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Bitcoin and crypto currencies

Cobalt wrote:

What is new here is only the electronic assignment of an NFT from one owner to another one, and ONLY one, without the involvement of the original issuer;

Absolutely – if the token itself holds the value, this can be done with blockchain technology. It’s like selling a car in a world were whoever has the key is the legal owner of the car.

Thing become more difficult when the token does only encode som external value. In that case even the best NFT technology can not guarantee that the value item is not sold twice – because it can only kind of guarantee that a specific token is not sold twice but never that there is not a different token that refers to the same value.

Can be easily illustrated (pun intended) with the current hype: The Art NFTs.
If a piece of art like e.g. a painting is packaged in a NFT the blockchain will make sure that this token is not sold twice. What can happen, however, is that a fraudster takes the picture and generates a second token around it. This new token can also be sold.
In a perfectly transparent world in which the entire blockchain and all the identities acting on the blockchain are public, this is not a huge issue as one can trace each NFT to the original creator – and if this is not the artist, the token is a copy.
But again: The flip side of this is a complete loss of privacy.

Germany

Or they would have lost 12% of their holdings last week.

Well, splitting hairs, -9% as of this morning.

But it is a bit silly valuing a hard currency in terms of one which government can print willy-nilly.

Holding cash reserves in BTC and working cash in fiat the former would be up about 100% in the last 12 months and the latter down about 5-30%, depending on what you want to buy with it.

Glenswinton, SW Scotland, United Kingdom

Jacko wrote:

Holding cash reserves in BTC and working cash in fiat the former would be up about 100% in the last 12 months

What many crypto-fans do not understand (or consciously fail to acknowledge): For a means of storing or exchanging assets, stability is a key value! A 100% value increase in one year might be great for adventurous investors but is actually a bad thing for the purpose discussed here.
If we seriously had to pay with BTC (and economy would not be based on real currencies), the 100% deflation of the last 12 months would have killed every economy completely.

Deflation of the main currency is a killer! 1-2% deflation might be tolerable, but anything beyond that has devastating effects: Would you really buy a plane (to use an on topic example) for 1.000 whatever if you know (or at least have the expectation) that you can buy the same plane next year for just 500 whatever (and keep the other 500 for yourself).

A case for BTC would be: “It has been completely stable in real value while real currencies had a variation of +-x%”

Germany

75% dive.

Will electricity usage fall 75%?

Administrator
Shoreham EGKA, United Kingdom

Peter wrote:

Will electricity usage fall 75%?

The difficulty needs to be adjusted first, but since the hash rate hasn’t followed the price yet, I’m not sure that will actually happen. Anyone with a better understanding of the mining economy has a clue why the miners don’t downscale?

EGKR, United Kingdom

I do not follow why bitcoin mining creates value but jogging does not. Unless a marketable object is produced the value is a con, like most of the products the UK bank and finance industry try to persuade people to invest in.

Maoraigh
EGPE, United Kingdom

YakovD wrote:

Anyone with a better understanding of the mining economy has a clue why the miners don’t downscale?

Because the market still (has to) believes that this is a temporary distortion and the prices will go up again soon. I would say: We’ll see.

Maoraigh wrote:

I do not follow why bitcoin mining creates value but jogging does not.

It does: https://charitymiles.org

Germany

I don’t see how either creates value in the Adam Smith “Wealth of Nations” sense.

Maoraigh
EGPE, United Kingdom

Nice perspective on Crypto and the underlying blockchain technology:

https://www.schneier.com/blog/archives/2022/06/on-the-dangers-of-cryptocurrencies-and-the-uselessness-of-blockchain.html

Last Edited by Malibuflyer at 04 Jul 11:24
Germany

According to the Daily Dirt Digger cryptocurrency seems to be a sure way to die in your sleep, or crash in a helicopter.

Can anyone think of why?

Administrator
Shoreham EGKA, United Kingdom
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