Crypto Currency - Believers Only
The_Greek That is not specific to crypto though. That is any asset. Not sure why you are singling it out. Everything has a value of what people are prepared to pay. If some fool is prepared to allow you to make a 13k profit in sterling then the government will want their cut.
What the BoE are saying is that although there is apparent value, which allows you to make a profit in GBP, there is no intrinsic vale and that apparent value could crash at any point.
There’s no intrinsic value to fiat currency. It’s pieces of cotton we collectively agree mean something?
There may he no intrinsic value to the digital currencies but the underlying block chain tech some of them use is revolutionary and can’t be disconnected from them since the currencies power them.
This BOE guy is bricking it because block chain tech can make banks redundant for huge swathes of the population. Transactions are faster by magnitudes and don’t lose commissions on the blockchain.
Only a matter of time before a killer app comes out on one of the programmable chains like Etherium and mass adoption begins imo.
Pretty much like fiat currency, backed back thin air, or IOUs on IOUs. It has no intrinsic value, nothing, zilch, it is just made up currency.
Well said Mr.Bailey, let me dig out the definition of fiat currency:
“Fiat money is a currency that lacks intrinsic value and is established as a legal tender by government regulation”
It is created to allow governments to overspend on public works, social programs and wars. It robs the future generations for the present overspending and saddles them with the debt, all in the name of economic stimulation and the whims of politicians.
Every year the government prints more money, your fiat currency is worth less, it is continually debased and will eventually be worth nothing like every other fiat currency.
The Bank of England has no money, it just creates fiat currency out of thin air to buy bonds which are created by the Treasury (or DMO now), which then releases it to the banks to create liquidity.
What do the banks do? Fractional reserve lending which is where most fiat currency is created, again, out of thin air.
Ponzi scheme? The current global financial system is a ponzi scheme, but don’t worry look over there at naughty crypto currency and assets with store of value over time, like precious metals, they are bad, real bad!
Remember this as well:
“In order for this system not to collapse it must always grow. And because every new pound created is backed only by debt on which interest is due, there can never be enough pounds in existence to pay down the debt. The currency supply must continue to grow exponentially in order to service the constantly compounding debt load, until one day when it will all collapse under its own weight.”
What a beautiful system, no wonder they want to trample the decentralised crypto currencies where it is immutable and infeasible to double spend or fractional reserve lend, why would anyone want that?
Thankfully the financial world is immune to catastrophes. 
mono-stereo I honestly an seriously worried, I mean, come on the next collapse is literally around the corner unfortunately
Wally Revolutionary and extremely simple. yes. But not great for transaction cost etc. Amazing for things like medical records where you prevent changes from last year. Amazing as a transaction ledger. But you do not need a ledger of every transaction ever made.
It is a solution. Just not to the problem you think.
The blockchain tech isn’t just a ledger. Etherium is a programmable blockchain for example. The Etherium virtual machine or world computer as they like to call it. It’s really selling it short to think it’s just a currency or ledger tech.
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I like the gambling analogy here - same with any share. Anyone with a hand in the game essentially has a cash out offer which means fuck all until they’ve taken the money. Anyone thinking they’ve made a penny until they’ve taken their money is fooling themselves.
A very few people will make fortunes.
Quite a few will do well.
The vast majority will lose everything to the two groups above.
Same as it ever was
That’s one use for it sure and admittedly a lot of the ‘dapps’ center around financial transactions at present but it’s not the only one. Anything programmable with a turing complete language can be used for a lot more and will be in time. As I said above, the tech has only really just started the maturation phase. There will be a killer app soon enough that drives mass adoption (maybe with people not even realising it’s blockchain powered). A lot of the arguments being deployed that frame blockchain tech in terms of existing tech is exactly the same thing that happened with the internet at first. ’Oh email, it’s just a computer letter then’ etc.
The tech is over a decade old and has been through several ‘could have been the end of it’ moments and still come through. It’s here to stay imo.
It’s good to be cautious but in other news, Etherium has hit seven all time highs in the last month or so. I think I’m bailing on stocks once gamestop is done. The returns are just too good and from looking at planned updates, it’s only going one way from here. Imo.
You are conflating 2 things. The perceived value of a the magic beans as an investment strategy. Which I think is a very bad investment in the long run, with the concepts of blockchain and ledgers, which I think will be hugely useful.
The transaction costs still seem to be eye watering. And the energy use solving piuzzles for the magic beans cannot be a good thing. Even if you say it is renewable, you are taking wind power and converting it into heat. On a massive scale. For what?
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Nah. The two are inseperable. You cannot have the Bitcoin (capital B) blockchain tech without bitcoin currency. You cannot have Etherium without ether. It’s digital currency. That’s how they work. Sure, some companies are setting up private blockchains using the tech (much like intranets) so the tech is clearly useful in itself but for this thread, private chains we can’t access or invest in are irrelevant no?
Transaction costs are coming down every day on Etherium and they are moving to a '‘proof of stake’ system (you pay 32 coins to become a validator which gives you a vested interest in it working as it should) in return for ether coins rather than the current '‘proof of work’ (which are the math problems you mention that are responsible for the energy usage concerns) so for Etherium (which I want to be clear is the only one I’m investing in and understand the future plans) that’s not a concern.
A blockchain is just a ledger. You do not need a currency to go with that. It is a neat and clever way of securing the transaction history. But a transaction could be an entry in your medical notes rather than a record of a solved puzzle changing hands. It is secure because of the distributed ledger meaning you cannot go back and change all of them.
All these currencies are is a solved puzzle which is passed around as a token of worth. Each movement is recorded using the blockchain.
You can have a blockchain without the currency. But not the currency without the blockchain.
You can have a private blockchain without the currency.
You cannot have a public one without a currency.
Fwiw, you can change the ledger too. You just need 51% of the network nodes to agree with you.
Etherium classic (which is NOT etherium and should be avoided) has been 51% compromised 3 times.
Does anyone actually use Bitcoin to, you know, buy shit with?
Seems like it would be a real ball ache to price goods in, considering how volatile it’s been over the years.
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mono-stereo Any place can choose to allow purchases via bitcoin and it’s as quick as a visa transaction. The reason it’s not in use all over the place is because of scepticism of the tech and the phase of the tech maturation it’s in. Also the volatility of the value. No one wants to pay 1 bitcoin for something and then find out they could have paid half a bitcoin the next day.
Visa have stated (see earlier posts) that they are looking to add bitcoin and other crypto currencies to their company in a big way. I would imagine it will explode overnight if they allow it which, while driving up the coin price for investors would also be antithetical to it’s designed purpose of cutting out Visa and other middle men completely.
Volatility will come down as the tech matures. Already bitcoin seems to be levelling out a bit (although what happens when it hits the 21 billion coin limit for artificial scarcity in a few years is anyones guess).
Wally No one wants to pay 1 bitcoin for something and then find out they could have paid half a bitcoin the next day.
Yeah that’s what I was getting at.