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Crypto is useful because it is used to create decentralized networks that allow for the transfer of value without an intermediary. The entire "faith based" argument against crypto makes no sense to me. The value is the network, which exists. You don't have to "believe" anything. Understand how it works and use it.
I can't say whether or not it will turn out to be a good investment, but I find it very interesting.
If you mean buying crypto coins and hoping they go up, that isn't investing, that's hoping to benefit from a Ponzi scheme. Which does happen, but it's still a Ponzi scheme..
Quote:
Originally Posted by tolovefromANFIELD
While you're not wrong, this type of reasoning can be applied to any asset whose return is solely dependent on capital appreciation.
All assets are based on appreciation of that asset …
Even dividend payers need appreciation or else all you have is a withdrawal against your balance .
Even art work counts on Appreciation yet produces nothing .
A Ponzi scheme is defined differently..
A Ponzi scheme promises rewards based on goods or services that don’t exist. It then pays those rewards out from the money of others who think they too are investing in goods or services that exist but don’t .
Crypto does not promise riches based on anything other than itself appreciating just like gold does or any other asset .
What its value is based on may be questionable , flawed or even unknown but that does not make something a Ponzi scheme.
You have the misinformed calling social security a Ponzi scheme too ..it is clearly not , it is no different than any other insurance where future claim paying counts on future payments coming in .
So Ponzi scheme is one of the most misused words
Last edited by mathjak107; 12-18-2022 at 05:57 AM..
It's the 1637 Dutch Tulip Bulb panic all over again.
The problem is we have no clue what current crypto is good for or reacts to .
Even the announcement of opening up crypto to 40 million accounts via fidelity got a ho hum response . If buy on the rumor sell on the news was true , it should be soaring .
It certainly isn’t digital gold , as gold has use in jewelry, industrial uses , is coveted by central banks and has a 5000 year history of a store of value .
It isn’t stable enough to act like a dollar . Imagine taking payment for your real estate and overnight you lost the 20% in gains on your property ?
It does not seem to react to any particular economic outcome .
It isn’t as secure as your bank account ..
We have better more secure ways of paying electronically
It counts on having electricity to exist unlike gold or diamonds which one can take with them
So right now it isn’t linked to doing anything better than we already have.
Like a painting , it counts on others seeing value , whether real or imaginary .
But that doesn’t mean it’s a Ponzi scheme ….loads of things are based on value others see in it.
The keyword is IN IT …it is not promising you rewards based on bitcoin and not buying bitcoin with your money but using new investor money to fool you into thinking they did buy it .
that is what makes all the difference in being a Ponzi scheme or not
Last edited by mathjak107; 12-18-2022 at 06:38 AM..
The problem is we have no clue what current crypto is good for or reacts to .
It certainly isn’t digital gold as gold as gold has use in jewelry, industrial uses , is coveted by central banks and has a 5000 year history of a store of value .
It isn’t stable enough to act like a dollar .
It does not seem to react to any particular economic outcome .
It isn’t as secure as your bank account ..
We have better more secure ways of paying electronically
It counts on having electricity to exist unlike gold or diamonds which one can take with them
So right now it isn’t linked to doing anything better then we already have
Every one of these points is true.
The most important of all being the lack of security.
I'll add one more big one: the government may eventually shut it down.
The problem is we have no clue what current crypto is good for or reacts to .
Even the announcement of opening up crypto to 40 million accounts via fidelity got a ho hum response . If buy on the rumor sell on the news was true , it should be soaring .
It certainly isn’t digital gold , as gold has use in jewelry, industrial uses , is coveted by central banks and has a 5000 year history of a store of value .
It isn’t stable enough to act like a dollar . Imagine taking payment for your real estate and overnight you lost the 20% in gains on your property ?
...
That is why USDC on Ethereum, Polygon, etc. is so important. If I were the US government, I would be cheering the fact that blockchains are spreading the US dollar all over the world. Of course, the US government could create their own digital dollar, but who knows how long that will take and what it will look like.
Crypto is useful because it is used to create decentralized networks that allow for the transfer of value without an intermediary. The entire "faith based" argument against crypto makes no sense to me. The value is the network, which exists. You don't have to "believe" anything. Understand how it works and use it.
But someone is running those networks, and I assume they don't want to run it as a charity forever.
- How do they get paid (which ultimately comes from end user fees, direct or indirect)?
- How much does that cost per user transaction?
- How long does it take? Less than 1 second, 1 minute, 1 hour? Is there any guarantee?
- How do the fees and processing time scale with number of transactions (both a large number and a small number)?
- How is the government able to audit transactions (who specifically is on each side)? If there's no ability for the government to audit, eventually they will regulate it out of existence.
Meh …the dollar is strong enough and there really is no advantage to most of us with Crypto vs using what we already have to transact business.
If the wheel was any more perfect, it wouldn’t roll
That is because you live in the US. Try living in Argentina, Nigeria, Pakistan, Ukraine, etc. Understand that billions of the least privileged people in the world do not have access to the traditional finance system. Then consider that a couple billion more have no faith in their country's financial system to corruption, bureaucracy, nepotism, etc.
When you understand this, the value of decentralized networks without intermediaries become clear.
America is has the most developed financial infrastructure in the world. For that reason, I could see why crypto may seem like "meh" thing to some. The majority of crypto users are in developing countries. Crypto investors are mostly from wealthier countries.
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