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Cryptocurrency as the next significant stage for computing technology, not just an investment


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so glad my laziness got in the way, as it ultimately prevented me from investing some $ in the crypto world. toward the end of last year I hung out with an old friend who is (um, maybe now was?) huge into the crypto, and was starting to put the idea in my brain that maybe I should put a few bucks into it. I had been looking at investing a little $ into something, and was looking for something outside the traditional stonks/bonds racket. I didn't get very far with this line of crypto thinking though, as I don't understand enough about all this, and felt like if I put some $ into something, I should be able to understand in simple enough terms (1) where the money went and (2) how the money turns into more money. with crypto, everyone starts yammering on about this and that - like this fuckin thread topic - proclaiming it to be the future of computing technology. yeah I know that came from Zeff, but it does highlight the fact that there is far too much "grey area" in the crypto markets, to make the average consumer want to leap into it. I mean take that super vague Matt Damon ad, where he talks about not missing out on an opportunity to help man kind advance, or some BS like this. like for real? crypto currency is where the future of civilization is heading? well explain to me the basics like (1) how and (2) why - and then let's party amigos!!

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Somebody knows about tulip mania that happened in Netherlands 17th century?

And Im full supportive for cryptos but c'mon, how can someone buy/sell stuff with BTC on a daily basis?

Also if you haven't noticed, they are mainly being used for illegal commercial purposes, like human trafficking, drugs, weapons, slavery, etc. For the mafia is more secure than traditional bank transactions.

Cryptos should have some kind of benign utility in the real world, not just like an speculative investment I mean...

an NFT for 100$ is ok, even for 1000$ but beyond that is just speculation, because there's another question here:

are digital assets more important than physical ones?

EDIT: I fear that centrals banks and institutions will see this as an opportunity to put some control and taxes on it, and I don't like it.

Edited by Diurn
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Here's a nice video about the whole Celsius shitshow that has been going on for the past few days. Basically people gave their money to Celsius and have little hope of ever getting it back.

 

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Financial losses specifically from NFT crimes just through May this year were already more than 600% higher than for all of 2021, with the space seeing twice as many hacks and bigger and bigger heists, according to analysis from digital privacy firm Top10VPN.

We've only scratched the surface of how bad the crypto crime wave has gotten (LA Times)

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The key takeaway from that analysis, which was conducted by a handful of Texas universities, was that the blockchain network is vulnerable and a stronger degree of power is concentrated within a smaller subsection of users.

DARPA pokes yet another hole in blockchain’s ‘decentralization’ claim (Input)

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You may have noticed that the young men bearing bar charts who are solving the world’s problems with these magic blockchains seem to be much, much, much wealthier than even the wealthiest of mobsters. This is not an accident.

The game of buying and selling Bitcoin or any other coin involves a line that goes up and down. Sometimes it goes up, sometimes it goes down. Sometimes this line is decorated with red and green bars called “candles” and sometimes it is decorated with more lines and occasionally even with triangles or circles. You can bet on the line going up or down. It doesn’t really matter. Because as you play this game a battery of cheating, psychological abuse, and deception will be unleashed upon you to ensure that you will almost always end up losing. The game looks like you might expect a stock market or similar locus of exchange of value might look — there are things that look like order books, things that look like clearing transactions, and all the bells and whistles associated with that sort of activity. But Nasdaq estimated that more than 90% of the numbers you see on these screens that resemble stock trading are made up out of thin air as recently as December 2021. And not made up at random. They are put there to send the fear of losing money down the back of your neck, to show you possibilities, ask you to 2x, 10x, even 100x your bets! And then ram poverty right back down your fucking throat.

Bitcoin Is A Hideous Monstrosity Made Out Of Computers And Greed That Must Be Destroyed Before It Devours The World, Part I (Medium)

Edited by dcom
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On 6/17/2022 at 2:42 PM, zero said:

so glad my laziness got in the way, as it ultimately prevented me from investing some $ in the crypto world. toward the end of last year I hung out with an old friend who is (um, maybe now was?) huge into the crypto, and was starting to put the idea in my brain that maybe I should put a few bucks into it. I had been looking at investing a little $ into something, and was looking for something outside the traditional stonks/bonds racket. I didn't get very far with this line of crypto thinking though, as I don't understand enough about all this, and felt like if I put some $ into something, I should be able to understand in simple enough terms (1) where the money went and (2) how the money turns into more money. with crypto, everyone starts yammering on about this and that - like this fuckin thread topic - proclaiming it to be the future of computing technology. yeah I know that came from Zeff, but it does highlight the fact that there is far too much "grey area" in the crypto markets, to make the average consumer want to leap into it. I mean take that super vague Matt Damon ad, where he talks about not missing out on an opportunity to help man kind advance, or some BS like this. like for real? crypto currency is where the future of civilization is heading? well explain to me the basics like (1) how and (2) why - and then let's party amigos!!

I think ur basically saying u dont understand crypto and for that reason its good u didnt invest.  if u read this entire thread and dont understand it then it means i failed.  what is it u dont understand?

when you "put money into it" the money u spent goes to whoever sold u the crypto, normally an exchange.  the idea that it will turn into more money is where u are faulting.  theres no guarantee of this.  uve transfered it from one form of money to another.  from state backed fiat with varying value depending on where u live, to crypto which is universal money independent of national boundaries with greater freedoms attached.  its the perfection of money, the ultimate bourgeois sublimation of the specificity of money

please note i say that while also being someone who opposes the bourgeoisie and wants communism i.e. transcendence of the very need for money, so dont become confused as if I'm praising it using the above terms.  i am but am also not.

Edited by ilqx hermolia xpli
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On 6/30/2022 at 12:13 PM, dcom said:

crazy how this article's title says its talking about bitcoin then the entire article is actually about everything except bitcoin, talk about clickbait garbage

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1 hour ago, ilqx hermolia xpli said:

the idea that it will turn into more money is where u are faulting.  theres no guarantee of this. 

I get there's no guarantee of this, similar to any type of investment. but this is the part that someone needs to tell all the lemmings who bought into this scam when they heard it was a hot product. crypto as we know is represented as an investment tool for a lot of people. I mean the IRS asks about crypto earnings when we do our taxes, therefore this can make money for average non tech-savvy people. then their friends hear about it making money for their buddy and buy in, and on and on, and you have people trying to make money based on something they may not quite understand due to its complex nature. that doesn't sound like smart investing to me, but to each their own. 

and if you just say oh but's it's not an investment tool but some new form of money that is not related to all the other money out there, then you are not living in reality. they of course are going to be related, as we have now seen in actuality with crypto experiencing the same (in fact worse) disruptions impacting every financial system, due to global stressors.

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12 minutes ago, zero said:

I get there's no guarantee of this, similar to any type of investment. but this is the part that someone needs to tell all the lemmings who bought into this scam when they heard it was a hot product. crypto as we know is represented as an investment tool for a lot of people. I mean the IRS asks about crypto earnings when we do our taxes, therefore this can make money for average non tech-savvy people. then their friends hear about it making money for their buddy and buy in, and on and on, and you have people trying to make money based on something they may not quite understand due to its complex nature. that doesn't sound like smart investing to me, but to each their own. 

and if you just say oh but's it's not an investment tool but some new form of money that is not related to all the other money out there, then you are not living in reality. they of course are going to be related, as we have now seen in actuality with crypto experiencing the same (in fact worse) disruptions impacting every financial system, due to global stressors.

I encourage you to deepen your critique of money, maybe you will become anti-money.  but anyway crypto is quite different from any fiat currencies and in fact different from any technologies invented so far in that it's not just a currency but also a universal decentralized computer

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r.i.p. zuckerberg's novi

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Both the Novi app and Novi on WhatsApp will no longer be available starting September 1, 2022. When the pilot ends, you will not be able to log in and access your Novi account. Please also be aware that starting July 21, 2022, you will no longer be able to add money to your account.

https://www.novi.com/help/349057613782941?helpref=faq_content

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On 7/5/2022 at 11:39 PM, zero said:

but this is the part that someone needs to tell all the lemmings who bought into this scam when they heard it was a hot product

I think crypto as an investment isn't that bad. The prices have been going through evenly spaced cycles of booms and crashes since the beginning, it's like seasons changing. It's winter time again now but I don't think the winter will be permanent. Also, if you had bought bitcoin at any point in the 2010s and held it until now, you would be in profit despite the current crash

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Everyone who thinks crypto as an investment is a good idea should read this interview (or listen to it if you prefer):

https://www.bloomberg.com/news/articles/2022-04-25/sam-bankman-fried-described-yield-farming-and-left-matt-levine-stunned

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Sam Bankman-Fried Described Yield Farming and Left Matt Levine Stunned

It’s no secret that the world of cryptocurrency has split into two very different visions, with one group of fundamentalists seeing some coins (especially Bitcoin) as unchanging static lines of code that can act as stores of value, and another group experimenting at an increasingly frenetic pace with new ways to make money in the world of decentralized finance. 

Within Defi, some of the most creative money-making seems to take place in “yield-farming,” where some cryptocurrency traders are making double, or even triple-digit yields just by lending or borrowing various coins. The source of this money has long been questioned, with plenty of Internet commentators calling it the equivalent of shuffling deckchairs on the Titanic, or worse.

On the most recent episode of the Odd Lots podcast, we reunited FTX Chief Executive Officer and crypto billionaire Sam Bankman-Fried with Bloomberg Opinion columnist Matt Levine, to talk about how people are making money in crypto right now. Matt asked Sam exactly how yield farming actually works.
 

Here’s what was said:

Matt Levine: (21:17)
Can you give me an intuitive understanding of farming? I mean, like to me, farming is like you sell some structured puts and collect premium, but perhaps there's a more sophisticated understanding than that.

Sam Bankman-Fried: (21:28)
Let me give you sort of like a really toy model of it, which I actually think has a surprising amount of legitimacy for what farming could mean. You know, where do you start? You start with a company that builds a box and in practice this box, they probably dress it up to look like a life-changing, you know, world-altering protocol that's gonna replace all the big banks in 38 days or whatever. Maybe for now actually ignore what it does or pretend it does literally nothing. It's just a box. So what this protocol is, it's called ‘Protocol X,’ it's a box, and you take a token. You can take ethereum, you can put it in the box and you take it out of the box. Alright so, you put it into the box and you get like, you know, an IOU for having put it in the box and then you can redeem that IOU back out for the token.

So far what we've described is the world's dumbest ETF or ADR or something like that. It doesn't do anything but let you put things in it if you so choose. And then this protocol issues a token, we'll call it whatever, ‘X token.’ And X token promises that anything cool that happens because of this box is going to ultimately be usable by, you know, governance vote of holders of the X tokens. They can vote on what to do with any proceeds or other cool things that happen from this box. And of course, so far, we haven't exactly given a compelling reason for why there ever would be any proceeds from this box, but I don't know, you know, maybe there will be, so that's sort of where you start.

And then you say, alright, well, you’ve got this box and you’ve got X token and the box protocol declares, or maybe votes by on-chain governance, or, you know, something like that, that what they're gonna do is they are going to take half of all the X tokens that were re-minted. Maybe two thirds will, two thirds will offer X tokens, and they're going to give them away for free to whoever uses the box. So anyone who goes, takes some money, puts in the box, each day they're gonna airdrop, you know, 1% of the X token pro rata amongst everyone who's put money in the box. That's for now, what X token does, it gets given away to the box people. And now what happens? Well, X token has some market cap, right? It's probably not zero. Let say it's, you know, a $20 million market …

Matt: (23:56)
Wait, wait, wait, from like first principles, it should be zero, but okay.

SBF: (23:59)
Uh, sure. Okay. Completely reasonable comments.

Matt: (24:04)
I mean, that's not quite true, but, like, when you describe it in this totally cynical way, it sounds like it should be zero, but go on.

SBF: (24:10)
Describe it this way, you might think, for instance, that in like five minutes with an internet connection, you could create such a box and such a token, and that it should reflect like, you know, it should be worth like $180 or something market cap for like that, you know, that effort that you put into it. In the world that we're in, if you do this, everyone's gonna be like, ‘Ooh, box token. Maybe it's cool. If you buy in box token,’ you know, that's gonna appear on Twitter and it’ll have a $20 million market cap. And of course, one thing that you could do is you could like make the float very low and whatever, you know, maybe there haven't been $20 million dollars that have flowed into it yet. Maybe that's sort of like, is it, you know, mark to market fully diluted valuation or something, but I acknowledge that it's not totally clear that this thing should have market cap, but empirically I claim it would have market cap.

Matt: (24:57)
I agree.

Joe: (24:59)
It shouldn't have any market cap in theory, but it practice, they always do. Okay.

SBF: (25:03)
That's right. So, and obviously already we're sort of hiding some of the magic impact, right? Like some of the magic is in like, how do you get that market cap to start with, but, you know, whatever we're gonna move on from that for a second. So, you know, X tokens [are] being given out each day, all these like sophisticated firms are like, huh, that's interesting. Like if the total amount of money in the box is a hundred million dollars, then it's going to yield $16 million this year in X tokens being given out for it. That's a 16% return. That's pretty good. We'll put a little bit more in, right? And maybe that happens until there are $200 million dollars in the box. So, you know, sophisticated traders and/or people on Crypto Twitter, or other sort of similar parties, go and put $200 million in the box collectively and they start getting these X tokens for it.

And now all of a sudden everyone's like, wow, people just decide to put $200 million in the box. This is a pretty cool box, right? Like this is a valuable box as demonstrated by all the money that people have apparently decided should be in the box. And who are we to say that they're wrong about that? Like, you know, this is, I mean boxes can be great. Look, I love boxes as much as the next guy. And so what happens now? All of a sudden people are kind of recalibrating like, well, $20 million, that's it? Like that market cap for this box? And it's been like 48 hours and it already is $200 million, including from like sophisticated players in it. They're like, come on, that's too low. And they look at these ratios, TVL, total value locked in the box, you know, as a ratio to market cap of the box’s token.

SBF: (26:43)
And they’re like ‘10X’ that's insane. 1X is the norm.’ And so then, you know, X token price goes way up. And now it's $130 million market cap token because of, you know, the bullishness of people's usage of the box. And now all of a sudden of course, the smart money's like, oh, wow, this thing's now yielding like 60% a year in X tokens. Of course I'll take my 60% yield, right? So they go and pour another $300 million in the box and you get a psych and then it goes to infinity. And then everyone makes money.

Matt: (27:13)
I think of myself as like a fairly cynical person. And that was so much more cynical than how I would've described farming. You're just like, well, I'm in the Ponzi business and it's pretty good.

Joe Weisenthal: (27:27)
At no point did any of this require any sort of like economic case, it’s just like other people put money in the box. And so I'm going to too, and then it's more valuable. So they're gonna put more money in, and at no point in the cycle, did it seem to like, describe any sort of like economic purpose?

SBF: (27:42)
So on the one hand, I think that’s a pretty reasonable response, but let me play around with this a little bit. Because that's one framing of this. And I think there's like a sort of depressing amount of validity…

Matt: (27:53)
Can you comment on like the sustainability of that? Because, you know, on the one hand you're like, well, a trillion dollars of institutional money is going to come into Bitcoin. And on the other hand you're like basically there are a lot of Ponzis that have done really well.

SBF: (28:06)
Right. So let me, okay, cool. I'll stay on the cynical route, think about like cynically, what could happen here? Well, okay. So you've got this boxes and it’s kind of dumb, but like what's the end game, right? This box is worth zero obviously. And like that, you know, you can't like keep this smart cap or something. But on the other hand, if everyone kind of now thinks that this box token is worth about a billion dollar market cap, that's what people are pricing it at and sort of has that market cap. Everyone's gonna mark to market. In fact, you can even finance this, right? You put X token in a borrow lending protocol and borrow dollars with it. If you think it's worth like less than two thirds of that, you could even just like put some in there, take the dollars out. Never, you know, give the dollars back. You just get liquidated eventually. And it is sort of like real monetizable stuff in some senses. And you know, at some point if the world never decides that we are wrong about this in like a coordinated way, right? Like you're kind of the guy calling and saying, no, this thing's actually worthless, but in what sense are you right?

Tracy Alloway: (29:15)
Can I just ask on this point, I mean, so are you saying that the value has to derive from everyone agreeing that it's worth something? And I know like on the one hand, that seems like a simple point about crypto, but on the other hand, throughout crypto's history, there have been these different arguments about how it actually gets value, you know, use cases for the underlying technology — for blockchain. Everyone's gonna start migrating stuff on blockchain, and then you're gonna have a real economic use attached to these assets. And that's where the value's gonna come from. But are you saying that it depends more on everyone just agreeing that these are worth something?

SBF: (29:53)
So really what I'd say is that it could come in theory from either. You can sort of get a market cap either because of cash flow and then Warren Buffett's like f*ck this. Like, I'm going to buy this if it's at too cheap of a price, because I'll just buy it and own it and get cashflow from it. And that's great. Or you could see something get market cap in the way that, I don't know, Doge coin or SHIB coin have, where people are just kinda like ‘ha ha’ and then they buy it. And if you're like, that's dumb, it has no cashflow flow. I'm gonna short sell it. You lose all your money. And, you know, those like, at least like over the last few years, those have both been ways that assets have gotten market cap. And I sort of like think that this starts to hint at like, at least some interesting angles on this, because it's not just cryptocurrencies that have had this dynamic, right? How about like, you know, AMC or Hertz or GameStop or meme stocks in general have like a very similar pattern to this and the sort of concept of maybe people will pay something for it even though it doesn't seem traditionally valuable, is not a crypto specific concept. Although it certainly has become like…

 

One takeaway from this whole conversation is that DeFi might be more similar to Bitcoin than a lot of people thought, deriving its value from collective agreement that the ‘thing’ (in this case the box, or yield-farming protocol) is worth something rather than deriving value from a fundamental usefulness. 

 

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For years I've only used crypto to buy drugs and never even attempted to hold any of it.  I cant really think of a better use for it really... but sometimes i wonder 'what if i had just held $200 in there back in 2016???'

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  • 3 weeks later...
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    • Facebook parent Meta lost $2.8 billion on its virtual reality division, Reality Labs, during the quarter ending in June.
    • The substantial sum is the latest sign that CEO Mark Zuckerberg and Meta continues to spend heavily to pivot the social media giant to the so-called “metaverse.”
    • Meta said earlier this week it planned to raise the price of the Quest 2 headset from $299 to $399.

     

    https://www.cnbc.com/2022/07/27/meta-reality-labs-lost-2point8-billion-in-q2-2022.html

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