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Cryptocurrency finally busted


cougar

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4 hours ago, Aristides said:

GIC's are now paying more than 4% and will go higher as the BoC hikes rates.

4% when inflation is somewhere in the area of 20% ?

You do the math what you get, or rather what you lose.

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There are cryptocurrencies that are backed by physical gold unlike bitcoin which is backed by nothing and is the reason for the wild price fluctuations.  Those cryptocurrencies backed by gold (or some other stable underlying asset) are sometimes referred to as 'stablecoins'.  A gold backed cryptocurrency utilizing blockchain technology is worthy of serious consideration. Why gold in particular? Mainly because the price of gold is priced according to the USD, interest rates, inflation, supply and demand, and world geo-politics. In effect, a gold backed cryptocurrency would become a derivative of the underlying gold asset. Russia has plans for a ruble gold backed stablecoin, and China for its own yuan gold backed digital currency.  For those who claim 'you can't eat gold' well i have news for you. In 2008 Zimbabwe with hyperinflation running rampant, gold was the only means to buy bread. 1 loaf of bread was had for .1 g of gold panned by Zimbabweans from nearby rivers.  Today in Venezuela where the socialists have turned the bolivar into a national laughingstock, gold along with currencies such as the USD and peso are routinely accepted as barter for goods and services.

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On 6/27/2022 at 1:10 PM, suds said:

For those who claim 'you can't eat gold' well i have news for you. In 2008 Zimbabwe with hyperinflation running rampant, gold was the only means to buy bread. 1 loaf of bread was had for .1 g of gold panned by Zimbabweans from nearby rivers. 

This is no evidence that one can eat gold.  The price of gold will go down to zero when you can no longer buy food with it.  Imagine the situation where those Zimbabweans had lots of gold but nobody could offer hem any bread.   What were they going to eat then?

You are saying "stablecoins" backed by gold or other assets.   Let's think for a moment over this concept.  "Backed" must mean that one coin is backed by a certain amount of gold.   Now if the value of this coin goes up, would you get more gold, corresponding to this new value?  If it goes down, the "backing" must mean it cannot go below the value of gold it is backed by, am I right?

If you tied your coin to gold, it will basically be a piece of gold - it may not depreciate much in value, but it will not appreciate much either.  Like , if you left a golden bullion in your volt you do not expect to find two or three gold bullions next time you open the volt.

 

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https://www.cnbc.com/2022/06/29/crypto-hedge-fund-three-arrows-capital-plunges-into-liquidation.html

“Major cryptocurrency hedge fund Three Arrows Capital has fallen into liquidation, a person with knowledge of the matter told CNBC, marking one of the biggest casualties of the latest so-called “crypto winter.””

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Look at the USDC stable coin

Copied from CoinMarketCap today:

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The live USD Coin price today is $1.00 USD with a 24-hour trading volume of $5,659,502,273 USD. We update our USDC to USD price in real-time. USD Coin is up 0.00% in the last 24 hours. The current CoinMarketCap ranking is #4, with a live market cap of $55,807,811,255 USD. It has a circulating supply of 55,802,605,113 USDC coins and the max. supply is not available.

----------------------------------------------------------------------------------------------------

Who wants to give his USD  in exchange of USDC which only supposedly follows the USD in a 1-1 ratio but IS NOT USD!

55 billion of these scam coins in circulation and the max supply is "not available" !

hi-hi-hi      , go and buy people.  This must be something really good and cool.

Edited by cougar
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On 6/29/2022 at 6:38 PM, cougar said:

This is no evidence that one can eat gold.  The price of gold will go down to zero when you can no longer buy food with it.  Imagine the situation where those Zimbabweans had lots of gold but nobody could offer hem any bread.   What were they going to eat then?

You are saying "stablecoins" backed by gold or other assets.   Let's think for a moment over this concept.  "Backed" must mean that one coin is backed by a certain amount of gold.   Now if the value of this coin goes up, would you get more gold, corresponding to this new value?  If it goes down, the "backing" must mean it cannot go below the value of gold it is backed by, am I right?

If you tied your coin to gold, it will basically be a piece of gold - it may not depreciate much in value, but it will not appreciate much either.  Like , if you left a golden bullion in your volt you do not expect to find two or three gold bullions next time you open the volt.

 

Gold is no different than anything else.  It will go to 'zero' when there's absolutely no demand for it. It has behaved as a currency and store of wealth for the last 2500 years which is good enough for me and most central banks. Be honest now, if you had to choose between bitcoin not backed by anything other than what get rich quick enthusiasts were willing to pay for it, or a gold backed crypto issued by the Perth Mint and backed by the Australian government.... which would it be? If you chose bitcoin it wouldn't surprise me because i have to believe most people are in the crypto game to make a killing. You can win big and you can lose big. I don't know enough to answer your other questions as the details provided in most cases are at best rather sketchy.

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19 minutes ago, suds said:

 I don't know enough to answer your other questions as the details provided in most cases are at best rather sketchy.

Yep. it is left to everyone's own interpretation.

If I had to choose between a gold backed crypto and gold, I would still go with gold.   Any "stablecoin"  is not stable by definition as one would rather have the physical asset than something backed by it.

Just like someone pointed out above, you can win out of any scam provided you join early and are smart to pull out before things blow up.

 

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https://www.coindesk.com/business/2022/07/01/voyager-digital-temporarily-suspends-all-trading-withdrawals-and-deposits/

“Shares of Voyager plunged more than 26% to $0.33 in Friday’s U.S. trading (shares of the firm’s main listing in Canada were not trading on Friday because of the country's Canada Day holiday). Shares are down more than 97% year to date.”

”Voyager recently disclosed it had significant exposure to Three Arrows Capital (3AC) and had issued a notice of default to the beleaguered hedge fund. Voyager claims 3AC has failed to make require payments on its loan of 15,250 BTC ($294 million) and $350 million USDC.“


They are basically saying, “Sorry, you can’t have your money.”

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1 hour ago, sharkman said:


They are basically saying, “Sorry, you can’t have your money.”

Nice.

I watched a guy in one of those interviews in his nice shirt and tie, nicely trimmed  beard and haircut , in his 50-s exuding confidence and saying  Yes, it makes sense to borrow from the bank at 3% interest to buy a BitCoin that gives you 7% growth every year or more.

Well, how does this look for him today?   Borrow at 3% interest to buy something that dropped down 30% in one month , while inflation is in the range of 10-30% depending on what you buy.     How much exactly is the loss?

I think if he bought BitCoins with hi sown money, his loss is even bigger, if he borrowed, the bank takes the inflation hit, but he still need to come up with 33% more cash than what he has after his smart investment.

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On 5/13/2022 at 4:48 PM, Faramir said:

That's the interesting thing being a Canadian investor.  Any gains in oil or gold or crypto currencies are usually tempered by the exchange rate to US dollars.  Thankfully so are the declines.  Gold was down 10 in US today and 33 in Canadian dollars so today was a pretty bad day for Canadian gold.  I don't really follow crypto currencies as I have to admit I don't quite understand them.

This is not just for you but others unaware regarding what these are and how they werk.

Given all 'money' represents value that is at minimal created out of ENERGY, some recognized instead of creating money by maintaining a hold on some form of real collateral asset or promises to return favor based upon some prior service yet to fulfil the trades, some computer scientist recognzied that you can create 'energy' in the form of one using the energy wasted on solving complex math 'puzzles'. 

Normally, an asset represents energy in the way that E = mc2 represents matter as being stored energy potential. Services are 'dynamic' assets that if served but yet to be compensated also represent stored potential energy,....both 'energy' because they have at least some stored potential that was created as DEBT, something yet to be canceled out by a normal bartered immediate completed transaction. 

The old means of creating these was to use some RARE commodity like gold or other rare jewels that were LIMITED finitely in supply. The creation of cryptocurrency removes the need for a literal commodity as well as the need for literal real value in dynamic trades. They artificially make the currency 'rare' by using a complex password or code based upon a very large unpredictable number. The particular number is like 'labeling' the coin with a very unique signature. 

Then, a program is ceated that tries to solve something that takes time for the computer to solve, like finding what the prime factors are in such a number (just an example). This will be used to 'mine' value by getting your computer to crunch numbers that take time and waste energy. The energy initially comes from the power plant's source and so is still 'real' at minum to the cost of energy being wasted to solve a given problem. 

When paper money, like promised of ownership (deeds) or debts unpaid (IOUs), these create money by holding onto either the asset directly like a bank buying a house initially before setting up your mortgage (they own whatever unpaid portion on the principle.) ...or by having some debt that someone owes formally printed in some hard to counterfeit means. [I can write an IOU but because someone could possibly fake my signature of promise to pay back, the document-paper moneys, which include most tradeable things on any stock exchange, these act as stored energy, promises to pay back energy incompletely traded.]

The program of a cryptocurrency saves the record of its strored value along with the up-to-date accounting of the average value of that finite limit of virtual coins divided by total energy expended. Note that each 'coin' can be represented as the energy needed to solve one of those math puzzles. But they take unpredictable amounts of time which then represents the 'IPO' value of a stock, its initial offer. This value is independent of any political interference and counts on the type of complexity of the each problem independently. This initial 'value' might be rated as the time it takes to solve the problem. Since each problem is random AND unique, a virutal coin can take as little time to create as an electric pulse to potentially years. This part of the initial creation of a coin makes it relatively a 'fair' gamble for anyone, a lottery. Once created, whomever has the particular problem solved on their system 'owns' the value of the coin which is that average SO-FAR of all coins traded. 

Then those who TRADE in these coins BEFORE all of the fixed number of coins are found act as the SUPPLY. Until that supply is exhausted, most trading is only the SPECULATIVE trading that creates the up or down present 'value' per coin. This is like those on the stock market trading in literal dollars rather than the use of these dollars as normal curency. THIS is different once the supply maximum is reached. then whatever final value the total has at the end of this period represent the FIXED or permanent value that is no longer needing to be created and no longer 'speculative' The speculartion part is where much of the abuse can come from.

But also, we still have to trust blindly the coders creating these to be trustworthy and given no government can inspect their credibility, no one can be certain that any real LIMIT (supply) is set. Thus this SHOULD lead to abuse somewhere given half the people anywhere in the world believes in some form of deception if they hold to unlimited wealth creation. As such, the speculation (creating a form of gambling addiction for those investing in computers to just solve the creation of coins) AND the fidelity or 'trust' in the literal fairness of the code to stop at the fixed limit in predefined supply, create the biggest risk takers as investors. 

BUT, if actually fair, the idea is sound. Once it reaches its maximum supply, the money acts similar to commodites like gold that has a fixed supply. Then the particular value only depends upon the total supply of value tied to each coin that the people using them gives them by using them as token promises in actual trades. 

The risks mainly relate to

(1) Assured Limit. ...trusting there will be a limit [they become Ponzi shemes if not),

(2) Not conterfeit....whether the programs 'mining' them are fair and sufficiently random, (not fraudulent programs pretending to be 'fair'),

(3) Use....whetther others USE them for trading, and

(4) No Safety Assurances without Regulation.... the lack of the means of safeguarding things like a 'run' on those wanting to cash out their coins during vulnerable ecomonic depressions et cetera. 

Edited by Scott Mayers
So far, changed "band" to "bank" (spelling error); more spelling and emphasis
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13 hours ago, cougar said:

Nice.

I watched a guy in one of those interviews in his nice shirt and tie, nicely trimmed  beard and haircut , in his 50-s exuding confidence and saying  Yes, it makes sense to borrow from the bank at 3% interest to buy a BitCoin that gives you 7% growth every year or more.

Well, how does this look for him today?   Borrow at 3% interest to buy something that dropped down 30% in one month , while inflation is in the range of 10-30% depending on what you buy.     How much exactly is the loss?

I think if he bought BitCoins with hi sown money, his loss is even bigger, if he borrowed, the bank takes the inflation hit, but he still need to come up with 33% more cash than what he has after his smart investment.

Not a pretty picture at all.  I’ve mostly ignored crypto currency, bitcoins and the like.  I heard that Trump does not favour bitcoin, and I wondered why, but at least I looked it up.  
 

I could not really understand how it was made or valued, so I stayed away, never tried to invest in it.  I think that’s a maxim of sorts, only invest in industry or business that you are knowledgeable about?

Anyway, I started to favour precious metals.  In these times many things are uncertain.  I don’t possess the knowledge that some of you have, but silver and gold are not as complicated as Bitcoin.  Unless I am missing something!

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On 7/1/2022 at 3:47 PM, Scott Mayers said:

They artificially make the currency 'rare' by using a complex password or code based upon a very large unpredictable number. The particular number is like 'labeling' the coin with a very unique signature. 

Then, a program is ceated that tries to solve something that takes time for the computer to solve, like finding what the prime factors are in such a number (just an example). This will be used to 'mine' value by getting your computer to crunch numbers that take time and waste energy.

 

Sounds fascinating and I have heard the concepts in one shape and form or another. "Mining" coins by asking a computer to solve puzzles?  C'mon!  The computer solves what we can solve, only much faster.  Then who is supposed to generate those new tasks for the coins to be mined, the computer is not generating them by itself??

In all honesty, I think it is a lot of mumbo-jumbo with technical concepts thrown in to baffle our brains.  The realities are much simpler.

And This is What I Think

---------------------------------------------------------------------

"Well, then," said the fox, "You're quite sure you want to go home? Go then, and so much the worse for you."

"So much the worse for you." repeated the cat

"Think well of it Pinocchio, for you are throwing away a fortune."

"A fortune" repeated the cat

"Between today and tomorrow your five gold pieces would have become two thousand."

"Two thousand" repeated the cat

"But how is it possible that they will become so many?" asked Pinocchio, his mouth open wide in astonishment

"I'll explain it to you at once." said the fox "You must know that in the Land of Fools there is a sacred field called the Field of Miracles. In this field you dig a little hole and you put into it, we'll say one gold piece. You then cover up the hole with a little dirt, water it with two pails of water from the fountain, sprinkle it with two pinches of salt, and then, when night comes, you go quietly to bed. During the night the gold piece will grow and flower, and in the morning, when you get up and return to the field, what will you find? You'll find a beautiful tree laden with as many gold pieces as a fine car of corn has kernels in the month of July"

"Suppose," said Pinocchio more and more bewildered, "that I buried my five gold pieces in that field.  How many would I find the following morning?"

"That is an exceedingly easy calculation," replied the fox " a calculation that you can make on the ends of your fingers. Figure that every gold piece gives you an increase of five hundred. Multiply five hundred by five, and the following morning you would find two thousand five hundred shiny new gold pieces in your pocket."

"Oh! How delightful!" cried Pinocchio dancing for joy "As soon as I've collected those gold pieces I will keep two thousand for myself and make a present of the other five hundred to both of you."

"A present to us?" cried the fox sounding much offended. "Don't be absurd!"

"Don't be absurd!" repeated the cat

"We don't work for our own gains." said the fox. "We work only to enrich the lives of others."

"Others" repeated the cat

"What good people" thought Pinocchio. And instantly forgetting his father, the new coat, the spelling book and all his good resolutions, he said to the fox and the cat, "Let's be off at once! I will go with you."

---------------------------------------------------------------------

 

 

pinocchio.jpg

Edited by cougar
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  • 2 weeks later...

And yet another domino...

https://www.cnbc.com/2022/07/11/how-the-fall-of-three-arrows-or-3ac-dragged-down-crypto-investors.html

“As recently as March, Three Arrows Capital managed about $10 billion in assets, making it one of the most prominent crypto hedge funds in the world.

Now the firm, also known as 3AC, is headed to bankruptcy court after the plunge in cryptocurrency prices and a particularly risky trading.”

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On 6/23/2022 at 12:48 PM, ironstone said:

I'm not sure if PP was totally wrong on his stance on the Bank of Canada.

I'm no expert on crypto but one of my coworkers was up to over $250,000 from an investment of less than $10,000. That was before the market tanked though. Perhaps the appeal was that it was more or less outside of the control of governments.

I think it's easier to understand when we invest in something more tangible, real bricks and mortar companies.

 

You are only up or down if you sell it, until then it's just a number.

 

Edited by Aristides
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https://www.cnbc.com/2022/07/12/founders-of-bankrupt-crypto-hedge-fund-three-arrows-go-missing.html

“The co-founders of failed crypto hedge fund Three Arrows Capitalappear to be on the run from creditors, according to court documents recently filed in New York.

Lawyers representing the creditors say the physical whereabouts of Zhu Su and Kyle Davies, who started Three Arrows in 2012, are “currently unknown,”“

 

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On 7/3/2022 at 12:23 AM, cougar said:
On 7/1/2022 at 4:47 PM, Scott Mayers said:

They artificially make the currency 'rare' by using a complex password or code based upon a very large unpredictable number. The particular number is like 'labeling' the coin with a very unique signature. 

Then, a program is ceated that tries to solve something that takes time for the computer to solve, like finding what the prime factors are in such a number (just an example). This will be used to 'mine' value by getting your computer to crunch numbers that take time and waste energy.

 

Expand  

Sounds fascinating and I have heard the concepts in one shape and form or another. "Mining" coins by asking a computer to solve puzzles?  C'mon!  The computer solves what we can solve, only much faster.  Then who is supposed to generate those new tasks for the coins to be mined, the computer is not generating them by itself??

In all honesty, I think it is a lot of mumbo-jumbo with technical concepts thrown in to baffle our brains.  The realities are much simpler.

And This is What I Think

---------------------------------------------------------------------

"Well, then," said the fox, "You're quite sure you want to go home? Go then, and so much the worse for you."

"So much the worse for you." repeated the cat

"Think well of it Pinocchio, for you are throwing away a fortune."

"A fortune" repeated the cat

"Between today and tomorrow your five gold pieces would have become two thousand."

"Two thousand" repeated the cat

"But how is it possible that they will become so many?" asked Pinocchio, his mouth open wide in astonishment

"I'll explain it to you at once." said the fox "You must know that in the Land of Fools there is a sacred field called the Field of Miracles. In this field you dig a little hole and you put into it, we'll say one gold piece. You then cover up the hole with a little dirt, water it with two pails of water from the fountain, sprinkle it with two pinches of salt, and then, when night comes, you go quietly to bed. During the night the gold piece will grow and flower, and in the morning, when you get up and return to the field, what will you find? You'll find a beautiful tree laden with as many gold pieces as a fine car of corn has kernels in the month of July"

"Suppose," said Pinocchio more and more bewildered, "that I buried my five gold pieces in that field.  How many would I find the following morning?"

"That is an exceedingly easy calculation," replied the fox " a calculation that you can make on the ends of your fingers. Figure that every gold piece gives you an increase of five hundred. Multiply five hundred by five, and the following morning you would find two thousand five hundred shiny new gold pieces in your pocket."

"Oh! How delightful!" cried Pinocchio dancing for joy "As soon as I've collected those gold pieces I will keep two thousand for myself and make a present of the other five hundred to both of you."

"A present to us?" cried the fox sounding much offended. "Don't be absurd!"

"Don't be absurd!" repeated the cat

"We don't work for our own gains." said the fox. "We work only to enrich the lives of others."

"Others" repeated the cat

"What good people" thought Pinocchio. And instantly forgetting his father, the new coat, the spelling book and all his good resolutions, he said to the fox and the cat, "Let's be off at once! I will go with you."

---------------------------------------------------------------------

 

 

pinocchio.jpg

Sorry for the late response. I'm not online as much lately. 

I already understand the problem regarding trust of what is occurring given the whole thing itself CAN be easily just set up fraudulently without others knowing the wiser. But we already have this with most technology. I don't like the general etiquette with cell phones given they are fully powerful miniture computers that SHOULD make people question the trust of these. They can (and do) have the ease to spy making anyone in its presence vulnerable to security. The very nature of faith we place in them is odd. Yet, I'm betting that you would be insulted if I asked you to place your phone in a secure faraday bag when coming into my place as though I am the one being paranoid, right? 

I already distrust cryptocurrency for the similar security reasons about trusting ANY tech. The point here is that IF we are trust the logic, ignoring whether anyone is being deceptive, my explanation is sound. The root of the term is, "crypto-" and refers to the same identical factors that we place trust in ANY of our passwords we use online. So think of the 'problems' that the computers solve as trying to decrypt passwords. The degree of passwords they solve though are far more complex than most of our regular online passwords we might use for doing our banking online. So if you distrust them, you should be very scared about even being here 'anonymously'.

Basically, if we are to gamble at all in trusting ANY computers not to be used against us, the cryptocurrency would be far more 'secure' in the kind of passwords they are using to solve such problems. The KIND of problems they usually deal with is to try to find the prime factors of very very big numbers. While computers can act quicker than humans, some of the types of problems they are 'solving' are not able to be solved even with the best computers without time. 

My explanation here is unable to delve into the literal methods they use given it requires more investment in time to learn than I could explain analgously. What I am explaining is how it works in principle. The trust issue is real and why I don't trust them. But in principle, if there were some means of 'trust' being assured, the logic is sound. The reason many oddly 'trust' them is because they don't trust governments, ...those 'computers' made up of people. But if you don't trust knowable people to secure currency, then why would you trust better the very anonymous uncertainty of currency that uses hidden computer algorithms made from unacountable and unknown PEOPLE who create them?

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  • 2 weeks later...
On 7/1/2022 at 4:24 PM, suds said:

....

Be honest now, if you had to choose between bitcoin not backed by anything other than what get rich quick enthusiasts were willing to pay for it, or a gold backed crypto issued by the Perth Mint and backed by the Australian government.... which would it be?

....

I would choose neither.

====

This is not new - but it always appear so. Since Tulips and shares in the South Sea.

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  • 4 months later...
On 6/13/2022 at 10:40 AM, cougar said:

Crypto Market Crashes Anew

 

Hurry up, guys, you can now buy a BitCoin for only US$23,000 !

I am totally sold.    On my way to the bank to convert my family savings into BitCoins !  ?

Five months later and you can buy the BitCoin for $15,701.60  (and probably even less by the time you read this line)

So I made money in those 5 months by NOT going to the bank and NOT converting my savings to BitCoins.

I made $7,300 of imaginary profit per BitCoin !   ?

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