Coinbase Onramp Now Supports Buying Crypto With Apple Pay

[flmmkr]

There is always an equal number of buyers and sellers. Prices change depend on how the buyer or seller value a thing relative to how they value money.



People trade currencies so they can buy stuff. A worker at a US factory can't do much with a Swiss franc, so you need to trade francs for dollars to buy the factory output, then the factory pays the worker with dollars. The number of francs you need to trade for dollars is the exchange rate. Exchange rates change based on the relative demand for goods and services and debt of each country. If I wish to buy iPhones wholesale, or Azure server space, or US Treasuries, I need dollars. As demand for those things rise, either because the products and services are valued higher than their competitors or because risk/return on the debt is more favorable than other countries, then one must trade more francs for each dollar.

Yes, people can speculate in the currency market, but that's not what drives the market. The speculation is an anticipation of these larger moves and an attempt to profit from anticipating the move (having the dollars now when someone wants them in the future) in exchange for taking on risk (the world changes, maybe nobody will want them). That speculation is just foam on top of the larger market drivers for most currencies in normal times. The crypto market is all the speculation and risk with no underlying motivators. Again with minor exceptions, the only thing people can buy with crypto is other currencies there is no significant demand for crypto directly that would explain the fluctuations in its exchange rate.

The "hope" you refer to is the gambling bit. When investors buy a national currency, there's a little hope but mostly it's informed by knowledge of market forces.

People do not "trade" currencies so they can buy stuff. They "trade" currencies because they are trying to take advantage of the changing prices of currencies between each other. Traders can and do make money simply by trading currencies. This is why forex exists.

People "exchange" currencies to buy stuff with other currencies. There's a difference.

 

[Analog Kid]

So the BTC denominated prices doubled in 2022, so what? In 2023 they were cut in less than half. In 2024, they were cut in nearly half again. I can argue the exact opposite that if you put all your money in BTC at the beginning of 2023 you'd be much better off than if you left it in U.S. dollars.

Yes, it can go up and down quite quickly and violently. It is not immune to inflation forces, it is wildly buffeted by them.

BTC is an asset. There is underlying value in it. [...]. What is the underlying value of the U.S. dollar? Absolutely nothing.

Exactly. What is the underlying value of a bitcoin? It's a number in a ledger, just like a bank deposit. It has no value other than what it can buy, just like a bank deposit. A dollar is a currency. A bitcoin is a currency.

It's a secure network with an entire economy almost all its own.

An isolated economy is not a good thing...

There's nothing behind it except for the word of a government that can just keep printing more and more as much as they want.

Yes, it has the word of a government behind it versus the word of some crypto hype man. You can buy things at your local store with dollars, you can pay dollars to get your pipes fixed. Importantly, you can pay your taxes with dollars.

It's losing value continuously, when there is an alternative that has a reducing inflation rate and just based on simple math will become more valuable over time in comparison to fiat.

Again, you keep trying to say bitcoin is a hedge on inflation when the very top of your post showed that it is not. They buying power of bitcoin fell in half over 2022.

Ask the 1930's about what happens when you keep your money supply fixed.

A currency can be inflated, so you are wrong about that. Look it up yourself, as I don't have the time to.

Ok, done:

What Is Inflation?​

Inflation is a gradual loss of purchasing power that is reflected in a broad rise in prices for goods and services over time. The inflation rate is calculated as the average price increase of a basket of selected goods and services over one year. High inflation means that prices are increasing quickly, while low inflation means that prices are growing more slowly. Inflation can be contrasted with deflation, which occurs when prices decline and purchasing power increases.

seems to align well with my statement:

Prices have an inflation rate. Inflation is not how much money exists, it is how much money is needed to buy a constant (or substitutable) thing.

M2 is the correct form of money supply to use, as it includes savings and other less liquid money. Again, look it up. If you still want to use M1, it looks just as bad, if not worse.

I said MB, not M1. M2 includes the impacts of fractional reserve banking. That's not what you're describing when you say there are a fixed number of bitcoin in the world. You're describing MB. But please, continue to "educate" me...

Yes, crypto is volatile. It's a whole new asset class and isn't mature yet. Volatility will likely decrease over time (and has) as adoption grows. With institutions, corporations, and nation states adopting it as a reserve asset and in their treasuries, adoption will likely continue to growing at a faster rate. Speculation, yes, but that's the direction it's now headed.

It is not a new asset class, it's a currency. Volatility is not decreasing, it's been increasing based on speculation that the US is likely to dump a huge amount of taxpayer money into the pot. If that doesn't happen, it will fall just a precipitously. A couple countries have toyed with using it as an official currency with relatively negative outcomes-- those are the same countries that typically try to peg their currencies to the dollar for stability but they're finding that while the dollar provides stability, crypto does not.

There's nothing competing with Bitcoin. [...] The closest would be Bitcoin Cash or Litecoin, which will never gain the adoption or user base of Bitcoin.

So nothing competing except for the things that are competing but won't ever gain adoption because of your base declaration that they won't?

That seems to contradict this statement:

any one can create a a crypto currency ?

Yes, there are various sites where you can actually create your own token. I almost decided to create one on DEGEN, a layer 3 network off of Ethereum, but I decided I didn’t have time to maintain it. Note that tokens managed by individuals tend to be meme coins and are generally unsafe, so always invest in those expecting them to go to zero. If they take off, great, but don’t expect it since hitting the right meme coin is very tough. The solid crypto coins are generally sponsored by businesses. Always do your due diligence when investing in specific coins or tokens.

which means anyone can compete.

 

[flmmkr]

Who pays for all of the energy consumed by crypto?

The miners. They also use renewable energy and what would otherwise be wasted energy for their operations. They operate on the basis of they will mine more value of BTC than the cost to mine (including the energy expense). Same concept as gold mining, and why it's called crypto mining in the first place.

 

[Analog Kid]

Yes. Anyone who bought Bitcoin and held it long enough to see a gain in their investment. Just as with stocks, if you sell when the price is lower than when you bought it you have a loss. It's no different. Anyone can buy stock in a company and that company's stock can decline after the purchase of the stock. Hold it long enough and it could go back up, but also the company could go out of business and the stock becomes worthless. That's happened with plenty of companies in the past.

You didn't read the story, you're caught up in trying to pretend stocks and bonds and dollars and crypto are all the same because of day to day blips in the market. The point is the underlying value.

Tell me a story where people buy bitcoin as my characters buy stock and bitcoin eventually goes away as my stock did and everyone makes money. That money made is the "underlying value". Feel free to simplify it as I did.

People do not "trade" currencies so they can buy stuff. They "trade" currencies because they are trying to take advantage of the changing prices of currencies between each other. Traders can and do make money simply by trading currencies. This is why forex exists.

People "exchange" currencies to buy stuff with other currencies. There's a difference.

I mean trading in the sense of "I'll give you this if you give me that". I don't know of a significant difference between trading and exchanging. I would call what you're describing to be "speculating", but whatever. I mean you trade/exchange one currency for another to buy stuff. That's what drives the currency markets and speculation is an effort to profit from inefficiencies in that market.

 

[onenorth]

The miners. They also use renewable energy and what would otherwise be wasted energy for their operations. They operate on the basis of they will mine more value of BTC than the cost to mine (including the energy expense). Same concept as gold mining, and why it's called crypto mining in the first place.

What is wasted energy and how is it salvaged for mining?

The miners are participants. They are earning money from other participants. So how is this not zero sum when there are huge losses (heat generated by the cores and energy needed to cool them)?

OK, I'll be frank here. I see a lot of pro-crypto posters on this thread who seem to have ready answers for everything, but they say it's complicated we need to "get educated" and then it will all make perfect sense.

But it really just sounds like the spiel one would get at one of those "get rich quick" seminars. Throw enough confetti in the air and people get bedazzled by the colors.

 

[flmmkr]

Yes, it can go up and down quite quickly and violently. It is not immune to inflation forces, it is wildly buffeted by them.

This is known and not disputed. Not sure what your point is.

Exactly. What is the underlying value of a bitcoin? It's a number in a ledger, just like a bank deposit. It has no value other than what it can buy, just like a bank deposit. A dollar is a currency. A bitcoin is a currency.

Again, not disputed. Currencies are an asset, so not sure what your point is.

An isolated economy is not a good thing...

No one said it's isolated. It's mixed in with the traditional economy as well.

Yes, it has the word of a government behind it versus the word of some crypto hype man. You can buy things at your local store with dollars, you can pay dollars to get your pipes fixed. Importantly, you can pay your taxes with dollars.

Bitcoin is decentralized, so you don't have to worry about trusting the government to follow through with its obligations.

Again, you keep trying to say bitcoin is a hedge on inflation when the very top of your post showed that it is not.

Ask the 1930's about what happens when you keep your money supply fixed.

There were other factors at play in the 1930s. It wasn't because of a fixed money supply. The money supply wasn't fixed. Dollars were backed by gold, which was still being mined and acquired, and money still being printed. It's just that now (after 1971) money is printed at a much greater rate.

Bitcoin is more of a hedge against the debasement of fiat than of inflation.

Ok, done:

I'm not disputing the base definition of inflation. All I'm saying is that a currency/money supply can be inflated, just like a balloon can. We can just call it increasing currency or money supply to satisfy you technically.

I said MB, not M1. M2 includes the impacts of fractional reserve banking. That's not what you're describing when you say there are a fixed number of bitcoin in the world. You're describing MB.

Ok look at an MB chart. Basically the same situation.

It is not a new asset class, it's a currency. Volatility is not decreasing, it's been increasing based on speculation that the US is likely to dump a huge amount of taxpayer money into the pot. If that doesn't happen, it will fall just a precipitously. A couple countries have toyed with using it as an official currency with relatively negative outcomes-- those are the same countries that typically try to peg their currencies to the dollar for stability but they're finding that while the dollar provides stability, crypto does not.

Bitcoin and crypto is more than just a currency. Bitcoin and crypto is a separate asset class because of unique characteristics and functionalities that distinguish it from traditional asset classes. This includes decentralization, digital scarcity (in the case of Bitcoin and some other cryptos), blockchain tech, correlation differences, function as both a currency and store of value, and programmability. There aren't any other assets like Bitcoin and crypto, making it its own asset class.

So nothing competing except for the things that are competing but won't ever gain adoption because of base declaration?

That seems to contradict this statement:

which means anyone can compete.

Bitcoin Cash and Litecoin previously attempted to compete with Bitcoin, but the market chose Bitcoin instead. Bitcoin Cash is the result of a fork years ago, and the market chose Bitcoin. Litecoin is kind of a copy, but the market chose to stick with Bitcoin. People can still buy and invest in either if they want. Competition is still there, but right now there's nothing as good as or better than Bitcoin to be a better choice, as dictated by the market. That's what I meant.

Could something else better than Bitcoin come along in the future? Sure. And if that happens, the market will slowly move towards that as it gains acceptance and adoption, just like the slow transition into Bitcoin now. That's no different than competition in any other industry.

We use Apple computers and products now because we like them and think they are the best. Could something better come along in the future? Certainly, and if that happens then the market can shift toward it. It won't be overnight, as there will be diehard supporters of the original who don't want to change, can't accept it, don't think the new one is better than the old, etc., until they are the ones left behind and eventually forced to change or switch.

 

[flmmkr]

What is wasted energy and how is it salvaged for mining?

The miners are participants. They are earning money from other participants. So how is this not zero sum when there are huge losses (heat generated by the cores and energy needed to cool them)?

OK, I'll be frank here. I see a lot of pro-crypto posters on this thread who seem to have ready answers for everything, but they say it's complicated we need to "get educated" and then it will all make perfect sense.

But it really just sounds like the spiel one would get at one of those "get rich quick" seminars. Throw enough confetti in the air and people get bedazzled by the colors.

Harnessing Wasted Energy: How U.S. Natural Gas Flaring Could Power Millions of Bitcoin Miners - D-Central

In recent years, the energy sector in the U.S. has been under scrutiny, not just for its contribution to global carbon emissions but also for the staggering

d-central.tech

Miners are not participants earning money from other participants. I don't know where you're getting that from. Miners run mining computers that solve mathematical problems (hash for the next block). The first to solve the hash for the next block gets the right to place transactions into that next block. Their reward for that work is the block reward, which is now 3.125 BTC. This happens every ~10 minutes. There is a cost for the miners to run their mining computers: energy, the ASICs, other overhead. They hope to profit from the difference between the value of the BTC they mine and the expenses they incur from operations. If the value of BTC is below a certain amount they incur a loss, and if it's higher they profit.

It's really not much different than any company producing a product that they hope to sell at a profit. Sometimes they can't sell enough product at a certain price to cover their overhead, and they incur a loss. Sometimes they sell enough that they have a profit.

In this case, the miners are spending money on energy instead of say metal, plastic, circuit boards, other manufacturing costs, etc. Instead of a computer or a phone, the miners produce BTC. Consumers buy BTC on the open market.

Not sure where your zero sum game idea comes from here.

The point is there are a lot of people that have found value in Bitcoin and other cryptos. You don't have to. But the acceptance and adoption has grown over the years and doesn't appear to be stopping. The inflows into the Bitcoin ETFs (Blackrock's IBIT is bigger than their Gold ETF, which has been around a lot longer) show that. Inclusion in corporate treasuries shows that. Nation states adopting Bitcoin as a reserve asset shows that. That should probably tell you that you might be missing something and you should maybe find out what it is.

I was one of the naysayers not that long ago, and then I really started digging in and researching. It's a free market/world though, and you are not obligated to do anything.

 

[flmmkr]

You didn't read the story, you're caught up in trying to pretend stocks and bonds and dollars and crypto are all the same because of day to day blips in the market. The point is the underlying value.

Tell me a story where people buy bitcoin as my characters buy stock and bitcoin eventually goes away as my stock did and everyone makes money. That money made is the "underlying value". Feel free to simplify it as I did.



I mean trading in the sense of "I'll give you this if you give me that". I don't know of a significant difference between trading and exchanging. I would call what you're describing to be "speculating", but whatever. I mean you trade/exchange one currency for another to buy stuff. That's what drives the currency markets and speculation is an effort to profit from inefficiencies in that market.

There's way more than that that drives currency markets. You clearly don't understand how those work. It's also supply and demand, interest rates, currency strength, economies of the nations, monetary policy, politics, and more. Speculation is only one part of it.

 

[onenorth]

That should probably tell you that you might be missing something and you should maybe find out what it is.

FOMO! Not a good reason to do anything, ever.

 

[flmmkr]

FOMO! Not a good reason to do anything, ever.

Doing proper research and learning more about something you do not or may not fully understand is not FOMO. FOMO is jumping into something you don't understand simply because you see others doing it. I, from the beginning, have said "educate yourself and learn more".

 

[Analog Kid]

This is known and not disputed. Not sure what your point is.

My point: Crypto doesn't protect you from inflation, it exposes you to more severe forms of it.

Again, not disputed. Currencies are an asset, so not sure what your point is.

My point: There is no underlying value to crypto, it is a means of exchange.

Bitcoin is decentralized, so you don't have to worry about trusting the government to follow through with its obligations.

It's funny how people say that, then when another exchange collapses because of fraud everyone wants governments to follow through with their obligations to justice and get their fiat currency back.

I haven't counted, but it would be interesting to know if more crypto coins and exchanges have failed or if more national currencies have descended into hyperinflation... 🤔

It seems people take a lot of risk to avoid a little risk.

There were other factors at play in the 1930s. It wasn't because of a fixed money supply. The money supply wasn't fixed. Dollars were backed by gold, which was still being mined and acquired, and money still being printed. It's just that now (after 1971) money is printed at a much greater rate.

If your monetary base is tied to gold reserves, you can't increase it to help fund banks experiencing runs or to stimulate aggregate demand through monetary policy. In the middle of a recession the Fed chose to raise interest rates to defend their gold reserves, reducing spending and investment and deepening the crisis into a Depression. Recovery of the major nations essentially followed the same sequence as when countries devalued their currencies relative to gold.

Bitcoin is more of a hedge against the debasement of fiat than of inflation.

Why do you care about debasement more than prices?

Bitcoin and crypto is more than just a currency. Bitcoin and crypto is a separate asset class because of unique characteristics and functionalities that distinguish it from traditional asset classes. This includes decentralization, digital scarcity (in the case of Bitcoin and some other cryptos), blockchain tech, correlation differences, function as both a currency and store of value, and programmability. There aren't any other assets like Bitcoin and crypto, making it its own asset class.

That's like saying a currency is a different asset class because it's a different color. You haven't described how it behaves differently, just the characteristics of the currency.

Bitcoin Cash and Litecoin previously attempted to compete with Bitcoin, but the market chose Bitcoin instead. Bitcoin Cash is the result of a fork years ago, and the market chose Bitcoin. Litecoin is kind of a copy, but the market chose to stick with Bitcoin. People can still buy and invest in either if they want. Competition is still there, but right now there's nothing as good as or better than Bitcoin to be a better choice, as dictated by the market. That's what I meant.

Could something else better than Bitcoin come along in the future? Sure. And if that happens, the market will slowly move towards that as it gains acceptance and adoption, just like the slow transition into Bitcoin now. That's no different than competition in any other industry.

Multiple such currencies breaks the scarcity assumption because they act as substitutes to each other, but it also degrades the utility by fragmenting into lots of different products.

 

[Analog Kid]

There's way more than that that drives currency markets. You clearly don't understand how those work. It's also supply and demand, interest rates, currency strength, economies of the nations, monetary policy, politics, and more. Speculation is only one part of it.

I'm going to suggest you stop telling me I don't understand things because it keeps blowing back on you.

Tell me how what you're saying is different than my post you're responding to:

Exchange rates change based on the relative demand for goods and services and debt of each country. If I wish to buy iPhones wholesale, or Azure server space, or US Treasuries, I need dollars. As demand for those things rise, either because the products and services are valued higher than their competitors or because risk/return on the debt is more favorable than other countries, then one must trade more francs for each dollar.

Yes, people can speculate in the currency market, but that's not what drives the market.

Calling people uninformed is the usual response from crypto proponents when they can't answer simple questions like the one I posed.

 

[Zest28]

People still use Coinbase after what happened to FTX?

 

[Zest28]

Crypto uses more energy than the entire country of Argentina. Since Apple cares so much about being "carbon neutral" and ESG, why are they supporting crypto which is clearly not carbon neutral and not "green".

 

[flmmkr]

My point: Crypto doesn't protect you from inflation, it exposes you to more severe forms of it.

That is completely untrue. Bitcoin spends more time up than it does down. That would expose you to more deflation than inflation.

My point: There is no underlying value to crypto, it is a means of exchange.

And this is where you don't understand crypto. There are numerous use cases for crypto.

It's funny how people say that, then when another exchange collapses because of fraud everyone wants governments to follow through with their obligations to justice and get their fiat currency back.

I haven't counted, but it would be interesting to know if more crypto coins and exchanges have failed or if more national currencies have descended into hyperinflation... 🤔

It seems people take a lot of risk to avoid a little risk.

Crypto is not an exchange and an exchange is not crypto. Exchanges are centralized businesses. the fraud is due to the people running those businesses and not because of crypto itself. It's the same as saying the stocks that Bernie Madoff was dealing with are not fraud... Bernie Madoff was the fraud.

If your monetary base is tied to gold reserves, you can't increase it to help fund banks experiencing runs or to stimulate aggregate demand through monetary policy. In the middle of a recession the Fed chose to raise interest rates to defend their gold reserves, reducing spending and investment and deepening the crisis into a Depression. Recovery of the major nations essentially followed the same sequence as when countries devalued their currencies relative to gold.

Before the end of Bretton Woods and the backing of the U.S. dollar by gold, there were recessions and the Great Depression. They did just fine getting out of those without printing trillions of dollars of money. Printing money is a solution, but it's not the best. It's only made the richer more rich and the poorer more poor, expanding the distance between lower and middle class and middle class and upper class.

Why do you care about debasement more than prices?

Probably because we're headed toward some kind of a currency crisis with the debt running out of control. At the rate they're going, it will get to a point where they won't be able to grow the economy enough to compensate. The only real solution they're going to have will be to eventually increase the debasement of the currency.

That's like saying a currency is a different asset class because it's a different color. You haven't described how it behaves differently, just the characteristics of the currency.

Umm, no. Again, you clearly do not understand crypto... and that's just fine if you want to stay that way. I just named a bunch of characteristics of crypto that do not apply to fiat.

Multiple such currencies breaks the scarcity assumption because they act as substitutes to each other, but it also degrades the utility by fragmenting into lots of different products.

It does not break the scarcity assumption. There's no reason there can't be multiple cryptocurrencies, just like we have multiple currencies now with fiat. You can still have scarcity with Bitcoin and the price will be reflected by supply and demand, which is affected by user adoption and use.

 

[flmmkr]

I'm going to suggest you stop telling me I don't understand things because it keeps blowing back on you.

Tell me how what you're saying is different than my post you're responding to:


Calling people uninformed is the usual response from crypto proponents when they can't answer simple questions like the one I posed.

Simply because that's not the whole picture on how currency markets work and what affects the exchange rates between currencies.

 

[flmmkr]

People still use Coinbase after what happened to FTX?

Coinbase is publicly traded and highly regulated in the U.S. FTX was based in the Bahamas and not under U.S. regulation. Coinbase is used by multiple institutions for custody because it's a qualified and trusted custodian. What happened to FTX was due to mismanagement, fraud, and lack of regulation.

 

[flmmkr]

Crypto uses more energy than the entire country of Argentina. Since Apple cares so much about being "carbon neutral" and ESG, why are they supporting crypto which is clearly not carbon neutral and not "green".

Not all crypto is proof of work, and proof of work is where most of the energy use is. Bitcoin is the largest of the big energy users in the space. Much of the energy used in Bitcoin mining is from renewable sources and using wasted energy (see link previously posted). The amount of energy used for Bitcoin mining is less than the energy used by the traditional finance system.

Bitcoin's Energy Usage Isn't a Problem. Here's Why.

Updated for 2023, this report is a deep dive on Bitcoin's energy usage and long-term scaling approach, with data tables and case studies.

www.lynalden.com

 

[tobybrut]

Stocks actually have companies doing stuff with the invested money to generate more hopefully.
Totally different game.

There are people who play the markets and bet on gains.

But the underlying product is vastly different from the crypto market which is always push push push for new blood to invest...

People who play the stock market are betting on gains (or losses if you’re a short seller). Otherwise, why buy it at all? When you say companies are doing stuff, so are many crypto companies. I invest in a number of AI cryptos, for instance, such as Render or io.net that have a business model of renting people’s GPU’s in order to process AI tasks for purchasing customers. While things like meme coins have no use, they are speculative, and you haven’t seen me say to buy those. Instead in practically every post I mention that if people stick to blue chip cryptos, they can expect to see secure cryptos that are not scams.

As for companies doing things, those do not directly affect the stock price. The stock price may be influenced indirectly by what a company does, favorably or unfavorably, but how that works is that the investor’s view of a company’s worth changes and may influence them to buy or sell a stock. It is the transaction that affects the price, not what the company actually does. With crypto, it operates exactly the same way. People have an idea of what a crypto should be worth and place the appropriate buy and sell orders to influence the price of that crypto.

 

[tobybrut]

You are technically correct because there's nothing at all "mysterious" about how dividends work. Stocks entitle their owner to a portion of the underlying company's growth in the form of asset expansion and/or dividend payments. That's "creating money" from the perspective of the shareholders.

I would point out cryptos which use Proof of Stake also earn rewards in the form of more crypto. Ethereum is the chief crypto that earns more ETH just by staking it. It is a form of earning interest. Dividends are unique to stocks, while interest is often available on many types of financial instruments like bonds or money market certificates. It is just different. I’ve never said cryptos were exactly like stocks. They have trading characteristics that are identical to every tradeable investment vehicle in existence, but they are not stocks.

I have another crypto called Jupiter (JUP) where it operates as a governance token. Jupiter is the name of a Solana-based decentralized exchange but has its own token, and the company puts out a proposal every few weeks for token holders to vote. If you vote on the various proposals the company puts out, you are rewarded handsomely with airdrops several times a year, often worth several hundred dollars per airdrop. Basically, stocks may have dividends, but cryptos often have their own ways of boosting investor profits.

 

[tobybrut]

Anyone still buying NFTs?

Or squatting on prime real estate in the Metaverse?

IT has a lot to answer for parting fools from their money...

Not me. I’ve never been interested in digital art or other forms NFT’s have. NFT’s were a craze in the last bull run, but interest has considerably cooled this bull run. There are still many buyers, but things popular in one cycle may not be as exciting in the next cycle.

 

[tobybrut]

You still cannot invest in spot Bitcoin ETFs through Vanguard. There's speculation they may allow it in 2025, but that has not been confirmed by Vanguard yet.

I agree with most everything else you said, though there are some technicalities are wrong. For example, the general consensus is that about 3.8 million BTC are lost. The gist of it is accurate though.

There are scams in crypto, just like in traditional finance, but crypto is not a scam.

I’ve seen the 6-7 million figure quite often. No one really knows the real number, which is why i called it an estimate, especially since many addresses inactive for many years may still have valid owners. Satoshi, himself (whoever he is), is rumored to have over 1 million Bitcoin, but no one knows if he’s still alive. You may be correct on the number of lost tokens and both of us could be wildly wrong.

 

[tobybrut]

Person A set forth such labors as taking loans, leveraging their credit cards, and investing their life savings for a sum total of $1 million US dollars to create a Company, and Person A looked upon the Company and saw that it was good. The Company brought forth Things whose value were in itself, and such Things fell upon the eyes of a Customer who valued the Thing more than Money and the evening and the morning brought a sale. Person A saw this sale and saw that it was good.

Through the sale of many Things, the Company became known and the Money covered the loans and debts and replenished the life savings until such time as Person A grew envious of their neighbor and wished for greater Money still. Person A divided the Company into 5 shares of which they kept one and sold 4 to the Investors for $8 million in total, for the Investors wished to partake of such magic as they saw Person A having worked alone. The $8 million did become Capital with which Person A could expand their business, improve their factories, raise their brand, and sell many Things into lands far and wide. And the Investors saw that it was good.

Person B saw the Money coming to the Company in such numbers as $1 million per year and wished it for himself alone. Person B spoke among the Investors and said unto them: “I offer onto you $2 million dollars for each share such that you may return to your homes and tend to your children and raise your gardens in the sun.” And the Investors and Person A sold their shares to Person B and saw that it was good.

For an era of 25 years, Person B reaped Money far exceeding their $20 million investment and bringing joy and fame and power to Person B, and Person B saw that it was good. Person B became renowned throughout the world, and drew the praise and attention of all the Peoples of the Earth and God became jealous and enraged. In God’s rage he raised the winds and the waters and the forces within the firmament and brought an end to the Company and no shares remained, and God saw that it was good. And the evening and the morning began the 26th year.

And this, dear reader, is how many may invest in stocks and all make Money by the end with no losers among their numbers.

Can anyone tell me a similar tale involving crypto?

Yes, as I mentioned before, every single person who has bought Bitcoin and has held it for at least four years is in the black. EVERY SINGLE PERSON. At no point in Bitcoin’s history has anyone held it that long and lost money.

 

[tobybrut]

There is always an equal number of buyers and sellers. Prices change depend on how the buyer or seller value a thing relative to how they value money.

You know what I mean here. You’re playing word games. When more people are selling, that pushes prices lower, which entices more buyers. What happens is that when there are more sellers (more ask orders than bids), that creates a downward pressure on prices to the point where buyers will scoop it up. When there are more buyers than sellers (more bids than asks), then the upward pressure pushes prices up to the point where it entices others to sell.

People trade currencies so they can buy stuff. A worker at a US factory can't do much with a Swiss franc, so you need to trade francs for dollars to buy the factory output, then the factory pays the worker with dollars. The number of francs you need to trade for dollars is the exchange rate. Exchange rates change based on the relative demand for goods and services and debt of each country. If I wish to buy iPhones wholesale, or Azure server space, or US Treasuries, I need dollars. As demand for those things rise, either because the products and services are valued higher than their competitors or because risk/return on the debt is more favorable than other countries, then one must trade more francs for each dollar.

Yes, people can speculate in the currency market, but that's not what drives the market. The speculation is an anticipation of these larger moves and an attempt to profit from anticipating the move (having the dollars now when someone wants them in the future) in exchange for taking on risk (the world changes, maybe nobody will want them). That speculation is just foam on top of the larger market drivers for most currencies in normal times. The crypto market is all the speculation and risk with no underlying motivators. Again with minor exceptions, the only thing people can buy with crypto is other currencies there is no significant demand for crypto directly that would explain the fluctuations in its exchange rate.

I disagree. There are more speculators in currency than you think. Entire companies are designed around arbitrage, a segment of the market that examines currency prices in markets all over the world, looking for imbalances in prices, buying those currencies in markets where prices are cheaper while simultaneously selling in markets where the prices are higher. That is called arbitrage, or riskless trading. Billions of dollars worth of that kind of trading goes on 24/7.

The person who trades his dollar in for a Swiss franc or vice versa to buy a toy for his kid does happen a lot but currency trading is a huge, huge business.

The "hope" you refer to is the gambling bit. When investors buy a national currency, there's a little hope but mostly it's informed by knowledge of market forces.

Crypto is also full of informed choices. For some reason, people here seem to think crypto is just a crap shoot and that buying and selling is pure luck. Just like with stocks, people use technical analysis to determine trends and to predict future prices. You wouldn’t believe how much of a fixed pattern Bitcoin trades in that is not seen in any stock. Bitcoin profits are actually easier to come by because its pattern is so well known. It runs in four year cycles with exact phases. The last monthly candle for Bitcoin just confirmed that we have entered Phase 4 of the current bull run where 90% of the profits are to be made. This is the phase nicknamed the banana zone by crypto investor, Raoul Pal, a famous name in crypto. And like clockwork, Bitcoin dominance has broken support, which means we are entering alt coin season.

 

[tobybrut]

What is wasted energy and how is it salvaged for mining?

The miners are participants. They are earning money from other participants. So how is this not zero sum when there are huge losses (heat generated by the cores and energy needed to cool them)?

OK, I'll be frank here. I see a lot of pro-crypto posters on this thread who seem to have ready answers for everything, but they say it's complicated we need to "get educated" and then it will all make perfect sense.

But it really just sounds like the spiel one would get at one of those "get rich quick" seminars. Throw enough confetti in the air and people get bedazzled by the colors.

I would point out that Bitcoin and other coins based on Proof of Work cannot function without miners. The purpose of mining is not to dredge up coins, but rather to serve the important task of validating transactions. When someone buys, sells, or transfers crypto, there is validation that goes on to ensure security of that transaction. Miners are the ones who are doing that validation. In other words, validation of transactions is the process of hashing algorithms that have the result of verifying the validity of a transaction with the reward of earning a block of crypto that you can keep. So if you successfully validate a transaction, you earn the mining reward.

Proof of Stake coins also undergo similar validation, but the process is somewhat different. People are able to run validation nodes at the cost of staking coins of that type. When they successfully validate a transaction, they are granted a reward based on how much they have staked.

Yes, both Proof of Work and Proof of Stake require energy to operate the computers that validate the transactions. And no, it’s not a zero-sum game because the rewards are not acquired from other crypto holders. They are given block rewards for crypto not yet in circulation. This is how the supply of a crypto increases.

We try to have answers for all of your questions, and we try because there is a lot of FUD going on in this thread that we want to clear up. Your assumption that mining takes crypto from other people is one of the incorrect assumptions people make. That is why we ask people to educate themselves on how crypto actually works because it seems a lot of the incorrect assumptions drive hatred against crypto. I personally am heavily invested, but am not trying to get anyone to invest in anything. Just stop putting out FUD.