Crypto. Ponzi Scheme?

LoveTrees said:
Nasdaq keeps going down and so DJIA since beginning of the year: inflation as key justification. And crypto dropping at higher speed in % than major indexes... For all the believers of Crypto as alternative to gold in times of fear: reality is contraddicting this propaganda...
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It is at times correlated with the markets and at times not. You're also omitting one key factor. Bitcoin remains a nascent asset in a nascent asset class. Since discussion on the topic began here in 2017, bitcoin, its ecosystem and market has evolved hugely. Whilst it reaching trillion dollar market status is a milestone, it's still only in the ha'penny place relative to gold, bonds, etc. It's far from a settled asset just yet - and so to expect it to perform out of the box as a risk off asset over short/medium term time horizons doesn't seem reasonable to me. But then, we can all form our own opinions.
As regards reality, the reality is that bitcoin has been the best performing asset bar none for the duration of the time it has been discussed on AAM - year on year.


RetirementPlan said:
Looks like a bit of a solution looking for a problem to solve. Are there really loads of further resales of lots of art that would make this a viable proposition for loads of artists?
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If you're an emerging artist and your artwork gets sold for buttons early on, wouldn't it be a major plus point if there was a mechanism that ensured further commissions at the point of each and every resale? And this has started with digital art, now they're starting to explore the same with music. One good aspect of the emergence of NFTs is that most of the interest has come from people that had no interest in crypto before....so whilst I don't get too excited about it (because it's not my bag - albeit that I also feel that I don't fully understand it and that it hasn't fully unpacked itself yet), there's a subset of folks who very much have taken to it.
 
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tecate said:
As regards reality, the reality is that bitcoin has been the best performing asset bar none for the duration of the time it has been discussed on AAM - year on year.
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Tesla?
Year on year? We started discussing bitcoin when it was $20,000. Within a couple of years it had fallen to $3,000.
From $20,000 to $3,000 to $70,000 to $38,000. This is some currency. This is some store of value.
 
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RetirementPlan said:
What problem would NFTs be solving for the physical art world, or even the digital art world?
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If done right, NFTs could wipe out Ticketmaster. Similar to an electronic ticket you receive on your app
tecate said:
It is at times correlated with the markets and at times not. You're also omitting one key factor. Bitcoin remains a nascent asset in a nascent asset class. Since discussion on the topic began here in 2017, bitcoin, its ecosystem and market has evolved hugely. Whilst it reaching trillion dollar market status is a milestone, it's still only in the ha'penny place relative to gold, bonds, etc. It's far from a settled asset just yet - and so to expect it to perform out of the box as a risk off asset over short/medium term time horizons doesn't seem reasonable to me. But then, we can all form our own opinions.
As regards reality, the reality is that bitcoin has been the best performing asset bar none for the duration of the time it has been discussed on AAM - year on year.




If you're an emerging artist and your artwork gets sold for buttons early on, wouldn't it be a major plus point if there was a mechanism that ensured further commissions at the point of each and every resale? And this has started with digital art, now they're starting to explore the same with music. One good aspect of the emergence of NFTs is that most of the interest has come from people that had no interest in crypto before....so whilst I don't get too excited about it (because it's not my bag - albeit that I also feel that I don't fully understand it and that it hasn't fully unpacked itself yet), there's a subset of folks who very much have taken to it.
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Good post, I wouldnt be interested in one of the those drunken monkey jpegs that sold for hundreds of thousands but NFTs do have the potential to wipe Ticketmaster off the face of the earth

Computer games companies are selling games directly without the need for a middleman (sony released PS5 with a hard copy games version and a cheaper version that is only for downloaded games.

When I originally saw this, I thought kids wouldnt be able to swap games, lend them or sell them 2nd hand. If there was an NFT proof of ownership attached, the consumer could sell the game to another person and the smart contract related to an NFT could charge a percentage of the sale to be returned to Sony.
 
DazedInPontoon said:
The stickied "Bitcoin is a clearly identifiable economic bubble" thread started on Nov 25th 2017. Price was ~8k.
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I reproduce my OP on that thread:
The Duke said:
This is a renowned economist talking. Are there any respected economists making the case for bitcoin? Ironically the amazing bitcoin performance of 2020, from 10k to 4k to 30k(?) spells its early demise. A nice steady performance would have been more indicative that bitcoin had come of age and was here to stay. 2017 was a similarly ridiculous year and it was followed by the collapse from 20k to 3k in 2018.
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The OP was based on a price of $30k. I think such an erroneous post by you is reportable, but I understand cultists are going through a difficult time at present.
 
ClubMan said:
Check out the "Cryptoland is embarrassing" YouTube video by penguinz0... :D
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I'd suggest that the following piece by markets analyst and macro economic commentator Sven Heinrich would be a far more worthy investment of time than the Guardian's irrelevant Cryptoland piece which describes someone making a misguided and amateur effort at a business venture (which doesn't in any way reflect on the proposition that something like bitcoin offers):

(R)evolution​


In the piece, Heinrich comes out in support of bitcoin - having long been one of its critics. His piece focuses heavily on the macro environment:
"The revolution is a conscious choice to find an alternative to an imposed monetary system, the evolution is to come to the conclusion that Bitcoin is such an alternative."


Additionally, those calling bitcoin a ponzi whilst implicitly supporting a conventional system where central banks buy their own bonds is amusing to say the least.
 
tecate said:
Additionally, those calling bitcoin a ponzi whilst implicitly supporting a conventional system where central banks buy their own bonds is amusing to say the least.
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Maybe this is the current howl in cultist circles but I don't get it.

Anyone holding govie bonds has a legal contract to receive future payments and they rely on no market and no central bank for that to happen.

A Ponzi scheme is where one's entitlement to future income is entirely dependent on there being people in future prepared to pay you for the same expectation that there will be people in future prepared to pay them etc. etc. If the musical chairs stop, you have a complete dud. Bitcoin is Ponzi in spades. (Correction, McAuley has forcefully argued that bitcoin is worse than Ponzi.)
 
tecate said:
So you have no problem with a central bank creating a new batch of the currency it issues (backed by nothing ) and propping up treasury bonds by buying them with the money it just created?
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I think we can reasonably regard the central bank and the government different wings of the same entity - the state. All that is happening is that the state is replacing its long term obligations with equivalent short (indeed) immediate term obligations, and of course totally at the discretion of the holder of the debt.
tecate said:
And to consider how sick the patient is, look at the negative yield of -2.31% that bonds delivered last year.
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You have gotten too used to the era of QE. The normal situation is that interest rates can go up as well as down. Interest rates going up mean the market value of bonds fall but no one is forced to sell them. If folk hold on to them they will get exactly what it says on the tin.
 
Duke of Marmalade said:
I think we can reasonably regard the central bank and the government different wings of the same entity - the state. All that is happening is that the state is replacing its long term obligations with equivalent short (indeed) immediate term obligations, and of course totally at the discretion of the holder of the debt.
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We can definitely regard them as one and the same. That one branch of the state is buying bonds from another branch of state with currency it just created out of thin air is the point I made. Circling back to where we started - it's amusing that bitcoin is deemed a ponzi by folk who implicitly accept this type of shenanigans.
 
tecate said:
We can definitely regard them as one and the same. That one branch of the state is buying bonds from another branch of state with currency it just created out of thin air is the point I made. Circling back to where we started - it's amusing that bitcoin is deemed a ponzi by folk who implicitly accept this type of shenanigans.
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This is the last I will say on this particular rabbit hole, so you are welcome to the last word.
Currency is not created out of nothing. It is backed by government debt. In QE it is then used to buy back longer term government debt. It is simply a rescheduling of government debt but at the discretion of the creditors. Now where it does get a bit hairy is when it is not used to buy back bonds but to monetize an increase in government debt.
But hey, if it allows the cult a supercilious laugh at the ponzi, they're welcome?
 
Fiat currency is created out of nothing and has been backed by nothing since the gold standard was done away with.

On the government buying its own bonds with 'money' it magic'ed up by adding a couple of zeros on a centralised database, you can try and dress it up any which way you want but it's a complete ponzi.
Additionally, if you had taken the time to read Heinrich's piece, you'd see that its an out of control macro environment that has driven him to appreciate an asset he had been critical of up until now.
In the 4+ years of discussion of BTC here, other than one or two utterances of 'concern' (when pressed) about money printing, there's never been an honest acknowledgement of just how out of whack this Keynesian system is.
 
The modern form of Fiat is an incredible advance for civilisation which has underpinned astronomical economical advance in those economies who have responsibly utilised it.
It has its vulnerabilities as do all human constructs.
A digital entry signifying nothing is not the ultimate salvation for the human race.
 
Duke of Marmalade said:
It has its vulnerabilities as do all human constructs.
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That's a complete cop-out. You're not addressing anything with that whitewash.


Duke of Marmalade said:
A digital entry signifying nothing is not the ultimate salvation for the human race.
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Do you have a link to where this 'ultimate salvation for the human race' has been claimed? I've never seen it mentioned here over the past 4+ years.
 
CuriousGeorge11 said:
If done right, NFTs could wipe out Ticketmaster. Similar to an electronic ticket you receive on your app

Good post, I wouldnt be interested in one of the those drunken monkey jpegs that sold for hundreds of thousands but NFTs do have the potential to wipe Ticketmaster off the face of the earth

Computer games companies are selling games directly without the need for a middleman (sony released PS5 with a hard copy games version and a cheaper version that is only for downloaded games.

When I originally saw this, I thought kids wouldnt be able to swap games, lend them or sell them 2nd hand. If there was an NFT proof of ownership attached, the consumer could sell the game to another person and the smart contract related to an NFT could charge a percentage of the sale to be returned to Sony.
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What value does a blockchain ledger bring to event ticketing, that a standard ticketing database doesn't already provide?

Your great plan for reselling of games doesn't require blockchain or cypto. It just requires a different way of doing business in that sector.
 
There's been a few false dawns but is the pyramid beginning to topple? A 34% adjustment in a month is pretty spectacular. Feel sorry for the poor creatures that bought at €56k in November.
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It is not only Bitcoin that is seeing a market correction. Hi Growth tech stocks have also been slammed in the last weeks (Netflix an extreme example), but even companies like Microsoft have seen a 10% reduction in recent weeks.

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tecate said:
Do you have a link to where this 'ultimate salvation for the human race' has been claimed? I've never seen it mentioned here over the past 4+ years.
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You do like to take me literally. I am not actually claiming that all cultists think bitcoin is the second coming of JC.
Fiat has been a very remarkable development for civilisation. But you and the cultists obsess on its vulnerabilities. I presumed that implied that you believed that with bitcoin you had achieved the perfect monetary system for the human race.
That would be on a power with the development of the silicon chip. And all from digital entries signifying nothing and mindless repeats of crypto puzzles.
 
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