OP is referring to the former obscenities.


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## newirishman (15 Jan 2022)

ClubMan said:


> I presume that you meant "has been solved"?


Oh yes, oops.


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## DublinHead54 (15 Jan 2022)

Duke of Marmalade said:


> Trying to get my head around this.
> As per Professor Roubini, crypto currencies have no assets, have no revenue, produce no goods or services.
> Are you telling us that tokens, like shares, have assets, do supply some service and do have revenue, or at least potentially so? If so then this is something of a red herring as I presume OP is referring to the former obscenities.



If your use of cryptocurrencies is referring to the entire market then you are wrong on a few points. Bitcoin, yes I agree with you but not for what I've bucketed as tokens. This is why the SEC can view them as securities and they become applicable to securities laws. I said it was a very simple comparison.

But many of these cryptocurrencies do offer a service and a product. 

You can still be a company with a share price without physical assets. 

My simple point here is that Bitcoin is intended to be a currency, many of the other 'cryptocurrencies' are not and probably should have the currency name removed. Its an important distinction.


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## Duke of Marmalade (15 Jan 2022)

Dublinbay12 said:


> If your use of cryptocurrencies is referring to the entire market then you are wrong on a few points. Bitcoin, yes I agree with you but not for what I've bucketed as tokens. This is why the SEC can view them as securities and they become applicable to securities laws. I said it was a very simple comparison.
> 
> But many of these cryptocurrencies do offer a service and a product.
> 
> ...


Sorry but trust me that I am not being my usual cantankerous duke here, just trying to understand these tokens.  Are they like shares in that they are shares in some genuine economic activity providing a service for revenues and profit?  I accept that there need not necessarily be assets as for say an actuary whose assets would amount to little more than a laptop but would be selling professional services for fees. 

Put more simply will the activity these tokens give ownership of be charging customers fees for some service?  Clearly that would distinguish them from bitcoin and are not I suspect the subject of OP.


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## DublinHead54 (15 Jan 2022)

Duke of Marmalade said:


> Sorry but trust me that I am not being my usual cantankerous duke here, just trying to understand these tokens.  Are they like shares in that they are shares in some genuine economic activity providing a service for revenues and profit?  I accept that there need not necessarily be assets as for say an actuary whose assets would amount to little more than a laptop but would be selling professional services for fees.
> 
> Put more simply will the activity these tokens give ownership of be charging customers fees for some service?  Clearly that would distinguish them from bitcoin and are not I suspect the subject of OP.



Yes I don't think it's the subject for the OP. However, as they said they any cryptocurrency has value I was highlighting that they aren't all currencies. 

My comparison to the stock market is that each company on the stock market at some point sold shares via an IPO to raise capital to fund their business strategy and provide services. Each company offers a different service e.g Facebook, AIB, BP etc. The shares are regulated strictly such that the owner of each share has certain rights. by holding a share in that company you own a bit of the company but you don't necessarily have to be a user of its products/services. 

Now for some of these cryptocurrencies that issued ICOs the first principle was the same as the stock market in that they raised capital by issuing tokens to fund their business strategy / plan. Next, so each token is against a certain business idea rather than just another Bitcoin. Yes a high % of ICOs failed or where scams (think I read 70% in a research paper) 

That's where it starts to differ from the stock market as there are different types of tokens offering different utilities. For example Polkadot (web3 platform) as a token holder you have voting rights in any proposed changes. 

So in essence you are getting ownership of the platform and this where it gets tricky on what service they are offering. In the example of Polkadot, it's building WEB3 and so is a platform for apps and DOT it's token purpose is as below. In this case the way I look at it is the amount of DOT I have rather than the dollar value. 1 DOT is 1 DOT on the platform and the dollar value is irrelevant. The dollar value is really just speculative trading. 

_DOT is the native token of the Polkadot Network. DOT can be used for transaction fees, staking, governance, acquisition of a parachain slot and for enabling several key functionalities on Polkadot._

Most of the top 10 cryptocurrency with the excoption of Bitcoin are platforms that want people to build scalable apps and solutions on that platform. The tokens are to be used in those platforms and are never intended to be used down the shop. 

Within these platforms there are apps providing services e.g financial (defi) etc. 

I guess it's a further derivation of why do companies like Facebook make so much money and have value or Airbnb, Uber etc. They are all platform companies. 

I've not answered why they have a dollar value, probably mostly down to speculation, but they do have a utility (in its infancy)


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## Duke of Marmalade (15 Jan 2022)

Dublinbay12 said:


> I guess it's a further derivation of why do companies like Facebook make so much money and have value or Airbnb, Uber etc. They are all platform companies.
> 
> I've not answered why they have a dollar value, probably mostly down to speculation, but they do have a utility (in its infancy)


Hmm!  I don't particularly understand why Facebook is worth so much.  But I do see they have something to sell e.g. advertising fodder.
As McAuley observes, the only value that can ever accrue to a bitcoin holder is that some other person wants to be a bitcoin holder - like Ponzi, there is no actual economic service being supplied for revenues.  I am not sure that many of these tokens do not fall into the same category. 
Admittedly many/most people hold shares on the prospect of selling them on to other folk.  But fundamentally the stockmarket is underpinned by the fact that even if trading was banned in the morning in theory the value would still be delivered over time from their economic activity.


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## CuriousGeorge11 (16 Jan 2022)

newirishman said:


> So what then /is/ the purpose of cryptocurrencies?
> 
> I have a solid background in computer science and systems engineering, so I can see some useful applications for blockchains (usually in the general space of digital signature / digital trust).
> But cryptocurrencies? Apart from the ponzi-scheme aspects? Can’t see the point beyond “get rich quick” schemes.
> Store of value usage or usage as currency is from a practical perspective pointless given the volatility.


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## CuriousGeorge11 (16 Jan 2022)

Dublinbay12 said:


> The tokens are to be used in those platforms and are never intended to be used down the shop.



You can spend the tokens down the shop every day now if you want to


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## DublinHead54 (16 Jan 2022)

CuriousGeorge11 said:


> You can spend the tokens down the shop every day now if you want to



Yes, but thats not the intention of those type of tokens.


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## Cavanbhoy (16 Jan 2022)

I am not sure of the longterm prospects of Crypto but there is definitely a lot more to it than bitcoin. The value of the token Cro that I hold is it enables me to get a 14% apr on dollar and sterling stablecoins.  Plus getting 5% cashback on credit card purhases. 
It has worked out ok for me sofar but who knows what the future holds.


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## CuriousGeorge11 (16 Jan 2022)

Disney is launching their own meta verse and minting NFTs, Facebook rebranded as Meta

Smart contracts are quite possibly the future of business transactions but people still call crypto a pyramid scheme.

I find it amusing and never attempt to change anyone's mind. Let people to their own opinions and if your on to a good thing then dont chart watch, collect your staking interest daily and dont forget to take your initial deposits out


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## RetirementPlan (17 Jan 2022)

CuriousGeorge11 said:


> Disney is launching their own meta verse and minting NFTs, Facebook rebranded as Meta
> 
> Smart contracts are quite possibly the future of business transactions but people still call crypto a pyramid scheme.
> 
> I find it amusing and never attempt to change anyone's mind. Let people to their own opinions and if your on to a good thing then dont chart watch, collect your staking interest daily and dont forget to take your initial deposits out


Does this reflect the process of selling NFTs for artworks accurately?


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## CuriousGeorge11 (17 Jan 2022)

RetirementPlan said:


> Does this reflect the process of selling NFTs for artworks accurately?
> 
> 
> View attachment 6056



I'm not a fan of NFT's personally but I am a fan of compounding daily staking interest.

Each to their own.


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## notthatkeen (17 Jan 2022)

RetirementPlan said:


> Does this reflect the process of selling NFTs for artworks accurately?
> 
> 
> View attachment 6056


Not really. But if you had a digital certificate of ownership of a piece of art, and you replaced the spreadsheet with a public database that was very hard to update illicitly. Then sort of.


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## RetirementPlan (17 Jan 2022)

notthatkeen said:


> Not really. But if you had a digital certificate of ownership of a piece of art, and you replaced the spreadsheet with a public database that was very hard to update illicitly. Then sort of.


The real question is the value of the digital certification of ownership, rather than the medium for recording the certificate.


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## tecate (20 Jan 2022)

RetirementPlan said:


> The real question is the value of the digital certification of ownership, rather than the medium for recording the certificate.


Are you suggesting that a decentralised public blockchain ( as the medium ) doesn't add any value in this instance?


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## RetirementPlan (20 Jan 2022)

tecate said:


> Are you suggesting that a decentralised public blockchain ( as the medium ) doesn't add any value in this instance?


I'm suggesting that there is no value in a certificate saying that I own the Mona Lisa, regardless of what medium it is stored in.


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## ClubMan (20 Jan 2022)

BBC R4 In Our Time this morning about the gold standard was interesting. One of the experts said that basically the whole system hinged on other people trusting that gold had some intrinsic worth.








						In Our Time - The Gold Standard - BBC Sounds
					

Melvyn Bragg and guests discuss what happened when world currencies were tied to gold




					www.bbc.co.uk


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## tecate (20 Jan 2022)

RetirementPlan said:


> I'm suggesting that there is no value in a certificate saying that I own the Mona Lisa, regardless of what medium it is stored in.


Digital property rights is the only part of NFTs that I do appreciate some value in. Lets say we both claim to own the Mona Lisa. Wouldn't possession of the accompanying digital certificate then have value? How about if we both have a Mona Lisa but one of them is a fake?


ClubMan said:


> BBC R4 In Our Time this morning about the gold standard was interesting. One of the experts said that basically the whole system hinged on other people trusting that gold had some intrinsic worth.
> 
> 
> 
> ...


That's absolutely true. Some will point to industrial uses of gold - but those uses are very recent in its history. Prior to that, it was used as jewellery but so were many polished rocks. The difference is that people assigned it value due to its durability and scarcity.


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## RetirementPlan (20 Jan 2022)

tecate said:


> Digital property rights is the only part of NFTs that I do appreciate some value in. Lets say we both claim to own the Mona Lisa. Wouldn't possession of the accompanying digital certificate then have value? How about if we both have a Mona Lisa but one of them is a fake?



Let's say we both show up at the Lourve with our accompanying digital certificates showing that we own it. Which of us do you think they're going to give it to?


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## ClubMan (20 Jan 2022)

The Mona Lisa isn't a digital asset that you can own via NFT. The Mona Lisa is in the real world.


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## RetirementPlan (20 Jan 2022)

ClubMan said:


> The Mona Lisa isn't a digital asset that you can own via NFT. The Mona Lisa is in the real world.


There are NFTs of physical art;








						Physical NFTs | Applied Blockchain
					

What the Damien Hirst Project The Currency Gets Right about Physical NFTs




					appliedblockchain.com
				












						Non-Fungible Tokens (NFTs) Explained | AWS Blockchain
					

Non-Fungible Tokens (NFTs) Explained: What is a fungible vs non-fungible asset?




					aws.amazon.com
				




"Non-fungible tokens, often referred to as NFTs, are blockchain-based tokens that each represent a unique asset like a piece of art, digital content, or media. An NFT can be thought of as an irrevocable digital certificate of ownership and authenticity for a given asset, whether digital or physical. "


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## Duke of Marmalade (20 Jan 2022)

tecate said:


> That's absolutely true. Some will point to industrial uses of gold - but those uses are very recent in its history. Prior to that, it was used as jewellery but so were many polished rocks. The difference is that people assigned it value due to its durability and scarcity.


And if polished rocks make attractive jewellery then they will have an intrinsic value like rubies, emeralds etc.  But they are quite unsuitable as money mainly for their lack of divisibility.  The key point is that, like gold, they have intrinsic value to the human senses.  I agree that the industrial use of gold is a red herring.


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## tecate (20 Jan 2022)

RetirementPlan said:


> Let's say we both show up at the Lourve with our accompanying digital certificates showing that we own it. Which of us do you think they're going to give it to?


That's a good question. The NFT can show a public chain of transactions - so I guess the answer could be the NFT that can be traced back to the first owner to mint said NFT. That's much cleaner when it comes to digital art. If it's physical art, it raises a whole host of other questions and legalities. Maybe this develops such that the societal expectation is that all art comes with an associated NFT. For the physical art ownership aspect of it, perhaps there will be a merging of the conventional ownership process with this digital component? 
Last year, the first real estate properties were sold via NFT - but to what extent this works when it would need to be accompanied by the traditional change of ownership process confuses me. I'd imagine for this to have any power and utility, it would need to be incorporated into existing approaches. 
Just in case it's not obvious from the above, I have a more settled view on something like bitcoin whereas I have the same difficulty with NFTs as many have here in getting their heads around bitcoin. Trying to keep an open mind on it as it unfolds but no earthly interest in buying an NFT of a JPEG any time soon!


Duke of Marmalade said:


> And if polished rocks make attractive jewellery then they will have an intrinsic value like rubies, emeralds etc.  But they are quite unsuitable as money mainly for their lack of divisibility.  The key point is that, like gold, they have intrinsic value to the human senses.  I agree that the industrial use of gold is a red herring.


Divisibility is another required characteristic but scarcity is key. There is plenty of jewellery made from other earthly elements that 'have intrinsic value to the human senses' yet they're not valuable in the same way as gold because of a lack of scarcity. Additionally, you've acknowledged that people determine what has intrinsic value.


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## ClubMan (20 Jan 2022)

RetirementPlan said:


> There are NFTs of physical art;
> 
> 
> 
> ...


Yes, but since practical ownership of the physical item really requires it to be physically held by the owner or in some sort of escrow, the rationale for the NFT effectively disappears.


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## RetirementPlan (20 Jan 2022)

tecate said:


> That's a good question. The NFT can show a public chain of transactions - so I guess the answer could be the NFT that can be traced back to the first owner to mint said NFT. That's much cleaner when it comes to digital art. If it's physical art, it raises a whole host of other questions and legalities. Maybe this develops such that the societal expectation is that all art comes with an associated NFT. For the physical art ownership aspect of it, perhaps there will be a merging of the conventional ownership process with this digital component?
> Last year, the first real estate properties were sold via NFT - but to what extent this works when it would need to be accompanied by the traditional change of ownership process confuses me. I'd imagine for this to have any power and utility, it would need to be incorporated into existing approaches.
> Just in case it's not obvious from the above, I have a more settled view on something like bitcoin whereas I have the same difficulty with NFTs as many have here in getting their heads around bitcoin. Trying to keep an open mind on it as it unfolds but no earthly interest in buying an NFT of a JPEG any time soon!
> 
> Divisibility is another required characteristic but scarcity is key. There is plenty of jewellery made from other earthly elements that 'have intrinsic value to the human senses' yet they're not valuable in the same way as gold because of a lack of scarcity. Additionally, you've acknowledged that people determine what has intrinsic value.


What problem would NFTs be solving for the physical art world, or even the digital art world?


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## tecate (20 Jan 2022)

RetirementPlan said:


> What problem would NFTs be solving for the physical art world, or even the digital art world?



My muddled understanding is that the claim is they provide clarity as regards property rights - but see above. It's not at all clear to me how that can be achieved for physical art/property without some form of merge with the current system. But who the hell knows. Perhaps the be all and end all as far as the digital native set that are coming up after us will be the digital certificate of ownership. For artists, future royalties can be baked in with them getting a commission on future sales. The likes of Adidas, Nike, etc seem to be getting involved - presumably there's value for them in terms of ensuring authenticity - which could help them deal with the fake product headache. The same re authenticity and ticketing.
In the gaming world, NFTs are likely to feature as the end user can take ownership over in-game items - which may then be used across multiple gaming platforms. To those of us who are of an older vintage, this might seem like a load of nonsense but it features in a market worth billions. Ditto re. the emerging metaverse.

I struggle to get my head around NFTs but I'm not inclined to write them off as there's probably other aspects to all this that haven't emerged yet. Personally, I'm not all that interested in art but from what I've been led to believe, we're likely to see new use cases emerge in 2022. I think its important to keep an open mind and see how all of this unpacks itself.


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## Duke of Marmalade (20 Jan 2022)

tecate said:


> Divisibility is another required characteristic but scarcity is key. There is plenty of jewellery made from other earthly elements that 'have intrinsic value to the human senses' yet they're not valuable in the same way as gold because of a lack of scarcity.


Yes of course, scarcity is important.  I mean air has huge intrinsic value for humans.


tecate said:


> Additionally, you've acknowledged that people determine what has intrinsic value.


Interesting philosophical point.  Things do not of themselves have "intrinsic" value.  Intrinsic is essentially human - hence my bit of poetry "gold has intrinsic value to the human senses".  So I suppose the point you are making is that bitcoin has intrinsic value to at least some humans. 
Well what is that intrinsic value? 
"Store of value" doesn't cut it for me as it is totally circular.
 Speculative chance to make a wada money.  That can't of itself be sustainable indefinitely.
Only or best way to buy some things (medium of exchange).  Nobody is giving it any intrinsic value on that count today.  It is again a bit circular as it needs intrinsic value to be a medium of exchange.
Heck, I don't want to regurgitate all the old arguments.


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## tecate (20 Jan 2022)

Duke of Marmalade said:


> Heck, I don't want to regurgitate all the old arguments.


You and me both!
I'm just addressing the 'human senses' bit. You're talking about human preferences - and linking that to intrinsic value. I'm not all that bothered about gold but clearly other humans have been and are. Maybe you (and others) find yourself in the same scenario re. bitcoin but you don't speak for everyone on the planet. I'll park it up at that.


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## DazedInPontoon (20 Jan 2022)

RetirementPlan said:


> What problem would NFTs be solving for the physical art world, or even the digital art world?


One is that smart contracts can be formed around transactions of the NFT. It's my understanding for example that it can be made so that every time the NFT is transacted (so effectively every time it changes ownership) some fraction of the sale price goes to the original creator. This of course is only beneficial to the creator, but as you can imagine artists love this idea. This should also give artists a motive to maintain the validity of NFTs for art and provide actual legal rights of ownership I think, it's in their own interest to do so.


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## RetirementPlan (21 Jan 2022)

DazedInPontoon said:


> One is that smart contracts can be formed around transactions of the NFT. It's my understanding for example that it can be made so that every time the NFT is transacted (so effectively every time it changes ownership) some fraction of the sale price goes to the original creator. This of course is only beneficial to the creator, but as you can imagine artists love this idea. This should also give artists a motive to maintain the validity of NFTs for art and provide actual legal rights of ownership I think, it's in their own interest to do so.


Looks like a bit of a solution looking for a problem to solve. Are there really loads of further resales of lots of art that would make this a viable proposition for loads of artists?


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## DazedInPontoon (21 Jan 2022)

I have no idea what the size of secondary art market is compared to the primary, but I wouldn't assume it's small.


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## LoveTrees (21 Jan 2022)

Nasdaq keeps going down and so DJIA since beginning of the year: inflation as key justification. And crypto dropping at higher speed in % than major indexes... For all the believers of Crypto as alternative to gold in times of fear: reality is contraddicting this propaganda...


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## tecate (21 Jan 2022)

LoveTrees said:


> Nasdaq keeps going down and so DJIA since beginning of the year: inflation as key justification. And crypto dropping at higher speed in % than major indexes... For all the believers of Crypto as alternative to gold in times of fear: reality is contraddicting this propaganda...



It is at times correlated with the markets and at times not. You're also omitting one key factor. Bitcoin remains a nascent asset in a nascent asset class. Since discussion on the topic began here in 2017, bitcoin, its ecosystem and market has evolved hugely. Whilst it reaching trillion dollar market status is a milestone, it's still only in the ha'penny place relative to gold, bonds, etc. It's far from a settled asset just yet - and so to expect it to perform out of the box as a risk off asset over short/medium term time horizons doesn't seem reasonable to me. But then, we can all form our own opinions.
As regards reality, the reality is that bitcoin has been the best performing asset bar none for the duration of the time it has been discussed on AAM - year on year.




RetirementPlan said:


> Looks like a bit of a solution looking for a problem to solve. Are there really loads of further resales of lots of art that would make this a viable proposition for loads of artists?



If you're an emerging artist and your artwork gets sold for buttons early on, wouldn't it be a major plus point if there was a mechanism that ensured further commissions at the point of each and every resale? And this has started with digital art, now they're starting to explore the same with music. One good aspect of the emergence of NFTs is that most of the interest has come from people that had no interest in crypto before....so whilst I don't get too excited about it (because it's not my bag - albeit that I also feel that I don't fully understand it and that it hasn't fully unpacked itself yet), there's a subset of folks who very much have taken to it.


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## Duke of Marmalade (21 Jan 2022)

tecate said:


> As regards reality, the reality is that bitcoin has been the best performing asset bar none for the duration of the time it has been discussed on AAM - year on year.


Tesla?
Year on year?  We started discussing bitcoin when it was $20,000.  Within a couple of years it had fallen to $3,000.
From $20,000 to $3,000 to $70,000 to $38,000. This is some currency.  This is some store of value.


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## CuriousGeorge11 (21 Jan 2022)

RetirementPlan said:


> What problem would NFTs be solving for the physical art world, or even the digital art world?


If done right, NFTs could wipe out Ticketmaster. Similar to an electronic ticket you receive on your app


tecate said:


> It is at times correlated with the markets and at times not. You're also omitting one key factor. Bitcoin remains a nascent asset in a nascent asset class. Since discussion on the topic began here in 2017, bitcoin, its ecosystem and market has evolved hugely. Whilst it reaching trillion dollar market status is a milestone, it's still only in the ha'penny place relative to gold, bonds, etc. It's far from a settled asset just yet - and so to expect it to perform out of the box as a risk off asset over short/medium term time horizons doesn't seem reasonable to me. But then, we can all form our own opinions.
> As regards reality, the reality is that bitcoin has been the best performing asset bar none for the duration of the time it has been discussed on AAM - year on year.
> 
> 
> ...


Good post, I wouldnt be interested in one of the those drunken monkey jpegs that sold for hundreds of thousands but NFTs do have the potential to wipe Ticketmaster off the face of the earth

Computer games companies are selling games directly without the need for a middleman (sony released PS5 with a hard copy games version and a cheaper version that is only for downloaded games.

When I originally saw this, I thought kids wouldnt be able to swap games, lend them or sell them 2nd hand. If there was an NFT proof of ownership attached, the consumer could sell the game to another person and the smart contract related to an NFT could charge a percentage of the sale to be returned to Sony.


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## DazedInPontoon (21 Jan 2022)

Duke of Marmalade said:


> Tesla?
> Year on year?  We started discussing bitcoin when it was $20,000.  Within a couple of years it had fallen to $3,000.


The stickied "Bitcoin is a clearly identifiable economic bubble" thread _started_ on Nov 25th 2017. Price was ~8k.


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## Duke of Marmalade (21 Jan 2022)

DazedInPontoon said:


> The stickied "Bitcoin is a clearly identifiable economic bubble" thread _started_ on Nov 25th 2017. Price was ~8k.


I reproduce my OP on that thread:


			
				The Duke said:
			
		

> This is a renowned economist talking. Are there any respected economists making the case for bitcoin? Ironically the amazing bitcoin performance of 2020, from 10k to 4k to 30k(?) spells its early demise. A nice steady performance would have been more indicative that bitcoin had come of age and was here to stay. 2017 was a similarly ridiculous year and it was followed by the collapse from 20k to 3k in 2018.


The OP was based on a price of $30k.  I think such an erroneous post by you is reportable, but I understand cultists are going through a difficult time at present.


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## ClubMan (22 Jan 2022)

Cryptoland runs aground as $12m bid to buy Fiji island for resort falls through
					

Plans by crypto-evangelists for the lavish hideaway have courted mockery and controversy, and now the island is back on the market




					www.theguardian.com
				



Check out the "Cryptoland is embarrassing" YouTube video by penguinz0...


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## DazedInPontoon (23 Jan 2022)

Duke of Marmalade said:


> ...I understand cultists are going through a difficult time at present.


Things seem to be especially rough for the president of El Slavador :

__ https://twitter.com/i/web/status/1485031106982428677


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## tecate (23 Jan 2022)

ClubMan said:


> Check out the "Cryptoland is embarrassing" YouTube video by penguinz0...



I'd suggest that the following piece by markets analyst and macro economic commentator Sven Heinrich would be a far more worthy investment of time than the Guardian's irrelevant Cryptoland piece which describes someone making a misguided and amateur effort at a business venture (which doesn't in any way reflect on the proposition that something like bitcoin offers):

(R)evolution​
In the piece, Heinrich comes out in support of bitcoin - having long been one of its critics. His piece focuses heavily on the macro environment:
_"The revolution is a conscious choice to find an alternative to an imposed monetary system, the evolution is to come to the conclusion that Bitcoin is such an alternative_."


Additionally, those calling bitcoin a ponzi whilst implicitly supporting a conventional system where central banks buy their own bonds is amusing to say the least.


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## Duke of Marmalade (23 Jan 2022)

tecate said:


> Additionally, those calling bitcoin a ponzi whilst implicitly supporting a conventional system where central banks buy their own bonds is amusing to say the least.


Maybe this is the current howl in cultist circles but I don't get it. 

Anyone holding govie bonds has a legal contract to receive future payments and they rely on no market and no central bank for that to happen.

A Ponzi scheme is where one's entitlement to future income is entirely dependent on there being people in future prepared to pay you for the same expectation that there will be people in future prepared to pay them etc. etc.  If the musical chairs stop, you have a complete dud.  Bitcoin is Ponzi in spades.  (Correction, McAuley has forcefully argued that bitcoin is *worse *than Ponzi.)


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## tecate (23 Jan 2022)

Duke of Marmalade said:


> Maybe this is the current howl in cultist circles but I don't get it.


So you have no problem with a central bank creating a new batch of the currency it issues  (backed by nothing ) and propping up treasury bonds by buying them with the money it just created?  And to consider how sick the patient is, look at the negative yield of -2.31% that bonds delivered last year.


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## Duke of Marmalade (23 Jan 2022)

tecate said:


> So you have no problem with a central bank creating a new batch of the currency it issues  (backed by nothing ) and propping up treasury bonds by buying them with the money it just created?


I think we can reasonably regard the central bank and the government different wings of the same entity - the state.  All that is happening is that the state is replacing its long term obligations with equivalent short (indeed) immediate term obligations, and of course totally at the discretion of the holder of the debt.


tecate said:


> And to consider how sick the patient is, look at the negative yield of -2.31% that bonds delivered last year.


You have gotten too used to the era of QE.  The normal situation is that interest rates can go up as well as down.  Interest rates going up mean the market value of bonds fall but no one is forced to sell them.  If folk hold on to them they will get exactly what it says on the tin.


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## tecate (23 Jan 2022)

Duke of Marmalade said:


> I think we can reasonably regard the central bank and the government different wings of the same entity - the state.  All that is happening is that the state is replacing its long term obligations with equivalent short (indeed) immediate term obligations, and of course totally at the discretion of the holder of the debt.


We can definitely regard them as one and the same. That one branch of the state is buying bonds from another branch of state with currency it just created out of thin air is the point I made. Circling back to where we started - it's amusing that bitcoin is deemed a ponzi by folk who implicitly accept this type of shenanigans.


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## Duke of Marmalade (23 Jan 2022)

tecate said:


> We can definitely regard them as one and the same. That one branch of the state is buying bonds from another branch of state with currency it just created out of thin air is the point I made. Circling back to where we started - it's amusing that bitcoin is deemed a ponzi by folk who implicitly accept this type of shenanigans.


This is the last I will say on this particular rabbit hole, so you are welcome to the last word.
Currency is not created out of nothing.  It is backed by government debt. In QE it is then used to buy back longer term government debt.  It is simply a rescheduling of government debt but at the discretion of the creditors.   Now where it does get a bit hairy is when it is *not *used to buy back bonds but to monetize an increase in government debt.
But hey, if it allows the cult a supercilious laugh at the ponzi, they're welcome?


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## tecate (23 Jan 2022)

Fiat currency is created out of nothing and has been backed by nothing since the gold standard was done away with.

On the government buying its own bonds with 'money' it magic'ed up by adding a couple of zeros on a centralised database, you can try and dress it up any which way you want but it's a complete ponzi.
Additionally, if you had taken the time to read Heinrich's piece, you'd see that its an out of control macro environment that has driven him to appreciate an asset he had been critical of up until now.
In the 4+ years of discussion of BTC here, other than one or two utterances of 'concern'  (when pressed) about money printing, there's never been an honest acknowledgement of just how out of whack this Keynesian system is.


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## Duke of Marmalade (23 Jan 2022)

The modern form of Fiat is an incredible advance for civilisation which has underpinned astronomical economical advance in those economies who have responsibly utilised it.
It has its vulnerabilities as do all human constructs.
A digital entry signifying nothing is not the ultimate salvation for the human race.


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## tecate (24 Jan 2022)

Duke of Marmalade said:


> It has its vulnerabilities as do all human constructs.


That's a complete cop-out. You're not addressing anything with that whitewash.




Duke of Marmalade said:


> A digital entry signifying nothing is not the ultimate salvation for the human race.


Do you have a link to where this 'ultimate salvation for the human race' has been claimed? I've never seen it mentioned here over the past 4+ years.


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## RetirementPlan (24 Jan 2022)

CuriousGeorge11 said:


> If done right, NFTs could wipe out Ticketmaster. Similar to an electronic ticket you receive on your app
> 
> Good post, I wouldnt be interested in one of the those drunken monkey jpegs that sold for hundreds of thousands but NFTs do have the potential to wipe Ticketmaster off the face of the earth
> 
> ...


What value does a blockchain ledger bring to event ticketing, that a standard ticketing database doesn't already provide?

Your great plan for reselling of games doesn't require blockchain or cypto. It just requires a different way of doing business in that sector.


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## 24601 (24 Jan 2022)

There's been a few false dawns but is the pyramid beginning to topple? A 34% adjustment in a month is pretty spectacular. Feel sorry for the poor creatures that bought at €56k in November.


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## DublinHead54 (24 Jan 2022)

It is not only Bitcoin that is seeing a market correction. Hi Growth tech stocks have also been slammed in the last weeks (Netflix an extreme example), but even companies like Microsoft have seen a 10% reduction in recent weeks.


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## Duke of Marmalade (24 Jan 2022)

tecate said:


> Do you have a link to where this 'ultimate salvation for the human race' has been claimed? I've never seen it mentioned here over the past 4+ years.


You do like to take me literally.  I am not actually claiming that all cultists think bitcoin is the second coming of JC.
Fiat has been a very remarkable development for civilisation.  But you and the cultists obsess on its vulnerabilities.  I presumed that implied that you believed that with bitcoin you had achieved the perfect monetary system for the human race. 
That would be on a power with the development of the silicon chip.  And all from digital entries signifying nothing and mindless repeats of crypto puzzles.


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## tecate (24 Jan 2022)

Duke of Marmalade said:


> You do like to take me literally.  I am not actually claiming that all cultists think bitcoin is the second coming of JC.


If you want to engage positively with the subject, then there's no need for exaggerated, inflammatory language - but rather than do so, you double down with your cultist jibes. I'd expect nothing less from you, Duke.



Duke of Marmalade said:


> Fiat has been a very remarkable development for civilisation.


Fiat in the form we find it in now - post gold standard - is a very recent phenomenon in relative terms and one we have not seen unfold in its entirety.



Duke of Marmalade said:


> But you and the cultists obsess on its vulnerabilities.


You have glossed over the shortcomings of the conventional system and won't address them.



Duke of Marmalade said:


> I presumed that implied that you believed that with bitcoin you had achieved the perfect monetary system for the human race.


Please outline where anyone has made that claim over the course of the past 4+ years. And if the response is - 'don't take me literally' - the answer is don't deliberately exaggerate/misrepresent or use inflammatory language (as per your 'cultist' jibes). The irony - bitcoin is rules based - everybody can clearly see those rules and otherwise, its governed by maths. Fiat is governed by 'faith'!!....and here you are with your cultist claims...lol.


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## tecate (24 Jan 2022)

24601 said:


> There's been a few false dawns but is the pyramid beginning to topple? A 34% adjustment in a month is pretty spectacular. Feel sorry for the poor creatures that bought at €56k in November.


You've placed a question mark at the end. Are you able to tell us that bitcoin is done for - it's going to zero and that will be the end of it?

Do you only feel sorry for 'poor creatures' who bought bitcoin at interim tops? Is that reserved for them or do you feel sorry for those that bought netflix, zoom, peloton, etc at recent highs? How about amazon stock when it corrected 80% in the past?


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## Sunny (24 Jan 2022)

Surely the problem isn't the price fall of Bitcoin, it is the fact that it falling while inflationary pressures are at their highest in years and rising yields. The concept of bitcoin being an hedge for inflation is not holding up at the moment. Argument is not settled one way or another yet but is interesting to see.


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## Duke of Marmalade (24 Jan 2022)

tecate said:


> If you want to engage positively with the subject, then there's no need for exaggerated, inflammatory language - but rather than do so, you double down with your cultist jibes. I'd expect nothing less from you, Duke.


Just trying to add a bit of colour.


tecate said:


> Fiat in the form we find it in now - post gold standard - is a very recent phenomenon in relative terms and one we have not seen unfold in its entirety.


That is right, just as many of the wonders of our current civilisation are a very recent phenomenon.  You seem to have singled out fiat as a step backwards.


tecate said:


> You have glossed over the shortcomings of the conventional system and won't address them.


I have not glossed over them.  I have referenced on several occasions my fear of inflation.  If I was able to address them I think my services would be in such high demand you wouldn't have the pleasure of engaging with me on AAM.


tecate said:


> Please outline where anyone has made that claim over the course of the past 4+ years. And if the response is - 'don't take me literally' - the answer is don't deliberately exaggerate/misrepresent or use inflammatory language (as per your 'cultist' jibes).


I was presuming that the banging on about the imminent demise of fiat meant that bitcoin had the answer/salvation.


tecate said:


> The irony - bitcoin is rules based - everybody can clearly see those rules and otherwise, its governed by maths.


Sure is and the very foundation of mathematics is the basic equation:  0 = 0



tecate said:


> Fiat is governed by 'faith'!!....and here you are with your cultist claims...lol.


Yes, an element of trust and confidence (faith sounds a tad spiritual) that the custodians of our monetary system have the technical skills and more importantly my interests at heart in managing that system.   I'll admit that I would not be so sanguine if we had an independent Irish Punt but then even our mad republicans never tried that one on.


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## tecate (24 Jan 2022)

Duke of Marmalade said:


> Just trying to add a bit of colour.


Go away outta that, Duke - you know well what yer at.




Duke of Marmalade said:


> That is right, just as many of the wonders of our current civilisation are a very recent phenomenon.  You seem to have singled out fiat as a step backwards.


Firstly, you know well that I never claimed fiat to be 'a step backwards'. However, I have claimed that there are deficiencies in the current system. The whole reason for bitcoin existing is in response to some of those deficiencies.
As regards me pointing towards recency, its relevant because we have not seen the full consequences of fiat and Keynesian economics just yet.



Duke of Marmalade said:


> If I was able to address them I think my services would be in such high demand you wouldn't have the pleasure of engaging with me on AAM.



I remember well - you said that you'd simply have to have 'faith' in the central bank gurus.



Duke of Marmalade said:


> Sure is and the very foundation of mathematics is the basic equation:  0 = 0


Thank you for addressing the fact that fiat money is backed by nothing.




Duke of Marmalade said:


> Yes, an element of trust and confidence (faith sounds a tad spiritual) that the custodians of our monetary system have the technical skills and more importantly my interests at heart in managing that system.


Your interests at heart? That may well be if you're in the top 10%. There's been a transfer of wealth since the onset of the pandemic with the top 10% having greatly increased their wealth at the expense of the rest. So, it could well be that they have your interests at heart if you belong to that group.
Faith does sound a bit cultish I would say - but then I'm sure you take comfort in the cultish iconography that appears on fiat currency. The "In God We Trust" type of stuff. Something had to be suggested to the plebs to convince them that a promissory note was worth the cost of the piece of paper it was printed on.


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## jasdpace@gmail. (24 Jan 2022)

I'm new here but am enjoying the banter.  Just an observation - it seems to me that the DOM is very reticent to let Tecate have the last word in spite of his earlier offer?


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## Duke of Marmalade (24 Jan 2022)

jasdpace@gmail. said:


> I'm new here but am enjoying the banter.  Just an observation - it seems to me that the DOM is very reticent to let Tecate have the last word in spite of his earlier offer?


Ah now!  It was on the particular rabbit hole that QE was a Ponzi scheme.  
I should warn you that whilst you may find our sparring at first a source of amusement  you risk being intensely bored as we have dug between us so many rabbit holes over the last number of years.


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## jasdpace@gmail. (24 Jan 2022)

Duke of Marmalade said:


> so many rabbit holes



Isn't that what we label a famous and shrewd investor?


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## CuriousGeorge11 (24 Jan 2022)

RetirementPlan said:


> What value does a blockchain ledger bring to event ticketing, that a standard ticketing database doesn't already provide?
> 
> Your great plan for reselling of games doesn't require blockchain or cypto. It just requires a different way of doing business in that sector.


Gamestop hired a leading crypto developer and already accept payments, maybe looking at crypto for in game purchases.

As far as "my great plan", it isnt exactly my plan


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## RetirementPlan (24 Jan 2022)

CuriousGeorge11 said:


> Gamestop hired a leading crypto developer and already accept payments, maybe looking at crypto for in game purchases.
> 
> As far as "my great plan", it isnt exactly my plan


Great for Gamestop - but I'm not seeing what value it adds over existing payment methods?


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## Duke of Marmalade (24 Jan 2022)

tecate said:


> There's been a transfer of wealth since the onset of the pandemic with the top 10% having greatly increased their wealth at the expense of the rest.


In danger of going off topic but yes I did read somewhere that billionaires' paper wealth increased a lot during the pandemic. I also read somewhere that ordinary folks' savings increased massively as they were prevented from enjoying themselves.  I find it hard to see the "transfer" aspect of all that and harder still to see how bitcoin would have prevented it - any update on that bitcoin paradise El Salvador?


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## tecate (24 Jan 2022)

Duke of Marmalade said:


> I also read somewhere that ordinary folks' savings increased massively as they were prevented from enjoying themselves.  I find it hard to see the "transfer" aspect of all that and harder still to see how bitcoin would have prevented it.


So you accept that there is now greater societal inequality due to the conventional financial and monetary system we have and you don't see the problem? I really can't help you any further with that one.



Duke of Marmalade said:


> any update on that bitcoin paradise El Salvador?


It's going just fine. I'll have boots on the ground there next month so I can give you a full report then if you'd like. Otherwise, I wouldn't be surprised to see another sovereign make bitcoin legal tender within the next 18 months.


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## tecate (24 Jan 2022)

RetirementPlan said:


> Great for Gamestop - but I'm not seeing what value it adds over existing payment methods?


Then why would they go there in the first place?


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## Duke of Marmalade (24 Jan 2022)

tecate said:


> So you accept that there is now greater societal inequality due to the conventional financial and monetary system we have and you don't see the problem? I really can't help you any further with that one.


Actually fiat had a very good pandemic, which may yet come to bite us, I agree.
It did indeed seem that there was a "money tree" with no difficulty at all in bailing out the affected sectors of our society with no immediate impact on the rest of us.
Can you begin to imagine how this would have panned out if there was a fixed money supply ala bitcoin or for that matter gold?  The World would indeed have been plunged into a disastrous depression - a fear that put stocks and bitcoin into freefall in the early months of 2020, until fiat came to the rescue.  Your narrative is that this was done for the benefit of billionaires.

If this works out (it mightn't; cultists can still dream) the pandemic will go down as a poster boy for the benefits of fiat to society.


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## tecate (24 Jan 2022)

Duke of Marmalade said:


> Actually fiat had a very good pandemic, which may yet come to bite us, I agree.


Maybe they would have gotten away with it if they hadn't put their hands in the cookie jar back in 08 and suddenly become socialist with public money in bailing out corporates.



Duke of Marmalade said:


> It did indeed seem that there was a "money tree" with no difficulty at all in bailing out the affected sectors of our society with no immediate impact on the rest of us.



The application of QE is not equitable - something that's recognised by way of the Cantillon Effect. As regards the money that made it directly into the hands of the public, you're seeing the symptoms of that already. A year ago here, there was  discussion about inflation. Others were saying there was no validity to the inflationary claims. Some months later, the FED started talking about 'transitory inflation' - but once prices go up, they're not coming down again. There's no such thing as a free lunch - so ordinary people will foot the bill. The savvy billionaire set won't.



Duke of Marmalade said:


> Can you begin to imagine how this would have panned out if there was a fixed money supply ala bitcoin or for that matter gold?


I recognise that there are advantages and disadvantages to every system. What you have failed to do from the very beginning of this debate is recognise that it doesn't have to be a zero sum game. You seem to be anti-choice and I would say that there has rarely been an occasion when choice has been a bad thing for society. Bitcoin can exist alongside fiat currency. It can act as an incentive for the proper management of fiat currency because as you have acknowledged yourself, there are a whole host of currencies at any given time which are being mismanaged.




Duke of Marmalade said:


> a fear that put stocks and bitcoin into freefall in the early months of 2020, until fiat came to the rescue.


I'd suggest you ponder that statement a little longer. There were many folks in Weimar Germany who thought they were doing fabulously ...until they weren't. I wouldn't be so proud of that statement if I was in your shoes and trying to defend fiat. The FED has been propping up the markets for years - for the benefit of some. The conventional market has in no way behaved normally. It's been manipulated. My most recent point re. the state buying its own bonds stands testiment to this manipulation also.



Duke of Marmalade said:


> Your narrative is that this was done for the benefit of billionaires.



My view is that it has been inequitable. You're the only one that I've ever seen contest the charge that QE has been anything but equitable in its application - as per the Cantillon Effect.



Duke of Marmalade said:


> If this works out (it mightn't; cultists can still dream) the pandemic will go down as a poster boy for the benefits of fiat to society.



By your own admission a long time ago, we have never been here before - so you don't know that and can't say it with certainty. *Maybe* a decade long run of inflation ( a la 1970s ) will allow them to reel it in ( in which case ordinary people will have their savings vapourised ). But otherwise, your Fed/ECB are on crack when it comes to money printing. They've started and they won't be able to stop.


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## Duke of Marmalade (24 Jan 2022)

tecate said:


> By your own admission a long time ago, we have never been here before - so you don't know that and can't say it with certainty.


I said "if".


tecate said:


> *Maybe* a decade long run of inflation ( a la 1970s ) will allow them to reel it in ( in which case ordinary people will have their savings vapourised ).


What makes me think that this is your fantasy?


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## tecate (24 Jan 2022)

Duke of Marmalade said:


> What makes me think that this is your fantasy?


Are you saying that I want this to happen? (I don't)....OR...are you saying that you see it playing out differently? I'd imagine you can't be sure as previously when I asked you how much is too much (money printing), you didn't know. 40% more usd was put into circulation. The Canadian government presided over money printing that exceeded the entire CAD print of all previous governments combined. It's fitting you should bring in the word fantasy as its a fantasy if anyone thinks that these guys can just magic up cash without paying the price of tomorrow (because tomorrow has to come at some point...there's only so much kicking the can down the road that can be done ).


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## Duke of Marmalade (24 Jan 2022)

I see that "fantasy" has a double meaning.  I meant one in particular but both will do.

I would hate to live in a country like Russia where the system is run for the elites.  It’s really quite sad that some folk who live in the civilised free West think the same.  Where would their location of choice be?
Ah, I know. El Salvador.


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## tecate (24 Jan 2022)

Duke of Marmalade said:


> I would hate to live in a country like Russia where the system is run for the elites.  It’s really quite sad that some folk who live in the civilised free West think the same.  Where would their location of choice be?
> Ah, I know. El Salvador.



For a guy that once mentioned that money & monetary/economic systems evolve, you don't seem to be in any way open to striving to improve anything...and before you come back with "certainly not bitcoin" - you're obstinance goes far beyond that - with the complete reticence in acknowledging that there are problems to be solved in the system that we have inherited.
In tandem with that, you're continually making the very same mistake as many others have done - you're continually considering what use is bitcoin to me and not considering it in global terms. It isn't an Irish phenomenon - it's a global phenomenon and to not consider it in that context is to miss the point completely. Along similar lines, to assume that the level of utility in bitcoin is evenly spread based on how you find it in Ireland - assuming the scenario to be the same in other parts of the world -  is a mistake.


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## RetirementPlan (25 Jan 2022)

tecate said:


> Then why would they go there in the first place?


Hype? To jump on a bandwagon?

The history of IT is littered with 'next big thing' bandwagons that really weren't that big at all.


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## tecate (25 Jan 2022)

RetirementPlan said:


> Hype? To jump on a bandwagon?
> 
> The history of IT is littered with 'next big thing' bandwagons that really weren't that big at all.



That's a fair point.

So blockchain/NFTs/crypto allow actual immutable ownership of in-game items by users. Furthermore, they'll be able to transfer these items between games. Via approaches such as play to earn, users share in the economic upside - alongside the game developers. Developers benefit at the expense of the gaming console monopolies.


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## RetirementPlan (25 Jan 2022)

tecate said:


> That's a fair point.
> 
> So blockchain/NFTs/crypto allow actual immutable ownership of in-game items by users. Furthermore, they'll be able to transfer these items between games. Via approaches such as play to earn, users share in the economic upside - alongside the game developers. Developers benefit at the expense of the gaming console monopolies.


Not sure why blockchain would be an inherent requirement for any of these benefits, compared to (for example) developers maintaining their own ownership ledgers using traditional databases?


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## tecate (25 Jan 2022)

RetirementPlan said:


> Not sure why blockchain would be an inherent requirement for any of these benefits, compared to (for example) developers maintaining their own ownership ledgers using traditional databases?



How would the user establish immutable ownership on that basis?


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## RetirementPlan (25 Jan 2022)

tecate said:


> How would the user establish immutable ownership on that basis?


Why would they need to establish immutable ownership? Users have relationships with all kinds of service providers, phone companies, tv companies, netflix type companies all the time and manage ongoing relationships with those companies without using blockchain and immutability. What problem does the immutability of the blockchain solve?


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## tecate (25 Jan 2022)

RetirementPlan said:


> Why would they need to establish immutable ownership? Users have relationships with all kinds of service providers, phone companies, tv companies, netflix type companies all the time and manage ongoing relationships with those companies without using blockchain and immutability. What problem does the immutability of the blockchain solve?


Because the asset is then in the possession of the user and not the platform. If they've paid for it, they should have ownership of it. They can then use the item in other games. I'm not a gamer but by all accounts there's also a secondary market for these type of game items - where items can be faked.
If users are being rewarded via this new business model via tokens, they'll want to be in a position to take ownership of those tokens and store them, exchange them, trade them, etc - without being locked in to a walled garden platform/environment. If a play to earn tokenomics model is being pursued, then they're likely to have less spend on marketing and more buy in from users.


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## RetirementPlan (25 Jan 2022)

tecate said:


> Because the asset is then in the possession of the user and not the platform. If they've paid for it, they should have ownership of it. They can then use the item in other games. I'm not a gamer but by all accounts there's also a secondary market for these type of game items - where items can be faked.
> If users are being rewarded via this new business model via tokens, they'll want to be in a position to take ownership of those tokens and store them, exchange them, trade them, etc - without being locked in to a walled garden platform/environment. If a play to earn tokenomics model is being pursued, then they're likely to have less spend on marketing and more buy in from users.


IT systems built all kinds of interfaces across all kinds of industries long before blockchain came along. There's nothing to stop industries agreeing interface standards about allowing assets to be transferred across games if there is demand for it. Again, it's hard to see what is the essential requirement for blockchain here.


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## tecate (25 Jan 2022)

RetirementPlan said:


> IT systems built all kinds of interfaces across all kinds of industries long before blockchain came along. There's nothing to stop industries agreeing interface standards about allowing assets to be transferred across games if there is demand for it. Again, it's hard to see what is the essential requirement for blockchain here.


It's early doors - lets see how it develops.


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## CuriousGeorge11 (25 Jan 2022)

RetirementPlan said:


> Not sure why blockchain would be an inherent requirement for any of these benefits, compared to (for example) developers maintaining their own ownership ledgers using traditional databases?





RetirementPlan said:


> IT systems built all kinds of interfaces across all kinds of industries long before blockchain came along. There's nothing to stop industries agreeing interface standards about allowing assets to be transferred across games if there is demand for it. Again, it's hard to see what is the essential requirement for blockchain here.



Very true and there is nothing to stop crypto from building decentralised platforms to act as banks where users can get interest on their investments either

I'm not aware of any bank that allows users to gain interest, compound it daily and watch their investments grow. If your very risk averse you can even do it with stable coins


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## RetirementPlan (26 Jan 2022)

CuriousGeorge11 said:


> I'm not aware of any bank that allows users to gain interest, compound it daily and watch their investments grow. If your very risk averse you can even do it with stable coins


Isn't this what banks have done since the dawn of time, or dawn of banks? Almost every investment fund allows you to 'watch their investments grow or fall, as all investments can fall and rise.


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## Duke of Marmalade (26 Jan 2022)

CuriousGeorge11 said:


> Very true and there is nothing to stop crypto from building decentralised platforms to act as banks where users can get interest on their investments


That is a big advantage of crypto - they can pay whatever interest they like, just like Madoff.


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## CuriousGeorge11 (26 Jan 2022)

Duke of Marmalade said:


> That is a big advantage of crypto - they can pay whatever interest they like, just like Madoff.



Very true and that highlights the importance of doing your research and only investing what you can afford to lose, similar to any investment

But today people will be getting a decent sum of interest that they will have turned into cash by tonight and the same again tomorrow and the day after and the day after that for as long as it lasts and if someone was clever they will have their initial investment pulled out but heh that's true for any investment

If the Fed announcement today causes a drop, it presents a great opportunity for some people but again each to their own


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## tecate (26 Jan 2022)

Duke of Marmalade said:


> That is a big advantage of crypto - they can pay whatever interest they like, just like Madoff.



Firstly, any products offered by centralised entities are completely separate from cryptocurrencies themselves.  The integrity of bitcoin for example is intact regardless of what products a centralised entity may build on top of it or related to it.
The Nexo's, BlockFi's and Abra's of this world are utilising the very same practices of Wall Street and conventional banking -> Rehypothecation. This has been well flagged. People enter into those products knowing the risks - that's their choice. Many have warned that the return doesn't merit the risk - but it's up to individuals to make their own decision on it and do their own due diligence.
It's likely that as we progress, these centralised entities will be reeled in with regard to capitalisation rules, etc. All three that I mentioned are in ongoing discussions with various regulators.

As regards the Madoff claim, if the Duke has evidence of fraud, then he should contact the SEC. Whilst there is a very real risk of these types of businesses going south, they don't necessarily have to be run in a manner that would put them into that position.

It's nice to see you holding crypto-related businesses to a higher bar than conventional banking though Duke. It's a shame we didn't have similar warnings from you back in 2008.


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## Duke of Marmalade (26 Jan 2022)

tecate said:


> As regards the Madoff claim, if the Duke has evidence of fraud, then he should contact the SEC. Whilst there is a very real risk of these types of businesses going south, they don't necessarily have to be run in a manner that would put them into that position.
> 
> It's nice to see you holding crypto-related businesses to a higher bar than conventional banking though Duke. It's a shame we didn't have similar warnings from you back in 2008.


I was heaping praise on crypto (for a change).  I said they could pay whatever interest they liked just like Madoff, I didn't say they were crooks like Madoff.  Gee, I just can't win!
Googled Rehypothiecation, still haven't a clue!


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## tecate (26 Jan 2022)

Duke of Marmalade said:


> I was heaping praise on crypto (for a change).  I said they could pay whatever interest they liked just like Madoff, I didn't say they were crooks like Madoff.


By associating it with Madoff? - sure you were. As I said, if you have evidence of fraud, go to the regulator. These businesses can be run without any need for anyone to resort to fraud. However, that doesn't mean that there isn't a very real risk until such time as certain parameters are set by the regulator and/or workable insurance products emerge (all three mentioned claim to have insurance in place to negate the risk - but most believe that it isn't fit for purpose).


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