thanks

Apparently only the young, smart, hipsters, can understand it. If you want to hang with ‘cool’, write some checks, don’t ask to many questions.

A friend was involved in a pyramid scheme decades ago. I asked him who was policing the rules? And what happens when you run out of new entrants? He explained it in the most simplistic terms, knew better than to ask me.

Yes I think it was illegal, yes it fell apart.

Of course with the crypto rage, if you got in & out at the right time, could do great.

quote:

Of course with the crypto rage, if you got in & out at the right time, could do great.

Yeah, and Aug. 2000 Enron was $90/share, nocody knew it would be $0 six months later.

While crypto has a definite techno flash, and the idea of getting Govts. out of the money business has a certain appeal, it basically comes down to the classic economic equation, the worth of a thing is what someone will pay for it. You can mine and trade all you want, but never forget that basic truth. Many of the artificial "currencies" that tried to jump on the ₿ craze are little more than Ponzi schemes held up by investor greed and unfounded optimism.

I found this course to be interesting and enlightening if you have a few hours to deveote to the subject.

Bitcoin at Saylor University

Saylor = Michael Saylor, the CEO of Microstrategy and holder of a couple billion dollars worth of Bitcoin.

Remember those Bearer Bonds Hans was after in Die Hard? Bitcoins and NFTs are the digital version of them. While the bond has the backing of who ever issued it, cryptocurrency is worth only what someone is willing to pay for it. And it is popular with drug dealers, hackers, and other bad people since it is off the governments ability to track. And it is a way to launder money or collect on a ransomware attack.

Cryptocurrency is a digital coin that isn't backed by government.
Blockchain is the math code that is what makes the crypto worth something. When you bought an NFT, you were not buying the image, but the blockchain embedded in the file.
Mining is trying to create your own blockchain. Depending on the type of currency you are chasing, these can be quite costly. In 2020 during the COVID lockdowns and chip shortages, one of the reasons graphics cards became hard to get back then was in part because thieves were getting their hands on GPUs to be used to mine for bitcoins. Not sure specifically what made graphics cards better than a CPU, but there were many reports of warehouses filled with GPUs in China working 24/7 mining coins. For those on the look out for a used card these days are given additional warnings when those cards wore out they were boxed back up and shipped over here for sale. Some of the other types of coins are trying to be minable on less energy hogging systems, but the collapse of FTX and people figuring out NFTs are a joke, cryptocurrency took a dive in value.

In as simplistic terms as I can sure, I'll use bitcoin here.

Lets say you have a bitcoin, and you transfer it to me, what happens is that is notated on the block chain (read: general ledger) that everyone (read: Miners) is tracking together. The miners tracking that ledger verify that transfer (ultimately there is a single verification) and it MAY generate a bitcoin for them as payment for the proof of that work.

it's a little convoluted but that's what's going on basically.

quote:

Originally posted by FenderBender:
In as simplistic terms as I can sure, I'll use bitcoin here.

Lets say you have a bitcoin, and you transfer it to me, what happens is that is notated on the block chain (read: general ledger) that everyone (read: Miners) is tracking together. The miners tracking that ledger verify that transfer (ultimately there is a single verification) and it MAY generate a bitcoin for them as payment for the proof of that work.

it's a little convoluted but that's what's going on basically.

That can't be true why would criminals and drug dealers use a public ledger of their illegal deeds?

quote:

Originally posted by Skins2881:

That can't be true why would criminals and drug dealers use a public ledger of their illegal deeds?

There is no name/ID column on this ledger sheet, courtesy of the arcane magic of public key cryptography. Possession of a private key is sufficient to prove ownership. Someone finding a break in SHA-256 will take down the whole edifice.

I'll stick with cash, checks and stock.

I'm still as confused now as I was when I first heard of it.

I kinda get the concept. After all of the explanations I've heard, I still can't wrap my head around how something that is not backed by something (government, gold etc) can have some intrinsic value.

A couple minutes regarding "anonymity" etc. with Bitcoin:

quote:

I'll stick with cash, checks and stock.

For me, I'd add Gold and Silver to those ^^^.

I can explain the math, I think.

Cryptocurrency = Blockchain = Bit coin mining = Kleptocurrency = Intangible wealth.

Right now, kleptocurrency in the Bahamas is the most recent corporate theft; before that Theranos, and more back into history.

I follow the rule “If it sounds too good to be true…”

I think Warren Buffett says it best: “Draw a circle around the businesses you understand and then eliminate those that fail to qualify on the basis of value, good management and limited exposure to hard times.”

In other words, don’t put your money into something that few people understand, has no real basis in value, and where one of the industry’s top managers was just exposed as a massive fraud.

"Cryptocurrency" says it all. You understand what currency is, don't you? Crypto means coded or encoded. Cryptocurrency is encoded currency or digitized currency.

Governments of the world create currency, also known as fiat currency. Fiat means they just print it and it's currency because they say it is. A couple of attributes of fiat currency is that the supply of it is controlled by the government issuing the currency. The supply of cryptocurrency is controlled by an algorithm; bitcoin's algorithm is that its production is made possible through "mining."

Governments take steps to ensure their currency is difficult to counterfeit so that someone holding their currency can be sure it's authentic. Cryptocurrency's authenticity is ensured by blockchain technology which as someone pointed out is a public ledger of the chain of custody for any one piece of cryptocurrency.

Another attribute shared by both fiat currency and crpyto currency is the assumption that people will continue to want to hold said currency. When demand goes up for a currency, the price of that currency goes up and vice versa. With fiat money, when the demand for US dollars go up, it will take more of another particular currency to buy it like US Dollars to Euro currency conversion. You saw something similar to bitcoin when it has risen in price from $30 around 2008 when I first heard about it through a story of someone using bitcoin to pay for a pizza to $60,000 sometime in the last two years and its decrease in value since then.

One difference between fiat and crypto currencies is that fiat money is backed by the government who issues them. That may not be much but nothing is backing up crypto currency and what's at play is the greater fool theory. You hope there's a greater fool than you come the time you want to sell your crypto currency.

Google Tulip mania. It is one of many market bubbles. Heck, you can even google "market bubbles."

quote:

Originally posted by egregore:
I'm still as confused now as I was when I first heard of it.

Right there with you buddy.

It's important to separate these concepts out and examine them individually, rather than lump them all together and say it's all bullshit.

Yes, these concepts build off each other. But just because (for example) the viability of Bitcoin and other cryptocurrency is questionable, that doesn't automatically mean that blockchain technology is. After all, with all schemes, it's easier to get people to buy in when it's based on at least a foundation of actual science/technology/proven concepts/etc. But that "real" concept can be be used to attract people to and prop up "fake" greedy schemes.

The blockchain ledger itself is an interesting technology concept that has potential utility in a number of different ways in the business and financial fields, besides just the questionable cryptocurrency and NFT routes that it's currently being used for.

quote:

Originally posted by RogueJSK:

The blockchain ledger itself is an interesting technology concept that has potential utility in a number of different ways in the business and financial fields, besides just the questionable cryptocurrency and NFT routes that it's currently being used for.

I was going to challenge you to name where it could be used besides those two then I thought, “wait a minute. They could use blockchain technology to record and process votes.” I would support this.

Trying to understand what has been presented so far……… key here is trying! So far I understand PONZI.
If one gets in, how does one get out, and with a profit, or even more likely without losing everything invested?