Good article that details exactly why the bitcoin is a pyramid scheme

[Faust]

Such wasted processing power when it could be used for important things such as brute force hacking wifi passwords... alternately, i recall some playstation thingy that clouded processing power for some kindof research and modelling, anyone remember?

There's several:
SETI (Probably less useful than bitcoin, but I'd prefer people waste CPU time with SETI than bitcoin)

and Foldit which had an excellent track record, most notably this:

http://www.sciencedaily.com/releases/2011/09/110918144955.htm

[Faust]

I don't know about that...but allegedly Hezbollah used Playstation 3 processors to act as guidance systems in their more sophisticated rockets.

That seems a sensible and efficient use of processing power.  And quite impressive, given how terrible the PS3 can be.

It makes sense, even with sophisticated algorythms to reduce calculations you are still going to need a strong processor to crunch the calculations.

Whatever about the the PS3 Hardware is still incredibly powerful. The problems with console gaming comes from optimization.
For consoles the games are optimized well before release (as bad initial sales are worse on consoles than pc), and then slow patches that are often entirely overlooked.

On PC you can have disastrous launches and patch the fuck out of it every day if needs be and as time goes by the game becomes more and more stable. Consoles tend to reach a certain point where updates are abandoned much faster than PC games.

[Cain]

True, I was just thinking of some of the infamous bugs reported on some of the game forums I played.  Like the infamous "no more than 8 enemies spawning" problems.

Which the US military should take full advantage of.  9 pieces of chaff will totally fry those missiles, at least until they upgrade to PS4

[Faust]

True, I was just thinking of some of the infamous bugs reported on some of the game forums I played.  Like the infamous "no more than 8 enemies spawning" problems.

Which the US military should take full advantage of.  9 pieces of chaff will totally fry those missiles, at least until they upgrade to PS4

It's entirely down to the game optimization, Hitman blood money is nearly a decade old now and it rendered an entire Mardi Gras parade with floats and hundreds of NPC's.

It was meant to be difficult to design for though because of the weird architecture, so it would be very easy for rendering/spawning/etc bugs to creep in.

[Doktor Howl]

https://www.ccn.com/bloodbath-crypto-market-11-billion-in-minutes?fbclid=IwAR0DRRhZqfRq6LTvkNJ8oenV2o7munuKPki9F77i4QT59TYewSma-qH3K_4


BOOM

[chaotic neutral observer]

On a semi-related topic, the founder of Quadriga, a Canadian cryptocurrency exchange, died recently, and $250M worth of "assets" just sort of...disappeared.  Nobody can find the passwords, or something.

https://www.cbc.ca/news/canada/nova-scotia/quadriga-mystery-deepens-with-little-evidence-of-cold-wallets-containing-250m-1.5011573

[TaylorDadly]

On a semi-related topic, the founder of Quadriga, a Canadian cryptocurrency exchange, died recently, and $250M worth of "assets" just sort of...disappeared.  Nobody can find the passwords, or something.

https://www.cbc.ca/news/canada/nova-scotia/quadriga-mystery-deepens-with-little-evidence-of-cold-wallets-containing-250m-1.5011573

I didn’t find enough information confirming everything described. But I know several facts against this theory The most important one is about the connection to HIMEOBS

[navkat]

Like that Liberty Dollar thing I almost lost my shirt in years ago?

We Reverend Doktors have a technical term for that sort of thing.

"Investing like a fan", which is a subcondition of "Betting like a fan".  In layman's terms, Canada Bill Jones said it best, more than a hundred years ago:  "It is morally wrong to allow a sucker to keep his money."

Having BEEN a sucker is not a shameful thing.  Lessons are learned, and they are never learned for free.  They may cost you money or pride or both.  It's only shameful when you run off and make the same fucking sucker bet a second time.

Agreed.

And luckily, I didn't buy too much of the paper certificates. I bought the coins and got rid of them before it became out-and-out illegal to possess them.

My friend Karl Riele, however, committed suicide after he lost EVERYTHING. Not only did he have faith and place his bets, but he dragged a lot of loved ones and friends into the casino. Ruined his reputation, self-esteem, everything. Before the Fed took his entire life savings away and brought him up on charges, he'd established a thriving market for the things in Western NY based on his faith in the Rochester currency.

He was a very, very good, kindhearted man and until just a couple years ago, I believed, a survivor. I've known a lot of people (a LOT) who have snuffed themselves out over the last few years over far less. Karl was a shock.

Bitcoin is going to do this to people. The Fed won't tolerate competition.

Ooooh...this aged...weirdly.

Since this, 3 more friends committed suicide after the Bitcoin Bust a few years back.

[P3nT4gR4m]

We're getting pretty close to this thread looking spectacularly wrong

All going well (for a fucking shitload of us at least) we're only three months or so from the beginning of the end

All j00r economics are belong to us

Anyone holding dynocurrency a couple of years from now is in serious danger of getting burned and, even before then, you're in for a hell of a heatwave.

From what I can make out pretty much everyone using the ponzi argument (and it's ponzi they're talking about - pyramid doesn't even make sense in this context) against crypto is generally using the word "bitcoin"

Problem with "bitcoin sucks cos..." positions is that Bitcoin is pretty much established now. It's a mature, 1st gen platform, tried and tested, it does exactly one thing at this point and that's act as instantly teleportable gold. As a hedge against $1.9 trillion stimulus packages, financial fuckery, organic inflation and the like devaluing paper it's currently storing about 1/10th as much money as the shiny yellow metal and gaining. So maybe it doubles in value this year or maybe it triples or even quadruples like last year. Maybe the rabid fanboys are right and it finally does an annual 10x. Sure, there's plenty of headroom but who gives a fuck? Few more millionaires and maybe the odd trillionaire. Nothing to write home about. It's settling down, reducing in volatility by the minute. Another couple of years and you'd be as well buying bonds.

After bitcoin came Defi, in the form of Etherium. This 2nd gen technology is often mistaken as a competitor to bitcoin or even a successor. It's not. BTC is to ETH as Gold is to every networked system currently in existence that's handling any kind of transactional or contractual financial business. BTC's potential growth is limited to metal, precious stones and the rest and it's unlikely to hoover up all those markets in their entirety. Diamonds will probably remain a girls best friend for the forseeable future. ETH/Defi on the other hand has the potential to swallow up all 100-odd trillion of the global capitalism apparatus. It's the internet all over again, only this time it's money but here's the rub, ETH has some serious fucking issues.

Since the institutional investors jumped onboard at the arse end of last year, more or less doubling my portfolio in the space of a couple of months, the cracks have begun to really appear in the creaky old second gen platform. Daily trading volume across the chain has spiked like a motherfucker. And this has caused insane levels of network congestion to the point where transaction fees are spiking close to the equivalent of 100USD during the busy times. This isn't anything you'd even notice if you're shifting a couple of hundred grand but if all you want to do is buy fifteen quids worth of cryptokitty to complete your collection it's a fucking serious showstopper.

Enter third generation. Massively scalable solutions with a side order of ffs we really ought to do something about the global warming thing. Third gen solves network bandwidth, transaction fees and energy consumption in one fell swoop. Right now we have a couple of contenders in the running, shiny new, 3rd gen protocols in direct competition with Etherium but the old workhorse might not be ready for the knackers just yet. There's an upgrade in the process of being rolled out, imaginatively titled "ETH2.0" which, if it goes smoothly and arrives in time, will effectively turn ETH into a 3rd gen platform with the kind of first mover advantage that would have made the late steve Jobs piss his pants back when i-phone launched. A thriving ecosystem of dapps and smartcontracts and layer2 solutions with hundreds of billions of dollar value already locked in and trading. Those Non-Fungible Tokens you keep hearing about in the news right now? All running on Etherium network. So from here it goes one of two ways. Either the ETH2.0 rollout progresses smoothly and in a timely manner or one or more completing protocols end up replacing it.

Either way, old fashioned virtual paper and those cute little trading cards with the pictures of presidents on, those are gone. They're not really even any use as collectibles since there's fucking trillions of them in circulation and the firm that prints them keeps flooding the market with more so, as an investment, they're fucking useless cos they devalue way quicker than you can possibly "catch them all".

So no, Bitcoin isn't a ponzi scheme. Bitcoin is shaping up to be the new gold. It's also going to be the new gold standard. Yup - that concept was good enough for your grandad and the whole world has kinda gone to shit since it was dumped so it's made a comeback. I've used the term $USD a few times referring to the value of this and that token but, honestly, I hardly look at it any more. I have Sterling for paying the bills and collecting payments from clients who aren't interested in the ETH discount. I measure my holdings against BTC these days as the emerging global reserve. When the dust settles, and volatility with it, that's pretty much what we're looking at. The fed can piss and moan all they like but what they can't do is compete on profitability and a wave from the invisible middle finger of the market is the best that uncompetitive business models can ever hope to receive. You've had a nice run Benjamin, you've served us well over the centuries now will someone take this guy outside and shoot him in the head? They either rebrand as a hipster cafeteria chain or they go the same way Barnes and Noble did when young Jeff Bezos came along.

So that's my take and, yeah, I've been wrong about a few things in the past (although never with technological revolutions) so take this with the customary pinch of salt. I just wanted to point out the counter argument. If I'm right then it'd make sense to at least hedge some of your savings in this space. Yanno, just in case? Short to medium term, it's a purely speculative market right now and it's in one hell of a bubble so ffs do your research (especially with the altcoins) and don't put anything in there that you're likely to need back out in a hurry. Unfortunately, for anyone who doesn't have any spare money they can afford to lose, you're as good as fucked. Because from where I'm sitting you're going to lose it if it stays in fiat long term. We're a decade and change into yet another tech revolution and these things always leave a hell of a lot of carnage in their wake when they reach inflection.

[rong]

how would you recommend someone go about buying and holding some bitcoin?

[P3nT4gR4m]

how would you recommend someone go about buying and holding some bitcoin?

If you're only interested in Bitcoin or Etherium then coinbase is dead easy. Binance has a bigger range of conversion options (other crypto tokens and exchange trading between then) but is a bit more fiddly to use.

You'll need legal photo ID like a driving license or passport for both and you'll need to take a selfie of you holding it and wait til it's verified their end. This felt a little shady and like trying to get a pornhub account or something when I did it but it's a legal requirement to prevent dodgy shit going down on their network that might get them into trouble with the SEC. Same Idea as when you sign up for a bank account only it's remote so the cashier can't see your face while you hand over the docs kinda deal.

From there just figure out how many tokens you want to buy and punch in your credit card number and either store it there for later or don't depending on how you feel about that kind of thing.

And that's pretty much it.

I'd advise you to do some research first, buy a couple of quids worth and keep an eye on the movement for a few weeks or months or whatever until you've lived through at least a couple of pumps and dumps and watched your $10 turn into $1 in the space of a day and jump up to 20 the next. The first time you wake up in the morning to find out that you've "lost" over a grand while you were sleeping can be a bit of a shock to the system. So ease in and make sure you understand how this is going to feel once you've chucked a fair chunk of your savings in there. Even though, like I said, the money I have in there is money I can ultimately live without, it's still a serious kick in the ballsack the first time you see it tank.

After you've watched the graphs for a bit on somewhere like coingecko or coinbase pro, you'll start to realise what's going on as it pingpongs between support and resistance bands and even occasionally busts through the floor then bounces back to all time highs. Right now we're in the middle of an epic bull run which means that most of the time when it dips, it dips to a higher position that it did the last dip and when it hits the top, the top is also higher so try to get your timing right and, when you finally feel you're ready to jump in with both feet, buy the next dip. It still might go down a bit further but you won't have as long to wait til it shoots back up and suddenly you're in profit. There's nothing as demoralising as sticking a couple of grand in there then watching it plummet from an ATH breakout, down to half or even a third of the value but, even if it does just hold the shit out of it. Stay frosty and wait for the uptick. This is all normal and you're going to gain long term regardless of emotional turmoil of the market.

Like any good tech revolution there are a couple of jargon words that we've come up with:

FUD - Fear Uncertainty and Doubt like when they replaced the main character in the whitehouse pantomime and he immediately appointed some old biddy who can't work facebook to "investigate the terrorist/crime syndicate that is Bitcoin" and the market tanked as all the bubblegummers panicked left in droves.

FOMO - Fear of Missing Out - when Elon Musk announces he's just stuck 1.5 billion on Tesla's balance sheet, suddenly everyone and their dog is remortgaging the house to buy in and bitcoin tops a trillion US briefly before the overvaluation corrects as the big boys frontrun their cream off the top and then convert back in, on the inevitable resulting dip

and my personal favourite - HODL (it's not geek speak if there isn't a typo in there, right?) - Hodling is just holding and all it means is hang onto your coin while the price crashes and have a laugh at all the lesser monkey's overheated amygdala's directing their investment choices.

This guy on YT is probably worth a sub, since he explains all this shit a lot better than me - https://www.youtube.com/watch?v=8a0LGCMrjAA

Oh and in terms of onboarding I heard something about paypal enabling buying and selling of BTC only in the states. So if it's really only bitcoin you're after and you live in the US, you could try there. I wouldn't know cos I'm geo-blocked so I can't look but going by the pump we got when that announcement went out it's probably easy as hell to buy in from there.

[rong]

thanks!

[chaotic neutral observer]

All going well (for a fucking shitload of us at least) we're only three months or so from the beginning of the end

What is the beginning of the end going to look like?  Give me a testable prediction, so that I can check in three months whether you were right or not.

Anyone holding dynocurrency a couple of years from now is in serious danger of getting burned and, even before then, you're in for a hell of a heatwave.

There is practically nothing around here available for purchase using cryptocurrency.  The idea that cryptocurrency will supplant government-issued currency within two years is highly dubious.

Another couple of years and you'd be as well buying bonds.

You can lose a hell of a lot buying bonds, don't you know.

And this has caused insane levels of network congestion to the point where transaction fees are spiking close to the equivalent of 100USD during the busy times. This isn't anything you'd even notice if you're shifting a couple of hundred grand but if all you want to do is buy fifteen quids worth of cryptokitty to complete your collection it's a fucking serious showstopper.

Sounds exciting.  But to be successful, a currency needs to be boring.  It needs to be highly liquid, and it needs to have a stable value.

If a cryptocurrency is boring, it's not likely to catch anyone's interest.  But if it's not boring, it won't be successful as a currency.

Either way, old fashioned virtual paper and those cute little trading cards with the pictures of presidents on, those are gone.

Why would they be?  I can already pay for doughnuts by waving my debit card at the plastic blob next to their till.  How would switching to a cryptocurrency make my life better?  How would it make anyone else's life better?

they're fucking useless cos they devalue way quicker than you can possibly "catch them all".

The inflation rate isn't that bad.  Even with all the stimulus cash flowing around, I doubt we'll get up to 1980's levels.

So that's my take and, yeah, I've been wrong about a few things in the past (although never with technological revolutions) so take this with the customary pinch of salt. I just wanted to point out the counter argument. If I'm right then it'd make sense to at least hedge some of your savings in this space. Yanno, just in case? Short to medium term, it's a purely speculative market right now and it's in one hell of a bubble so ffs do your research (especially with the altcoins) and don't put anything in there that you're likely to need back out in a hurry.

I am completely unconvinced.  I have a fair bit of free cash on hand, and I'd like to think that not buying into speculative bubbles is part of the reason for that.  I see no reason to put anything into any cryptocurrency.

After you've watched the graphs for a bit on somewhere like coingecko or coinbase pro, you'll start to realise what's going on as it pingpongs between support and resistance bands and even occasionally busts through the floor then bounces back to all time highs.

I was under the impression that "support" and "resistance" were just lines that people drew on the graph after the fact, and that they didn't have any significance in reality.  In finance, people like to construct narratives to explain what they've observed.  Often, there's no way to know if the explanations are true or not.

[P3nT4gR4m]

What is the beginning of the end going to look like?  Give me a testable prediction, so that I can check in three months whether you were right or not.

Hyperbole - guilty as charged. The beginning of the end has actually come and gone. You sound like you missed it. In 2009 Bitcoin launched at around $0.0008 per coin. That marked the start of the money exodus. At time of writing  $1,806,885,026,917 worth of money has transferred from various fiat currency platforms to blockchain. Yes, there is ebb and flow for now and probably always will be until the government banks lose the fight. At that point all the money will be on chain. This is what the end will look like. When it happens, I wouldn't like to guess. Governments can be very stubborn when they put their minds to it. I used the phrase beginning of the end to signify an acceleration of this process. Like - it's really going to fucking take off in a big way.

There is practically nothing around here available for purchase using cryptocurrency.  The idea that cryptocurrency will supplant government-issued currency within two years is highly dubious.

That's what changes around june/july. Couple of years and anyone not accepting crypto payments will be finding it as hard to turn a trade as anyone not accepting card payments does now. Couple of years. You can hold me to that.

You can lose a hell of a lot buying bonds, don't you know.

Congratulations, you caught the gag! Have a cookie.

Sounds exciting.  But to be successful, a currency needs to be boring.  It needs to be highly liquid, and it needs to have a stable value.

If a cryptocurrency is boring, it's not likely to catch anyone's interest.  But if it's not boring, it won't be successful as a currency.

Liquidity and stability are already here, just not with bitcoin. Defi platforms already host "stablecoins" tied to pretty much all the cool kid currencies. Ironically the stability of the old currencies is about to become mega wobbly only in part due to blockchain and in part due to manipulation so the stable coins will actually become less stable than the increasingly stable pure crypto options. This is to be expected. The transition doesn't really work unless all the old currencies approach zero as the value moves on chain.

Why would they be?  I can already pay for doughnuts by waving my debit card at the plastic blob next to their till.  How would switching to a cryptocurrency make my life better?  How would it make anyone else's life better?

Quite simply - it's more efficient. Tech revolutions always succeed because they are straightforwardly better at doing whatever it is they are designed to replace. Cars took over from horses because they were better at horse stuff. Microprocessors took over from buildings full of human bean counters because they were better at counting beans. The internet took over from retail because it was better at selling. Crypto is taking over from banking and finance because it's better at banking and finance. The value is in the efficiency and this translates directly to cost saving. As soon as someone can do something cheaper and faster, they outcompete their competitors, the competitors must either adopt the new method or lose the farm. Right now you wave your card and only a fraction of your money pays for donuts, the rest is skimmed off the top by middlemen who facilitate the transaction. What blockchain offers if cheaper donuts, cheaper ingredients, cheaper shipping of said ingredients. Cheaper lighting and heating in a cheaper bricks and mortar donut shoppe. With the banks out the way, everything gets cheaper. The compound effect is astronomical. 

The inflation rate isn't that bad.  Even with all the stimulus cash flowing around, I doubt we'll get up to 1980's levels.

Let's wait and see

I am completely unconvinced.  I have a fair bit of free cash on hand, and I'd like to think that not buying into speculative bubbles is part of the reason for that.  I see no reason to put anything into any cryptocurrency.

Remember the dotcom crash back in 95? Same deal. Tech revolutions always arrive with a kind of cambrian explosion of ideas. These ideas are 99% idiotic and 1% fucking paradigm shifting because humans but money is pumped into all of these ideas more or less equally, also because humans. Skepticism is always popular around these phases because only early adopters actually understand a) the technology and b) the potential. Eventually the bubble bursts and the sceptics all do that smug thing where they say - "See! Told you so! The internet was a fad! We all understood the whole thing better than the experts!" And then the entire world changes very profoundly and very suddenly and the sceptics stand there with their jaws hanging open and say "Well, yeah but nobody could have seen that coming" But we did see it coming, in large part because we were the ones who made it happen. I have no interest in convincing you, tho. It actually works out better for me long term if you remain unconvinced so lets agree to disagree and leave it there

I was under the impression that "support" and "resistance" were just lines that people drew on the graph after the fact, and that they didn't have any significance in reality.  In finance, people like to construct narratives to explain what they've observed.  Often, there's no way to know if the explanations are true or not.

You should get under a new impression, that one's just straight up wrong as fuck. Human psychology and economic activity is actually much more mathematically predictable than a lot of people realise. Especially since the dawn of the microprocessor. Investment bankers and hedge funds have known this for hundreds of years and that's why they now own most of the money. It's not the inability to predict normal market trends that fucks them up it's a mixture of unsustainable criminal manipulation of the markets and black swan events. The invention of blockchain technology is such an event.

[chaotic neutral observer]

That's what changes around june/july.

What changes, exactly?  I've already asked you for a testable prediction.

Quite simply - it's more efficient. [...] Right now you wave your card and only a fraction of your money pays for donuts, the rest is skimmed off the top by middlemen who facilitate the transaction.

How is it more efficient?
Interac fees appear to be $0.03 per transaction.  My bank doesn't charge me anything to make withdrawals, deposits, payments, or transfers.  It appears that small businesses might pay $5/month to the bank (that's the flat rate for electronic transactions; it's more if they have to move paper around).  $5 is like...one doughnut.

So who is skimming off the top here, and how much? 
In real terms, what fraction of my money is not paying for the doughnut?  I assume the transaction fees for blockchain are non-zero, so what would be the new fraction if all the transactions were done with a cryptocurrency?

Remember the dotcom crash back in 95? Same deal. Tech revolutions always arrive with a kind of cambrian explosion of ideas. These ideas are 99% idiotic and 1% fucking paradigm shifting

Let's say then, that 99% of cryptocurrencies are going to bomb, and 1% will become a success.  Much as in the dotcom era, it doesn't make sense to invest in them at random....unless you can predict the next Microsoft, or Amazon.  I can't predict an Amazon, and I know it.  But I can rest comfortably with the knowledge that, if one of these cryptocurrencies is going to become a boon for mankind, someone else is already throwing huge amounts of money at it.  I can reap the benefits...modestly...once the dust settles.  It means I'm giving up the chance to become a multi-billionaire, but the chances were against that, anyway.

Skepticism is always popular around these phases because only early adopters actually understand a) the technology and b) the potential. Eventually the bubble bursts and the sceptics all do that smug thing where they say - "See! Told you so! The internet was a fad! We all understood the whole thing better than the experts!"

Most of the early adopters don't know what they're getting into, any more than the skeptics who dismissed the whole thing in advance.  For every 1950s businessman who said "this data processing thing will never catch on" there's a naif who lost a fortune in a dot-com venture that went bust.  I wish to be neither of those people.

And then the entire world changes very profoundly and very suddenly and the sceptics stand there with their jaws hanging open and say "Well, yeah but nobody could have seen that coming" But we did see it coming, in large part because we were the ones who made it happen.

Life isn't a bad kids movie.  When the skeptics turn out to be wrong, many of them pivot and try to figure out how to profit from the changing situation.  The people left with their mouths hanging open are the newscasters.

I have no interest in convincing you, tho. It actually works out better for me long term if you remain unconvinced so lets agree to disagree and leave it there

How does it work out better for you if I'm unconvinced?  I wouldn't have thought it should have any material effect on you at all.

Really, if the whole world decided to move over to a cryptocurrency next week, then...my employer would start paying me with such, my stock portfolio would be revalued against it, and I'd transfer my cash over at the current exchange rate.   I don't see a downside to waiting for the dust to settle.  No, I won't get in "on the ground floor", but why do I need to?

You should get under a new impression, that one's just straight up wrong as fuck. Human psychology and economic activity is actually much more mathematically predictable than a lot of people realise.

I actually have an interest in this area, so I would appreciate it if you could point me to a book, article, or lecture series discussing this.

Especially since the dawn of the microprocessor. Investment bankers and hedge funds have known this for hundreds of years and that's why they now own most of the money. It's not the inability to predict normal market trends that fucks them up it's a mixture of unsustainable criminal manipulation of the markets and black swan events.

So...mathematically predictable, except when it isn't?  Hmm.

Hedge funds and investment bankers typically do worse than the market average, so...