Is crypto just a stupid scam, sort of like the Tulip Bubble? I'd say the answer is obvious based on one single thing:
Crypto enthusiasts actually tout the fact that anyone can create a cryptocurrency, which is almost the only true thing they say. But it should be pretty easy to see that if something can be created literally out of thin air and an algorithm by anyone who wants to, it's definitionally not something that can have any value except as a bubble-ish collectible.
So yes, crypto is plainly valueless as money. It's value is solely that of a collectible, which can crash anytime the marks finally figure out what's going on. Or when they just get bored and move on to a new scam.
In terms of usefulness, crypto also fails in pretty obvious ways. There are many ways of transferring money (cash in an envelope, Western Union, money orders, wire transfers, hawalas, checks, Venmo, banks, etc.), nearly all of which are quick, efficient, and safe. Blockchains, aside from burning up absurd amounts of electricity, are generally limited in speed and capacity by their very design (though the blockchain folks are working on this). Even in third-world countries there's really nothing crypto can do that traditional money networks can't do better.
Except for one thing: criminal transactions that benefit by being hidden from the prying eyes of public police forces. And even then you have to be motivated: Most cryptocurrency is kept by crypto exchanges, which need to have an address and need to pay employees. This means that prying government eyes can see everything they do. You can do crypto on your own, but it takes some effort.
And of course, ordinary non-criminal types will do almost all their crypto investing through an exchange, because it's as easy as investing in stocks through Charles Schwab. Easy but nonregulated, that is. Criminals might like this, but all those depositors who put $10 billion into their FTX brokerage accounts aren't going to get bailed out by the FDIC anytime soon.
I've got some magic beans I'd like to sell!
Yeah, but what about digital trading cards? I understand there’s some really cool ones that were recently made available via a MAJOR ANNOUNCEMENT by TFG. Only $99 each!
That was one of the most pitifully hilarious things I've seen in a very long time. He literally just gave every comedy writer on every late night show a week off work. The jokes write themselves.
That reminds me of the time right after Dick Cheney shot his friend in the face, and Louis Black was doing a show and he said "Dick Cheney..." and the audience erupted in laughter, and after it died down, Louis said "See how easy that was? I didn't even have to say 'Dick Cheney, the Vice President, who shot his friend in the face....' to get a laugh"
Cryptid currencies.
I should have just read the headline about how I "don't have to know anything", and said, "I'm good then". But no, instead I spent another precious three minutes reading the first two paragraphs, and then typic this snarky comment, just to confirm the simple facts that a) I don't understand this thing b)I don't want to understand this thing and c) I don't need to understand this thing
I will never get those three minutes back. Very poor choice.
Guess trump realized it is too iate to amass a fortune in crypto & get out quickly, so he belatedly decided to model his new business gambit on Melania's last effort - her NFTs.
Too bad that crypto won't take down only the trendiest, but those who can't afford to gamble. Better to wait until a casino opens nearby if you really can afford a loss.
Pathetic. Whatever the little man might have had at one time, he lost it. He's yesterday's news. No one pays him attention anymore. He's running for president and who gives a shit. If he wants to make headlines, he'll have to be indicted. The haters & QAnon crazies are following Elon now. The party people are going for DeSantis. The MAGA cult can only afford so much grift. He's not worth a penny for an NFT, or a pound of pity.
I am an optimist. I think he still has enough juice to sabotage more Republican candidates. He still has a cadre of true believers, and it's not as if he will use this residual power to play well with others.
+1 for sly comment of the day
The best case for crypto I've seen is this: https://astralcodexten.substack.com/p/why-im-less-than-infinitely-hostile
Basically, crypto *does* do better than banking in many third-world countries where the banking system is completely dysfunctional, or there's a ton of inflation. A few years ago, I'd have argued that wild swings in crypto value make it not much better than a wildly inflating currency, but the swings have calmed down a lot for the main coins.
That's right. Crypto is popular in India and Vietnam, for example, places where the banking system is a joke.
“ if something can be created literally out of thin air and an algorithm by anyone who wants to, it's definitionally not something that can have any value”
That’s like saying anybody who can print a number on a piece of paper can make money.
No one can create bitcoins out of thin air. I agree 99.9% of coins out there are junk but please distinguish between products. A legal dollar bill is not the same as monopoly dollars.
It is true that only the Ty company could make Beanie Babies, and Bitcoin is backed by the full faith and credit of people who think Bitcoin has value.
"Bitcoin is backed by the full faith and credit of people who think Bitcoin has value"
+1!
And worthy to join my other favorite crypto line: "One reason I still have trouble believing cryptocurrency is money is that there aren’t commercials for money."
--(Tweeted by @noahgarfinkel, retweeted by Josh Marshall).
The big irony is how all the proponents of cryptocurrency touted the relatively fixed amount of crypto-coins over the inherently "inflationary" character of fiat currency, while the extreme ease of creating new cryptocurrencies resulted in their number doubling ever one or two years. Now THAT'S inflationary!
Criminals are also discovering a down side to crypto. Crypto relies on a blockchain which means that EVERY transaction is both public and immutable. If you want some semblance of secrecy, you might try splitting transactions into a maze of smaller transactions, but there are now forensic programs for identifying this ruse. Unlike cash or even checks sent to short lived corporations, everything in crypto is right out there.
I think the thing that at least initially gave crypto rockets was the libertarian fringe trying to eliminate fiat money from their lives. Silk Road pretty conclusively proved that you can't use crypto for crime as it is actually not untraceable.
XRP seems pretty legit. But it's trying to be hyper efficient crypto for banks and institutions, not shadow dollars for buying heroin on the internet.
Making an excellent point here about Donald Trump's fabulous tarot cards selling out in less than a day,
https://twitter.com/MuellerSheWrote/status/1603782510688624640
There simply cannot be that many suckers in the world, at least not such huge suckers.
Makes me wonder just how many giant crypto frauds there have been. Africrypt, which defrauded people of an unknown amount of money (3 Billion? Hundreds of Millions? who knows!) was pretty limited to Africa, so that flew under the radar here.
From what I've seen, money laundering using crypto is much cheaper than traditional routes, so we're likely to see a lot more scams and illegal usage in future.