So is Crypto a pyramid scheme or something else?

[TNNurse]

Wanting some input. A great way to launder money??

[RandiFan1290]

1. DU is not the best place to ask

Here's an introduction

[Blue_Tires]

10. It's a rip-off

[lapfog_1]

16. well, I don't know who this "finance guy" is, but his history of the internet

is, shall we say, rather lacking.

But, like most histories, when someone tells a "story" often enough, especially as fact, and enough people repeat it, it becomes "history" ( or maybe theirstory ). Having worked on TCP/IP in the early 1970s I can tell you that the dates and stories ( about Pizzahut, etc ) are simply wrong. Hell, I sold a wine collection consisting of thousands of bottles of wine that my brother-in-law collected in the decades prior... in 1990. Of course I could not take payment over the net. I held the auction via an auction where I would publish a lot description in a news group (rec..wine.
I would list the lot and the current price for the cases included in the lot, wait a day for new bids, put out a "going once" post, wait 1 more day... and gavel the auction closed. Then deliver the wine to whoever bought it and get the money. I had just enough "lots" of wine to make me think about how hard it would be to automate this system. AKA Ebay. But instead I decided to just do it by hand.

Anyway, the rest of his description about cryptography was sort of true as well... sort of. Cryptography is better described as an algorithmic method of creating a coded message. The other method of course is to simply have a "code" where every word or concept has a substituted new code. you memorize or have a code book to decipher the message. the disadvantage is that you can only transmit words or concepts that are pre-arranged with the recipient AND if someone finds a "code book" they can listen in on the conversation. OTOH, without the code book, it is much more difficult to decipher coded messages.

Personally I think Bitcoin and all cryto-currencies are both a "belief based currency" and very likely a Ponzi scheme.
People keep educating me about "well it represents the amount of compute power or floating point operations or FLOPS it takes to break the next "crypto block" and thereby be the lucky winner to add the next block in the block chain or write once log of transactions. And those FLOPS are represented by the cost of the computer plus, fundamentally, the cost of the power to do the calculations. Except that I will point out that the cost in power or electricity is going down all the time. One can imagine the day when you home quantum parallel computer (Nvidia X10000 ) will cost almost nothing to instantly solve the next block chain thus granting you the owner of such ALL the value of ALL the new Bitcoin ( Bitcoin itself is reaching the theoretical last block). Thus making the entire concept nearly worthless. i.e. if we are ALL "newcoin" billionaires... what does it mean?

So, like a Ponzi scheme it will eventually end.

But that could be said of any currency not based on the "value" or perceived value of a commodity like gold or oil or uranium or corn or whatever group of valued commodities you choose. Select diamonds, for example. If we had diamond backed money... and now can fairly cheaply make synthetic diamonds... what is that currency worth?

Or gold. We believe that supernovas are the source of all gold that exists... but it is made by fusion. Someday perhaps we can also make gold from more plentiful elements by simply making it in a fusion reactor ( I know, right now we can barely make helium from hydrogen... but thinking ahead here ). Gold is now worthless.

And so on.

[LAS14]

35. Need some clarification here.

break the next "crypto block" and thereby be the lucky winner to add the next block in the block chain or write once log of transactions.

Did you explain earlier in your post what "break the next crypto block" means and why it would make you rich? If so, would you point me to it?

[ProfessorGAC]

52. Excellent Post! One Minor Flaw.

Gold is not made by fusion.
Elements cannot fuse once the get to the mass of the iron atom. The atomic mass of gold is about 4.5x that of iron.
It's made in supernovae because of the intense heat & the shock wave, strong enough to force larger atoms together, absorbing huge amounts of energy.
Your diamond example is strong. Gold, not so much.
But, the point you're making is superb & well-stated.

[ThoughtCriminal]

75. It could be transmuted by a particle accelerator

Bombarding another element with protons. It's been done with bismuth. But even cheap fusion power would probably not ever be economical to produce gold this way.

[ProfessorGAC]

77. Fair Enough

But, since the post was basically economic, I was including the fiscal practicality.
You're right; it could be done but unlikely to be done economically because of the massive energy required per unit mass.

[waterwatcher123]

54. It is the perfect currency for criminals (drug cartels, gun runners, human traffickers, rogue nation states, etc.)

[LAS14]

32. Thanks!! This looks like the kind of thing I've been hunting for for years.

I wish there weren't so much interaction with the audience, but hey...

Does anyone know how MIT gets away with offering courses for free? I guess you can't take the tests and get the academic credit.... All you can do is learn stuff.

[Redleg]

49. They likely have a very large endowment

They can afford to offer some freebies to hook people into signing up for other courses charging fees.

[TNNurse]

62. You warned me about asking on here.

I see your point. Clearly not a consensus.

I am not inclined to join those who support it.

[LAS14]

86. The use of blockchain in Crypto

I started watching this video and got inspired to dig on my own. I went to ChatGPT and got the best answers to my questions I've ever seen. In the foggy past I was a programmer, hence my references to ancient programming languages. (Note. I'd actually typed "PowerPoint" instead of "PowerBuilder" myself, but I left that part in because the answer was also interesting.

**********************

Explain blockchain to a person who only understands Basic+ and PoweBuilder
ChatGPT said:
ChatGPT
Sure! Let me break down blockchain in a way that's simple, using concepts you might already be familiar with.

Think of Blockchain Like a Digital Notebook
Imagine you have a notebook (this is your blockchain) that records important things. Every time someone does something that needs to be remembered—like a transaction—it gets written down in this notebook.

Blocks = Pages in the Notebook
In the blockchain, every "block" is like a page in the notebook. Each page contains a list of things that happened, like transactions. These things are recorded in a specific order.

On one page, you might have someone sending money to someone else.
The next page might have another transaction, and so on.
Blockchain = A Chain of Pages
Now, imagine you connect each page (block) in a chain. Each page not only has its own information but also refers to the page before it. So if anyone wants to change something on a previous page, they'd have to change every page after it, which is nearly impossible. This keeps everything secure.

Everyone Has a Copy
Instead of just one person controlling this notebook, everyone who is part of the system has their own copy of it. If someone tries to cheat and change something on their copy, the others will notice and not agree with the change. This is like everyone checking each other's slides in a PowerPoint presentation and agreeing that all the information is correct before moving forward.

Security
To make sure that only the right people can add new pages to the notebook (or add new blocks to the blockchain), we use a system that requires people to solve very complex math problems. This is like a lock on the notebook, ensuring only the authorized person can write the next page.

Powerpoint Analogy
In PowerPoint, imagine if every slide (block) had a list of things happening, and after creating a slide, it couldn't be changed without affecting all the slides before it. The whole group of slides (the blockchain) would be a secure presentation where every slide has a reference to the one before it, ensuring everything stays in order.

So in summary, blockchain is like a notebook or PowerPoint where:

Each page (block) records something important.
Each page links to the one before it, creating a chain.
Everyone has a copy, so it's hard to cheat.
Special math problems make sure only authorized people can add pages.
Does that help?


You said:
Yes, pretty good. Except you changed "PowerBuilder" (a programming language) in my prompt to "PowerPoint."
ChatGPT said:
ChatGPT
Ah, I see! Thanks for pointing that out. Let's now explain blockchain in terms of PowerBuilder instead of PowerPoint.

Think of Blockchain Like a PowerBuilder Application
PowerBuilder is a tool used to build applications that manage data. You might use PowerBuilder to create programs that handle information in databases. Now, let's imagine you are creating a database system with PowerBuilder, and this system needs to securely store data, track changes, and make sure no one can tamper with the data.

Blockchain = A Database with Special Rules
In the blockchain, instead of just storing data like a regular database, we use a special type of database that records data in blocks (which are like records) and links them together in a chain. Every time new data is added, a new "block" is created, which contains information about transactions, or events, that happened.

Blocks = Data Records in PowerBuilder
In PowerBuilder, you might create a data window or table that stores individual records. In the blockchain, each "block" is like a new data record or entry in a PowerBuilder database. It contains the details of a specific event, such as a transfer of data or money.

Example: You have a table that logs transactions, and each record has information like who sent money, who received it, and the amount.
In the blockchain, these records are grouped together in a block.
Chain = Linked Records (Data Integrity)
In PowerBuilder, you might set up a system where every new record references previous ones to ensure that they are all connected in the right order. In blockchain, each block contains a reference to the previous block, linking them together in a chain.

This is like when you set up foreign keys or references between tables in PowerBuilder to make sure the data is linked correctly.
If someone tried to change a block, it would break the link, and everyone else would know that something was wrong.
Blockchain = Everyone Having a Copy of the Database
Instead of having just one central database where the data is stored, with blockchain, everyone in the system has their own copy of the entire chain of blocks (the blockchain). This is like multiple users having access to the same PowerBuilder application, where each one has a copy of the database.

If someone tries to change something in their version of the database (blockchain), the others will notice the change and reject it, because their copies don’t match.
Security and Validation = PowerBuilder's Data Validation
When you create an application in PowerBuilder, you might have checks to validate data before it is saved (e.g., ensuring that data is correct or follows a rule). In blockchain, before a new block is added to the chain, there are checks (like solving complex math problems) to ensure the data is valid.

Think of it like running a validation script in PowerBuilder to make sure everything is correct before a record is added to the database.
Summary with PowerBuilder Analogy:
Blockchain is like a PowerBuilder database that stores data in blocks.
Each block is like a new record in a PowerBuilder data table, containing important information.
Blocks are linked together like related records in a database, and altering one would affect the others.
Everyone has a copy of the blockchain (like users having access to the PowerBuilder app with their own database), so no one can cheat or change data without being detected.
The system uses validation checks (similar to PowerBuilder’s validation) to ensure the data is correct before it is added.
I hope this version better aligns with PowerBuilder! Let me know if you'd like to dive deeper into any part of it.


You said:
How does the authorized person solve the very complicated mathematical problem? How does the authorized person even find out what the problem is?
ChatGPT said:
ChatGPT
Great questions! Let me explain how an authorized person (often called a miner or validator) solves the complicated mathematical problem in the blockchain. This process is called Proof of Work (in Bitcoin, for example) or other consensus mechanisms in different blockchains.

How Does the Authorized Person Find Out What the Problem Is?
The "problem" is not something a person needs to find; it's automatically generated as part of the blockchain's structure. Here's how it works:

Blockchain Nodes: There are many nodes (computers) that participate in the blockchain network. Each node is a copy of the blockchain, and all nodes are involved in verifying and adding new blocks.

Creating a New Block: When a new block of transactions is ready to be added to the blockchain, a mathematical problem is created. This problem involves finding a specific number that, when combined with the contents of the block, meets certain criteria. This process is called mining.

The Problem = Hashing Puzzle:

The "problem" is essentially a hashing puzzle. A hash is a special kind of cryptographic function that takes an input (in this case, the data in the block) and transforms it into a fixed-length string of characters (the hash).
The mining problem is to find a specific hash that meets a predefined condition. For example, in Bitcoin, the condition is that the hash must start with a certain number of zeros. The only way to find the right hash is through trial and error.
How Do They Solve the Problem (Mathematical Puzzle)?
Hashing the Data: The miner takes the contents of the block (including the previous block’s hash, transactions, and some additional data) and applies a cryptographic hash function (like SHA-256 for Bitcoin) to it. This gives them a string of numbers and letters.

Finding the Right Hash: The miner has to keep changing a small part of the data in the block, called the nonce (a random number), and re-hash the block until the result meets the condition. For Bitcoin, the goal is to find a hash that starts with a certain number of zeros.

Example: Suppose the block's data produces the hash "abc123", but it doesn’t meet the condition (e.g., it doesn’t start with four zeros). The miner changes the nonce, re-hashes the block, and gets "xyz456". The process continues until they find a hash that satisfies the condition.
Proof of Work: Once the miner finds the correct hash, it’s considered proof of work. This proves that the miner has spent computational power (work) to find the solution. This process is energy-intensive because it requires trying many different nonce values to find the right one.

Broadcasting the Solution: Once a miner finds the correct hash, they broadcast the solution to the rest of the network. The other nodes in the network verify that the hash meets the condition and, if they agree, the new block is added to the blockchain.

Why Is This Secure?
Difficulty and Time: The reason the puzzle is so difficult is that the miner doesn't know which nonce will work, so they must try many possibilities, which takes time and computational resources. This makes it hard for anyone to cheat and change the blockchain, because changing even one block would require redoing the proof of work for all the following blocks.

Cryptographic Security: The cryptographic hash functions are designed so that it is impossible to reverse-engineer the hash and figure out the correct data without trying many possibilities. This is what makes the system secure.

So, to summarize:
The problem is generated automatically when a new block is being created. It’s a hash-based puzzle that requires finding a value (nonce) that, when combined with the block’s data, creates a hash that meets certain conditions.
The authorized person (miner) doesn’t know the solution in advance but uses their computer to try different possibilities until they find the correct answer. This process takes time and computing power.
Once the correct solution is found, the miner broadcasts it to the network, and everyone agrees that the new block is valid, adding it to the blockchain.
This process of solving the mathematical problem ensures that new blocks are added securely and that the blockchain remains tamper-proof.

[2naSalit]

2. It's a way to...

Exclude everyone but the 1% since only they can access it. Makes laundering moot. They want a currency we can't access so they can withdraw vital needs from us in order to secure subservience. They want all of us to become serfs.

[bamagal62]

3. The way I understand it,

It’s just “made up” money. It’s not based on anything. Seems like a huge scam to me.

[Voltaire2]

14. All money is 'made up'.

Money is a token used for exchange. It has no intrinsic value, other than the obsolete gold and silver coins that aside from their monetary role were based on metals that were also used in real commodities.

[Happy Hoosier]

33. That's the thing... BTC is NOT used as a token of exchange for anything other than money laundering by tha VAST majority

It's true that fiat currency is "made up" too. BUT, it's a medium of exchange. And in the case of the USD, heavily guaranteed by the USG and it's widespread use gives a persistance something like BTC doesn't have, at least yet. If your BTC wallet goes poof tomorrow, there is basically nothing you can do about it.

The fact that BTC isn't an actual currency is noted by the fact that it is ALWAYS referenced to it's value in USD. Even in places where you can buy stuff in BTC directly, the BTC price is determined by the equivalent price in actual currency, usually USD.

A limited asset like BTC is unlikely to become a real currency because it appeciates. Being a limited (indeed, contracting) resource means that people would expect it to appreciate in value relative to local currencies, good, and services. So there is basically no incentive to spend or invest it. That's why the gold standard was so troublesome.... in hard times, people tended to horde money instead of spending it, stimulating economic growth.

But hey, some people have gotten very wealthy off it, so WTF do I know. They can apparently read human psychology better than I can. I think the desire to be a "Bitcoin Millionaire" havs kept this going for a while, and may well keep it going a while longer.

[Voltaire2]

38. It is used, to a very limited extent, as an exchange token.

Last edited Sun Dec 8, 2024, 04:58 AM - Edit history (1)

But its huge volatility and transaction costs limit its usefulness.

[Happy Hoosier]

44. Exactly.

I know it’s heavily used in scams as well.

[bamagal62]

73. I know that. Thx.

But, you do earn it for work or appreciation of property etc. etc What I don’t understand is where did crypto come from?

[Alephy]

19. Made up money as opposed to the Drachma...

The Yuan, the Lempira, the US Dollar?

People have accepted different ways to exchange goods, store value throughout history. Or even before history. How are those ways 'truer' besides the fact that enough groups of people, at certain point, accepted them?

Bitcoin is new. It might or it might not stick around. Right now, it seems quite a bit of people are willing to accept it as a store of value. I am skeptical if it will work well to exchange goods on a daily basis. Or even if will stick as a store of value. But I am also willing to make a few $ while this plays out. I am not happy with the Trumpist acceptance of it. As we are all well aware, everything he touches turns to shit.

[Happy Hoosier]

34. Your observation of it as a STORE of value is good one.

At least for now, it DOES store value relative to acutal spending currency. The tell is that it's value is always referenced to a local currency. People almost always convert it to a local currency before spending it. We do not value goods in services in BTC, but it USD. BTC's utility is in the willingness of people to give you spending currency in exchange for it. Will that contnue? Who knows. Glad you're making some bucks on it, though. It just makes my hackles stand up....

[dawg]

60. "Bitcoin is new"

Bitcoin is 16 years old.

[Alephy]

63. Yes, it is really, really new

Very few people knew about it before 2017--that is nothing in the history of ideas.

[dawg]

66. Bitcoin is an antiquated energy-wasting protocol. If the world was ever serious ...

about cryptocurrency as a medium of exchange, it would be foolish to go with bitcoin when so many more efficient alternatives are available.

[Alephy]

67. Sure

But it is still new

[dawg]

69. It's the currency of the future ...

and it always will be.

[Alephy]

20. My apologies

I did not mean to reply to my own post with a duplicate.

I don't post enough so I don't know how to remove it. If someone tells me, I will. Thanks.

[Attilatheblond]

53. Not sure, but if I recall correctly, when you make a reply, the "powers" button below it becomes active for you

Pressing "powers" will show option of getting rid of the comment. You have to be signed in to make it work.

[Alephy]

56. Thank you very much

Yes, I see that now.

'Powers' allows 'self-delete' of the post.

[Attilatheblond]

71. Just passing along what someone else showed me here

We do get by with a little help from our friends.

[Lonestarblue]

28. It's made-up money, but its primary benefit is that it's untraceable.

Billionaires who want to move money secretly can do so, as can global drug kingpins, sex traffickers, and anyone who doesn’t want governments to know what they’re doing.

[Passages]

4. Scam, well known.

Joseph Stiglitz: Bitcoin ought to be outlawed

The World Economic Forum
https://www.weforum.org › stories › 2017/11 › joseph-...
Nov 30, 2017 — Nobel prize-winning economist Joseph Stiglitz has said the cryptocurrency 'doesn't serve any useful function'.

[hatrack]

5. Molly White does a great job of tracking this scam . . .

Hack after hack, ripoff after ripoff, rug pull after rug pull.

https://www.web3isgoinggreat.com/

[paleotn]

6. The perferred method of exchange for criminals the world over.

They take full advantage of crypto's only inherent value, it's supposed anonymity and untraceablity compared to national currencies controlled and regulated by central banks. The rest is wild speculation backed by nothing but vapor. And we know where that leads.

[Hugin]

7. It's more like timeshares for the new millennium.

Easy to buy and impossible to sell.

An economic heat sink gobbling up the value of real currency and providing nothing in return.

I marvel almost every day that the weakness of crypto is openly displayed on every financial page in the world by being valued in Dollars and it’s believers don’t see it. If the Dollar goes away, crypto is worth exactly nothing.

[Frasier Balzov]

8. Crypto is an experiment in harnessing perception as wealth.

Whether such perception is enduring or fleeting defines a particular crypto strain's usefulness as a medium of exchange and repository of future value.

[Celerity]

9. DU is probably the worst possible place to discuss BTC that I have seen. Years ago, a DU poster put up dozens of

Last edited Sat Dec 7, 2024, 11:38 AM - Edit history (1)

DU posts, going back to when it was under 100 dollars per BTC, and moving up to the 10,000 dollars or so valuation per BTC (down from around 20K USD, which obviously , at a present near 100K USD per BTC valuation, was simply a cyclical drop), with each post saying it was dead, done, buried (and usually employing the utterly failed 'tulip bubble' false analogy) and anyone holding it was a fool who would lose everything. The higher it went, the more the bitterness and doom-casting was evidenced in the posts.

I have seen the faulty 'tulip versus bitcoin' attempted comparison (mentioned above) since I joined DU in mid 2018. It fails at multiple base levels.

1. Bitcoin is a fungible asset, tulips are not. (fungibility is the property of a good or a commodity whose individual units are essentially interchangeable)

2. Bitcoin is durable, tulips are not. Tulips are a plant with a limited lifespan, especially for the flowers once they bloom. Bitcoin, once mined, goes onto the permanent de-centralised blockchain public ledger. To transfer bitcoin, the blockchain verifies the sender's public and private keys, and the recipient is given a new private key. The transaction is recorded on the blockchain in a file and becomes part of an automatic verification process.

3. Tulips require a complex physical supply chain/delivery process, one that can take a long time and can be impacted by physical conditions. Bitcoin can be transferred to someone anywhere on the planet within seconds or minutes, via any device that can access the stored bitcoin and the blockchain on the internet.

on edit:

4. Divisibility: One Bitcoin can be divided into smaller units. Tulips cannot.

[Blue_Tires]

13. I'll never trust any money I cannot physically touch

And I'd rather the OP hear from the skeptics and realists on DU instead of the HODL cultists on Twitter

[Celerity]

17. Do you use debit and credit cards? Are you paid via EFTs?

If so, you are not physically touching that money.

As for 'realists', those old posts I referenced in my previous reply turned out to be ones profoundly out of touch with the present reality.

People who consistently make wrong predictions year after year after year are not realists, and many who clung to those old doom-castings (some for well over a decade) were simply engaging in 'no-skin-in-the game' continuous Martingale-type (ie, keep doubling down on failure after failure, prediction-wise) prognostication antics.

[TNNurse]

24. I do use debit and credit cards,

but they are connected to banks where payments can be traced. Crypto does not have that.

[Voltaire2]

39. Actually blockchain - the tech behind bitcoins-

is a public decentralized ledger system that records every transaction.

[Blue_Tires]

81. Thank you for beautifully illustrating my point

How much money did you have invested in this scam? You know you're only helping wannabe despots like Donnie and Melon Husk along with communist regimes in Red China and North Korea, right? To say nothing about the environmental consequences?

Yes, now that Donnie and his apartheid errand boy are running the show crypto is on an all-time high since ironically "decentralized finance" needs the blessing and support of big bad government to finally get their desperately needed mainstream legitimacy... I just hope you have the stones bookmark this thread and find me the next time the bottom falls out of the crypto market and we SEE who's "right" 🤨

[Celerity]

82. No, I did not illustrate your point at all, sorry.

Also, you said:

I just hope you have the stones bookmark this thread and find me the next time the bottom falls out of the crypto market and we SEE who's "right"

Number one, I am a cis-gender female, and as such I do not have 'stones', so you can bin that misogynistic framing that having testicles somehow imparts courage.

There have been a very large number of replies over the last 10 plus years here (as shown by other DUers, some who far pre-date me with my 6 and a half years on DU) who said it was dead, worthless, a scam, a tulip bubble (I have show repeatedly why that is a fatally logic-flawed analogy), etc etc, with many of them exhibiting little no knowledge of how crypto (not just currency, but blockchain tech in general) actually works. Many even preface their doom with 'I do not understand crypto and blockchaim at all' admissions.

Over the course of that decade plus, those doom-casters (whether old school or later-on joiners) have been consistently wrong when you look at the long arc. Over, and over, and over.

Their positings have been shown to be faulty for many years, yet the same projections are just doubled-down upon, then doubled down upon again, and again, and again, in, as I already stated, a Martingale-style fashion. They simply repeat the same thing over and over, and when they were shown to be wrong multiple times, over the span of many years in some cases, they just keep on going, in hope that the next time they will finally become permanently right.

At some point, the doom-casters lose their credibility, over their long runs of predictive failure, yet they know they are dealing with an audience here on DU that is (partially) far too often ready to just accept the endless incorrect claims, as well as giving out pats on the back to those doomsters, as the doomsters are fulfilling that part of the DU audience's preconceptions and wishes. The failed doomster prediction-makers are thus free to just continue the endless double-downing, no matter how many times they are shown to be in error.

Bookmark away.

[Blue_Tires]

84. Like I said before, you're only helping Elmer and Donnie

and Vlad and a cadre of libertarian tech bros so please by all means keep laughing all the way to the bank... I'm sure you'll continue to make a killing as long as you get out at the right time.

You can't claim to be against fascism while supporting a system that perpetuates said fascism, so I suggest you figure out which side of the line you're fighting on. You can continue to insult me all you like, but at the end of the day I know what little money I do earn is clean...

[Celerity]

85. I do not mine BTC or any other crypto currency, nor do I trade in BTC or any other crypto currency.

I am not aiding Musk, Trump, or Putin in any way, shape, or form. That is a scurrilous and false personal attack.

[LisaM]

37. It's not strictly true that tulips can't endure.

Tended properly, tulips can produce more tulips. They aren't just a one and done thing. That's why the bulbs are so valued.

I am not saying comparing tulips and Bitcoin is an apt analogy. I don't think it is. But tulips can be a longer term asset than just one growing season.

Most get rich schemes are subject to mania and frenzy, and only a few people ultimately get rich. Look at the gold rushes.

[Celerity]

43. Yes, but you are now introducing both labour and non-fungibility.

Tended properly, tulips can produce more tulips.

The original tulips are not a permanent manifestation. Bitcoins are. You do not have to inject labour to maintain them and to keep the potential value (ie the value they currently hold at the time of redemption for another asset, say US dollars for Euros).

Also, in regards to fungibility, the products of that tulip labour are not the same as the original tulip, they are by definition, a new thing, not identical to the original. They are not automatically interchangeable with any or all other tulips, unlike a bitcoin, which is completely exchangeable on a like-for-like basis with another bitcoin.

I also forgot (I have since edited to add it) to list a fourth difference:

4. Divisibility: One Bitcoin can be divided into smaller units. A tulip cannot.

[Alephy]

57. I appreciate your commentary on this topic

I am bookmarking it

[Celerity]

58. thanks

[JCMach1]

61. Precisely, I have been in and out of Bitcoin since it first

Posted as an experiment. Mined about 30 on an old pc and eventually just deleted as I was treating it as an experiment. That 30 is worth about 3M today, but totally worthless when I deleted it.

I have been in and out as a trader and miner many times. I literally paid the down payment on my house with the proceeds of my trading in recent years. The only money I ever lost was that first week when I deleted.

Having said that, DU is not the place to discuss BTC,.or Crypto as most do not understand the tech and also have taken a political stance against it that seems to have become the stereotypical position on the left.

[Celerity]

64. thank you, and OUCH! (the 30 deleted BTC) yikes

[JCMach1]

65. I was treating it as an experiment... So I try to laugh

It off as much as I can. Also the spoils of having ADHD. Whoa isn't this cool, squirrel!?!

[Celerity]

68. well, at least you didn't spend 10,000 BTC on 2 pizzas................ (worth roughly 1 BILLION USD now)

The Untold Story: Who Received 10,000 Bitcoin for Pizzas? 🍕💰

https://www.binance.com/en/square/post/17211497879794

The story of the infamous Bitcoin Pizza Day has become crypto folklore. On May 22, 2010, Laszlo Hanyecz, a programmer, made history by paying 10,000 BTC for two Papa John’s pizzas—valued at around $41 at the time. Today, those bitcoins would be worth hundreds of millions of dollars, making it the most expensive meal ever recorded. But while everyone remembers the buyer, what about the guy who received 10,000 BTC?

1. Who Was the Seller? The Man Behind the Wallet 👤

The person who accepted the 10,000 BTC in exchange for pizzas was Jeremy Sturdivant, also known by his online handle "jercos." At just 19 years old, Jeremy was active on the Bitcoin forums, where Laszlo posted his offer to trade BTC for real-world goods. Seeing the opportunity, Jeremy jumped in to fulfill the request.

👇👇👇

$BTC

2. What Did Jeremy Do with the 10,000 BTC? 🤔

Unlike Laszlo, who famously “spent” his bitcoin, Jeremy didn’t hold onto his newfound treasure. Instead, he spent or traded the coins as Bitcoin gained traction in niche online communities. At the time, Bitcoin wasn’t seen as a store of value but more as an experimental currency. Jeremy later explained in interviews that he never regretted spending the bitcoins, as their value was insignificant back then. “Hodling” wasn’t yet a common practice in the crypto world!

3. Where Is He Now? 🕵️

Jeremy Sturdivant has largely stayed out of the public eye, unlike Laszlo, who has become a Bitcoin celebrity. Despite missing out on a fortune, Jeremy’s involvement in the early Bitcoin ecosystem has cemented his place in history. He continues to show an interest in technology and cryptocurrency but prefers to remain low-key.

snip

[TNNurse]

11. Thank you all.

I suspected there might be many answers.

[Blue_Tires]

12. It's closer to a ponzi scheme

Backed by rampant speculation and quick buck artists...

[GoCubsGo]

22. It's a great way to launder money, too.

Because, it's often hard to track transactions using it. Which is why it's also the favorite currency of sex traffickers.

[nitpicked]

15. IMO, the rise of Bitcoin (and maybe other crypto) is being fueled by hopeium

That the stuff can be more readily exchanged for goods and services once Thump gets inaugurated and sponsors such policies.

[Wonder Why]

18. The answer is Yes.

[Voltaire2]

21. Mostly yes.

The original motivation was a tech-anarcho-capitalist fantasy of a decentralized non-government controlled exchange currency. But most of the more recent activity has been pyramid scams.

[Jacson6]

23. The European Tulip Price Collapse.

In Europe there was a Tulip flower bidding war that drove up the price in Tulips and people were making lots of money selling Tulips. Then the demand for Tulips fell off and people lost all of their money they thought they were going to make. This was back in the 1600's.

Soon the demand for crypto will drop and the price of a bitcoin will leave people bankrupt. Those that got in early and get out now will make a handsome profit. But this isn't a PONZI scheme. It is just speculative investing.

[Celerity]

40. Fatally flawed analogy, and one that has been trotted out here continously long before I joined DU in mid-2018, as

evidenced by dozens of posts that a DUer put up years ago.

1. Bitcoin is a fungible asset, tulips are not. (fungibility is the property of a good or a commodity whose individual units are essentially interchangeable).

2. Bitcoin is durable, tulips are not. Tulips are a plant with a limited lifespan, especially for the flowers once they bloom. Bitcoin, once mined, goes onto the permanent de-centralised blockchain public ledger. To transfer bitcoin, the blockchain verifies the sender's public and private keys, and the recipient is given a new private key. The transaction is recorded on the blockchain in a file and becomes part of an automatic verification process.

3. Tulips require a complex physical supply chain/delivery process, one that can take a long time and can be impacted by physical conditions. Bitcoin can be transferred to someone anywhere on the planet within seconds or minutes, via any device that can access the stored bitcoin and the blockchain on the internet.

4. Divisibility: One Bitcoin can be divided into smaller units. Tulips cannot.

[BannonsLiver]

45. Excellent comparison. Thank you for that.

[Amanita Pantherina]

55. And the South Sea Company

https://www.historic-uk.com/HistoryUK/HistoryofEngland/South-Sea-Bubble/

tldr; Get in, GTFO.. Buy land with the profit.

[usonian]

25. It's not quite.

This article seems helpful. Mind you, I am a techie and should understand this stuff but it is a head-scratcher.

https://www.bankrate.com/investing/what-is-cryptocurrency/#what-are-the-risks-of-crypto

Crypto is an asset, not a currency. That is the main deal. To me, as an outside observer, a few things stand out.

• Its value fluctuates wildly, since it's used by speculators. It has no peg. Hence, it's not currency.

• It really is hard to convert into legal tender, and fraught with fraud.

• It takes enormous assets to create -- "mine" -- and has a giant environmental impact due to power and cooling demand ( and then came "AI", which dwarfs the damage. )

• Most, Bitcoin mainly, limit the number of tokens. For bitcoin, 21 million. Impact? I don't know, but it's like holding a closed-end fund, if you're comfortable with that.

• Despite its fluctuating value, people use it to make transactions. It seems anonymous, so all sorts of evil people use it as currency/ransom. But it has to be converted at some point, and is commonly uncovered by law enforcement.

• And, it is used to make transactions outside the regulated banking system, ( a.k.a. "Deep State" ) as in money laundering, the name of the game for Orange Caligula and his owners, Musk and Putin, and North Korea, whose economy is largely funded by bitcoin theft ) and who just happen to be big fanbois of it.

• One more thing. It's as secure as your password. People are held up or even killed to get the wallet password. Protection? Zero, nada, zilch, zero.

And have a great day!

[claudette]

26. I never understood what it is.

[bucolic_frolic]

27. Crypto is electronic barter wrapped around a restrained supply of medallions

It's like driving a taxi where all the passengers carry around a sack of quarters to pay the cabbie.

[Happy Hoosier]

29. It's a game of hot potato

Lots of people have made lots of money.... assuming folks actually cash out to harvest gains (a lot DO NOT).

It has no value other than the hope that at some point later, someone will pay you more for it than you paid for it.

It's limited nature means it will NEVER be a serious daily spend currency.

So basically, people buy hoping they make money before people decide to sell more than buy. It probably has more upside, but it's not something I would risk any needed money on. Even if the S&P500 takes a major ****, it won't go to zero, and it will rebuild, because the economy will continue to exist. Crypto COULD go to zero (or close to it) and stay there, becuase their is nothing under it. Lots of "coins" have done just that. BTC and ETH are pretty much the only "serious coins" out there. Most of the others are basically the "penny stocks" of the coin market.

I'm sure some folks on here have made a shiton on it. I know a guy who has. He literally bought when BTC was $400. He cashed out when BTC hit $93,000 (not sure why he picked that numner). So, he 232X'sd his stake. I mean... good for him. But he could have just as easily lost his entire stake.

[oasis]

30. Crypto-gypto

[marble falls]

36. All currency not based an a physical commodity, but traded in markets are a scheme and a process of continual ...

... laundering. Reputation and stability are all that's being bought and sold. That somehow, the labor I perform gets me a loaf of bread that you made, the miller of the wheat and farmers a half continent or an ocean away, and the guy who .... also get paid from.

I think people like the feel of cash. Ask that guy who buried $800million in BitCoin code number in a garbage dump by accident. Andwho's the mysterious guy who invented BitCoin and disappeared?

It's all faith based. On all US currency is the word, "Trust".

[Wavelight]

41. Have bought and held BTC (only) for a couple years

Repost this thread in 5-10 years, and we'll talk.

[TNNurse]

48. Well, I will be 80 in 5 years so I doubt that will be my concern.

[Mark.b2]

70. I regret my timidity with it...

I did really well with it…but only bought one when it was $16K and sold when it was $45k. :-/

I play with BTC miners and have done decently. Their price trends are are fairly correlated with the BTC price so I’m cheering for BTC to keep it up! The miners are not for the faint of heart though. There can be wild day-to-day price swings. I’ve learned not to brag to me wife about a +$8k day because tomorrow maybe a -$12k!

[littlemissmartypants]

42. It's a threat to the environment. ...

It uses excessive amounts of water, electricity and the enormous data centers required to maintain it are poorly regulated. They are excessively loud creating a nuisance to those living nearby. Often they are set up in areas that soon come to regret that decision because of their drain on local resources that create hardships for the very local governments bamboozled into approving their construction.

[Blue Full Moon]

46. Yes

[DJ Synikus Makisimus]

47. Money laundering, tax evasion, medium for illegal purchases.

If you've got tons of cash laying about from your child sex trafficking, you can get it into mainstream finance through crypto. Same for drug deals, illegal arms purchases, etc. Got millions you stole and want to get it to your offshore bank? Crypto is for you! Want to hide your earnings from the IRS and "free" your employer from paying into SDI, mandatory health insurance and such? Go with crypto. Need slave workers for your onion farm? The cartels take crypto!

Because crypto isn't government backed or really regulated, it's very easy to engage in fraud. Do you trust the people affiliated with it (or "issuing" it)? Sam Bankman-Fried comes immediately to mind, but he's just one example if the ilk that peddle and promote this stuff.

Other than that, it's not really good for much - all the Cracken ads notwithstanding. It appeals to folks who swallow the Reaganite propaganda and think that government is horrible and out to get you. It also appeals libertarian capitalists, who think they should be free to make money through any means without government interference and laws. Think Ron Paul disciple "Dread Pirate Roberts" (a.k.a. Ross Ulbricht) of Silk Road on the dark web, currently doing life in a Tucson jail.

If your personal finances don't stray far into criminal activity, you really are better off with government-backed currency and/or financial vehicles (like a debit card) that moves it electronically.

[andym]

50. A speculative mania-- really an improved version of the Tulip mania

It is fungible, faster and available worldwide. But is backed by nothing, and has an artificial limited supply, but OTOH easily cloned/forked ---- folks will tell you the forks aren't the "real" Bitcoin, even if they work exactly the same, and even if they are engineered to preserve the Bitcoin blockchain-- but as far as utility goes they do everything Bitcoin does.

[keithbvadu2]

51. The big money return in crypto is:::

The big money return in crypto is:::
1. Starting it, hyping it, selling it, and getting out, leaving the
suckers holding the bag.
2. Handling/storing it for others.
...a. Not your own money/crypto. Someone else's money/crypto.
...b. Lots of fraud/money manipulation/theft/lack of regulation.
3. Backed by trust/faith/great promises/optimism... but no
real assets.
4. It can literally disappear and good luck with lawsuits.
------------------
A few have profited by 'investing' but not the majority.

[JCMach1]

59. Very poor way to launder money as BTC has an open ledger

Unlike cash.

[keithbvadu2]

72. Many places take Bitcoin as payment..... Who accepts Trump crypto as payment?

[Vinca]

78. I've never encountered one place that takes crypto. If I go to the grocery store I can't buy a gallon of milk with it.

If I go to the gas station, I can't fill up my car with it. If I decide to buy a house, will the seller take bitcoin? I doubt it. The whole thing sounds like a scam that will collapse like a house of cards. Trump's endorsement only makes it scammier.

[RandiFan1290]

79. I have a Visa debit card through Coinbase

I can spend mine anywhere that takes Visa.

[AncientOfDays]

74. And the worst part is ...

... the tRumpsters are fixing to steal Billion$ of tax money - they want the US government to "invest" in Bitcoin - which will basically take money from the US treasury and put it in billionaire pockets.

MSNBC has an article on this
https://www.msnbc.com/all-in/watch/-enormous-heist-hayes-on-the-audacious-scheme-to-reward-big-donors-226432069961

[._.]

76. Laundering Money

Is what that's all about. It's simple, it's easy, it's pretty much foolproof.

[Kid Berwyn]

80. Plot to crash economy and make US taxpayer pay for it.

Other than that, the billionaires keep the loot and skate off.

This may be the game plan.

https://www.democraticunderground.com/100219691355

Oh, and Putin wins.

[SoFlaBro]

83. Some fucking crypto is easier to track that others. Bitcoin leave a clear trail. Monero fucking does not. Very different