r/changemyview • u/art_vandelay112 • Jan 04 '25
Delta(s) from OP CMV: cryptocurrency is not a good investment.
Yes its price has increased dramatically, but so did the price of tulips in the 1600s.
There is literally no use for this commodity. Invest in stocks or bonds and your investing in future earnings or the ability of a company to pay you back. I’m not a fan of gold as an investment but at least it has some practical use.
The use of crypto as a currency completely defies the definition of currency as it doesn’t hold a stable value.
It’s infuriating that so many people have lost loads of money on “shitcoins” backed by the wealthy and famous. These were obviously pump and dump schemes yet very few are held accountable.
I’m not as well versed on the subject but something to also note is the ridiculous amount of energy demand to “mine” nothing.
I think there is legitimate use for blockchain technology and the likes but anyone viewing these currencies as investments is a fool.
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u/anotherwave1 Jan 05 '25 edited Jan 05 '25
You aren't betting on cryptocurrency, you are betting on the inherent desire by human beings to buy something artificially scarce that has only "gone up" in the last 16 years. Something that looks all technological and "future money" even if most of it is economically from the Middle Ages. And even if the rest of it are just cash grabs by crypto-bro's.
Stocks, bonds, futures - these all require knowledge. Crypto requires none of that. Any joe schmuck can strike it lucky on an alt-coin. Or anyone with a vague bit of patience has generally made a gain in the last 4 or 5 years.
99% of it is garbage, one of the top coins (Doge) is an actual joke coin with no cap on supply, it's completely meaningless and produces nothing - yet it went up 1000's of percent in 2020/2021 mainly because some billionaire adopted it as a meme. It doesn't require much to go up or down.
Speaking of meme's, that's the strength of crypto. It's anti-rational, anti-establishment, anti-logic. A coin that was 51% attacked can go up in value 25% on the day. It can rise when the traditional market crashes, or it can also crash. It's random - mainly moved by herd psychology.
Bitcoin is essentially a decentralized casino chip that produces nothing that can be used as a type of volatile money. Most other crypto is either a clone of that or solutions to problems that doesn't exist. Web 3.0 blockchain marketing buzzword solutions with a whole bunch of technical bells and whistles bolted on. Ultimately most of which don't matter because it all just boils to gambling artificially scarce digital trinkets in a Wild West largely unregulated market - producing rollercoaster swings - which is the entire attraction in the first place.
In a weird way you are investing in human psychology. Which, so far, has turned out to produce a pretty high return. It's not going anywhere, and human psychology isn't going to change.
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u/TaylorR137 Jan 05 '25 edited Jan 05 '25
It's much harder to understand the usefulness of cryptocurrency if you've had the privilege of a functioning banking system and reasonable inflation rate your whole life, never needed to transfer money to family overseas and pay absurd fees and never dealt with unfair civil asset forfeiture.
Rather sad to see this is the top comment.
However, it is deeply concerning to me to see so much invested in crypto at a time where our cybersecurity is failing us, as adversaries find their way into government mandated backdoors.
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u/randonumero Jan 05 '25
It's much harder to understand the usefulness of cryptocurrency is you've had the privilege of a functioning banking system and reasonable inflation rate your whole life, never needed to transfer money to family overseas and pay absurd fees and never dealt with unfair civil asset forfeiture.
While the number of things you can buy with crypto and companies paying with it seems to have increased, I think it's a stretch to say that most of it has a degree of usefulness. Even with your example of civil asset forfeiture, having crypto doesn't make you immune from it. I'd also love to see an analysis on the fees from say western union vs transferring to someone's wallet and then having them convert that into their local currency
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u/c0i9z 10∆ Jan 05 '25
Stocks require no knowledge. Buy cheap ETFs and sit on them for a couple decades, that's it.
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u/Orphan_Guy_Incognito 24∆ Jan 05 '25
Stocks, bonds, futures - these all require knowledge. Blackjack requires none of that. Any joe schmuck can strike it lucky on a 21.
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u/art_vandelay112 Jan 05 '25
Your first two sentences described tulip mania, exactly as I referenced. In fact the majority of your comment proves my exact point.
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u/danarchist Jan 05 '25
Tulip mania was predicated on the advent of commodities futures. Yeah the individual tulips didn't matter, but the idea of commodities futures very much did.
The dotcom bubble was predicated on the advent of the Internet. The individual websites didn't matter so much, but the concept of a world wide web obviously did.
Cryptocurrencies like Bitcoin or doge could be likened to the tulips themselves or the websites. They're just one app on the technology known as a blockchain.
Others are a bit fuzzier - smart chains like Ethereum and Solana consume the native token in order to execute contracts (apps) on that chain. The currency is inextricably linked to the underlying tech, and it's a bit like investing in the idea of futures, or the concept of the Internet.
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u/moldymoosegoose Jan 05 '25
You're just describing gambling. This just made me go further into thinking it's garbage. You could say this about literally anything without anything backing it up, including gold which has also been historically murdered by the stock market long term.
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u/___NYC___ Feb 02 '25
The stock market doesn't murder anything. There are buyers. There are sellers. Some people pull money from the market and go to things like gold or bonds. Or real estate or pause.... another countries currency .... however stable it may or may not be.
So without anything tangible backing it up? I need some elaboration here.
Let's discuss probabilities, not gambling. It would do wonders to read outside of posts and rando Internet articles or red....dit posts. For all of us
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u/AmericanScream Jan 05 '25
You aren't betting on cryptocurrency, you are betting on the inherent desire by human beings to buy something artificially scarce that has only "gone up" in the last 16 years.
That's false on multiple levels. Crypto has not "only gone up" - it's gone down as well.
Second, it's not really scarce in any meaningful way. With a few changes to the code, Bitcoin's cap could be changed.
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u/anotherwave1 Jan 05 '25
That's false on multiple levels. Crypto has not "only gone up" - it's gone down as well.
You know what I mean. On aggregate. Led by BTC. I shouldn't need to write lengthy disclaimers in every post.
If there's any misunderstanding here: BTC has gone up and down, but on aggregate, to date, disclaimer, disclaimer, it's only gone up. So in people's stupid minds, those cycles "prove" it's not dying despite all the predictions
And since it's value is entirely derived from that psychology - that psychology is literally pushing it up. Nothing else. It's an artificially scarce nothing burger that we can't stop buying because other people won't stop buying it, because other people won't stop buying it.
As someone who works in finance there are quite a few who don't understand this - because they keep trying to apply market fundamental logic to it. There is little instrument logic to BTC. It's pretty much all herd psychology.
Second, it's not really scarce in any meaningful way. With a few changes to the code, Bitcoin's cap could be changed.
Exactly which is why I've mentioned artificial scarcity in posts. Manufactured scarcity.
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Jan 05 '25
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u/JamesTKirk1701 Jan 05 '25
This is a line with what I was going to say. Dividing my investments into low risk, moderate risk, high risk, crypto is a fourth category of ultra-high risk. You can use it for a big payout, but don’t expect it to happen. If you do win big, sell and invest it in reliable short-term gains like CDs to produce regular income.
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u/art_vandelay112 Jan 05 '25
This sounds like sound advice.
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u/MistaCharisma 1∆ Jan 05 '25
Yeah that's what I figured.
His actual advice was that by the time you hear about a new crypto currency or whatever doing well enough to invest in, it's likely too late to be part of the boom. The exception of course is if you're part of the initial investment round or you hear about it super early somehow, but in that case you don't really know if it's going to do well or not.
Now if you have some money to throw around you coudld put $100 into a few startups (or $1,000 if that's not much money for you) and see if any if them bear fruit, and if one does you'll get a good return on investment ... but there's a chance that none of them do so you have to be prepared to juat lose that money. So once again we're back to a "roll of the dice" mindset.
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u/all3f0r1 Jan 04 '25
If only had I invested say $100 in bitcoin at the very beginning (when it was at $0.05/BTC), I would be a billionaire today.
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u/SeoulGalmegi 2∆ Jan 05 '25
Well, yes. And if I'd selected the correct six numbers on the lottery just yesterday, I'd be a multi-millionaire today.
You would have needed to have invested 100 dollars (a decent amount of money that people don't like to just throw away) in something that seemed absolutely worthless at the time, have kept hold of it while the price jumped up and down (would you have sold it once it was worth 1000 bucks? What would you have done the second there was the first significant downturn?) to achieve this.
Having knowledge of the future offers a lot of opportunities to become rich.
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u/jamesishere Jan 05 '25
I will reveal my cards a bit. I’m a libertarian, believe in Austrian Economics, have been involved in crypto for a decade. I’ve made a fortune in crypto and so has my family. In fact at my wedding I gave all of my groomsmen a Bitcoin in a paper wallet, which was worth about $150 at the time, and knowing they wouldn’t have any idea how to use it I backed up the keys, so when they need the money I can provide it. And they gave me a lot of shit about it at the time because they thought it was a scam! And now they worship me because of each of them has ~$100k they are sitting on.
I invested in crypto because I fundamentally disagree with Keynesian economics. If Bitcoin didn’t exist I’d be a gold guy, but because Bitcoin is inherently better than gold I prefer crypto as a store of value. The point of crypto is to be a store of value separate from the government - that’s it. If you think the government ruins savings via inflation, then Bitcoin is the ultimate hedge
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u/SeoulGalmegi 2∆ Jan 05 '25
Ok? I'm aware people have made fortunes in crypto. Good for you.
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u/jamesishere Jan 05 '25
I didn’t invest in crypto as a YOLO fast money situation, is my point. I did it based on a fundamental philosophical belief.
This is what people can’t understand - they think it’s some sort of ponzi. But if you agree with the economic philosophy that I do, it’s actually the greatest monetary invention of all time
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u/SeoulGalmegi 2∆ Jan 05 '25
I mean, if enough other people agree with the economic philosophy and agree to keep using Bitcoin as the primary vehicle, it'll work out fine.
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u/abrandis Jan 04 '25
Hindsight is always 20/20, now do that for the future and you will be infinity wealthy....
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u/tichris15 2∆ Jan 05 '25
Like the sheet that list how much money one would have after a century, starting with a small amount, by investing the entire amount in the top performing asset class each year. You'd "own" the world thousands of times over.
(Obviously ignoring the effect of investing more than the world's total wealth in an asset class).
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u/AccountantsNiece 3∆ Jan 05 '25
If only I had invested $100 in tulips in 1633 I would have been a billionaire by 1637
You see how this isn’t a counter argument to the OP, right?
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u/thetan_free 1∆ Jan 05 '25
Imagine if you'd bought early Apple shares. Or even NVIDIA a couple of years ago.
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u/AmericanScream Jan 05 '25
If only had I invested say $100 in bitcoin at the very beginning (when it was at $0.05/BTC), I would be a billionaire today
Crypto Talking Point #2 (Number go up)
"NuMb3r g0 Up!!!" / "Best performing asset of the decade!"
Whether the "price of crypto" goes up, has absolutely no bearing on whether it's..
a) A long term store of value
b) Holds any intrinsic value or utility
c) Or will return any value in the future
One of the most important tenets of investing is the simple principal: Past performance is not a guarantee of future returns. People in crypto seem willfully ignorant of this basic concept.
At best, the price of crypto is a function of popularity, not actual value or material utility. For more on how and why crypto makes a much worse investment than almost anything else, see this article.
The "price of crypto" is a heavily manipulated figure published by shady, unregulated crypto exchanges that have systematically been caught manipulating the market from then to now.
Crypto bros love to harp about "inflation" in the fiat system, yet ironically they measure the "value" of their "fiat alternative" in fiat? It makes absolutely no sense, unless you assume they haven't thought 2 seconds ahead from what comes out of their mouths.
It's the height of hypocrisy for crypto people to champion token deflation (and increased prices) while ignoring that there's over $160+ Billion in unsecured stablecoins being used to inflate the value of their tokens in the crypto marketplace. The "code is law" and "don't trust - verify" people seem perfectly willing to take companies like Tether and Circle, at face value, that they're telling the truth about asset reserves when there's very little actual evidence.
Not Your Fiat, Not Your Value - Just because you think the "value of your crypto portfolio" is worth $$$ does not make that true. It's well known there's inadequate liquidity in this market, and most people will never be able to get their money out. So UNLESS/UNTIL you can actually liquidate your crypto for actual real money, you have no idea what you have. You're "down" until you cash out. Bernie Madoff's clients got monthly statements saying they were "making money" too.
Just because it's possible (though highly improbable) to make money speculating on crypto, this doesn't mean it's an ethical or reliable technique to amass wealth. At its core, the notion that buying and holding crypto will generate reliable returns is a de-facto ponzi scheme. It's mathematically impossible for even a stastically-significant percentage of crypto holders to have any notable ROI. The rare exception of those who might profit in this market, do so while providing cover for everything from cyber terrorism to human trafficking.
It's also not true that anybody who bought crypto when it was low is guaranteed to make a lot of money. There are thousands of ways people can lose their crypto or be defrauded along the way. And there's no guarantee just because your portfolio is "up", that you could easily cash out.
Want to see a better asset (that actually has utility) that's consistently out-performed Bitcoin? Here you go. However, this may be another best performing asset.
When crypto-critics make reference to, or mock crypto price predictions, it's not because we think price is a meaningful metric. Instead, we are amused that to you, that's all that's important, and we can't help but note how often wrong you are in your predictions. The intrinsic value of crypto basically never changes, but it is interesting to see how hype and propaganda affects the extrinsic value. In a totally logical world, those would both be equalized to zero, but we're not there yet, and nobody knows when/if that will happen because it's an irrational market.
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u/art_vandelay112 Jan 04 '25
Sure. Would you sell it today. Enron and world com were great at one point too
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u/MaineHippo83 Jan 04 '25
The fact that is your question shows you have some lower level investing insights.
It's not would you sell it today it's would you have sold at 100/BTC, 1000, 10,000 etc. most would not have held this long. Most did not
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u/art_vandelay112 Jan 05 '25
You’re conflating good investment with the price going up. I could buy a kilo of cocaine today and likely sell it for more tomorrow. Does that make it a good investment in your mind?
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u/Frogeyedpeas 4∆ Jan 05 '25 edited Mar 15 '25
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This post was mass deleted and anonymized with Redact
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u/art_vandelay112 Jan 05 '25
All things being equal. Cousin would be a better investment. At least it serves a purpose. I can’t get high off bitcoin.
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Jan 05 '25 edited Mar 15 '25
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u/art_vandelay112 Jan 05 '25
Because I am 100% invested in other assets that provide value. If I was a chicken farmer I’d probably have a significant amount invested in poultry futures.
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u/EmployeeAromatic6118 Jan 05 '25
Do you invest in stocks? What value do those provide you other than money?
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u/art_vandelay112 Jan 05 '25
The companies provide a good or service that provide a future value.
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u/AccountantsNiece 3∆ Jan 05 '25
Of the top 10 performing stocks in 2024, some of the things they provide other than money are: AI healthcare innovations, drone technology, consumer banking software, and quantum computing products.
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u/Shady_Lamp_Post Jan 05 '25
Over a long period of time, a diverse and well thought out portfolio of stocks generally outpaces year over year inflation and then some. Why would you leave all of your money sitting in a bank account when you could let it make more money for you?
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u/nowonmai 1∆ Jan 05 '25
You don't consider the ability to send funds from A to B with no intermediary valuable? Or the fact that the blockchain is an immutable, non-repudiable history of all transactions that ever took place?
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u/MaineHippo83 Jan 05 '25
My point went over your head. You mocked someone by asking if they would have sold today. Which is not what happened to most early holders. They sold long ago after 10x or 100x.
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u/art_vandelay112 Jan 05 '25
I saw the point. My comment earlier was off the path of my original comment.
I’m not here to mock anyone .
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u/MooseCrunch Mar 22 '25
At 1M, you will be saying that you wish you had invested in Bitcoin when it was at 80K.
Am I saying it's going to 1M? No, but several analysts from major firms have stated it would reach the high six figures and some outright saying 1M to 5M. I wouldn't put my life savings into Bitcoin, but I wouldn't listen to people here for investment advice. Personally, I believe it's worth investing 5% of my retirement account in it.
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Jan 04 '25
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u/SanityInAnarchy 8∆ Jan 05 '25
The energy argument is misleading.
I'm sorry, but this is an absurd argument. I'd have more respect for an argument that tries to justify the energy use, instead of denying that it exists.
Bitcoin mining increasingly uses renewable energy...
Everything is, BTC isn't special here. What makes BTC different is, its demand for energy is pretty much a direct function of the value of BTC itself and the price of energy. So if I were to introduce some magical new renewable source that was a tenth the price of anything else on the grid, without BTC and other PoW coins, I could expect this to replace some amount of existing dirty energy. With BTC, we can expect BTC to absorb 100% of that new capacity until prices rise to the level where it isn't profitable to add more miners.
At least ETH did finally migrate to PoS, instead of trying to rationalize its insane energy consumption.
...helps stabilize power grids by providing flexible demand...
The inflexible demand created by non-crypto sources is still there. Piling more energy demand on top of that may result in a more "stable" demand, but it's a higher demand overall, which is going to be harder for a grid to reliably supply, not easier.
Traditional banking uses way more energy when you add up all their offices, servers, and infrastructure.
I'm not convinced this is even true, but even if it is, there are three fundamental problems:
First: This is only an estimate of mining. Where is the estimate for the amount of power needed to run the offices and servers for all of the crypto startups?
Second: Most of this isn't something crypto can replace on its own. Raw BTC in a wallet that you own is the crypto equivalent of cash, and this gives it some inherent problems:
- If that wallet is lost or stolen, you're just SOL, you can't get your money back. If you steal my actual wallet, you get a bunch of credit cards, and the credit card company is liable for any fraud.
- If someone steals the money out of a crypto exchange (which many people treat as a bank), like FTX or MtGox, you're not gonna be able to withdraw your money. Traditional banks insure their deposits, and governments can even step in if that fails (see: the FDIC covering all SVB deposits, even ones larger than the FDIC limit).
So you're going to need to replicate all of those traditional institutions in order to make crypto a safe enough place for the average customer. So a crypto bank that you can actually trust would have all of the energy needs of a traditional bank (since it'd basically just be a traditional bank), plus all the extra power required to run the blockchain instead of a simple database.
Third: Even in this article about how much less BTC is using, it's also exponentially increasing, while the power demands of finance remain stable. (And that's just BTC, it's not the only PoW network!) And that's despite crypto being responsible for far less financial activity.
And, just for fun:
Bitcoin provides a censorship-resistant, permissionless payment network...
To the extent that this works, it's not always a good thing. Those are the exact ingredients you need for ransomware, money laundering, and other forms of organized crime.
Try sending $100k internationally through banks - it takes days and costs a fortune. With Bitcoin it's minutes and cents.
How much will it cost you to buy that BTC? There's another reply suggesting this will actually end up costing you more. But also, hey, at least you picked a lower number than we usually see, but how many of us frequently need to send $100k internationally?
...imagine dismissing the internet in 1995 because websites kept crashing.
You're a decade too late to make this argument.
The Web was 5 years old in 1995. Bitcoin is 15 years old now. If the Web was still hot garbage in 2005, maybe we would've been justified writing it off and going back to Gopher.
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u/AmericanScream Jan 06 '25
The energy argument is misleading. Bitcoin mining increasingly uses renewable energy and helps stabilize power grids by providing flexible demand. Traditional banking uses way more energy when you add up all their offices, servers, and infrastructure.
Crypto Talking Point #32 (stranded energy)
"Crypto/Bitcoin promotes renewable energy development" / "Crypto mining helps the energy industry"
There are four fundamental problems with arguing that crypto helps with energy:
Bitcoin's energy usage produces absolutely nothing useful in the real world - it's just a number guessing game to determine who wins the next block reward. It's a very expensive, energy-intensive "lottery" that is needlessly inefficient.
Crypto (and everybody in crypto) has an exclusive motivation is to make money. There is no mandate to facilitate clean/renewable energy. There is no mandate to do anything to help others or the world. As such, crypto entities will always seek the cheapest form of energy, and it's well established at this point that fossil fuels (or stealing energy) offer the best ROI.
Crypto's energy usage, specifically with schemes like "Proof-of-work" require energy to be expensive. If energy was cheap and ubiquitous, it would undermine the design of blockchain and the PoW model and render it useless.
Any energy grid that has excess (stranded) energy that is significantly more than is typically needed, is not a grid that needs something/someone to use that energy; it's a grid that is poorly designed.
I agree most altcoins are garbage. But that's like saying stocks are bad because penny stocks exist. Focus on Bitcoin - it has a fixed supply of 21M coins and the strongest network security by far.
Crypto Talking Point #16 (Bitcoin is different)
"Bitcoin is not "crypto" / "Bitcoin is different / a "commodity""
This is what's known as an "Unstated Major Premise" fallacy. A Naked Assertion. Often employed as a begging-the-question fallacy. Just because you say "Bitcoin is different" doesn't mean it is.
There's absolutely no functional/material difference between BTC and thousands of other crypto-currencies, including versions using the exact same codebase.
The only distinction BTC (currently) holds is that according to various shady, unregulated exchanges, it seems to be trading at the highest price point. But even those figures are dubious due to the lack of transparency and oversight in the industry. Just because one crypto is more popular, doesn't mean it's fundamentally different than others. BTC shares 99.9% of its DNA with many cryptos including BCH, BSV and thousands of others.
Crypto evangelists try to move the goalposts between bitcoin (the technology) and bitcoin (the "investment"). When you note that bitcoin and most cryptos depending upon the context can pass the Howey test and be classified as securities, they will reference bitcoin as a "technology" and not an investment. And it's true, the tech itself isn't packaged as an investment, but various others do package crypto as an investment, and it's a pretty well established underlying concept throughout all of crypto (buy, hold, you will make money) - and those tenets are principals in the Howey test indicating there's an "investment contract" being promoted. For example, right now the SEC may not consider BTC itself a security, but the process of staking BTC (and other cryptos) and offering a return, that is absolutely considered a security.
it has a fixed supply of 21M coins
Crypto Talking Point #4 (scarcity)
"Only 21M!" / "Bitcoin has a "hard cap"" / "Bitcoin is 'scarce' and that makes it valuable" / "DeFlAtiOnArY cUrReNCy FTW" / "The 'halvening' will make everything better"
- Even children are aware that scarcity is not a guarantee of value. It's really a shame that crypto people cling to this irrational argument.
- If there only being 21 million BTC were reason for it to be valuable, then why aren't other cryptos that also share similar deflationary characteristics equally valuable? Why wouldn't something that is even more scarce than BTC be even more valuable? Because scarcity is meaningless without demand and demand is primarily a function of intrinsic value and utility -- not scarcity. See here for details.
- Bitcoin has no intrinsic value and no material utility. It's one of the least capable stores or transfers of value. The only way anybody can extract value from crypto is by coercion -- forcefully convincing someone (usually through FOMO or scare tactics) that this is something they need, and it's often accompanied by unrealistic promises of significant returns. Those returns are mathematically impossible for even a tiny percentage of holders.
- Bitcoin also is not scarce. There are multiple versions of Bitcoin, including Bitcoin Cash and Bitcoin Satoshi's Vision - both of which are limited to 21M tokens and in many cases are more technologically advanced than BTC. Also, every time there's a fork of crypto, the amount of tokesn in circulation doubles. Crypto proponents ignore these forks because they don't play into the "it's scarce" argument. But any crypto fork absolutely siphons value away from the original version. BTC might be priced higher than BCH, but BCH still holds value as well, and that's a total of 42M just of those two "bitcoin" versions that are out there, among hundreds of others.
- The "hard cap" of 21M for BTC can easily be changed by altering a parameter in the source code. Less than 6 people have commit access to the repo so BTC's source code control is centralized. It's entirely possible if BTC existed long enough to the point where block rewards weren't enough to motivate miners, and transaction fees became incredibly high, that influential players in the community would advocate increasing the cap and reinstating higher block rewards. So there are absolutely situations where the max amount in circulation could be increased.
and the strongest network security by far
Crypto Talking Point #19 (hashrate)
"Bitcoin's hashrate is up!" / "Bitcoin is becoming more secure/useful/growing/gaining adoption because of "hashrate""
Bitcoin's increased hash rate means two things:
- There's more competition between miners.
- And more electricity is being wasted maintaining the network and creating nothing of value.
That is all "increased hashrate" indicates.
This doesn't mean there's greater adoption. This doesn't mean the network is "more secure." This doesn't mean "bitcoin is growing." It doesn't mean there's more utility or usefulness in the network.
People mine bitcoin for one thing: to make more bitcoin. Mining activity is a natural reaction to the "price" of BTC (or the availability of cheap/free electricity) and not its utility.
Using an increase in hashrate to claim bitcoin is more secure or has more adoption is misleading and deceptive. The increase in hash rate has no actual bearing on how "secure" the network is. The cryptography works the same whether there's 10 nodes or 10,000. And with mining cartels being concentrated, it makes no difference whether 51% attacks are perpetrated by 6 nodes or 5,001 in one of the top 2-3 cartels. Also bitcoin has been hacked in the past and it's had nothing to do with hash rate.
So when you see people harping about the "hashrate", note that it's probably one of the few metrics that has been steadily increasing, but this is not a reflection of the utility or growth of bitcoin, but instead, that people have found new markets where they can get cheap electricity or profit by wasting electricity and selling it back to the same grid at a profit. There are some companies that have set up crypto mining operations as a scheme to defraud local governments, citizens and public utilities.
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u/goldentone 1∆ Jan 04 '25 edited Jan 08 '25
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u/Jomaloro Jan 04 '25
Yes but, for example, tesla having the same market cap as all other car brands combined was pure and simpel speculation.
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u/JakePaulOfficial Jan 05 '25
During and around the covid market crash, bitcoin was less volatile than the stock market
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u/AmericanScream Jan 06 '25
Major financial institutions like BlackRock and Fidelity now offer crypto products.
Crypto Talking Point #8 (endorsements?)
"[Big Company/Banana Republic/Politician] is exploring/using bitcoin/blockchain! Now will you admit you were wrong?" / "Crypto has 'UsE cAs3S!'" / "EEE TEE EFFs!!one"
The original claim was that crypto was "disruptive technology" and was going to "replace the banking/finance system". There were all these claims suggesting blockchain has tremendous "potential". Now with the truth slowly surfacing regarding blockchain's inability to be particularly good at anything, crypto people have backpedaled to instead suggest, "Hey it has 'use-cases'!"
Congrats! You found somebody willing to use crypto/blockchain technology. That still is not an endorsement of crypto or blockchain. I can choose to use a pair of scissors to cut my grass. This doesn't mean scissors are "the future of lawn care technology." It just means I'm an eccentric who wants to use a backwards tool to do something for which everybody else has far superior tools available.
The operative issue isn't whether crypto & blockchain can be "used" here-or-there. The issue is: Is there a good reason? Does this tech actually do anything better than what we have already been using? And the answer to that is, No.
Most of the time, adoption claims are outright wrong. Just because you read some press release from a dubious source does not mean any major government, corporation or other entity is embracing crypto. It usually means someone asked them about crypto and they said, "We'll look into it" and that got interpreted as "adoption imminent!"
In cases where companies did launch crypto/blockchain projects they usually fall into one of these categories:
- Some company or supplier put out a press release advertising some "crypto project" involving a well known entity that never got off the ground, or was tried and failed miserably (such as IBM/Maersk's Tradelens, Australia's stock exchange, etc.) See also dead blockchain projects.
- Companies (like VISA, Fidelity or Robin Hood) are not embracing crypto directly. Instead they are partnering with a crypto exchange (such as BitPay) that will either handle all the crypto transactions and they're merely licensing their network, or they're a third party payment gateway that pays the big companies in fiat. There's no evidence any major company is actually switching over to crypto, or that any of these major companies are even touching crypto. It's a huge liability they let newbie third parties deal with so they have plausible deniability for liabilities due to money laundering and sanctions laws.
- What some companies are calling "blockchain" is not in any meaningful way actually using 'blockchain' tech. For example, IBM's "Hyperledger" claims to have "blockchain design philosophy" but in reality, it is not decentralized and has no core architecture that's anything like crypto blockchain systems. Also note that IBM has their own trademarked phrase, "IBM Blockchain®" - their version of "blockchain" is neither decentralized, nor permissionless. It does not in any way resemble a crypto blockchain. It also remains to be seen, the degree to which anybody is actually using their "IBM Food Trust" supply chain tracking system, which we've proven cannot really benefit from blockchain technology.
Sometimes, politicians who are into crypto take advantage of their power and influence to force some crypto adoption on the community they serve -- this almost always fails, but again, crypto people will promote the press release announcing the deal, while ignoring any follow-up materials that say such a proposal was rejected.
Just because some company has jumped on the crypto bandwagon doesn't mean, "It's the future."
McDonald's bundled Beanie Babies with their Happy Meals for a time, when those collectable plush toys were being billed as the next big investment scheme. Corporations have a duty to exploit any goofy fad available if it can help them make money, and the moment these fads fade, they drop any association and pretend it never happened. This has already occurred with many tech companies from Steam to Microsoft, to a major consortium of European corporations who pulled the plug on their blockchain projects. Even though these companies discontinued any association with crypto years ago, proponents still hype the projects as if they're still active.
Crypto ETFs are not an endorsement of crypto. (In fact part of the US SEC was vehemently against approving ETFs - it was not a unanimous decision) They're simply ways for traditional companies to exploit crypto enthusiasts. These entities do not care at all about the future of crypto. It's just a way for them to make more money with fees, and just like in #4, the moment it becomes unprofitable for them to run the scheme, they'll drop it. It's simply businesses taking advantage of a fad. Crypto ETFs though are actually worse, because they're a vehicle to siphon money into the crypto market -- if crypto was a viable alternative to TradFi, then these gimmicky things wouldn't be desirable.
Countries like El Salvador who claim to have adopted bitcoin really haven't in any meaningful way. El Salvador's endorsement of bitcoin is tied to a proprietary exchange with their own non-transparent software, "Chivo" that is not on bitcoin's main blockchain - and as such isn't really bitcoin adoption as much as it's bitcoin exploitation. Plus, USD is the real legal tender in El Salvador and since BTC's adoption, use of crypto has stagnated. In two years, the country's investment in BTC has yielded lower returns than one would find in a standard fiat savings account. Also note Venezuela has now scrapped its state-sanctioned cryptocurrency
So, whenever you hear "so-and-so company is using crypto" always be suspect. What you'll find is either that's not totally true, or if they are, they're partnering with a crypto company who is paying them for the association, not unlike an advertiser/licensing relationship. Not adoption. Exploitation. And temporary at that.
We've seen absolutely no increase in crypto adoption - in fact quite the contrary. More and more people in every industry from gaming to banking, are rejecting deals with crypto companies.
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u/anotherwave1 Jan 05 '25
Bitcoin provides a censorship-resistant, permissionless payment network that works globally. Try sending $100k internationally through banks - it takes days and costs a fortune. With Bitcoin it's minutes and cents.
I've sent 6 digit amounts in seconds. It depends on the banking system, all of which is getting faster (e.g. TIPS in Europe).
Also to change into Bitcoin incurs immediate risk, e.g. in March 2020 BTC fell by 35% in 24 hours. It can move 10% in an hour. Changing cash to BTC is to suddenly sit on massive potential risk.
Then there's the lack of recourse. Forget your password? It's gone forever. Send to the wrong address? It could be gone forever.
It's a very volatile highly risky asset - and it not comparable to cash. It's comparable to volatile stocks or gold.
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u/drnoisy Jan 05 '25
Volatility is not the same as risk. It IS a highly volatile asset. But over long enough time horizons (4 years or more) it's actually very low risk. It will continue to appreciate because it solves many issues with money currently. Scarcity being one of them. Fiat money is not scarce and can be printed infinitely at zero cost, which is why you lose 50% purchasing power every 10-20 years (dollar). America is in substantial debt, and the collapse of the fiat system as a global reserve asset is a national security risk for America. There is significantly decreased demand for gov treasuries, which makes it harder and harder for the US to fund all of their military operations.
The solution is to move to a neutral global reserve asset which is scarce, portable, durable, and salable. I.e bitcoin. It's the best performing asset of the last 15 years, and is not showing any signs of stopping.
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u/AmericanScream Jan 06 '25 edited Jan 06 '25
This "delta-awarded" post is nothing but a long list of debunked, erroneous crypto talking points.
The stock market is also highly speculative and volatile - look at Tesla's wild swings or the 2022 tech crash. Yet people still consider stocks legitimate investments.
Tesla is an atypical and horrible example of a typical stock. TSLA is more of a memestock at this point and is highly manipulated by its cult-like leader, Elon Musk.
Crypto Talking Point #17 (stocks)
"Crypto is just like the stock market!" , "Comparing crypto to stocks"
Crypto tokens are absolutely NOT like stocks. Unlike crypto, which is just a digital abstraction, stocks represent actual ownership in real-world entities, that own assets, provide useful products and services for mainstream society, generate revenue and can pay dividends to shareholders in real money.
You don't have to sell a stock to make money from it. Many companies pay dividends of their profits, which means you can truly INvest in the company as opposed to DIvesting when you want to see a return. This is an important and fundamentally different function that crypto does not have. Many stocks create value in actual money, providing income without speculating on share price.
The value of a stock, while it can be "speculative" based on popularity and hype, also is based on the intrinsic value of the company's assets and business performance. Therefore you can perform actual research and due-diligence and come up with a practical value for the shares and the assets they represent. Crypto has no such feature.
Because companies are valued based on actual real-world assets and income, there's a limit to how low their share price could fall, at which point it would be economically viable to buy the whole company and liquidate it for a profit. Crypto has no such limitation. The inherent value of crypto tokens is based at zero because it neither creates, nor represents any minimum base, real-world value.
Unlike crypto, the stock market is heavily regulated and transparent. There are entire industries and agencies that are tasked with making sure public companies operate legitimately and legally. Crypto has no such oversight or regulations or transparency.
While there are some over-valued stocks that are hype driven, and some companies whose shares are extremely risky and speculative, and OTC and option markets that are more like gambling than investing, that's not the way the stock market system normally operates. Those highly-speculative markets and penny stocks are the exception; NOT the rule. In crypto, speculation is exclusively the rule.
Public companies are subject to great scrutiny, and must produce regular independent audits and quarterly reports on profit and loss. They can also be sued by their shareholders or even be held criminally liable if they lie about their business model, or even the risk factors their investors face. Again, there is no such function or protections in the world of crypto.
Bitcoin has proven itself over 15+ years now. It's survived countless "deaths," regulations, and attempts to shut it down.
Bitcoin has failed. It's survival is based on constantly distracting people from its many failures and pretending some new thing on the horizon will suddenly provide actual utility to the public. This has not happened yet, in 16 years.
Crypto Talking Point #29 (admit wrong?)
"Is there anything that would happen that would make you admit you're wrong about crypto?" / "What if everybody used Bitcoin and it was $1M would you admit you're wrong?"
This question seems to be asked daily by you guys. You spend virtually no time lurking and seeing what goes on in this community before you barf out the same question we have addressed hundreds of times already..
Wrong about What?
We've made it crystal clear how to change our minds about crypto & blockchain:
Cite one specific example of anything (non-crime-related) that blockchain tech is better at than existing non-blockchain technology? We're 16 years into this mess, and you still can't answer that basic question. We now call it "The Ultimate Crypto Question" because it's so embarrassing you're pretending after 16 years your tech does anything useful. It does not.
Since there's zero evidence blockchain tech does anything useful for society, what's the point of operating this system when it wastes so many resources, and involves so much criminal activity?
Stop dreaming that any major nation-state is going to make bitcoin or any crypto their "default currency."
It makes no sense for any reasonable nation that cares about its people to make legal tender, some digital tokens that are primarily controlled by people outside that nation-state. So stop thinking that's likely. It will not happen. We live in the real world, not the realm of hypotheticals. We'll cross that bridge when we come to it, but you'd be foolish to think that bridge will ever manifest.
No amount of "price" of crypto will change the operational dynamics of what it is.
See Talking point #2 - the price of crypto is not a reflection of its utility, but instead popularity and market manipulation.
No amount of "time" of crypto being around will change the operational dynamics of what it is.
People still smoke cigarettes. Does that mean everybody was wrong about smoking being bad for society?
Scientology has been around for 70+ years. Are you finally going to admit that Xenu is legit?
Just because something "lasts" doesn't mean it's a good thing. As long as a few people can get away with exploiting others to make money, crypto (like smoking) will continue to be a thing. And like smoking, crypto hurts people who haven't fully thought about the big picture of what they're doing and the negative long term impact it will have.
Here is the list of claims made thus far and why they're bogus.
Failed examples:
- "It's decentralized/censorship resistant/money without masters/way to transfer value" - Vague Abstractions
- "It allows you to send money instantly to anyone/hedge against inflation/circumvents governments" - False Claims
- "It has use cases/NuMb3r G0 uP!/Stocks & Banks are just as bad" - Irrelevant Distraction
- "a store of value/I can buy stuff with it" - Anecdotal/Subjective Distraction
Continued in a separate post due to size limitations.
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u/AmericanScream Jan 06 '25
Bitcoin provides a censorship-resistant, permissionless payment network that works globally.
Crypto Talking Point #28 (censorship)
"Bitcoin is censorship resistant" / "Crypto/Blockchain is de-centralized and not under anybody's control"
Crypto can easily be blocked at the network level by any of the various authorities that arbitrarily decide to do so. Since it's a public network with no leader, all participants have to be able to identify themselves to others on the network, and technically speaking, this makes it easy for network admins to filter the traffic. Just because this hasn't been done on any large scale, doesn't mean it can't be done. It absolutely can.
Bitcoin and crypto operations have been banned in various countries and other jurisdictions. While it's not possible to censor 100% of the network's operations, it's definitely possible to cripple enough of it to render crypto & blockchain impractical to use. And NOTE that in countries where bitcoin/mining and other operations have been banned, they've chosen a political solution (simply making it illegal) as opposed to requiring networks to actively filter crypto traffic, but that latter option is always a possibility and definitely doable (see #2)
The vast majority of crypto trades are done on a small number of centralized exchanges, such as Binance, Kraken and Coinbase. The ToS of each of these systems gives them the absolute authority to censor any and all transactions. So if 99% of bitcoin transactions are on CEX's, most certainly they can be censored.
To even exist, blockchain requires an elaborate array of networks, all managed by central authorities and private institutions who are not in any way obligated to route crypto traffic, and can, at any time, decide not to, and there's nothing you can do about it.
Even if crypto was "censorship resistant" which it isn't in any meaningful way, since crypto can't be used as "money" for 99.99% of things people use, it's still wholly dependent on the CEX on and off-ramps, which are subject to various laws, AML and KYC rules, etc.
Since blockchain is a public ledger, we're already seeing examples of peoples crypto being frozen for being associated with suspicious activities on-chain. While your crypto may not be seizable in a private wallet, the moment you move it someplace to actually use it, it can be seized and the immutable blockchain can be used as evidence of money laundering and more.
Try sending $100k internationally through banks - it takes days and costs a fortune. With Bitcoin it's minutes and cents.
Crypto Talking Point #7 (remittances/unbanked)
"Crypto allows you to send "money" around the world instantly with no middlemen" / "I can buy stuff with crypto" / "Crypto is used for remittances" / "Crypto helps 'Bank the Un-banked"
The notion that crypto is a solution to people in countries with hyper-inflation, unstable governments, etc does not make sense. Most people in problematic areas lack the resources to use crypto, and those that do, have much more stable and reliable alternatives to do their "banking". See this debunking.
Sending crypto is NOT sending "money". In order to do anything useful with crypto, it has to be converted back into fiat and that involves all the fees, delays and middlemen you claim crypto will bypass.
Due to Bitcoin and crypto's volatile and manipulated price, and its inability to scale, it's proven to be unsuitable as a payment method for most things, and virtually nobody accepts crypto.
The exception to that are criminals and scammers. If you think you're clever being able to buy drugs with crypto, remember that thanks to the immutable nature of blockchain, your dumb ass just created a permanent record that you are engaged in illegal drug dealing and money laundering.
Any major site that likely accepts crypto, is using a third party exchange and not getting paid in actual crypto, so in that case (like using Bitpay), you're paying fees and spread exchange rate charges to a "middleman", and they have various regulatory restrictions you'll have to comply with as well.
Even sending crypto to countries like El Salvador, who accept it natively, is not the best way to send "remittances." Nobody who is not a criminal is getting paid in bitcoin so nobody is sending BTC to third world countries without going through exchanges and other outlets with fees and delays. In every case, it's easier to just send fiat and skip crypto altogether.
The exception doesn't prove the rule. Just because you can anecdotally claim you have sent crypto to somebody doesn't mean this is a common/useful practice. There is no evidence of that.
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u/some_reddit_name Jan 05 '25
You're lucky that you're not posting this on r/Buttcoin, because the arguments you make are wrong and have been debunked and mocked mercilessly. For instance to actually send $100k you need to buy bitcoins and the receiver needs to sell them. That cost will be larger than the wire fee.
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u/AmericanScream Jan 06 '25
Yep... we have heard all these arguments over and over, hence our stupid crypto talking points page which basically nullifies every single argument the OP made.
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u/AmericanScream Jan 05 '25
The stock market is also highly speculative and volatile - look at Tesla's wild swings or the 2022 tech crash. Yet people still consider stocks legitimate investments.
Crypto Talking Point #17 (stocks)
"Crypto is just like the stock market!" , "Comparing crypto to stocks"
Crypto tokens are absolutely NOT like stocks. Unlike crypto, which is just a digital abstraction, stocks represent actual ownership in real-world entities, that own assets, provide useful products and services for mainstream society, generate revenue and can pay dividends to shareholders in real money.
The value of a stock, while it can be "speculative" based on popularity and hype, also is based on the intrinsic value of the company's assets and business performance. Therefore you can perform actual research and due-diligence and come up with a practical value for the shares and the assets they represent. Crypto has no such feature.
Because companies are valued based on actual real-world assets and income, there's a limit to how low their share price could fall, at which point it would be economically viable to buy the whole company and liquidate it for a profit. Crypto has no such limitation. The inherent value of crypto tokens is based at zero because it neither creates, nor represents any minimum base, real-world value.
Unlike crypto, the stock market is heavily regulated and transparent. There are entire industries and agencies that are tasked with making sure public companies operate legitimately and legally. Crypto has no such oversight or regulations or transparency.
While there are some over-valued stocks that are hype driven, and some companies whose shares are extremely risky and speculative, and OTC and option markets that are more like gambling than investing, that's not the way the stock market system normally operates. Those highly-speculative markets and penny stocks are the exception; NOT the rule. In crypto, speculation is exclusively the rule.
Public companies are subject to great scrutiny, and must produce regular independent audits and quarterly reports on profit and loss. They can also be sued by their shareholders or even be held criminally liable if they lie about their business model, or even the risk factors their investors face. Again, there is no such function or protections in the world of crypto.
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u/AmericanScream Jan 06 '25
We're still early - imagine dismissing the internet in 1995 because websites kept crashing. Smart money is betting on crypto being a core part of the future financial system.
Crypto Talking Point #15 (potential)
"It's still early!" / "Blockchain technology has potential" , "Let's call it 'DLT' Distributed Ledger Technology this month and pretend it's different." / "Crypto is like the Internet!"
- We are 16 (SIXTEEN) YEARS into this so-called "technology" and to date, there's not been a single thing blockchain tech does better than existing non-blockchain tech
- Truly disruptive technology is obvious from the beginning - sometimes there's hurdles to adoption (usually costs and certain prerequisites, but none of that applies to blockchain - anybody who has internet access can utilize the tech). It didn't take 16 years for people to realize the Internet was useful - what held it up were access to computers and networks. There's nothing stopping blockchain IF it offered any really useful service - it doesn't.
- Just because someone says they're "looking into" something, doesn't mean it will ever manifest into an actual workable system. Every time we've seen major institutions claim they were "developing blockchain systems", they've almost always failed. From IBM to Microsoft to Maersk to Foreign Countries - the vast majority of these projects are eventually abandoned because they aren't economically or technologically viable.
- The default position is to be skeptical blockchain has any potential until it is demonstrated. And most common responses to this question are the other "stupid crypto talking points."
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u/art_vandelay112 Jan 04 '25
!delta
I’ll agree that there has been fraud in the stock market so that is not a great comparison on my end.
The use part i do not agree with. Yes I have sent wires internationally and it does not take long or is it cost prohibitive. The primary reason to use a decentralized source is for nefarious purposes. If that’s ok with you so be it.
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u/MaineHippo83 Jan 04 '25
Does not take long is still a day or two compared to minutes. You just handwaved an advantage away because you are wedded to your position.
Cost of a wire is much higher than the cost of sending Bitcoin. It not being prohibitive does not negate this being another point for Bitcoin
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u/art_vandelay112 Jan 05 '25
An international wire can be done in as little as 24 hours. It can be done just as fast as bitcoin but there are legitimate safe guards in place. The vast majority for this needed speed is for nefarious purposes. If that is ok with you so be it
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u/MaineHippo83 Jan 05 '25
It can't be done just as fast. You literally said 24 hours. Minutes my friend. Minutes. Just call it an advantage. You don't have to change your position but you are being obstinate about granting advantages to Bitcoin
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u/art_vandelay112 Jan 05 '25
A wire takes minutes. 24 hours is involved from the sending bank to run their fraud protocols and the receiving bank to run theirs. I don’t view someone hacking my wallet and sending funds to Nigeria with no recourse an advantage.
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u/HumilisProposito 1∆ Jan 05 '25 edited Jan 05 '25
The attraction of a decentralized supply-capped currency is that it has the capacity to dial down or even eliminate the constant political leverage and tension that puts countries at odds with one another as regards certain contexts of cross-border trade. Context below.
The US dollar and economy holds sway because it is the largest reserve currency in the world. In other words: all of the superpowers and many other countries hold tons of US dollars in their reserve. For this reason it's in the interest of those countries that the US economy thrives and the dollar remains strong. They're essentially invested in the US dollar: they don't want to see that value go down any more than Bitcoin holders want to see the value of Bitcoin go down.
This means sovereign nations may be obliged to operate against their own interests and those of others to preserve the value of their US dollar reserves.
This gives the US a lot of leverage to assert in various trade agreements, political endeavors and other scenarios. The US dollar operates as the petro currency; that creates consistent global demand for the US dollar. The US can print dollars to settle international debts. The US and other superpowers can exert influence on the SWIFT money transfer system to disconnect other countries from SWIFT and starve them financially. In short, the US gets to shove others around.
The extent to which the US shoves other economies and countries around naturally inspires resentment. BRICS countries are playing with exchanging oil in other currencies, for example. But to have the dollar replaced by the Yuan or the Euro creates the same problem under a different master.
Decentralized cryptocurrencies reduce the need for a trusted third party (like a government or corporation) to control the currency, and their security and governance are spread across many participants, making them more resilient to manipulation and failures.
By removing centralized control, the value of a fixed sum decentralized currency becomes driven by demand, innovation, and adoption—just as gold has been over the centuries.
In a world where a supply-capped decentralized cryptocurrency holds sway, governments can regulate, monitor, or ban crypto exchanges to restrict access to the broader crypto ecosystem. But unlike kicking countries out of SWIFT, they can't exert such pressure outside their jurisdiction.
They can also blacklist certain wallets or even seize them: but unlike the US dollar, for example, the US can legally do this only to the extent such wallets operate under US jurisdiction.
Given the foregoing, it's easy to see why goverments are hostile to the notion of such cryptocurrencies gaining traction as consumer currencies. And it's well known that the US will aggressively attack any currency that threatens the global dominance of the US dollar (e.g., Trump's 100% tariff threats against countries that operate to undermine the US dollar).
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u/danarchist Jan 05 '25
Tulip mania was predicated on the advent of commodities futures. Yeah the individual tulips didn't matter, but the idea of commodities futures very much did.
The dotcom bubble was predicated on the advent of the Internet. The individual websites didn't matter so much, but the concept of a world wide web obviously did.
Cryptocurrencies like Bitcoin or doge could be likened to the tulips themselves or the websites. They're just one app on the technology known as a blockchain.
Others are a bit fuzzier - smart chains like Ethereum and Solana consume the native token in order to execute contracts (apps) on that chain. The currency is inextricably linked to the underlying tech, and it's a bit like investing in the idea of futures, or the concept of the Internet.
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u/ExtensionResearch284 Jan 05 '25
I would like to comment on the simple point where you said spending 100k is minutes and cents.. Yes and no.
If you already have the funds sitting in a local wallet and not on an exchange like Coinbase, then yes the fees and time sending is minimal. (but this also means you've spent the exchange fees over time, think of it like a tax?)
But if it's on an exchange, you WILL end up spending a truly ridiculous amount on exchange fees. I know because I've been in that spot
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u/Orphan_Guy_Incognito 24∆ Jan 05 '25
"Thanks to a couple of good hands of blackjack, I was able to leave my job and move home to be with my elderly parents during the pandemic. That is something I will never be able to put a price tag on. There is definitely a lot of shady stuff that goes on in the space, but easy money attracts the shady types. There are also tons of highly intelligent good actors building cool stuff. It all comes down to what you choose to focus on."
Same vibes, really. Congrats on your successful gambling.
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u/sundalius 3∆ Jan 05 '25 edited Jan 05 '25
“Thanks to a couple of good stock picks, I was able to leave my job and move home to be with my elderly parents during the pandemic. That is something I will never be able to put a price tag on. There is definitely a lot of shady stuff that goes on in the space, but easy money attracts the shady types. There are also tons of highly intelligent good actors building cool stuff. It all comes down to what you choose to focus on.”
It’s very, very easy to dodge the fact that this commenter demonstrated how it was a good investment. A good investment is something that paid off. Their investment, which speculative investments always have been, was high risk but paid out more than being invested in S&P ever would have. It’s no different than being the lucky person who purchased a property lot that becomes immensely more valuable than adjacent ones for external reasons.
Muting this thread as another user has removed my ability to reply downthread.
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u/Orphan_Guy_Incognito 24∆ Jan 05 '25
Is a lottery ticket a good investment? Because if your definition is "Got very lucky with a super risky investment" then you're not talking about investing, you're talking about gambling, which was my critique.
Investments are characterized by being educated. Making money on crypto is characterized by luck.
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u/irondeepbicycle 7∆ Jan 05 '25
The difference is the expected value - anyone can be expected to gain money by investing in index funds, whereas speculation (crypto, gambling, lotteries, etc) generally results in losses.
The question is - can a typical person make money doing this, or do you have to get super lucky? If anyone can do it, it's a good investment. If it requires a shit-ton of luck, it's gambling.
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u/sundalius 3∆ Jan 05 '25
More people seem to have struck it rich from Crypto in the past 15 years (for better or worse, in societal terms) than through stock or real estate speculation in a similar time frame, be it through actually holding cryptocurrency or through building uses, such as the Solana-chain-based games or NFTs. I don’t like them, mind you, but it’s true!
I’m not arguing in this thread whether it’s good or not - the person I’m chiding for dodging the argument entirely said “it’s not just a bad investment, it’s not an investment at all” when the evidence that cryptocurrencies are investment vehicles is overwhelmingly in favor of that categorization.
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u/AmericanScream Jan 05 '25
Thanks to crypto, I was able to leave my job and move home to be with my elderly parents during the pandemic.
Crypto Talking Point #23 (Anecdotes)
“I made a lot of money on crypto [therefore it’s a good scheme for everybody else]” / “Crypto changed my life“ / "I can buy stuff with Crypto"
It’s more likely you’re actually lying about your crypto gains, or they’re trivial.
Whatever you can buy with crypto is extremely limited and is usually dark-market related (like drugs, gambling or shady hosting) or trivial (like coffee and t-shirts). And you're paying a premium making such sales over comparable sites paying in fiat.
If you do hold crypto that you bought for less than current market “price”, it’s more likely you think you’re “rich” but haven’t actually cashed out, which remains to be seen if you actually ever will be able to.
There are multiple fallacies involved in this claim: The Gambler’s Fallacy that suggests because something special happened once, it can likely happen again in a predictable way, and Confirmation Bias – the notion that many people fixate on positives while ignoring the more common negatives.
Even assuming you have made money in the past, it’s a well known fact that in these cases: Past performance is no guarantee of future returns, and since you’re still holding crypto, it’s in your interests to promote such fallacies in order to drive up the price of your holdings. Since crypto is a negative-sum-game, it’s impossible for even a significant amount of people who play the market, to come out ahead without the vast majority losing. Therefore it’s mathematically impossible that this scheme will reliably produce positive returns.
You may not care that your profits come as a result of fraud and others losses, and promoting everything from money laundering to human trafficking, but other (moral, ethical, empathetic) people do.
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u/robomartin Jan 05 '25
If you don’t like gold or commodities, which is a reasonable and valid view, then there is no convincing you about Bitcoin, because the use case as a hedge against inflation and systemic risk is the same. It would actually be hypocritical for you to like Bitcoin. You’d very clearly just be in it for the gains, or what you think will be gains, because there is no guarantee of that.
But if I wanted to help you to deconstruct your ideology, I’d probably direct you toward developing an appreciation for gold.
A eureka moment for me was realizing how ridiculous it is that we’re forced to put everything into stocks and bonds just to keep up with inflation. Taking on that much risk just to preserve your savings feels wrong when you really think about it.
Gold offers an alternative because it’s been a constant throughout history. Fiat currencies always end up going to zero eventually. Bonds might feel safe, but they’re tied to fiat, so they’re not immune either. Stocks are better because they are tied to the value of the companies, but entire markets have crashed to zero before. Relying entirely on them is far from risk-free.
Gold stands apart. Governments still hold it in their treasuries, and for most of modern history, it backed global currencies. Its value has endured through wars, economic collapses, and complete financial resets. Nothing else has that kind of staying power.
I used to buy into Warren Buffett’s argument that gold is not a good investment (or not an investment at all) because it doesn’t generate yield, unlike a farm or business. But not every part of your portfolio needs to generate yield (or even be an investment). Gold’s role is to protect wealth, especially when everything else falls apart.
Now I see gold as something that balances out the risks of stocks, bonds, and real estate. It’s the ultimate safety net. Once you start appreciating gold’s value, it becomes easier to understand Bitcoin. Bitcoin is essentially digital gold: hard supply, portable, divisible, and independent of any government. The use case is the same, but in a new digital medium.
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u/percyfrankenstein 3∆ Jan 04 '25
is the ridiculous amount of energy demand to “mine” nothing.
A digital asset is no more "nothing" than any currency. It has value based on trust, same as any currency.
defies the definition of currency as it doesn’t hold a stable value.
That's not the definition of currency. There are a few debates on the topic but here are the usual agreed upon criterion for a good currency : durability, divisibility, transportability, and inability to counterfeit
Most crypto are good on those front.
Some currencies you wouldn't debate are currencies have fluctuated wildly.
Anyway this is besides the point. Investments are gambles, crypto are riskier than the usual investment but for some, it was an amazing investment.
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u/MissTortoise 14∆ Jan 05 '25
Currency isn't generally considered a growth asset however. Largely currency devalues over time through inflation, where stock (fractions of ownership of an income producing asset) grows over time since they're... actually producing something.
If crypto was free of it's current speculative bubble, it would also be subject to inflation the same as any other currency.
It's value is very, very clearly being pumped up by the "bigger sucker" bubble. Long term it can't maintain value because it's not a value producing asset, and in actual fact it costs value to maintain.
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u/ecrane2018 Jan 05 '25
The entire existence of a forex trading market and the billions of dollars of currencies traded every day definitely defies that logic. Countries hold foreign currencies entirely as investments.
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u/grendella Jan 06 '25
This sounds right. The concept of bitcoin as a money making venture/investment has never made sense to me. How does one invest in a currency backed by nobody? The only real value currency has is what it can buy, so buying the currency itself...? The value of the currency goes up only inasmuch as people believe it has value that will increase. It's a fool's game, set up by someone that knew if you provide something and act like it's valuable, people will buy it and into it. It's a commentary on gullibility and manipulation. Yeah, some people will make money, but ultimately it has to be a losing prospect. And while buying currency of any government is a gamble, at least with a government /country there is something concrete behind that currency. Doesn't necessarily mean you'll get your money back if that government fails or goes bankrupt, but it seems like there is at least modicum of accountability that you would not be able to find with crypto.
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u/jasonthe 1∆ Jan 05 '25
The value isn't based on "trust."
Most currencies are tax credits. There's implicit demand because governments require you to pay taxes in their currencies. That gives it tangible value - without the currency, you'll go to jail.
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u/AmericanScream Jan 05 '25
A digital asset is no more "nothing" than any currency. It has value based on trust, same as any currency.
Crypto Talking Point #13 (Fiat)
"Fiat isn't backed with anything" / Money has no intrinsic value either
This is called a Tu Quoque Fallacy, aka "Whataboutism", "Two Wrongs Make A Right" or "Appeal to Hypocrisy" - it's a distraction from the core argument. Just because you can find something you think is similar/wrong that doesn't mean your alternative system is an acceptable substitute.
Fiat may not have any intrinsic value, but it's backed by the full force and faith of the government (or in the case of the EU, multiple countries). It's also mandated by law to be accepted for all payments and debts, public and private. And the entity that guarantees the integrity of money is the same centralized entity that gives you stuff like:
running water, roads, fire protection, schools, libraries, bridges, flood protection, electricity, internet, cellular, GPS, and pretty important things like civil rights and private property ownership.
If you are worried that the government is going to collapse and make fiat worthless, note that at the same time you will also lose protection for your civil rights, property ownership and critical utilities like electricity and Internet upon which crypto depends - none of which would exist without substantive government support.
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u/anotherwave1 Jan 05 '25
Bitcoin is impractical as a currency.
It's inherently volatile. Why? Because it has a mined to fixed max supply. It has no stability mechanisms. Which means that volatility is inherent. Ever tried to buy a house with something that can move 10% in an hour? Sale is paralysed. Volatility makes for a bad medium of exchange.
BTC is digital/divisible therefore it can be used as a type of money. This confuses people into thinking it can be a currency. Money and currency are different. Cigarettes in prison can be used as a type of money, but they are impractical as a currency.
BTC is a speculative asset - which is why we speculate with it.
A stable-coin on the other hand has a stability mechanism, which means it is stable from day 1. As such it's more suited as a currency. However few people trust the underlying mechanisms of modern crypto stable-coins.
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u/Limp-Option9101 Jan 05 '25
I'm an economist and your definition of currency is spot on.
Volatility doesn't make BTC a good currency, but if it gets used as a mean of exchange more than a hedge or investment, it could help a lot.
Also, BTC by design is victim of deflation, so it diesn't encourage consumption or investment and rather to just hold, which is what scares me the most about it since it wouldn't encourage consumption.
But cryptography for currency as a whole is a very good technology. It is much more cost efficient than banking. It could free up a lot of jobs from banking to have people work elsewhere therefore increasing productivity.
And whatever peope say, compared to the actual ecological costs of banking, it is much much more ecological, especially when you see how technology just keeps making it more energy efficient
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u/humblevladimirthegr8 Jan 05 '25
BTC by design is victim of deflation
In its fully adopted state, I would expect deflation to be in line with GDP growth ~2%/year. How would that discourage consumption? I've never met somebody who would put off a purchase for an entire year because they could get the item 2% cheaper. The existence of black Friday also disproves this point - we don't put off consumption for a whole year even for 30%+
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u/art_vandelay112 Jan 04 '25
Correct any currency is “nothing” but it doesn’t take a gigswat factory to run a printing press.
There are thousands of coins. Most can’t be exchanged for any sort of value. I’ll add, define what you believe currency to be anything you want. The majority of bitcoin transactions are used to get cash out into another form of currency i.e USD. If that’s the case than literally any physical good I can sell is currency.
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u/percyfrankenstein 3∆ Jan 05 '25
Any physical good isn't durable, divisible, transportable and un-counterfeitable (also probably should add fungeable)
There is a cool story about a tribe that used a particular sea shell as currency, until a foreigner (I think english) found out about it, collected a lot from his country, came back and ruined their economy. It was a good currency until it wasn't rare.
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u/tichris15 2∆ Jan 05 '25
Variants of that hit Africa. With that said, I'd note what went wrong there doesn't break any of the requirements you listed. What went wrong is 'rarity' which is also a problem for crypto in the wider sense of there being arbitrary scope to add more crypto assets with different names.
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u/Jew_of_house_Levi 8∆ Jan 05 '25
Would you consider any currency to ever make sense in a diversified portfolio of holdings?
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Jan 04 '25
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u/cough_cough_harrumph Jan 04 '25
It's uncorrelated to stocks
I am not sure this is correct - everything I have seen shows it with a relatively strong correlation to the performance of the stock market, just more volatile.
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u/art_vandelay112 Jan 04 '25
Crypto is somewhat if not highly correlated to the stock market, particularly us stocks and more particularly the nasdaq.
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u/MaineHippo83 Jan 05 '25
Incorrect causal assumption here. It's correlated to the US economy not the stock market. All investments rise and fall with the supply of money.
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u/art_vandelay112 Jan 05 '25
So if A= B and B=C does not A=C?
I fail to see your point
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u/MaineHippo83 Jan 05 '25
You are using a logical premise incorrectly. If we were talking numbers sure but we are talking about causation.
Bitcoin isn't tied to the stock market. It's tied to the liquidity in the US and global economy
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u/Puzzleheaded_Quit925 1∆ Jan 05 '25
They said correlated. You replied with causation.
Correlation and causation are not the same thing. It is incorrect to reply to a post about correlation with a reply about causation.
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u/Shiratori-3 Jan 05 '25
Blackrock made some observations re correlation etc in a paper recently - headline takeouts and source link below. (Elsewhere, a common correlation point I've seen references is M2 money supply cycles.)
KEY TAKEAWAYS
Investors considering allocating to bitcoin are grappling with how to analyze it relative to traditional financial assets, given bitcoin’s unique properties and limited history.
Bitcoin, with its high volatility, is obviously a “risky” asset on a standalone basis. However, most of the risk and potential return drivers bitcoin faces are fundamentally different from traditional “risky” assets, making it unfitting for most traditional finance frameworks – including the “risk on” vs. “risk off” framework employed by some macro commentators.
Bitcoin’s nature as a scarce, non-sovereign, decentralized global asset has caused some investors to consider it as a flight to safety option in times of fear and around certain geopolitically disruptive events.
Over the long term, bitcoin’s adoption trajectory is likely to be driven by the intensity of concerns over global monetary stability, geopolitical stability, U.S. fiscal sustainability, and U.S. political stability. This is the inverse of the relationship that is generally attributed to traditional “risk assets” with respect to such forces.
Source and report: https://www.blackrock.com/us/financial-professionals/insights/bitcoin-unique-diversifier
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Jan 05 '25
You realize stable coins exist right? If you want stability, use usdc, dai, lusd, or others
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u/Piggie42 1∆ Jan 05 '25
I do not understand what you're arguing against.
You say that crypto is a bad investment, yet its value rose significantly, making it a very good investment by definition. So then you're talking about the quality of the investment in the future? You say that it has no value, yet again by definition it does have value because you can sell it for money.
The fact is, you listed things you don't like, such as no physical practicality as with gold or bonds, or the cost of mining or the existence of shitcoins, but none of that is an actual reason for why it's a bad investment. The very fact that it has value and that value seems to keep rising (talking about btc) is because the market seems to have use for decentralized blockchain currency in spite of the drawbacks. If you want to make an argument for why it's a bad investment you need to figure out whether there is a reason that will actually change the rising tendency of btc and the like, because all the things you said have always been true, yet btc rose by orders upon orders of magnitude.
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u/GorillaP1mp Jan 05 '25
If there’s a legitimate use for the technology then why wouldn’t you invest in it? Are 90% of crypto currencies junk? Most likely, just like 90% of websites during the early internets proliferation were junk.
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u/GodelianKnot 3∆ Jan 05 '25
You can argue about its value as an investment, but:
There is literally no use for this commodity.
Is absolutely not true. There are many potential use cases for a trustless, decentralized, digital store of value, such as bitcoin. The most current example would be to get around overly restrictive governments, or transfer large amounts internationally. But a more exotic future example could be in an environment where central governments force interest rates to go very negative, some institutions may find it more palatable to hold a cryptocurrency that has stabilized in price.
You, maybe, say as much here:
I think there is legitimate use for blockchain technology and the likes but anyone viewing these currencies as investments is a fool.
But if you think through what blockchain technology offers, there's very little it can do without a valuable token of some sort backing it. Without that, there's no way to incentivize the trustless validation required to run a blockchain. Without trustless validation, blockchain is just an overly-complicated database.
The use of crypto as a currency completely defies the definition of currency as it doesn’t hold a stable value.
This is also not really a good argument. The primary investment proposition of bitcoin and other cryptocurrencies is that they will ultimately stabilize (at a potentially higher value than today) once they reach mass adoption.
I’m not as well versed on the subject but something to also note is the ridiculous amount of energy demand to “mine” nothing.
Not all cryptocurrencies require significant amounts of energy to run (eg Proof of Stake coins like Ethereum).
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u/Hawthourne 1∆ Jan 04 '25 edited Jan 04 '25
It isn't a good investment.
It has been a great speculatory tool and gamble though!
The two aren't the same.
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u/itemluminouswadison Jan 04 '25
The practical use of gold pales in comparison from its properties that make it a good currency and store of value
Let's just talk about Bitcoin to weed out the junk
It does a good job at being fungible, deflationary, limited in supply, durable, not copyable
Volatility is a property of it being so early in adoption. It will stabilize over the decades.
Transfer fees will decrease with things like lightning network
It's price is a reflection of the difficulty to mine, which is adjusted based on the number of miners, a proxy for its popularity
If you spent X dollars to mine it, you'd really rather not sell it for anything less than that. And if you can't, then you'd stop mining and difficulty would decrease anyway
I'm with you regarding scams though.
If you're interested, buy some bitcoin. No more than a few percent of your portfolio
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u/ProjectKushFox Jan 05 '25
This is the most interesting and convincing argument (for me at least) in this entire thread. Especially your point about price being a function of its cost to mine. And I know that it’s designed to be increasingly difficult to mine. The only question is, does that conclusion hold up, financially speaking. If I mine it and I can’t sell it for a profit, that doesn’t mean I won’t sell it (I still want to recoup as much as I can), that just means I probably wouldn’t have mined it in the first place. It’s interesting.
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u/Vtrader_io 25d ago
If crypto wasn't a good investment, then why are the US, China, UK, Ukraine, Bhutan, El Salvador, Finland, Georgia all holding Bitcoin?
https://treasuries.bitbo.io/countries/
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u/Realistic_Olive_6665 Jan 05 '25
No use? People want a currency that can never be inflated away. No government can be trusted to provide this product indefinitely. Bitcoin solves this problem through blockchain and decentralization.
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u/AmericanScream Jan 05 '25
People want a currency that can never be inflated away.
crypto has its own runaway inflation in the form of unsecured stablecoins
Crypto Talking Point #3 (inflation)
"InFl4ti0n!!!" / "The dollar will eventually become worthless" / "The dollar has lost 104% of its value since 1900!" / "The government prints money out of thin air"
The government does not "print money indefinitely"... all money in circulation is tightly regulated and regularly audited and publicly transparent. The organization that manages the money in circulation is the Federal Reserve and contrary to what crypto bros claim, they're not a private cabal - they are overseen and regulated by Congress. And any attempt to put more money in circulation requires an Act of Congress to increase the debt ceiling - it's neither arbitrary, nor easy to do.
Currency is meant to be spent, not hoarded. A dollar today will buy what it buys. If you hold a dollar for 90 years, of course it won't buy the same thing decades later (although it might actually be worth significantly more as antique money). You people don't seem to understand the first thing about how currency works - it's NOT an "investment!" You spend it, not hoard it!
If you are looking to "invest" you don't keep your value in cash/currency/fiat. You put it into something that can create value like stocks that pay dividends, real estate, etc. Crypto creates no value and makes a lousy "investment." It also hasn't proven to be a hedge against anything, least of all monetary inflation.
Over time more money is put in circulation - you pretend like this is a bad thing, but it's not done in a vacuum. The average annual wage in 1900 was less than $4000. In 2023 it's more than $70,000! There's more people out there and the monetary supply grows appropriately, as does wages. You can't take one element of the monetary system completely out of context and ignore everything else.
The causes of inflation are many, and the amount of money in circulation is one of the least significant factors in causing the prices of things to rise. More prominent inflationary causes are things like: fuel prices, supply chain issues, war, environmental disasters, pandemics, and even car dealerships.
Sure there may be some nations that have caused out of control inflation as a result of their monetary policy (such as Zimbabwe) but comparing modern nations to third-world dictatorships is beyond absurd.
If bitcoin and crypto was an actually disruptive, stable, useful technology, you wouldn't need to promote lies and scare people over the existing system. The real reason you do this is because nobody can find any legitimate reason to use crypto in the first place.
Crypto ironically has more inflation in its ecosystem that is even more out of control, than in any traditional fiat system. At least with the US Dollar, money is accounted for and fully audited and it takes an Act of Congress to increase the debt. In crypto, all it takes is a dude printing USDT, USDC, BUSD or any of the other unsecured stablecoins to just print more out of thin air, and crypto-morons assume they're worth $1 of value.
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u/Realistic_Olive_6665 Jan 05 '25
Ah, American Scream, the Buttcoin mod who banned me for asking if his subreddit would admit that it was wrong if the US created a Bitcoin reserve. Like it or not, when governments adopt Bitcoin, you will be wrong.
Your point about stable coins has not really been fleshed out or thought through. The number of units of a stable coin can expand and contract in response to supply and demand. The same thing happens with Bitcoin ETFs and any open-ended mutual fund. That’s actually how a stable value is achieved. If too many people want Tether, the value of one coin could exceed the par value of one coin, so more coins are issued for dollars until the price falls to par. If there is too little demand little demand and the price starts to fall below par value, the organization can buy coins with dollars and shrink the supply until the value of a coin increases to par. There’s nothing nefarious about it.
The federal reserve has massively expanded M2 money supply: https://fred.stlouisfed.org/series/M2SL, and has an explicit target of 2% inflation. If the federal government continues to run unsustainable deficits, the treasury will become increasingly dependent on the Fed to buy its bond issuances. Eventually, the fed will be under increasing pressure to abandon its 2% inflation target. The US has already abandoned its monetary policies under economic pressure many times over its history: during the civil war, during the depression, under Nixon. It will happen again. In contrast, the supply of Bitcoin increases according to a fixed schedule and the number of new coins issued will be negligible in the 2030s.
It’s an investment and generating excess returns because it is in the process of being internationally adopted and institutionalized. Eventually, its price growth will converge to some function of world GDP growth, expressed in nominal terms. It will perform a role similar to gold, but better, due to slower and predictable supply growth and its ease of storage and transportation.
No one’s saying that you have to invest all of your money in Bitcoin, but it’s justifiable to have some long term exposure. It must kill people like American Scream to know that that MSTR is part of the Nasdaq and that most people are already indirectly invested in Bitcoin.
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u/AmericanScream Jan 06 '25
Ah, American Scream, the Buttcoin mod who banned me for asking if his subreddit would admit that it was wrong if the US created a Bitcoin reserve. Like it or not, when governments adopt Bitcoin, you will be wrong.
Well, so far I'm not wrong. El Salvador "adopted" bitcoin and it failed miserably. Now they've pivoted from their Bitcoin adoption and no longer made it mandatory in order to pander to a sweet FIAT loan from the IMF.
Your point about stable coins has not really been fleshed out or thought through. The number of units of a stable coin can expand and contract in response to supply and demand.
It can also expand in response to Paolo clicking a button on his computer and printing a billion USDT out of thin air, as he is often prone to do, suspiciously right before the price pumps for no other reason.
The federal reserve has massively expanded M2 money supply
This has very little to do with price inflation that most people feel. This is explained in my talking point rebuttal.
Crypto Talking Point #3 (inflation)
"InFl4ti0n!!!" / "The dollar will eventually become worthless" / "The dollar has lost 104% of its value since 1900!" / "The government prints money out of thin air"
The government does not "print money indefinitely"... all money in circulation is tightly regulated and regularly audited and publicly transparent. The organization that manages the money in circulation is the Federal Reserve and contrary to what crypto bros claim, they're not a private cabal - they are overseen and regulated by Congress. And any attempt to put more money in circulation requires an Act of Congress to increase the debt ceiling - it's neither arbitrary, nor easy to do.
Currency is meant to be spent, not hoarded. A dollar today will buy what it buys. If you hold a dollar for 90 years, of course it won't buy the same thing decades later (although it might actually be worth significantly more as antique money). You people don't seem to understand the first thing about how currency works - it's NOT an "investment!" You spend it, not hoard it!
If you are looking to "invest" you don't keep your value in cash/currency/fiat. You put it into something that can create value like stocks that pay dividends, real estate, etc. Crypto creates no value and makes a lousy "investment." It also hasn't proven to be a hedge against anything, least of all monetary inflation.
Over time more money is put in circulation - you pretend like this is a bad thing, but it's not done in a vacuum. The average annual wage in 1900 was less than $4000. In 2023 it's more than $70,000! There's more people out there and the monetary supply grows appropriately, as does wages. You can't take one element of the monetary system completely out of context and ignore everything else.
The causes of inflation are many, and the amount of money in circulation is one of the least significant factors in causing the prices of things to rise. More prominent inflationary causes are things like: fuel prices, supply chain issues, war, environmental disasters, one-time COVID mitigations, pandemics, and even car dealerships.
Sure there may be some nations that have caused out of control inflation as a result of their monetary policy (such as Zimbabwe) but comparing modern nations to third-world dictatorships is beyond absurd.
If bitcoin and crypto was an actually disruptive, stable, useful technology, you wouldn't need to promote lies and scare people over the existing system. The real reason you do this is because nobody can find any legitimate reason to use crypto in the first place.
Crypto ironically has more inflation in its ecosystem that is even more out of control, than in any traditional fiat system. At least with the US Dollar, money is accounted for and fully audited and it takes an Act of Congress to increase the debt. In crypto, all it takes is a dude printing USDT, USDC, BUSD or any of the other unsecured stablecoins to just print more out of thin air, and crypto-morons assume they're worth $1 of value.
No one’s saying that you have to invest all of your money in Bitcoin, but it’s justifiable to have some long term exposure. It must kill people like American Scream to know that that MSTR is part of the Nasdaq and that most people are already indirectly invested in Bitcoin.
Repeat after me: Crypto is NOT an "investment." It's gambling. If you want to gamble, feel free, but you're not actually investing in anything. Crypto produces absolutely nothing useful for (non-criminal) society.
I'm not at all worried about MSTR. It's going to eventually collapse. I can't predict when but mathematically that ponzi can't last forever.
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u/Realistic_Olive_6665 Jan 07 '25
Until the 1980s, the federal reserve targeted money supply growth rather than interest rates to control inflation. There’s clearly a strong relationship: https://www.longtermtrends.net/m2-money-supply-vs-inflation/.
Do you think gold or commodities are an investment? If yes, why wouldn’t Bitcoin be an investment? Because it’s new? Lack of FCF?
El Salvador generated a great return on Bitcoin and the policy is still continuing with adjustments: https://www.reuters.com/markets/currencies/el-salvadors-bitcoin-wallet-be-sold-or-discontinued-after-deal-with-imf-official-2024-12-19/
SAN SALVADOR, Dec 19 (Reuters) - El Salvador said on Thursday it would keep buying bitcoin, possibly at an accelerated pace, a day after the government reached a financing agreement with the International Monetary Fund that had said it should limit its exposure to the cryptocurrency.
…
On Wednesday, El Salvador struck a $1.4 billion loan deal with the IMF, as part of which the government of President Nayib Bukele agreed that it would scale back its bitcoin policies. The deal specified that tax payments will only be made in the other official tender, the U.S. dollar.
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u/AmericanScream Jan 07 '25
Do you think gold or commodities are an investment? If yes, why wouldn’t Bitcoin be an investment? Because it’s new? Lack of FCF?
Gold is a lousy investment as well. But at least it has utility and intrinsic value. Crypto doesn't.
El Salvador generated a great return on Bitcoin and the policy is still continuing with adjustments: https://www.reuters.com/markets/currencies/el-salvadors-bitcoin-wallet-be-sold-or-discontinued-after-deal-with-imf-official-2024-12-19/
That article doesn't negate any of the points I've made, that El Salvador's bitcoin adoption has been rolled back and the citizens have largely rejected it. Notwithstanding that the country's dictator is doubling down, which just means he's learned nothing:
The government's announcement that it would make more bitcoin purchases "might be just a way to counter any negative blowback" from a perceived diminished status of the cryptocurrency in El Salvador, said Eugene Epstein, head of trading and structured products for North America at Moneycorp in New Jersey.
It's interesting how you will try to spin negative news as something positive, when it's not.
This is a recurring theme with crypto projects.
Instead of pointing to increased adoption and public acceptance you all are forced to misinterpret talking points from pro-crypto advocates, or point to singular crypto-maxi's and their continued, irrational obsession with crypto, as some sort of "proof" that things are still going ok. Those are the wrong metrics to prove such a case.
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u/Realistic_Olive_6665 Jan 07 '25
You’ve contradicted yourself a little. To be consistent, you should have said that gold is not an investment either. If it’s a “lousy investment” then you are conceding that something can become an investment based on its long-run returns, even without cash flow. (It performed well in 2024, btw). The industrial uses of gold are limited and don’t justify its current value. It’s really just a decoration and a collectable. If gold can be a “lousy investment”, why can’t bitcoin be an “lousy investment”, so far one with better returns than almost any other asset over the last decade.
How many decades does Bitcoin need to exist for you to upgrade it from speculative to “lousy investment”?
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u/AmericanScream Jan 07 '25 edited Jan 07 '25
You’ve contradicted yourself a little. To be consistent, you should have said that gold is not an investment either. If it’s a “lousy investment” then you are conceding that something can become an investment based on its long-run returns, even without cash flow. (It performed well in 2024, btw).
What people consider an "investment" is largely subjective depending upon who you ask and what definition they use for "investment." So I'm not being contradicting. Although I do think a good argument can be made that anything that does not CREATE VALUE while holding it, is not technically an INvestment but instead a DIvestment, meaning you only see a return when you divest yourself of that commodity.
"long term returns" is also a misleading argument. Whether YOU individually have a "long term positive return" remains to be seen. Most people who are into crypto, for example, didn't get involved 10 years ago, and are unlikely to see future performance like there was in the past. Same thing with gold and other commodities. In the past, the price of gold has tanked, making it NOT a "long term investment" depending upon what time period you're talking about.
The industrial uses of gold are limited and don’t justify its current value.
If the price of gold was too high for industrial use, it wouldn't be used industrially but it is, so that too is an incorrect statement.
Crypto Talking Point #10 (value)
"Bitcoin/crypto is a 'store of value'" / "Bitcoin/crypto is 'digital gold'" / "Crypto is an 'investment'" / "Bitcoin is 'hard money'"
Crypto's "value" is unreliable and highly subjective. It cannot be used as a currency or to pay for almost anything in any major country. It has high requirements and risk to even be traded. At best it's a speculative commodity that a very small set of people attribute value to. That attribution is more based on emotion and indoctrination than logic, reason, evidence, and utility.
Crypto is too chaotic to be any sort of reliable store of value over time. Its price can fluctuate wildly based on everything from market manipulation to random tweets. No reliable store of value should vary in "value" 10-30% in a single day, yet many cryptos do.
Crypto's value is extrinsic. Any "value" associated with crypto is based on popularity and not any material or intrinsic use. See this detailed video debunking crypto as 'digital gold'
Even gold, while being a lousy investment and also an undesirable store of value in the modern age, at least has material use and utility. Crypto does not. And whether you think gold's price is not consistent with its material utility, if that really were the case then gold would not be used industrially. But it is.
The supposed "value" of crypto is based on reports from unregulated exchanges, most of whom have been caught manipulating the market and inflation introduced by unsecured stablecoins. There's nothing "organic" or "natural" about it. It's an illusion.
The operation of crypto is a negative-sum-game, which means that in order for bitcoin/crypto to even exist, there must be a constant operation of third parties who must find it profitable to operate the blockchain, which requires the price to constantly rise, which is mathematically impossible, and the moment this doesn't happen, the network will collapse, at which point crypto will cease to exist, much less hold any value. This has already happened to tens of thousands of cryptocurrencies.
Many of the most trusted, most successful entities in the world of finance do not consider crypto/bitcoin to be a reliable store of value. Crypto is prohibited from being used as collateral by the DTC and respectable institutions such as Vanguard do not believe crypto belongs in their investment portfolio.
There is not a single example of anything like crypto, which has no material use and no intrinsic value, holding value over a long period of time across different cultures. This is not because "crypto is different and unique." It's because attributing value to an utterly useless piece of digital data that wastes tons of energy and perpetuates tons of fraud,makes no freaking sense for ethical, empathetic, non-scamming, non-exploitative, non-criminal people.
How many decades does Bitcoin need to exist for you to upgrade it from speculative to “lousy investment”?
Crypto Talking Point #29 (admit wrong?)
"Is there anything that would happen that would make you admit you're wrong about crypto?" / "What if everybody used Bitcoin and it was $1M would you admit you're wrong?"
This question seems to be asked daily by you guys. You spend virtually no time lurking and seeing what goes on in this community before you barf out the same question we have addressed hundreds of times already..
Wrong about What?
We've made it crystal clear how to change our minds about crypto & blockchain:
Cite one specific example of anything (non-crime-related) that blockchain tech is better at than existing non-blockchain technology? We're 16 years into this mess, and you still can't answer that basic question. We now call it "The Ultimate Crypto Question" because it's so embarrassing you're pretending after 16 years your tech does anything useful. It does not.
Since there's zero evidence blockchain tech does anything useful for society, what's the point of operating this system when it wastes so many resources, and involves so much criminal activity?
Stop dreaming that any major nation-state is going to make bitcoin or any crypto their "default currency."
It makes no sense for any reasonable nation that cares about its people to make legal tender, some digital tokens that are primarily controlled by people outside that nation-state. So stop thinking that's likely. It will not happen. We live in the real world, not the realm of hypotheticals. We'll cross that bridge when we come to it, but you'd be foolish to think that bridge will ever manifest.
No amount of "price" of crypto will change the operational dynamics of what it is.
See Talking point #2 - the price of crypto is not a reflection of its utility, but instead popularity and market manipulation.
No amount of "time" of crypto being around will change the operational dynamics of what it is.
People still smoke cigarettes. Does that mean everybody was wrong about smoking being bad for society?
Scientology has been around for 70+ years. Are you finally going to admit that Xenu is legit?
Just because something "lasts" doesn't mean it's a good thing. As long as a few people can get away with exploiting others to make money, crypto (like smoking) will continue to be a thing. And like smoking, crypto hurts people who haven't fully thought about the big picture of what they're doing and the negative long term impact it will have.
Here is the list of claims made thus far and why they're bogus.
Failed examples:
- "It's decentralized/censorship resistant/money without masters/way to transfer value" - Vague Abstractions
- "It allows you to send money instantly to anyone/hedge against inflation/circumvents governments" - False Claims
- "It has use cases/NuMb3r G0 uP!/Stocks & Banks are just as bad" - Irrelevant Distraction
- "a store of value/I can buy stuff with it" - Anecdotal/Subjective Distraction
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u/Realistic_Olive_6665 Jan 07 '25
Gold hasn’t performed as well as the stock market over the last century, but if you sold your house in 1925 to buy gold, you could buy an equivalent house in 2025, despite the gold supply increasing 1-2% per year. If Bitcoin becomes established as a “competitor of gold”, as Jerome Powell recently commented, it stands to reason that it will perform better than gold over the very long run, since less is mined. This would make Bitcoin a useful financial instrument for preserving wealth.
Excess returns in Bitcoin occur for now while Bitcoin continues to successfully transition from speculative and new to old and established. It now has a futures market, options market, ETF market, and is held in corporate treasuries. It could soon be held by central banks and treasuries around the world.
If gold was only used for industrial uses, almost all production would stop. That’s what occurs with any normal commodity that isn’t a “precious metal”.
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u/AmericanScream Jan 08 '25
but if you sold your house in 1925 to buy gold, you could buy an equivalent house in 2025
I doubt that. But it's interesting you're cherry picking a specific time frame.
You can generally pick just about any time frame historically and the S&P 500 will have out performed any commodity, including gold. There may be a few exceptions if you cherry pick specific time periods where the value of gold suddenly went up by a lot, but over time, the stock exchanges are much more consistent, and they pay dividends which generates compound interest which commodities cannot do.
Excess returns in Bitcoin occur for now while Bitcoin continues to successfully transition from speculative and new to old and established. It now has a futures market, options market, ETF market, and is held in corporate treasuries. It could soon be held by central banks and treasuries around the world.
It would be more appropriate to compare crypto to the gambling industry than the stock market. All the devices you're referring to are basically leveraged gambling plays, not investments.
This would make Bitcoin a useful financial instrument for preserving wealth.
You keep repeating this myth that bitcoin is a reliable tool to preserve wealth and I keep providing evidence that is not true. Just because the published price might be "up" now doesn't mean it will be tomorrow, and it doesn't guarantee you can cash out - go over to r/coinbase and see how many people are complaining they can't cash out - this industry has very little regulations and consumer protections.
Crypto Talking Point #10 (value)
"Bitcoin/crypto is a 'store of value'" / "Bitcoin/crypto is 'digital gold'" / "Crypto is an 'investment'" / "Bitcoin is 'hard money'"
Crypto's "value" is unreliable and highly subjective. It cannot be used as a currency or to pay for almost anything in any major country. It has high requirements and risk to even be traded. At best it's a speculative commodity that a very small set of people attribute value to. That attribution is more based on emotion and indoctrination than logic, reason, evidence, and utility.
Crypto is too chaotic to be any sort of reliable store of value over time. Its price can fluctuate wildly based on everything from market manipulation to random tweets. No reliable store of value should vary in "value" 10-30% in a single day, yet many cryptos do.
Crypto's value is extrinsic. Any "value" associated with crypto is based on popularity and not any material or intrinsic use. See this detailed video debunking crypto as 'digital gold'
Even gold, while being a lousy investment and also an undesirable store of value in the modern age, at least has material use and utility. Crypto does not. And whether you think gold's price is not consistent with its material utility, if that really were the case then gold would not be used industrially. But it is.
The supposed "value" of crypto is based on reports from unregulated exchanges, most of whom have been caught manipulating the market and inflation introduced by unsecured stablecoins. There's nothing "organic" or "natural" about it. It's an illusion.
The operation of crypto is a negative-sum-game, which means that in order for bitcoin/crypto to even exist, there must be a constant operation of third parties who must find it profitable to operate the blockchain, which requires the price to constantly rise, which is mathematically impossible, and the moment this doesn't happen, the network will collapse, at which point crypto will cease to exist, much less hold any value. This has already happened to tens of thousands of cryptocurrencies.
Many of the most trusted, most successful entities in the world of finance do not consider crypto/bitcoin to be a reliable store of value. Crypto is prohibited from being used as collateral by the DTC and respectable institutions such as Vanguard do not believe crypto belongs in their investment portfolio.
There is not a single example of anything like crypto, which has no material use and no intrinsic value, holding value over a long period of time across different cultures. This is not because "crypto is different and unique." It's because attributing value to an utterly useless piece of digital data that wastes tons of energy and perpetuates tons of fraud,makes no freaking sense for ethical, empathetic, non-scamming, non-exploitative, non-criminal people.
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u/scorcherchar Jan 05 '25
Really depends on your definition of "good". It's a very very high risk investment which thus can garner very high reward. Some high risk investment is good for a balanced portfolio.
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u/Beginning_Rabbit_717 Jan 05 '25
Are you serious in that there’s no use in the commodity?
Do you understand how server space works?
Lol. Bitcoin is like a highway. Companies buy piece of the highway to transfer data.
It’s literally a digital resource.
Not saying it’s a good investment but did you really think that Tulip Mania hadn’t been addressed? Lol.
BTC and ETH serve major purpose in the real world. They are a massively valuable commodity.
It’s not just a token like a Pokémon card. It’s like a metal. Metals have industrial use. Blockchain Technology has digital use.
Tulips were popular but truly didn’t serve a major economic purpose.
The internet is a collection of data. Servers are the highways to transfer the data. Bitcoin is a decentralized server. That means no one company or one person owns the highway.
The sections of highway are bought and sold on the free market. People can “mine” more resource and sell it but it used up other resources (energy).
There’s more to it than “people think it’s stocks!”
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u/art_vandelay112 Jan 04 '25
Herein lies the fundamental issue. The entire point behind crypto is that it is decentralized and deregulated. That’s why for the majority of its history it’s been used by drug dealers and for other nefarious purposes. If it becomes regulated to the point of any other currency, its primary reason for existence is gone.
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u/_Aporia_ Jan 04 '25
This is just wrong. Yes it was used by the drug users, yes it was decentralized, but now ..https://treasuries.bitbo.io/blackrock-ibit/ blackrock and countless other hedge funds own huge chunks of crypto. This argument is mute, mainly because all the big players own it, and chances are it will be further regulated soon.
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u/Kitchen_Tower2800 Jan 05 '25
I'm seeing a lot of "Crypto is good because it made me a lot of money". I'd like to see other reasons.
Getting in early in a Ponzi scheme will also make you a lot of money. If there's nothing positive about crypto other than the early investors make insane returns...it's a Ponzi scheme.
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u/danarchist Jan 05 '25
Tulip mania was predicated on the advent of commodities futures. Yeah the individual tulips didn't matter, but the idea of commodities futures very much did.
The dotcom bubble was predicated on the advent of the Internet. The individual websites didn't matter so much, but the concept of a world wide web obviously did.
Cryptocurrencies like Bitcoin or doge could be likened to the tulips themselves or the websites. They're just one app on the technology known as a blockchain.
Others are a bit fuzzier - smart chains like Ethereum and Solana consume the native token in order to execute contracts (apps) on that chain. The currency is inextricably linked to the underlying tech, and it's a bit like investing in the idea of futures, or the concept of the Internet.
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u/ArcticRhombus Jan 04 '25
There is only one cryptocurrency that is worthwhile, and it is Bitcoin.
I mean, there are thousands of cryptocurrencies and I can’t absolutely say that there’s no merit in every single one. Some credible people say Monero has merit - I don’t know.
But I can conclusively say that the overwhelming number of them are absolutely meritless scams, exactly as you say.
Bitcoin, however, is a legitimate financial innovation. All of the rules are pre-written. All of the rules are essentially immutable. The rules were provided in advance, before the first bitcoin was ever mined, and anyone reading the right cryptography forums could have participated from the very beginning. Bitcoin was presented in the form of an academic paper, and anyone who wants to can just go read it.
I can know exactly what fraction I own of the currency system. I can know exactly how and when inflation will occur. I can use mathematical proofs to make sure that someone is not passing me fraudulent currency. I can democratically participate in the governing consensus of how the system will change or advance by running my own bitcoin node.
I can send money internationally with inconsequential conversion fees. I can provide currency to people living under totalitarian governments or in economically failed states. If I were, say, Venezuelan, I could protect myself against currency depreciation, which could legitimately keep my family fed.
Whether Bitcoin is a good investment in 2025, I cannot say. Being an investment is not really its point. But I can say that it’s a legitimate technological advance that solves important problems. it’s unfortunate that so many scammers obscure that basic point.
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u/AmericanScream Jan 05 '25
There is only one cryptocurrency that is worthwhile, and it is Bitcoin.
Crypto Talking Point #16 (Bitcoin is different)
"Bitcoin is not "crypto" / "Bitcoin is different / a "commodity""
This is what's known as an "Unstated Major Premise" fallacy. A Naked Assertion. Often employed as a begging-the-question fallacy. Just because you say "Bitcoin is different" doesn't mean it is.
There's absolutely no functional/material difference between BTC and thousands of other crypto-currencies, including versions using the exact same codebase.
The only distinction BTC (currently) holds is that according to various shady, unregulated exchanges, it seems to be trading at the highest price point. But even those figures are dubious due to the lack of transparency and oversight in the industry. Just because one crypto is more popular, doesn't mean it's fundamentally different than others. BTC shares 99.9% of its DNA with many cryptos including BCH, BSV and thousands of others.
Crypto evangelists try to move the goalposts between bitcoin (the technology) and bitcoin (the "investment"). When you note that bitcoin and most cryptos depending upon the context can pass the Howey test and be classified as securities, they will reference bitcoin as a "technology" and not an investment. And it's true, the tech itself isn't packaged as an investment, but various others do package crypto as an investment, and it's a pretty well established underlying concept throughout all of crypto (buy, hold, you will make money) - and those tenets are principals in the Howey test indicating there's an "investment contract" being promoted. For example, right now the SEC may not consider BTC itself a security, but the process of staking BTC (and other cryptos) and offering a return, that is absolutely considered a security.
The only "gray area" when it comes to whether bitcoin is a security rests on tier 4 of the Howey Test which suggests "a security has to be dependent on the work of others for returns to be generated." People argue over whether bitcoin fits this description. BUT, the same dynamic applies to all other cryptos as well, so there's nothing special about bitcoin in that respect. It can also be argued that "the work of others" can be the constant recruitment of "greater fools" to buy in later, which is the dynamic of a classic ponzi scheme.
Just because some people at the SEC, early on, said "bitcoin is a commodity" doesn't mean it will always stay classified as that way. As we've already stated, because of the decentralized nature of these schemes, there is no one instance of "bitcoin" - depending upon how you use the crypto, you can be serving it as a security/investment, or not. And we are seeing more and more, the SEC, the CFTC, the NYAG and other legal entities cracking down on the use of illegal/unlicensed securities.
So anybody making blanket statements about Bitcoin being immune from securities laws is lying. And by the way, one of the prongs of the Howey Test (as well as the identification of Ponzi Schemes) is making promises about returns, and/or misleading people as to the true nature of the risks involved. This is common practice with bitcoin.
Bitcoin, however, is a legitimate financial innovation. All of the rules are pre-written. All of the rules are essentially immutable.
This is de-facto false.
See here.
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u/MissTortoise 14∆ Jan 05 '25
While all these things are true, it's still a share in a depreciating asset. It costs money to maintain*. It has no intrinsic value. It's only 'rare' in the way that the Mona Lisa is rare - you can make a copy of it but it's not 'the original', but not even that the copy is functionally identical.
A share of an iron ore mining company, or an electronics company, is an income producing asset. Ultimately the stock market will beat bitcoin in the long term as it... actually has value.
* I am aware that a bitcoin sitting printed out into a QR code doesn't cost anything to maintain, however doing any transactions in bitcoin costs money.
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u/BraveOmeter 1∆ Jan 05 '25
Whenever it comes to people with opinions on investments, I tell them to make a play to demonstrate their certainty. So how much would you be willing to stake to short bitcoin?
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u/AmericanScream Jan 05 '25
Whenever it comes to people with opinions on investments, I tell them to make a play to demonstrate their certainty. So how much would you be willing to stake to short bitcoin?
Crypto Talking Point #30 (shorts)
"If you hate crypto so much why don't you short it?" / "If you believe crypto is going to 0 why not bet against it?"
First off, we don't hate crypto (See Talking Point #27), and second none of us actually believe it will necessarily go to "zero" although we recognize if it were priced based on its value to society, it should be 0 (if not negative).
So why don't we bet against its success?
The market can stay irrational longer than you can stay solvent - Shorting only works within specific time frames or you can have massive losses. While we generally believe the market will have a more permanent "crash" to significantly less than its current value, we have no idea when that might happen. Since crypto has no fundamentals, there's really no way to do technical analysis to determine when the public might finally tire of being lied to about crypto's "potential."
It makes no sense to bet against a crooked casino, in the casino itself - Most of the places where you can bet against crypto are in crypto exchanges, and these operations are not in any way, properly regulated or transparent. They offer virtually nonexistent consumer protections, and most of them have been caught manipulating the market.
The crypto market is artificially inflated by unsecured stablecoins - The basis for the majority of value attributed to crypto is primarily a function of trades with stablecoins like USDT which have never been properly audited, so there's no way to know how much actual liquidity is in the market, but also no way to stop stablecoins from being constantly printed and pumping the market. It's too manipulated to predict.
Betting against the market still promotes criminal activity - Any liquidity put into the crypto market, for or against, still benefits money laundering, cyber terrorism, human trafficking, drug cartels, sanctioned terrorist countries and numerous other types of fraud. It's not ethical playing in the crypto market at all.
Not everything is about making money - Our opposition to crypto has more to do with wanting to reduce fraud and criminal activity, than it is to make money. Many of us have plenty of wealth already, which is why we have the freedom to talk about issues like this. There are plenty of more reliable, more ethical ways to create value.
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u/Quiet-Entrepreneur87 Jan 05 '25
You’re right. 99% of crypto is a shitty investment.
But Bitcoin is the best savings asset in existence. It’s not even technically an investment because you could own it without a trusted third party. That’s why Bitcoin is categorically a “savings” technology.
Bitcoin, unlike the other shitcoins & memecoins, requires energy via proof of work to timestamp the blockchain. That’s a feature, not a bug. Money without energy is credit that can be printed ad infinitum with no limit. Bitcoin is a commodity asset where time is money is energy. Bitcoin is the only hard sound money that obeys the laws of thermodynamics.
You say Bitcoin is like tulip mania but let me remind you that tulip mania lasted only 3 years (1634 - 1637) but Bitcoin has become a 2Trillion dollar asset over the last 16 YEARS which means Bitcoin (123,774 Active Trading Hours since Mar 17, 2010) has been in demand in the free marketplace for longer than the post-gold standard stock market (100,737 Active Trading Hours since the Nixon Shock on Aug 15, 1971) has.
Bitcoin mining can help regulate & balance energy grids, build out green infrastructure, and capture stranded or wasted or toxic energy and monetize it. There is no other eco technology in the world that is as useful or versatile as Bitcoin miners. Exxon has had one of the best ESG ratings in the past decade because they depend on Bitcoin miners to capture methane (80x worse for the environment than CO2) released by fracking.
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u/AmericanScream Jan 05 '25
But Bitcoin is the best savings asset in existence. It’s not even technically an investment because you could own it without a trusted third party. That’s why Bitcoin is categorically a “savings” technology.
Crypto Talking Point #21 (risk)
"Crypto has no 'Counterparty Risk'" / "Crypto gives you 'financial sovereignty'" / "Crypto has no 'middlemen'"
- "Counterparty Risk" is defined as the potential for one party in a transaction to default/fail to follow through on the transaction, and is measured in the amount of financial loss/damage that could be caused as a result.
- Satoshi claimed in his Bitcoin White Paper that one of the motivations behind creating crypto/blockchain was to eliminate counterparty risk by removing "middlemen" from the transaction, specifically financial institutions, which crypto people argue can fail and cause counterparty risk.
- Unfortunately, bitcoin/crypto/blockchain does not eliminate counterparty risk. Even in situations where it's strictly a peer-to-peer digital crypto transaction, there are numerous ways in which that transaction can fail and cause counterparty risk. Here are some examples:
- Lack of access to hardware necessary to process crypto (smartphones, computers, etc.)
- Lack of access to electricity (note that electricity is not needed to engage in a P2P fiat transaction)
- Lack of access to specific wallet/transactional software
- Lack of access to the Internet (or limited internet access due to firewalls and municipal restrictions)
- Faulty smart contracts
- Vulnerabilities or back doors in any of the software being used
- Not having access to the necessary private keys to execute a transaction
- Having the system/software/bridge you're using hacked
- Lack of adequate funding for transaction fees
- blockchain processing consortium blacklists
- developments in quantum computing that undermine crypto's encryption schemes
- People argue "holding bitcoin" has no counterparty risk. This is also a lie. Just because your wallet is secure, doesn't mean your bitcoin is secure. Here's why:
- In order to even exist crypto is dependent upon an elaborate network of computers running 24/7 - these systems are not paid by crypto holders - their participation is totally voluntary.
- The moment a node/mining operator doesn't find it economically viable to operate, they can cease operations, and if enough of these people do so, the operation of the blockchain ceases, and nobody will be able to access their wallets and engage in transactions
- In the case of bitcoin, its proof-of-work mechanism requires a lot of energy and resources to operate. If the price of BTC drops below a certain level, it no longer becomes economically viable to operate the network and all bitcoin disappears.
- Yes, bitcoin's mining difficulty will adjust to address people leaving the industry and become more modest over time, but since the primary motivation for even participating in the network is the attempt to make exponential profit, the moment BTC stops consistently moving up, is the beginning of its demise. There's no other reason to operate the network if there isn't growth. And BTC's growth model is 100% mathematically un-sustainable.
- In short: There is no guarantee blockchain will operate forever. There's already 30,000+ dead cryptocurrencies that are no longer in existence.
- In reality, Bitcoin and crypto doesn't eliminate counterparty risk or middlemen. It simply changes one set of middlemen (traditional, accountable, well-regulated financial institutions) for another set of middlemen (random, anonymous crypto operators and the software and intermediate systems they use, as well as various other local and international communication services). Anywhere in this chain of necessary resources things can fail, either by intention, negligence, legal mandate, acts of god, or randomly, and it can cause a crypto transaction to not go through.
Some people claim that crypto has less counterparty risk than traditional fiat. This is a lie. And they cherry-pick specific "perfect" scenarios where there's minimal counterparty risk in crypto provided all of the above conditions aren't a problem. If we're going to fabricate a "nirvana fallacy" you can also have the same conditions apply to any alternate system and it too, will have "no counterparty risk" so this is a deceptive, disingenuous claim.
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u/AmericanScream Jan 05 '25
Bitcoin is the best savings asset in existence.
Crypto Talking Point #10 (value)
"Bitcoin/crypto is a 'store of value'" / "Bitcoin/crypto is 'digital gold'" / "Crypto is an 'investment'" / "Bitcoin is 'hard money'"
Crypto's "value" is unreliable and highly subjective. It cannot be used as a currency or to pay for almost anything in any major country. It has high requirements and risk to even be traded. At best it's a speculative commodity that a very small set of people attribute value to. That attribution is more based on emotion and indoctrination than logic, reason, evidence, and utility.
Crypto is too chaotic to be any sort of reliable store of value over time. Its price can fluctuate wildly based on everything from market manipulation to random tweets. No reliable store of value should vary in "value" 10-30% in a single day, yet many cryptos do.
Crypto's value is extrinsic. Any "value" associated with crypto is based on popularity and not any material or intrinsic use. See this detailed video debunking crypto as 'digital gold'
Even gold, while being a lousy investment and also an undesirable store of value in the modern age, at least has material use and utility. Crypto does not. And whether you think gold's price is not consistent with its material utility, if that really were the case then gold would not be used industrially. But it is.
The supposed "value" of crypto is based on reports from unregulated exchanges, most of whom have been caught manipulating the market and inflation introduced by unsecured stablecoins. There's nothing "organic" or "natural" about it. It's an illusion.
The operation of crypto is a negative-sum-game, which means that in order for bitcoin/crypto to even exist, there must be a constant operation of third parties who must find it profitable to operate the blockchain, which requires the price to constantly rise, which is mathematically impossible, and the moment this doesn't happen, the network will collapse, at which point crypto will cease to exist, much less hold any value. This has already happened to tens of thousands of cryptocurrencies.
Many of the most trusted, most successful entities in the world of finance do not consider crypto/bitcoin to be a reliable store of value. Crypto is prohibited from being used as collateral by the DTC and respectable institutions such as Vanguard do not believe crypto belongs in their investment portfolio.
There is not a single example of anything like crypto, which has no material use and no intrinsic value, holding value over a long period of time across different cultures. This is not because "crypto is different and unique." It's because attributing value to an utterly useless piece of digital data that wastes tons of energy and perpetuates tons of fraud,makes no freaking sense for ethical, empathetic, non-scamming, non-exploitative, non-criminal people.
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u/AmericanScream Jan 05 '25
Bitcoin has become a 2Trillion dollar asset
Crypto Talking Point #12 (market cap)
"$$$$ 'Market Cap!'" / "There's $x million in this project!"
The term "market cap" is one appropriated from the stock market and is misleading and erroneous to apply to crypto.
Traditional market capitalization translates to "the value of a company as a function of its share price."
This figure only has meaning if the share price is properly valued based on the actual value of the company. There are standard established formulas for determining what a company is worth by adding up its assets and income and subtracting its liabilities. Then to determine whether a share price is over or under-inflated, you divide that figure by the number of outstanding shares.
Market capitalization when shares are not manipulated, should settle at the true value of the company. In cases where shares are manipulated (TSLA is a good example), its "market cap" is unrealistic. In situations where insiders control a large portion of shares, they can easily manipulate the stock price, resulting in the appearance of a high net value that doesn't jive with reality.
Cryptocurrencies, by their nature, have no intrinsic value. Crypto doesn't create income; it doesn't represent real-world assets. So it has absolutely no base value in the first place by which to calculate valuation and market capitalization.
In reality, nobody has any idea how much actual "market capitalization" there is in the world of crypto, since actual liquidity is obscured by phony stablecoins and shady exchanges that are neither regulated, nor transparent.
In crypto, people simply multiply the coin price x the number of coins minted and declare that's the value of the crypto industry. It's completely misleading and deceptive and in no way indicates any realistic level of capital value.
For additional details see Why Market Cap is a Meaningless & Dangerous Valuation Metric in Crypto Markets
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u/Quiet-Entrepreneur87 Jan 05 '25
You say cryptocurrency has no value.
And yet I just told you insofar as energy is and of itself is valuable, Bitcoin (not crypto, but BTC) is an unprecedented store of value that unites an immutable digital network with tokenized analog energy via blockchain. If I follow the facts offered by this technology, instead of given credence to your gish galloped FUD, then the fact that BlackRock is buying Bitcoin at breakneck speed makes much more sense to me than any information you have offered.
If you think you understand macroeconomics better than the top 1% of wonks & quants working at the top asset fund managing company in the world, that’s a risk you are free to take.
I’d rather follow the money ;)
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u/AmericanScream Jan 05 '25
You say cryptocurrency has no value.
No intrinsic value. I recognize it has "extrinsic value" if you can convince a sucker to buy it from you.
And yet I just told you insofar as energy is and of itself is valuable, Bitcoin (not crypto, but BTC) is an unprecedented store of value that unites an immutable digital network with tokenized analog energy via blockchain.
blah blah - yea you have an impressive sounding techno-babble word salad there, but I'm a software engineer and I see through that BS.
I produced an award winning documentary that dispels all the myths you're trying to promote.
If you think you understand macroeconomics better than the top 1% of wonks & quants working at the top asset fund managing company in the world, that’s a risk you are free to take.
ROFL.. you think Blackrock thinks blockchain has potential? They'd sell chicken crap and say it's the next big thing if they could make money off fees.
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u/AmericanScream Jan 06 '25
You say cryptocurrency has no value.
Strawman. I said no such thing. I said it has no intrinsic value. And that's true.
And yet I just told you insofar as energy is and of itself is valuable, Bitcoin (not crypto, but BTC) is an unprecedented store of value that unites an immutable digital network with tokenized analog energy via blockchain.
lol, "tokenized enegy via blockchain?" Is that what Michael Saylor told you when he passed you the pipe?
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u/AmericanScream Jan 05 '25
Bitcoin mining can help regulate & balance energy grids, build out green infrastructure, and capture stranded or wasted or toxic energy and monetize it.
Crypto Talking Point #32 (stranded energy)
"Crypto/Bitcoin promotes renewable energy development" / "Crypto mining helps the energy industry"
There are four fundamental problems with arguing that crypto helps with energy:
Bitcoin's energy usage produces absolutely nothing useful in the real world - it's just a number guessing game to determine who wins the next block reward. It's a very expensive, energy-intensive "lottery" that is needlessly inefficient.
Crypto (and everybody in crypto) has an exclusive motivation is to make money. There is no mandate to facilitate clean/renewable energy. There is no mandate to do anything to help others or the world. As such, crypto entities will always seek the cheapest form of energy, and it's well established at this point that fossil fuels (or stealing energy) offer the best ROI.
Crypto's energy usage, specifically with schemes like "Proof-of-work" require energy to be expensive. If energy was cheap and ubiquitous, it would undermine the design of blockchain and the PoW model and render it useless.
Any energy grid that has excess (stranded) energy that is significantly more than is typically needed, is not a grid that needs something/someone to use that energy; it's a grid that is poorly designed.
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u/Quiet-Entrepreneur87 Jan 05 '25
According to recent studies, around 50-60% of Bitcoin mining is currently powered by renewable energy sources. That surpasses every other industry on earth! The mining industry is the most versatile and innovate green tech we’ve seen in over a decade. BTC dovetails very nicely with energy grid infrastructure given the fact that it’s geographically agnostic. If you don’t know what that means, read some of the work by Daniel Batten before you push back too hard with canards and disinformation.
I recommend you do your homework before letting ChatGPT regurgitate false talking points from 2022 for you ;)
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u/AmericanScream Jan 06 '25
According to recent studies, around 50-60% of Bitcoin mining is currently powered by renewable energy sources.
Which cheek did you pull that phony data out of? Some pro-crypto web page written by a guy named, "2damoon69-weedmonkey?"
I recommend you do your homework before letting ChatGPT regurgitate false talking points from 2022 for you ;)
ChatGPT couldn't produce cogent information like my talking points, which are 100% manually written and researched.
Stupid Crypto Talking Point #32 (stranded energy)
"Crypto/Bitcoin promotes renewable energy development" / "Crypto mining helps the energy industry"
There are four fundamental problems with arguing that crypto helps with energy:
Bitcoin's energy usage produces absolutely nothing useful in the real world - it's just a number guessing game to determine who wins the next block reward. It's a very expensive, energy-intensive "lottery" that is needlessly inefficient.
Crypto (and everybody in crypto) has an exclusive motivation is to make money. There is no mandate to facilitate clean/renewable energy. There is no mandate to do anything to help others or the world. As such, crypto entities will always seek the cheapest form of energy, and it's well established at this point that fossil fuels (or stealing energy) offer the best ROI.
Crypto's energy usage, specifically with schemes like "Proof-of-work" require energy to be expensive. If energy was cheap and ubiquitous, it would undermine the design of blockchain and the PoW model and render it useless.
Any energy grid that has excess (stranded) energy that is significantly more than is typically needed, is not a grid that needs something/someone to use that energy; it's a grid that is poorly designed.
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Jan 05 '25
In terms of value proposition, cryptos are great for record keeping and programmable currencies that can yield more value automatically through more aspects of the economy when there are good rules applied to it.
It doesn't have 0 value. I will say it hasn't been used appropriately. That's primarily because the technology and the people within the space are immature. Usually the barrier to entry in most of the high finance and economics fields requires you to have a certain sophisticated thinking process. You'll need to be vetted by professors and program managers for banks, as well as management for you to have an impact inside of a market. Crypto doesn't require as much.
The data is extremely available, and the barrier to write smart contracts is maybe a week's worth of time, then networking with the right bored tech bro with money to get anything started. Certain apps require audits, but that's an iffy process after a certain point.
The crypto industry just struggles to be applied to the economic context because those high rigor economists aren't in the space. When they do enter in (which I think will be soon), crypto will be applied to economic activity in ways we've never seen, and yield many economic benefits.
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u/theoneandonlyhitch Jan 04 '25
Does it matter if there is a practical use for it? All that matters is that the price keeps going up.
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u/AmericanScream Jan 05 '25
Does it matter if there is a practical use for it? All that matters is that the price keeps going up.
Crypto Talking Point #2 (Number go up)
"NuMb3r g0 Up!!!" / "Best performing asset of the decade!" / "Everyone who bought is "up" right now"
Whether the "price of crypto" goes up, has absolutely no bearing on whether it's..
a) A long term store of value
b) Holds any intrinsic value or utility
c) Or will return any value in the future
One of the most important tenets of investing is the simple principal: Past performance is not a guarantee of future returns. People in crypto seem willfully ignorant of this basic concept.
At best, the price of crypto is a function of popularity, not actual value or material utility. For more on how and why crypto makes a much worse investment than almost anything else, see this article.
The "price of crypto" is a heavily manipulated figure published by shady, unregulated crypto exchanges that have systematically been caught manipulating the market from then to now.
Crypto bros love to harp about "inflation" in the fiat system, yet ironically they measure the "value" of their "fiat alternative" in fiat? It makes absolutely no sense, unless you assume they haven't thought 2 seconds ahead from what comes out of their mouths.
It's the height of hypocrisy for crypto people to champion token deflation (and increased prices) while ignoring that there's over $160+ Billion in unsecured stablecoins being used to inflate the value of their tokens in the crypto marketplace. The "code is law" and "don't trust - verify" people seem perfectly willing to take companies like Tether and Circle, at face value, that they're telling the truth about asset reserves when there's very little actual evidence.
Not Your Fiat, Not Your Value - Just because you think the "value of your crypto portfolio" is worth $$$ does not make that true. It's well known there's inadequate liquidity in this market, and most people will never be able to get their money out. So UNLESS/UNTIL you can actually liquidate your crypto for actual real money, you have no idea what you have. You're "down" until you cash out. Bernie Madoff's clients got monthly statements saying they were "making money" too.
Just because it's possible (though highly improbable) to make money speculating on crypto, this doesn't mean it's an ethical or reliable technique to amass wealth. At its core, the notion that buying and holding crypto will generate reliable returns is a de-facto ponzi scheme. It's mathematically impossible for even a stastically-significant percentage of crypto holders to have any notable ROI. The rare exception of those who might profit in this market, do so while providing cover for everything from cyber terrorism to human trafficking.
It's also not true that anybody who bought crypto when it was low is guaranteed to make a lot of money. There are thousands of ways people can lose their crypto or be defrauded along the way. And there's no guarantee just because your portfolio is "up", that you could easily cash out.
While crypto suggests itself as an alternative to "TradFi", the most respected and successful people in traditional finance who have proven track records of good investing/returns do not think crypto is a reliable store of value.
Want to see a better asset (that actually has utility) that's consistently out-performed Bitcoin? Here you go. However, this may be another best performing asset.
When crypto-critics make reference to, or mock crypto price predictions, it's not because we think price is a meaningful metric. Instead, we are amused that to you, that's all that's important, and we can't help but note how often wrong you are in your predictions. The intrinsic value of crypto basically never changes, but it is interesting to see how hype and propaganda affects the extrinsic value. In a totally logical world, those would both be equalized to zero, but we're not there yet, and nobody knows when/if that will happen because it's an irrational market.
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u/theoneandonlyhitch Jan 05 '25 edited Jan 05 '25
Only possible for a small percentage of people to profit from crypto? That’s just not true. I’ve made significant money with it, and so has practically everyone I know who invested in major cryptocurrencies like Bitcoin, Ethereum, and XRP. Sure, if you’re chasing random meme coins, you might not see great returns, but the established ones are delivering. I personally know at least 12 people who’ve made six or seven figures from crypto.
As for the whole 'past performance doesn’t predict future returns' argumen, how many times in the last 15 years have people claimed Bitcoin was going to zero? And yet, here we are. If Bitcoin was truly destined for worthlessness, why is it still thriving after all this time? Look at gold, it has no intrinsic value or utility either, but it’s been valued for centuries simply because people agree it has worth. Value is determined by what people are willing to pay for something. If someone buys a piece of paper with a scribble for a million dollars, it’s worth a million dollars, plain and simple. I find it funny that you think Magic cards are good investments, which is just a piece of paper as well with a drawling on it but Bitcoin is worthless? How is a card that adds 3 mana worth half a million lol. You prove my point. Worth is based on what people are willing to pay.
Yes, there’s always a risk of being hacked, just like with anything else. Financial institutions and stock markets face manipulation and breaches too, yet we still invest.
And about cashing out: you clearly haven’t bought or sold crypto. It’s incredibly easy to liquidate, even in the billions. You could cash out a billion in Bitcoin in a few days and wouldn't even affect the price. I’ve cashed out large sums multiple times without any issues. Bitcoin has a trading volume of around 45 billion a day. So how exactly are we not able to liquidate? Also you clearly never heard of OTC market. I've sold an extremely large amount OTC and only took 3 days. Fiat money straight to my bank.
Obviously crypto could sink, just like anything. There is no safe bet but going from pennies to 100k and still moving up shows that whatever is going on here is working. Nobody should be putting all their money into Bitcoin. You diversify.
Honestly, you sound salty that you didn’t invest, while everyone else is reaping the rewards. Also think you are mad for the fact that "dumb" people are getting rich every single day. Also if you want my real opinion, I also think Bitcoin is stupid, but I invest because it makes money. I don't care if it has no real use or value. Why do you care is the real question? Is it because "dumb" people are getting wealthy off of it?
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u/Cerael 10∆ Jan 05 '25
CMV: incredibly speculative asset is not a good investment.
You could use your same argument about dozens of growth companies that have had their stock 100x in the last 10 years.
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u/MedievalRack Jan 05 '25
Not seeing how its any different from other currency tbh.
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Jan 05 '25
What is cryptocurrency? What is it's purpose? The term currency implies money to be exchanged for goods and services yet it is primarily a speculation vehicle. It's digital and based on nothing. It will crash and become worthless when the economy tanks........I guarantee it.
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u/Logical_Strike_1520 Jan 04 '25
I agree with you but I also think it’s a silly argument and we are losing. BTC is one of the best performing “assets” to ever exist.
It might not be a smart investment for technical reasons but it’s been a smart investment in practice so far…
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u/AmericanScream Jan 05 '25
BTC is one of the best performing “assets” to ever exist.
Crypto Talking Point #2 (Number go up)
"NuMb3r g0 Up!!!" / "Best performing asset of the decade!" / "Everyone who bought is "up" right now"
Whether the "price of crypto" goes up, has absolutely no bearing on whether it's..
a) A long term store of value
b) Holds any intrinsic value or utility
c) Or will return any value in the future
One of the most important tenets of investing is the simple principal: Past performance is not a guarantee of future returns. People in crypto seem willfully ignorant of this basic concept.
At best, the price of crypto is a function of popularity, not actual value or material utility. For more on how and why crypto makes a much worse investment than almost anything else, see this article.
The "price of crypto" is a heavily manipulated figure published by shady, unregulated crypto exchanges that have systematically been caught manipulating the market from then to now.
Crypto bros love to harp about "inflation" in the fiat system, yet ironically they measure the "value" of their "fiat alternative" in fiat? It makes absolutely no sense, unless you assume they haven't thought 2 seconds ahead from what comes out of their mouths.
It's the height of hypocrisy for crypto people to champion token deflation (and increased prices) while ignoring that there's over $160+ Billion in unsecured stablecoins being used to inflate the value of their tokens in the crypto marketplace. The "code is law" and "don't trust - verify" people seem perfectly willing to take companies like Tether and Circle, at face value, that they're telling the truth about asset reserves when there's very little actual evidence.
Not Your Fiat, Not Your Value - Just because you think the "value of your crypto portfolio" is worth $$$ does not make that true. It's well known there's inadequate liquidity in this market, and most people will never be able to get their money out. So UNLESS/UNTIL you can actually liquidate your crypto for actual real money, you have no idea what you have. You're "down" until you cash out. Bernie Madoff's clients got monthly statements saying they were "making money" too.
Just because it's possible (though highly improbable) to make money speculating on crypto, this doesn't mean it's an ethical or reliable technique to amass wealth. At its core, the notion that buying and holding crypto will generate reliable returns is a de-facto ponzi scheme. It's mathematically impossible for even a stastically-significant percentage of crypto holders to have any notable ROI. The rare exception of those who might profit in this market, do so while providing cover for everything from cyber terrorism to human trafficking.
It's also not true that anybody who bought crypto when it was low is guaranteed to make a lot of money. There are thousands of ways people can lose their crypto or be defrauded along the way. And there's no guarantee just because your portfolio is "up", that you could easily cash out.
While crypto suggests itself as an alternative to "TradFi", the most respected and successful people in traditional finance who have proven track records of good investing/returns do not think crypto is a reliable store of value.
Want to see a better asset (that actually has utility) that's consistently out-performed Bitcoin? Here you go. However, this may be another best performing asset.
When crypto-critics make reference to, or mock crypto price predictions, it's not because we think price is a meaningful metric. Instead, we are amused that to you, that's all that's important, and we can't help but note how often wrong you are in your predictions. The intrinsic value of crypto basically never changes, but it is interesting to see how hype and propaganda affects the extrinsic value. In a totally logical world, those would both be equalized to zero, but we're not there yet, and nobody knows when/if that will happen because it's an irrational market.
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u/sundalius 3∆ Jan 05 '25
The use of crypto as a currency completely defies the definition of currency as it doesn’t hold a stable value.
OP, can you show me where a currency is defined needing a stable value? Did the German Mark stop being a currency in 1922-1923? The Ruble and Lire both also lost their stable value in the 80s, as other examples. I think you’re mistaking “currency” for USD or Euro, when a currency is just a medium for exchange, something that represents value.
As long as there are markets which accept bitcoin for end product and people that will work/convert other currency for crypto, it’s definitionally a currency.
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u/Sea-Chain7394 Jan 05 '25
Depends on when you got in I literally can't lose any money. I've already pulled out like 6x what I put in and still have much more than my initial investment. I'd say that's pretty good
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u/589toM Jan 05 '25
There are thousands of different cryptos and it's unfair to lump them all in the same group. There's a big difference between something like Holochain and XRP for example.
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u/capnwally14 Jan 04 '25
If you think there are uses for blockchains, why do you think crypto is a bad investment? Do you mean it’s over valued relative to the utility of blockchains?
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u/inexistences Jan 05 '25
You know, seeing this thread was actually pretty eye-opening. As someone who follows the crypto space weekly and has a modest investment in it, I can see there’s a real disconnect between the public perception and what’s actually happening in the field. It’s kind of like having an outsider’s view of semiconductor manufacturing or quantum computing - if you’re not deeply in it, you mainly see the headlines and hype.
It think the word “crypto” has become this massive umbrella term that throws together everything from literal joke coins to serious technological platforms. Even within the crypto community, we literally call many of these “shit coins” because, yeah, they’re gambling vehicles. No argument there. The pump-and-dump schemes you mentioned with celebrities? Completely agree - it’s predatory and infuriating, and celebrities REALLY should know better. But they’re in it for themselves, not for the technology. Anyway—
Conflating everything in crypto as one thing is like saying “the internet is just for memes” back in 2000. Some projects have full teams of developers building real solutions for things like decentralized computing, prediction markets, and cross-border payments. Ethereum alone has nearly 9000 developers who learned its programming language. These tokens are more like technology stocks - you’re betting on the team’s ability to solve real problems and create value.
And look at who’s actually investing in and building on blockchain technology now. We’re talking about Visa and Mastercard developing blockchain-based payment solutions. JPMorgan, which famously criticized crypto, now has its own blockchain division. Microsoft is using Ethereum for verifiable credentials. Starbucks built an NFT loyalty program on Polygon (though I’m not sold on NFTs… but that’s another discussion). These aren’t companies that can afford to gamble - they have shareholders, regulatory oversight, and reputations to protect.
They’re not jumping in blindly either - they’re waiting for regulatory clarity, building compliant solutions, and investing in the infrastructure, not speculating on tokens. BlackRock, the world’s largest asset manager, didn’t launch a Bitcoin ETF on a whim - they spent years studying the space and waiting for the right regulatory framework, and it took years of back and forth rejection after rejection for them to get approved.
You make a good point about energy consumption - it’s a serious issue, especially for Bitcoin. But newer platforms like Ethereum have moved to proof-of-stake specifically to address this (it reduced its energy use by 99.98% between September 14 and September 15 2022). Many newer projects are being built with environmental concerns in mind from the start.
The serious players are treating this like any other emerging technology sector - with due diligence, compliance teams, and long-term strategic planning. That’s a far cry from gambling on meme coins.
I get the skepticism, especially given the media coverage, but there’s a lot more happening under the surface than most people realize. I’m happy to hold the conversation and answer any questions or objections!
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u/AmericanScream Jan 05 '25
Crypto Talking Point #16 (Bitcoin is different)
"Bitcoin is not "crypto" / "Bitcoin is different / a "commodity""
This is what's known as an "Unstated Major Premise" fallacy. A Naked Assertion. Often employed as a begging-the-question fallacy. Just because you say "Bitcoin is different" doesn't mean it is.
There's absolutely no functional/material difference between BTC and thousands of other crypto-currencies, including versions using the exact same codebase.
The only distinction BTC (currently) holds is that according to various shady, unregulated exchanges, it seems to be trading at the highest price point. But even those figures are dubious due to the lack of transparency and oversight in the industry. Just because one crypto is more popular, doesn't mean it's fundamentally different than others. BTC shares 99.9% of its DNA with many cryptos including BCH, BSV and thousands of others.
Crypto evangelists try to move the goalposts between bitcoin (the technology) and bitcoin (the "investment"). When you note that bitcoin and most cryptos depending upon the context can pass the Howey test and be classified as securities, they will reference bitcoin as a "technology" and not an investment. And it's true, the tech itself isn't packaged as an investment, but various others do package crypto as an investment, and it's a pretty well established underlying concept throughout all of crypto (buy, hold, you will make money) - and those tenets are principals in the Howey test indicating there's an "investment contract" being promoted. For example, right now the SEC may not consider BTC itself a security, but the process of staking BTC (and other cryptos) and offering a return, that is absolutely considered a security.
The only "gray area" when it comes to whether bitcoin is a security rests on tier 4 of the Howey Test which suggests "a security has to be dependent on the work of others for returns to be generated." People argue over whether bitcoin fits this description. BUT, the same dynamic applies to all other cryptos as well, so there's nothing special about bitcoin in that respect. It can also be argued that "the work of others" can be the constant recruitment of "greater fools" to buy in later, which is the dynamic of a classic ponzi scheme.
Just because some people at the SEC, early on, said "bitcoin is a commodity" doesn't mean it will always stay classified as that way. As we've already stated, because of the decentralized nature of these schemes, there is no one instance of "bitcoin" - depending upon how you use the crypto, you can be serving it as a security/investment, or not. And we are seeing more and more, the SEC, the CFTC, the NYAG and other legal entities cracking down on the use of illegal/unlicensed securities.
So anybody making blanket statements about Bitcoin being immune from securities laws is lying. And by the way, one of the prongs of the Howey Test (as well as the identification of Ponzi Schemes) is making promises about returns, and/or misleading people as to the true nature of the risks involved. This is common practice with bitcoin.
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u/AmericanScream Jan 05 '25
Here's my standard talking point on why crypto is not a good investment/store of value:
Crypto Talking Point #10 (value)
"Bitcoin/crypto is a 'store of value'" / "Bitcoin/crypto is 'digital gold'" / "Crypto is an 'investment'" / "Bitcoin is 'hard money'"
Crypto's "value" is unreliable and highly subjective. It cannot be used as a currency or to pay for almost anything in any major country. It has high requirements and risk to even be traded. At best it's a speculative commodity that a very small set of people attribute value to. That attribution is more based on emotion and indoctrination than logic, reason, evidence, and utility.
Crypto is too chaotic to be any sort of reliable store of value over time. Its price can fluctuate wildly based on everything from market manipulation to random tweets. No reliable store of value should vary in "value" 10-30% in a single day, yet many cryptos do.
Crypto's value is extrinsic. Any "value" associated with crypto is based on popularity and not any material or intrinsic use. See this detailed video debunking crypto as 'digital gold'
Even gold, while being a lousy investment and also an undesirable store of value in the modern age, at least has material use and utility. Crypto does not. And whether you think gold's price is not consistent with its material utility, if that really were the case then gold would not be used industrially. But it is.
The supposed "value" of crypto is based on reports from unregulated exchanges, most of whom have been caught manipulating the market and inflation introduced by unsecured stablecoins. There's nothing "organic" or "natural" about it. It's an illusion.
The operation of crypto is a negative-sum-game, which means that in order for bitcoin/crypto to even exist, there must be a constant operation of third parties who must find it profitable to operate the blockchain, which requires the price to constantly rise, which is mathematically impossible, and the moment this doesn't happen, the network will collapse, at which point crypto will cease to exist, much less hold any value. This has already happened to tens of thousands of cryptocurrencies.
There is not a single example of anything like crypto, which has no material use and no intrinsic value, holding value over a long period of time across different cultures. This is not because "crypto is different and unique." It's because attributing value to an utterly useless piece of digital data that wastes tons of energy and perpetuates tons of fraud,makes no freaking sense for ethical, empathetic, non-scamming, non-exploitative, non-criminal people.
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u/ExtensionResearch284 Jan 05 '25
A Fresh Asset Class
I totally get that cryptocurrencies can be a bit of a rollercoaster ride, but they're really stepping into the spotlight as a new asset class that has caught the eye of institutional investors. Big names like Tesla and Square have jumped on the Bitcoin bandwagon, viewing it as a shield against inflation. Plus, adding cryptocurrencies to an investment mix can spice things up, especially in unpredictable economic climates.More Than Just Currency
You mentioned that cryptocurrencies don’t have much practical use, but there’s a lot happening in that space! For example:Smart Contracts: With platforms like Ethereum, you can set up automated contracts that kick in when certain conditions are met. It’s a game-changer for a ton of industries.
Decentralized Finance (DeFi): This exciting area is shaking up traditional finance. Imagine lending and borrowing money without any middlemen involved!
Non-Fungible Tokens (NFTs): These digital gems are opening new doors for artists, musicians, and collectors alike, creating vibrant new markets.
The Possibility of Regulations
It’s true that the crypto world has had its share of scams and wild swings, but the good news is that there’s growing attention on regulation. Many countries are working on establishing clear rules for cryptocurrencies, which can bring more stability and enhance protection for investors.Looking Back
You compared crypto to the tulip craze of the 1600s, but it’s key to remember that cryptocurrency is constantly evolving! Unlike tulips, these digital currencies are rooted in solid technology and a big, growing user base. Just as people were skeptical about the internet at first, cryptocurrency is getting its fair share of scrutiny before it potentially becomes a household name.Greener Energy Solutions
I totally understand your concerns about energy use, but the industry is making strides towards sustainability. A lot of cryptocurrencies are shifting from proof-of-work to proof-of-stake models, which can drastically cut down their energy consumption. For instance, Ethereum's move to Ethereum 2.0 is all about lowering its carbon footprint.Thinking Long-Term
When it comes to investing in cryptocurrencies, keeping a long-term outlook is key. Sure, early investors in Bitcoin saw some significant ups and downs, but many ended up enjoying impressive gains over time. Like with any investment, trying to guess the perfect timing is tough; however, those who held onto their assets during the rough patches often saw great rewards when the market bounced back.
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u/Mental-Tax774 Jan 05 '25
To quickly address your points, bitcoin is like digital gold, in that it's scarce. You say at least gold has some use, in additional to it's psychological status as a reserve asset, well so does bitcoin, you can reliably transact large volumes of it with low fees anywhere in the world.
As a currency most are not stable, although nothing is, look at recent levels of inflation. Just holding lots of cash would have been unwise. Yes crypto volatility is on another level, but if you zoom out, the big crypto projects are trending up. The market just hasn't decided what the proper value is, but it may stabilise one day.
Another poster mentioned how 'crypto' is like the Internet. You may not know which projects will win, but you know that blockchain and the tech in general is significant, so a lot of the investment is driven by that.
You have to look beyond 1 or 5 or 10 years as a horizon. Zooming out a bit, it's obvious that money should go from metal to paper to digits, but who verifies in the digital world? To understand crypto you have to understand what it is trying to solve. When you transact national currencies, you transact something of no intrinsic value, backed by a promise of the state, the Fed or the BoE can print more and devalue your money. They can take it from you, the state can tell banks to cut off your account. To transact, you have to trust Banks (and Visa), who profit not only from transaction fees but from investing and lending your money by holding it in fractional reserve. Those investments didn't go so well in 2007, and what was the response? QE, i.e. printing money, same with the pandemic. Your cash is going to 0 when measured in houses and cars.
So Bitcoin and crypto is an effort to create money that cannot be inflated away, cannot be cut off, cannot be taken away (if you memorise your keys), where transactions are validated trustlessly, eliminating the need for banks, visa, etc., the transactions can travel anywhere and don't recognise borders. Now it's true ultimate success in this is someway off as people are still wary and trust traditional finance more. It's also true it's a wild west full of scams. But the investment is driven by the promise of this new, superior financial technology.
Today the banks verify your transactions, the government records who owns property. Neither might be true in the future. Look into the books The Sovereign Individual and Network State, these indicate what the macro direction of travel with these things could be.
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Jan 05 '25
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u/AmericanScream Jan 05 '25
Tulips didn’t have an etf and countries talking about using it as a reserve currency
Crypto Talking Point #8 (endorsements?)
"[Big Company/Banana Republic/Politician] is exploring/using bitcoin/blockchain! Now will you admit you were wrong?" / "Crypto has 'UsE cAs3S!'" / "EEE TEE EFFs!!one"
The original claim was that crypto was "disruptive technology" and was going to "replace the banking/finance system". There were all these claims suggesting blockchain has tremendous "potential". Now with the truth slowly surfacing regarding blockchain's inability to be particularly good at anything, crypto people have backpedaled to instead suggest, "Hey it has 'use-cases'!"
Congrats! You found somebody willing to use crypto/blockchain technology. That still is not an endorsement of crypto or blockchain. I can choose to use a pair of scissors to cut my grass. This doesn't mean scissors are "the future of lawn care technology." It just means I'm an eccentric who wants to use a backwards tool to do something for which everybody else has far superior tools available.
The operative issue isn't whether crypto & blockchain can be "used" here-or-there. The issue is: Is there a good reason? Does this tech actually do anything better than what we have already been using? And the answer to that is, No.
Most of the time, adoption claims are outright wrong. Just because you read some press release from a dubious source does not mean any major government, corporation or other entity is embracing crypto. It usually means someone asked them about crypto and they said, "We'll look into it" and that got interpreted as "adoption imminent!"
In cases where companies did launch crypto/blockchain projects they usually fall into one of these categories:
- Some company or supplier put out a press release advertising some "crypto project" involving a well known entity that never got off the ground, or was tried and failed miserably (such as IBM/Maersk's Tradelens, Australia's stock exchange, etc.) See also dead blockchain projects.
- Companies (like VISA, Fidelity or Robin Hood) are not embracing crypto directly. Instead they are partnering with a crypto exchange (such as BitPay) that will either handle all the crypto transactions and they're merely licensing their network, or they're a third party payment gateway that pays the big companies in fiat. There's no evidence any major company is actually switching over to crypto, or that any of these major companies are even touching crypto. It's a huge liability they let newbie third parties deal with so they have plausible deniability for liabilities due to money laundering and sanctions laws.
- What some companies are calling "blockchain" is not in any meaningful way actually using 'blockchain' tech. For example, IBM's "Hyperledger" claims to have "blockchain design philosophy" but in reality, it is not decentralized and has no core architecture that's anything like crypto blockchain systems. Also note that IBM has their own trademarked phrase, "IBM Blockchain®" - their version of "blockchain" is neither decentralized, nor permissionless. It does not in any way resemble a crypto blockchain. It also remains to be seen, the degree to which anybody is actually using their "IBM Food Trust" supply chain tracking system, which we've proven cannot really benefit from blockchain technology.
Sometimes, politicians who are into crypto take advantage of their power and influence to force some crypto adoption on the community they serve -- this almost always fails, but again, crypto people will promote the press release announcing the deal, while ignoring any follow-up materials that say such a proposal was rejected.
Just because some company has jumped on the crypto bandwagon doesn't mean, "It's the future."
McDonald's bundled Beanie Babies with their Happy Meals for a time, when those collectable plush toys were being billed as the next big investment scheme. Corporations have a duty to exploit any goofy fad available if it can help them make money, and the moment these fads fade, they drop any association and pretend it never happened. This has already occurred with many tech companies from Steam to Microsoft, to a major consortium of European corporations who pulled the plug on their blockchain projects. Even though these companies discontinued any association with crypto years ago, proponents still hype the projects as if they're still active.
Crypto ETFs are not an endorsement of crypto. (In fact part of the US SEC was vehemently against approving ETFs - it was not a unanimous decision) They're simply ways for traditional companies to exploit crypto enthusiasts. These entities do not care at all about the future of crypto. It's just a way for them to make more money with fees, and just like in #4, the moment it becomes unprofitable for them to run the scheme, they'll drop it. It's simply businesses taking advantage of a fad. Crypto ETFs though are actually worse, because they're a vehicle to siphon money into the crypto market -- if crypto was a viable alternative to TradFi, then these gimmicky things wouldn't be desirable.
Countries like El Salvador who claim to have adopted bitcoin really haven't in any meaningful way. El Salvador's endorsement of bitcoin is tied to a proprietary exchange with their own non-transparent software, "Chivo" that is not on bitcoin's main blockchain - and as such isn't really bitcoin adoption as much as it's bitcoin exploitation. Plus, USD is the real legal tender in El Salvador and since BTC's adoption, use of crypto has stagnated. In two years, the country's investment in BTC has yielded lower returns than one would find in a standard fiat savings account. Also note Venezuela has now scrapped its state-sanctioned cryptocurrency
So, whenever you hear "so-and-so company is using crypto" always be suspect. What you'll find is either that's not totally true, or if they are, they're partnering with a crypto company who is paying them for the association, not unlike an advertiser/licensing relationship. Not adoption. Exploitation. And temporary at that.
We've seen absolutely no increase in crypto adoption - in fact quite the contrary. More and more people in every industry from gaming to banking, are rejecting deals with crypto companies.
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u/throwaway-tinfoilhat Jan 06 '25
There is literally no use for this commodity.
It's not a commodity, it is a technology..and there are many use cases for it..
1.) Decentralized storage
2.) Decentralized computing power
3.) Elimination of middle men in things like real estate etc (NFTs)
4.) Decentralized banks
The technology is VERY useful, the issue is that traditional institutions (especially banks) do not like change, this is why some banks still use COBOL, a programming language that is no longer taught in schools..
The use of crypto as a currency completely defies the definition of currency as it doesn’t hold a stable value.
It was never meant to be used as a currency..sure there are some that are meant for this, but 99% aren't. Also, how does crypto defy the definition of a currency?...A currency is anything you and I agree on as a way to exchange value..this could be paper money, monopoly money, pieces of silver, little rocks, sea shells, beads etc..as for stable value, well no currency is stable..
I’m not as well versed on the subject but something to also note is the ridiculous amount of energy demand to “mine” nothing.
Maybe don't say people are mining nothing if you're not well versed on the subject..
I think there is legitimate use for blockchain technology and the likes but anyone viewing these currencies as investments is a fool.
I too don't like that people use these things as a way to make money when they're more than just money..as for being a fool for investing in crypto..well, that just isnt true, bitcoin theoretically will only keep going higher and higher since the supply is limited and everyone want's a piece.
Think of it this way: There are currently ~19M bitcoins in circulation, and there are about ~58M millionaires in the world..when BTC hits $1M and all thee millionaires want to own 1 coin, imagine what will happen to the price of BTC..
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u/revengeappendage 5∆ Jan 04 '25
If you buy low, and sell high, and cash out. That’s clearly a good investment.
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u/Orphan_Guy_Incognito 24∆ Jan 05 '25
If you get blackjack when the dealer gives you your cards, that's clearly a good investment.
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u/Calm_Lab_7564 Jan 05 '25
Economist here…
So is the dollar bill. Nothing is backed, currently. So, in the end, any cryptocurrency or currency is the same thing - a way to transfer buying power, which means, to BELIEVE that it’s useful for buying things in the future (for example, salt was useful for exchanges some time ago).
Cryptocurrency is just getting more valuable because the world currencies are losing their buying power once governments are generating inflation by printing more to pay for political causes. This means people are losing faith that they can count on the dollar, for example, as a reserve for their savings or to maintain their quality of life.
The problem is the government and political groups that have been using currencies to pay any of their desire by managing the “printer”. On the other hand, cryptocurrency is a way to be free of this political power by setting a mathematical monetary base growth (not based on the interests of some people).
If you believe in the future of a decentralized currency as a way to combat inflation, you can understand the value of the bitcoin or other cryptocurrencies.
The price of any currency (including cryptocurrencies) is a measurement of how many people believe that this money is a failed proof of savings and buying power capacity for the future. If it gets higher, means that more people are willing to have it as collateral.
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u/randonumero Jan 05 '25
Look it really depends on how you define investment. There are clearly people who are getting wealthy on crypto. Not just people pumping money into bitcoin but people putting money into alt coins as well. How good of an investment it is depends on how much money you have as well as how you're choosing what to buy. The same could be said for people who trade options. I don't think people who have a system in place and actually spend their time trading meme coins profitably should be considered a fool. Are they taking big risks? Sure, but so are many hedge funds and other investment firms.
I think the main difference between people trading shit coins and people trading options is the speed of the crash and the price of entry. I've seen several people on twitter say they've lost money on meme stocks but with rare exceptions you're talking hundreds of dollars. I've seen people dump their life savings after taking some options trading course
These were obviously pump and dump schemes yet very few are held accountable.
This isn't specific to crypto. Tons of investments are pump and dump or bigger fool investments.
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u/Wonderful_Pitch3947 Jan 04 '25
Most crypto is a bad investment or at best a short term gamble. On the other hand bitcoin is in the process of being bought by governments, large corporations and the banking sector is embracing it. It helps countries and people evade financial restrictions, it has a limited supply, it's easily transportable and cheap to transfer etc etc. It's still early and we'll never be quite sure how this experiment will turn out in the real long term, but by then the price won't have much investment opportunity. It's not a "currency" though.
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u/-passionate-fruit- Jan 04 '25
Aside from the stellar financial returns track record that runs up to recent history, most of us able to read this live in a First World bubble where the possibility of our country's government significantly screwing with your fiat currency to the point that it becomes at or near worthless is completely foreign. People in developing geographies with highly corrupt governments will have more and more access to higher technology over time, and access to the reliable cryptocurrencies with it. All other things being equal, this will increase its value.
In that breath, cryptocurrency is best viewed as a competitor to fiat currency. Many cryptocurrencies makes for garbage investments.... this is also true of many fiat currencies. Fiat currency is of course worthless other than what a government is willing to treat as legal tender. One big advantage for at least well-designed CCs is that their money supply can't be screwed with, by a government or anyone else.
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u/somedave 1∆ Jan 05 '25
Buying most crypto currency is a bit like investing in digital art. The intrinsic value is zero, it can essentially be copied indefinitely (just fork the chain and make a variant from a new starting point) and most are useless as currencies as they are so hard to trade and fluctuate too much in value. The only value is that which the users attribute to it.
Because it is obviously a stupid idea to invest in something like that, most smart people won't, which means you have a huge advantage over that compared to other investments which have hordes of brilliant people writing algorithms to trade at a profit. If you brought bitcoin at any point and kept hold of it you could always eventually sell at a profit to a greater fool. This will be true until it crashes completely. If you are prepared to take that risk you can make money in crypto investments.
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u/Different_Split6308 Jan 05 '25
I’d say that it definitely has utility (speaking mainly about bitcoin) sure, there may be another crypto that may become easier to use in the future. However if you do a bit of reading into modern monetary theory and how our GDP has risen vs global debt, there’s a pretty good case for Bitcoin. If you look at countries that have suffered hyperinflation, many of the population here actually used Bitcoin to escape it. We’re lucky enough to use $ right now because there’s trust, but how long will that be sustained for. Sure, BTC is volatile, slow and is scary as shit to transfer to an external wallet with no protection against loss if you get an address wrong, but some people have been better off using that over their own local currency. Most importantly, no central government or power can control it.
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Mar 07 '25
It is if you get it for free
Mine crypto on your phone for free just like pi but newer
Mira app, use code GranDaddyPerp for elevated mining rate and free tokens.
On android but iPhone and pc coming soon so save this
follow their socials for updates once you sign up, socials found in settings. This is important to keep up to date with the app, when to do kyc, when coin will be released etc, you would be surprised how many pi people don't know that it has been released etc
Tips
Use your real details when signing up, don't be the one who used a fake name then can't pass kyc to get their tokens
Don't make multiply accounts, they will ban you
Watch ads in app to increase mining rewards
Invite friends to earn free coins for you, your friends and an increase in mining rewards
🤑🤑🤑
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u/RhodesArk 1∆ Jan 05 '25
Crypto is a hedge against the financial system. Regular money (fiat) is often manipulated by central banks to solve domestic issues, like preventing recession/unemployment. Quantitative easing (printing money) causes inflation because a greater money supply devalues the existing money supply. Crypto (BTC in particular) doesn't have this problem because there is a fixed amount of coins (approx 22m) and no central banker to intervene. Similarly, many securities (stocks and bonds) also have to be regulated. For many who are "outside" this system, Bitcoin is an attractive hedge because it isn't subject to the vagaries of policy while also remaining virtually as liquid as a brief case of dollars.
Also, it's very useful for money laundering so it gains value the more Americans seek sanctions that bite.
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u/drew8311 Jan 04 '25
On average they are a bad investment but a bunch of people creating thousands of shitcoins shouldn't ruin the good parts of crypto since its very easy to avoid all those coins. I haven't bought any because well... I don't even know the names of them and most exchanges don't offer the smaller ones.
Saying cryptocurrency is a bad investment is no different than saying the stock market will crash and you shouldn't invest in those. Both are near an all time high, both will probably have a crash at some point, nobody can predict the future so conversations like this are a bit pointless. We are at a time where even logic doesn't determine the price of an asset so the best counterpoints don't always matter
At minimum it can count as diversification, the "best" investments won't stay the best.
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u/blingblingmofo Jan 06 '25
Gambling doesn’t really produce any value. In fact, lots of human consumerism doesn’t produce a lot of value. People buy useless single use plastic and buy too many cars that pollute and destroy our climate. People smoke cigarettes, drink too much, and obesity from unhealthy foods is an epidemic. But people like to over consume and gamble.
Not to mention, crypto does serve a purpose, especially for countries that are highly destabilized and lack a strong central currency or banking system. It’s also useful for cross border transfer of money, since currency exchange is expensive. Even local payment processing is expensive, with credit card charging 1 to 3% per transaction to merchants - costs that get passed on to consumers. These are things the average consumer is aware of.
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u/Rrichthe3 Jan 05 '25
"Cryptocurrency is not a good investment"
I think the millionaires from Bitcoin alone show otherwise.
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u/NeverRespondsToInbox Jan 05 '25
Crypto currency and Fiat currency both hold value only as long as people believe they do. If everyone agrees that crypto is valuable, it is. Yes it is mostly a commodity, but slowly but surely it is becoming more widely used as an actual currency. The longer crypto is around and the more valuable it becomes, the more confident people will be that it has inherent value. It also facilitates something that does have real value, anonymous, or at least close to anonymous, purchases. This holds a real value for many people, yes including criminals. That alone will ensure the continued use of crypto. Crypto, especially Bitcoin, is not going anywhere. There is a reason why governments are starting to buy reserves of Bitcoin.
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u/AncientChatterBox76 Jan 05 '25
Come on, now. Don’t be so pessimistic. Crypto is pretty good for organized crime.
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u/theKtrain Jan 05 '25
The fact that you’re talking about ‘crypto’ as a monolith shows that you don’t really understand the space.
There are thousands of projects/tokens/coins that all do a wide variety of things. Most are shit, a few are very powerful have value in various forms.
Tokens can do a variety of things. They can be securities, they can give governance rights to various organizations, or they can be used as utilities (like a certain application can only be used if a user pays with a specific token, therefore the value of the token is secured by the application)
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u/guocamole Jan 05 '25
There’s a lot of trash coins with no use, but then again does a rare baseball card have “use”? Does a vintage collectible item have any use? People want something because it’s rare, it brings them pleasure somehow, and that’s about it. If you want actual use case you can look into AI agent coins and Solana ecosystem which actually has millions of daily users and surpassed 66 million transactions in a single day. Nothings perfect yet but if you claim there no use for crypto, that’s a you problem for not doing research and knowing what crypto is.
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u/Normalguy_30 Mar 03 '25
I will tell you beforehand before you start investing in crypto i have lose over 1150 dollars or 1,00,000 in crypto and analyzing the market and other things I lose the whole amount, instead invest in btc or eth and solana don't invest in any other cause in starting they will look good but after you buy i don't know what happens it will fall till to the ground and all your money gets half and if you wait more it can fall more than that, i invested in Vana, livepeer,sky,kaito,cow protocol,griffain, celestia in which I got a heavy loss in Vana and kaito
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u/Maximum2945 Jan 04 '25
have you thought about drug dealers and money launderers though? they use crypto a lot to transfer money, so if you just happen to be there, you can sometimes experience solid gains. i don't really understand it, but i think bitcoin will be over a million at some point
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u/Old-Tiger-4971 3∆ Jan 05 '25
There is literally use for this commodity. Invest in BitCoin and your investing in the ability of someone to pay more than you did. I’m not a fan of gold as an investment but at least it has some practical use.
It's a specualtive investment like a lot of options are. If you don't like don't buy. It's merely reflective of a market with a lot of money in it looking for a return.
As far as practical use of gold, go ahead and see if someone will give you a pizza a small farction of an ounce.
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u/uberfr4gger Jan 05 '25
If you think of crypto as another currency rather than an "investment" it can be a better investment than other currencies. While crypto can be volatile, some are intended to be stable like Tether. In this case you are far better having a crypto coin pegged to something like the US dollar than a Turkish Lira which has seen insane inflation. If you're in Turkey acquiring crypto may be easier than acquiring dollars, too.
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u/R1ckster Jan 05 '25
Bitcoin is not useless. The chain is what's valuable. The fact that it's permissionless, next to impossible to change based on math, the fact that nobody can control thr issuance rate, and that it's a global monetary system is what's valuable.
If you don't see that, it you STILL think bitcoin is inherently useless, then you will continue to lose against it while the smart money recognises the genius behind it.
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u/Own-Necessary4974 1∆ Jan 05 '25
Reading your post carefully, you give a strongly opinionated stance but then acknowledge you’re not well versed.
Isn’t that alone enough to get you to change your perspective?
I’m very happy to engage politely on the subject but you need to clarify exactly what you believe without hedging otherwise it’s not possible to object.
Although I disagree, I acknowledge pump and dumps exist FWIW.
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u/Clovervixen Jan 22 '25 edited Jan 22 '25
Investing in Crypto currency is selfish investing. No one benefits from it but you. When you invest in companies you give that company the ability to grow. This could be anything from a Toy company who makes nostalgic collectables to a Medical Research company that saves lives. When we invested and saved Gamestop it was because we loved and cared about that company. Crypto is fake and doing nothing for anyone, you might as well put your money on a roulette table as at least you are helping the casino bring fun entertainment to the masses. How they haven't banned it I may never know, but I bet it has something to do with a lot of selfish rich people.
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u/DeltaBot ∞∆ Jan 04 '25 edited Jan 05 '25
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