Neither does your dollars. In fact, the dollar almost crashed in 2008, WITH electricity enabled.Bitcoin has no intrinsic value, doesn’t physically exist when the electricity goes off,
It doesn't have to be defined that way. Bitcoin can work perfectly within itself. If the dollar or the whole global fiat system collapses, Bitcoin will keep existing.and must be defined based on the amount of DOLLARS you can get with one.
It might be. Still not nearly as bad as fiat.This is a fool’s investment.
Tulip Mania 3.0
Neither does your dollars. In fact, the dollar almost crashed in 2008, WITH electricity enabled.
Ultimately, an independent medium will always be required to function as a currency. It is exactly because Bitcoin has no other function, that it fits this role perfectly.
It doesn't have to be defined that way. Bitcoin can work perfectly within itself. If the dollar or the whole global fiat system collapses, Bitcoin will keep existing.
It might be. Still not nearly as bad as fiat.
And a lot of fools made, are making, and will make a bunch of money with it. The only thing you're guaranteed to do with fiat is lose value... So...
None of those could have done nothing to save it in 2008. Therefore they are not really backing it.My dollars are backed by the military industrial complex and about 10,000 nuclear weapons.
My dollars is insured up to $250,000 by the FDIC.
The most powerful computer network on the planet.What backs Bitcoin?
What insures it?
None of those could have done nothing to save it in 2008. Therefore they are not really backing it.
And when it crashes again, which is closer than you think, those nuclear weapons will be standing by as if nothing happened.
The most powerful computer network on the planet.
Gasoline, milk or food can no longer be produced when the power goes out. So they're practically in the same boat as Bitcoin... Not counting the miners that will simply remain online because they are running on renewable energy, and will most likely be using StarLink...#1 The most powerful computer network is 100% useless when the power goes off.
Please let me watch you try to buy some gasoline, milk or food when a hurricane, natural disaster or a war knocks out the power.
I recommend you go watch Inside Job.#2 2008 was a bunch of bankers lining up to "get theirs" from Bush's government cronies (Paulson) before cutting off credit cards to the regular people - and then reactivating them to put them into debt.
It doesn't have to do anything about it. It's the government policies, aka the current financial system, that allowed student loan debt to become what it is. It's not Bitcoin's resonsibility... Although, if they would have put that money into Bitcoin, they would actually be able to pay back the debt by nowWhat exactly is Bitcoin doing about Student loan debt?
If they do that it's only a matter of time before everyone on Bitcoin switches to Monero.Besides allowing the IRS to effectively tax the world?
Gasoline, milk or food can no longer be produced when the power goes out. So they're practically in the same boat as Bitcoin... Not counting the miners that will simply remain online because they are running on renewable energy, and will most likely be using StarLink...
In case you didn't notice, we're on the verge of a cashless society.
People will fight the cashless society. But they will lose. You can guess what their alternative is... Not to mention that wanting dollars at this point is.... risky, to say the least.I believed that the cashless society was coming immediately but there are a lot of people still fighting it. Specifically poor people who continue to keep them selves low tech.
Bottom line is: you should be investing in Square, bank stocks with dividends and other transfer methods like I did back in March during the crash.
The returns that I’m getting from Square are far higher than any return that I would’ve gotten from crypto.
There is no higher return than in crypto.
Well, since crypto in general doesn't provide such sovereignty... In fact, as a percentage of money, I and people I know lost more to crypto theft and fraud (or plain inability to access a wallet) than we lost to anything else.We're in a sad world when the importance of gaming is chosen above the importance of personal sovereignty over one's money, value and transactions...
Actually, it does. The whole crypto space doesn't necessarily, but Bitcoin and Ethereum do.Well, since crypto in general doesn't provide such sovereignty... In fact, as a percentage of money, I and people I know lost more to crypto theft and fraud (or plain inability to access a wallet) than we lost to anything else.
Nothing is stopping anyone from mining with their graphics cards. And since you're small, you simply join a mining pool and get a pro rata reward for your hashrate. Whether big mining farms exist or not is irrelevant. The moment that one farm becomes too big, the whole thing collapses. That means that as long as it is working well, it is decentralized. Simple as that.What's sad is that there are people who on one hand believe in a distributed crypto network and on the other hand support mining, which is the exact opposite of that, as is puts the vast majority of the network in the hands of a handful of individuals with mining farms in places where electricity is cheap.
No they could not. The moment one entity takes over the network, its value literally becomes zero. If it was that easy, any company would have simply bought Bitcoin or Ethereum when their market cap was low. No one does it, because it is the equivalent of burning money.It's sad that if people think there's any security in those mined currencies when it's clear that if there was any value then a company like NVIDIA could just take over the network.
What...? In the US, the top 1% owns 99% of wealth.It's sad that people accept inequality in "money" distribution that's much higher than anything in the real world.
OkIn short, anyone who argues that proof of work coins are good in any way is either extremely naive or disingenuous.
Can you at least level with us whether you're arguing against crypto in general, or just being a stealth maximalist for whichever proof-of-stake bag you're holding? In finance it's good form to clarify these things.In short, anyone who argues that proof of work coins are good in any way is either extremely naive or disingenuous.
A typical financial balloon. Soon to burst.
You seem to love Square a lot... Did you know that Square actually bought Bitcoin....?Tesla, Square, Pinterest, Nio and a few others outperformed Bitcoin in 2020.
Bitcoin sat well under $19,000 from 2018 till 2021 when it suddenly got boosts from welfare checks and corporate welfare (Elon musk).
In order to double your money on Bitcoin, at this point, you'd need to see Bitcoin rise from its current value to double its current value. Plenty of stocks did way better than that.
Since March I did better with apple (pre split), for example, and Tesla (pre split)
Not to mention my oil stocks and bank stocks paying dividends.
It all depends where you try to start counting.
I'm not gonna waste energy arguing about it. If you believe in crypto, then risk your money on it.
I'm not arguing against crypto in general. I'm arguing against proof-of-work mining, which is plain stupid. I don't have any current stake in crypto. I held a little crypto years back, then realised how bad mining was and got anti-crypto, then realised that proof-of-work isn't all of crypto so there's no reason to be against it in general. I think that there are some good ideas there and personally admire what Vitalik Buterin has done. That hopefully clarifies my stance.Can you at least level with us whether you're arguing against crypto in general, or just being a stealth maximalist for whichever proof-of-stake bag you're holding? In finance it's good form to clarify these things.
I think I'll go into a series of posts about the misconceptions of mining. A series just so it's easier to discuss instead of bundling everything together as I did before. If you'd rather I put more points together, say so. If you agree with a point, just say so and I'll go on.Nothing is stopping anyone from mining with their graphics cards.
Alright. Let's go.I think I'll go into a series of posts about the misconceptions of mining. A series just so it's easier to discuss instead of bundling everything together as I did before. If you'd rather I put more points together, say so. If you agree with a point, just say so and I'll go on.
This is true. But, countries are pretty much irrelevant in the crypto world.
This is true. Basically, you're giving the mining pool your hashing power, and they ultimately pay you for it pro rata, after you reach a certain milestone, which is normally denoted in a specific amount of coins.That map also misrepresents some of the data by attributing the mining people do at home to their geographic location.
People who mine at home don't get coins or contribute to the blockchain directly. They do work for a mining pool, which in turns gets the mined coins and rewards its users.
A mining pool might be centralized, but what maintains the pool is still decentralized, for the simple fact that anyone can join whichever mining pool they wish at any given time.So all the work the users of a mining pool are doing is centralised at the mining pool. If there is a problem with that mining pool, its collective mining power is lost. (Or, if the mining pool is acting in bad faith, could be misused. But that's for another point.)
Mostly true... Except for...Misconception 2: Mining supports the blockchain.
While people in crypto occasionally offer some comment about their view of mining power usage, I don't think they give it much attention beyond trying to excuse it.
Though it's not really that excusable. Mining does, at the basic level, make the blockchain work, but still, 99.99...% of the power use is completely wasted, and doesn't actually help with anything, just makes it worse.
Crypto mining is designed such that the more computing power you put into the system, the less efficient it becomes. Other systems might require more work the more transactions there are or the more users there are, but mining is infinitely inefficient, in that no matter how much computing power you put into it, it will all go to waste.
The idea behind this is to make the blockchain continue to grow at the same rate, and produce the same number of coins, regardless of how much power is put in. Most of what's behind mining is human engineering rather than software engineering, and that's part of it. That's also where it fails, as people are still incentivised to shift the balance of mining to their favour by using more power.
If the value of crypto was limited, then that would have put a limit on the power people are willing to put in, but a lot of crypto (such as Bitcoin) is designed to infinitely deflate, due to a limited number of coins.
People in crypto sometimes compare how wasteful the banking system is compared to the crypto system. They tend not to make a comparison of efficiency in the first place (ignoring how much larger number of people and transactions the banking system supports). With the inefficiency of crypto being unbounded, if mining based crypto is ever truly successful, it will suck down as much power as is available.
Which brings me toThe more power is put into the network, the more secure it is
Well, people generally won't gain much from it, because, everyone else can decide to go back to another block before the attack. It's basically what happened with Ethereum, splitting into ETC and ETH.Which brings me to
Misconception 3: proof of work coins are secure.
I'll only discuss the majority attack, since that's a vulnerability shared by all coins. If someone has more than 50% of the mining power, then they can add whatever they want to the blockchain.
That's hardly a far fetched situation, and indeed has happened. It's a lot easier to carry out than most people think. The typical crypto fan response would be that people won't gain much by it, but that's about as relevant a defence as "security by obscurity". If there's an easy attack vector, then people will find use for it.
Disrupting the mining operations has a cost. And if it ultimately kills the coin, it's money spent with pretty much zero return. No one is going to do that.For example, suppose that crypto becomes big in the US, to the point where China, which has 65% of mining in its area, feels that it would be useful to disrupt it. It could take over the mining equipment in its area and disrupt any coin it wants, and do it repeatedly over time, unless a kind of "cold war" starts in which the US and China put more and more power into crypto (at the expense of other things), in which case we'd still have complete instability of the coins.
Uh... Not at all... The other 90% of the network will recognize the fraudulent transaction and kill that chain automatically. The only way to disrupt the network is a 51% attack.But there's no real need for having over 50% of total mining power to disrupt pretty much any coin. I don't know who owns the mining farms (if there's any information, it'd be helpful), but it's certainly not out of the question that a single player has, let's say, 10% of the mining power. That should be enough to steal from most coins' blockchains, or disrupt them.
It's not that easy though. If we take Bitcoin for example, it uses ASICs... That means that any coin that uses something other than SHA256 cannot be mined on Bitcoin miners. And there are many different ASICs out there.It wouldn't have been enough if there was just one coin, but that's not the case. Most miners don't support any particular coin, but rather mine the most profitable coin. Less profitable coins have fewer people mining them, so any large player should be able to easily take over the coin.
If the player wants to take over another coin, that's profitable, all they need is to make another coin more profitable, which for a large player shouldn't be hard by playing both the mining efforts and the exchanges.
True. But acting in bad faith has built in consequences, I.e. you're wasting power and not gaining any rewards, because the blockchain rejects the results of the pool. Only with a 51% attack would it be an issue. And if we take Bitcoin, things are looking quite good;Mining pools are similar to single players (that's part of the centralisation problem), in that if they act in bad faith, they can give miners whatever work they want done.
Well... It's pretty much impossible to have an issue with Bitcoin at this point. The network is too powerful, and there is no incentive for the miners to stop their operations, which is pretty much the main danger to Bitcoin.Going back to what you said, it's true that the more power is put into a network, the more secure it is against outside attack. On the other hand, putting more power into mining doesn't make any particular network more secure, since for most coins this is "outside power" that could be used for attack.
It's also worth noting that other aspects of coins, such as mining pools and exchanges, are dependent on trust, and that trust has certainly been broken in the past (I personally lost coins to both).
(Sorry for the late reply.)Disrupting the mining operations has a cost. And if it ultimately kills the coin, it's money spent with pretty much zero return.
True, but who controls these ASICs? Bitcoin has often been in a situation when it could have a 51% against it. While, as you say, there might not be incentive for it currently, if it ever becomes big enough that disrupting it is valuable to someone, then it should be easy to do. That's what centralisation leads to. If the network is centralised enough, and I'd certainly guess so, then perhaps building a competing facility is a problem, but someone could take the existing ones by force.If we take Bitcoin for example, it uses ASICs...