A particularly ignorant form of ageism at that. I’m a GenXer who was building Web sites and creating and investing in Internet startups before a lot of Millenials and all GenZers were born. I was also running a little Bitcoin miner as an intellectual experiment before most people knew what it was. I also own some cryptocurrency, although it’s a tiny part of my portfolio and more of an allocation-primer/toy than anything else. But yeah, let’s pretend that GenX has no idea how technology works.
It’s in large part because of my age and experience that I understand how dodgy and scammy and (in the case of proof-of-work coins and NFTs) wasteful the cryptocurrency sector (as distinct from blockchain technology) is.
That’s the most likely explanation, although criminals choosing it as their token de jour for big transactions might also explain it. If the owner isn’t greedy (an assumption I never make with cryptocurrency guys) he should be able to clear $30-50 million on the initial investment before the whole thing collapses and the rubes take big haircuts.
This reminds me of a paper by FA Hayek discussing private currencies and he basically came to the same conclusion that without a basket of goods to exchange the private currency it has zero value. So in effect all money, even state backed ones, depend on their relative stability vs a basket of goods. Other than that, these are just ways to evade taxes or launder money from criminal enterprises.
Edit: But I do want to expand on this thought because right there’s been some kind of hype about “stablecoins” or cryptocurrencies with cash backing. These are also scammy, imo, as these depend on the good faith of the firm to keep a cash reserve matching X coins to Y currency. And right now there’s no legal framework to enforce their reserves like say you can with a bank in the US or most other places. To me, there’s really no good end point for crypto that doesn’t include either a near total devaluation (thus reverting them to currency exchange processors) or they get shut down due to a global black market boom (slavery, sex trafficking, guns, etc).
Bitcoin average energy consumption per transaction compared to that of VISA as of October 21, 2021 (in kilowatt-hours)
table
column chart
Characteristic Energy consumption in kWh
1 Bitcoin transaction 1,779.11
100,000 VISA transactions 148.63
Showing entries 1 to 2 (2 entries in total)
The idea of crypto is fine, distributed ledgers of transactions and even the idea of an alternative currency isn’t terrible*, the problems come from everything built on it, and the cost to the environment creating something entirely digital solely so people can make money.
Amusingly, the original idea came from devs trying to figure out a way to curb email spam. Basically, servers would be given a limited set of tokens and in the process of sending/receiving email it would balance out since you should be sending roughly as much as you’re receiving ideally. The theory goes that spammers would be able to shoot out a ton of emails but eventually run out of tokens. Plus, once you knew which servers were running spam operations you’d just deny their tokens due to ledger transactions proving their activity. Mind you, I’m going off of my memory of the paper so I don’t have all the details right probably. But the idea is sound it’s just Dining Philosophers but scaled up to the Internet.
I can guarantee you that the very small number (<10%) of people making serious real-world money off of gaming coins and other metaverse-adjacent tokens now and in the future aren’t the type to be influenced by any meme army chasing the coin of the day.
Yeah, it all comes back to limiting something (theoretically) unlimited, and unfortunately over the course of human history, we’ve seen how well humanity plays with a limited, accumulable* resource.
This is insane. I really have trouble understanding this. Is it “really” volumes in billions, in a way that’s tied to reality?
I mean, the market volume for a stock like Google’s is in the million dollar-range. Is this actually saying that people are trading thousands of times more money per day on one of literally thousands of joke coins?
Or is it disconnected to the dollar? If I buy $1 worth of Shibu coins before the price goes up x1billion, and you buy $1 worth of BoingBoingCoin before the price goes up x1billion, and we trade those back and forth, does that inflate the trading volume to lala land?
And yet if we can trade them back and forth, and into some slightly-more standard coin, it seems like you can turn those back into dollars. And so it is tied to reality. Which is insane.
Eh, because I was so confused I spent some time looking at it. It looks like there were piddling trades until it got listed on CoinBase, and then two weeks later it started spiking up, basically once people could actually trade it.
It’s just bidding it up back and forth with confederates or fake accounts on the cryptocurrency markets, without exchanges to fiat currency ever taking place until the pumper finally dumps it. They may be using other, more established or tethered cryptocurrencies as proxies for USD.
Unlike the regular stock market there are no circuit breakers and no bad ol’ state regulators monitoring things, so a crazy steep increase in supposed value doesn’t trip any alarms with the public until it’s too late. At that point, the main holder of the tokens has quietly smurfed out at least USD$30-million worth of fiat currency into offshore accounts in preparation for a final laundering back into Benjamins. Then, following a fire sale or just letting nature take its course, the rubes are left “hodling” the bag of once-again worthless tokens.
That’s the exit. CoinBase is where the suckers are going to be found. Some of them were in on the pump without actually knowing they were.
Absolutely, once you sell. This sort of thing is an example of the proposed wealth tax. There is little chance that he can liquidate this asset for the amount of the taxes on it. The difficulty in valuing assets like these mean that there will be lots of shenanigains come tax time. That’s why my proposal is to make capital gains payable when an asset is used as a security. That should be enough to prevent the wealthy from never selling (and therefore never paying capital gains) but living off of their assets by borrowing against them. Also, it means that those assets are valued by organizations that are putting their own money at risk.
In a larger sense, crypto currencies are a return to the “wildcat” banking days, because notwithstanding any mathematical methods of limiting the inflation of the supply, anybody can start a crypto-currency.
I just thought of something I’ve really wanted to ask… what is the fundamental difference between any of the cryptocurrencies (or NFTs) and the large stone-based “money” used in Micronesia? Every time I read “bitcoin/NFT isn’t worth anything”, I am reminded these large stones are only worth what everyone agrees they are.
I have no cryptocurrency or NFTs. I read the Satoshi paper in 2012 and sort of understood the ideas behind it. I recall thinking I should buy ~$100 worth at the time, but sadly never did. Although I probably would have gotten out when it doubled in price, so my current financial situation would likely be the same.
anyone know if this meand they’d be subject to the nice new (if pending) billionaire’s tax?
it’d be an awesome way to force people to liquidate assets like this - in order to pay the tax bill - and force the world to see the pennies they are really worth
My Gen-X clutching-pearls are worth exactly as much as a ${randstr}coin, and always have been.
You (poster to whom Tamsin replied) think you’re making us upset by calling us out, but you’re forgetting: we’re Gen X. No-one has ever cared what we think.
