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3 hours ago, Jeff Matthews said:

The allure of crypto was that it was not regulated.  Now, we are seeing what happens without regulation. 

 

I wonder if Congress will regulate it, thereby validating its investment value, or let it die a natural death.

 

 

The dream of getting rich quick seems to be a large part of what’s keeping cryptocurrency going.  It’s hard to put a damper on a fire that strong.

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6 hours ago, Islander said:

 

The dream of getting rich quick seems to be a large part of what’s keeping cryptocurrency going.  It’s hard to put a damper on a fire that strong.

 

 

An adage that applies to dating may apply here as well:

 

”Never let an old flame burn you twice.”

 

...unless you’re into the sunk cost fallacy, lol

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14 hours ago, Jeff Matthews said:

The allure of crypto was that it was not regulated.  Now, we are seeing what happens without regulation. 

 

I wonder if Congress will regulate it, thereby validating its investment value, or let it die a natural death.

 

 

I think this is 'partially' true...

 

the real allure of bitcoin, the original asset, was that it was able to operate OUTSIDE of traditional legacy banking systems... not that it was necessarily regulated or not.

 

at this point, it is overwhelmingly considered a GOOD THING for regulation to come into the space... and it will. this opens the doors for more conservative asset managers, corporations and fiduciaries to know exactly where they stand in terms of legitimacy.

 

that being said, Bitcoin has ALREADY been declared a commodity... EVERYTHING ELSE, including the second largest Cryptocurrency Ethereum, is a security and has already been given a 'opinion' as such by Gensler.

 

there is two very distinct differences between the two assets, Bitcoin has no centralized control and had no initial offering to any investor where EVERY OTHER CRYPTO ASSET has a centralized point of control and usually had initial offerings to Angel investors prior to public sale... Security.

 

the idea of 'get rich quick' is somewhat a truism, but a more appropriate description is that folks are looking to get into the space 'on the ground floor' as it begins to grow and flourish for some of these L1 protocols... and it will. This is called the 'network effect' and this is a class of technology that is redefining to humanity and JUST BEGINNING to be developed.

 

 

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5 hours ago, JJkizak said:

How do you regulate something that no one understands?

JJK

 

I can explain any aspect to you if you like, all you have to do is ask the question.

 

What are cryptocurrencies?

Outside of Bitcoin, Cryptocurrencies are tokenized currencies that are used to secure a network by forcing entities to 'invest' significant assets in order to participate. for this 'investment' your funds are rewarded. These networks are then used by 'developers' to deploy new software... this software can be nearly anything, from financial to NFT's.

 

What happens if someone buys more than 51% of the network?

this is called a 51% attack, and can indeed cause issues with that protocol. when the governance holds >more than 51% of the assets, that governance can make any changes to the network that they want... including crashing that network or gaining access to all of the data therein.

 

what prevents this from happening is the SIGNIFICANT amount of funds that would be required to accomplish this feat... in the hundreds of millions of dollars... and this is the beauty of the decentralized network. Ownership of the assets/tokens/coins are 'decentralized' making it 'nearly' impossible for one person to accomplish this attack and the larger these protocols grow, the less likely this becomes.

 

Again... Bitcoin is completely different.

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On 7/11/2022 at 6:33 AM, JJkizak said:

How do you regulate something that no one understands?

 Credit cards  came about ,  cash ,Gold , Silver are  still around   you cant stop progress , they said  , 

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Money is portable energy.  When you earn an income, you’ve converted your energy to money, which you can then use to trade for other people’s energy and materials.  It has a fairly consistent value, which keeps life simple.  

 

If the value of money starts to fluctuate wildly, life becomes very complicated, with some getting rich and some starving, which can cause a society to collapse.  If you have lots of money and are not at risk of homelessness and starvation, it’s exciting to see your energy multiply, and if it starts to shrink, you will remain above the threshold of poverty.  For people who only have the energy that they can generate themselves, when the value of money starts to fluctuate wildly, life stops being simple.  Sometimes life stops altogether.

 

Cryptocurrency is a different story, but it can have the same results as wildly fluctuating “regular” money.  Imagine how things would be if “crypto” became the only form of money.  Great news for the minority with lots, horror for the majority with much smaller amounts.

 

Sometimes it does look like a Ponzi scheme.  The more people who buy into it, the bigger it gets.  Mining Bitcoin by doing calculations?  Are these useful calculations, with results that are useful and benefit people, or is it just an exercise to generate what passes for energy by consuming lots of electrical and human energy?  This should be made clear, because to most people, that’s how it looks.

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I think that ^ very much sums up the understanding of the majority of folks... WHO DO NOT comprehend crypto assets.

 

Fundamentally we need to be able to speak the same language in order to have an intelligent conversation... we need to be able to cease conflating 'currency' and 'Money' because they ARE NOT the same thing.

 

USD is NOT money, it is currency... It is a promise to pay.

 

Gold is money... Silver is money... Bitcoin is money... Fungibility is the the distinction.

 

We also need to understand that in order for there to be something that is labeled as, 'a ponzi scheme', there absolutely needs to be someone at the top of the pyramid exploiting all the rest of the participants. That central point of control is primary to something being a ponzi. Bitcoin DOES NOT have a single point of failure, there is no one sitting at the top of a pyramid looking to exploit the masses of late adopters. Bitcoin is decentralized and no one holder as more to say about the network than any other holder, the network still functions based on a 'Consensus' mechanism... that is the exact opposite of a Ponzi.

 

Now that we have those definitions ironed out as part of a common language... we can begin our conversation.

 

What is more portable... an algorithm that can be stored in your head, a big stack of HEAVY physical metals or a GIGANTIC stack of paper/cloth?

 

Post Script:

the long standing view that gold has some kind of 'Inherent' value and things like Bitcoin do not is fundamentally wrong.

 

The only 'inherent' value that gold has is that over a thousand years it has built in a belief that it has value because of it's rarity. It is this legacy belief that gives it the modern view that it must be valuable.

 

In reality, the only reason Gold holds value is because of humanities belief that it does hold value... if people STOP believing in it's value, the valuation would drop to zero. In essence, the same issue that people assign to bitcoin of being 'only valuable because people mistakenly think it is' also applies to gold... to real estate... to art... TO ANYTHING. This argument is not really a point on which to bolster a position.

 

Gold's rarity is not even relative to other rare earth metals like Platinum or Palladium... it is NOT rare at all. When pricing goes up, they merely mine more gold.

 

Bitcoin has a hard cap at 21 million coins... that makes it the most rare, hardest money in the world. There are currently approximately 47 million millionaires in the world... there is not even enough Bitcoin for each millionaire to have one whole Bitcoin. Each Bitcoin can be segmented into Satoshi's and each Bitcoin is equal to 100 Million Satoshi's... so the math is 21m*100m.

 

I do agree with the assessment that Money is equal to Energy and that is precisely why Bitcoin makes perfect sense. the nature of Bitcoin isolates individuals 'financial energy' against dilution and manipulated inflationary erosion that federal governments are capable of when we use 'CURRENCIES'. Bitcoin's inflation rate is capped at 1.2%... the Fed just printed >40% of all money ever created in the history of USD over the last year and a half... which of the two is a better place to hold and store you 'financial energy'?

 

The choice is clear for those that want to protect their 'financial energy' as we move forward into the future... even if you do not fully understand it as yet. Bitcoin Limits the effects of outside and centralized monetary policies by insulating it against those effects, a hedge.

 

Before you say 'how can Bitcoin be a hedge when it is significantly down in relative terms against USD', I say to you that that is a 'Micro' view and it doesn't hold legitimacy over a longer time period and historical proof has been proven time and again over the 'Macro' view. you only loose purchasing power if you 'realize' your energy by converting Bitcoin to USD... if you continue to hold your energy into the future, you will be rewarded with massive appreciation against USD which continues to loose purchasing power and continues to inflate at >8-10% per annum over the last couple years.

 

Market has shown Bitcoin should be thought of as a monetary debasement hedge, NOT necessarily a hedge against CPI inflation.

 

The price of bitcoin valued in USD is exactly correlated to how much 'financial energy' is being stored in that network... it is precisely correlated, no multiple, no derivative just prefect clarity. As bitcoin grows, the price of each bitcoin can be precisely described... if gold is a 10 trillion dollar asset, as bitcoin passes it in terms of total market capitalization, each Bitcoin will be worth >500,000$ a coin.

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One thing I would like to add as part of the general understanding about being paid in Bitcoin...

as bitcoin begins to drop in price, the AMOUNT of bitcoin you receive as you earn actually increases, Unlike Currency. This offset makes being paid, all or in part, in Bitcoin a great idea...

 

This is a 5 year relative strength chart of the USD's ability (denominated at $1) to purchase a Bitcoin. 5 Years ago one dollar could purchase you .001 Bitcoin, today we're look at .000023 Bitcoin for that same dollar. So as the dollar gains strength or when bitcoin looses liquidity relative to USD, you GAIN more Bitcoin.

 

Screenshot-2022-02-15-at-09.33.59-2.jpg

 

Think of Bitcoin LESS as an Investment... and MORE as a store of Financial Energy. Of course, as it becomes more adopted and as liquidity flows into it, there is an inherent ROI component.

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Everyone has  a different tolerance for risk , so  crypto may look attractive to those comfortable buying  high risk assets . Unfortunately many crypto investors don’t really understand the risk and volatility of there investment and they may inadvertently  put there life savings / retirement savings on the line . Many of these people have only seen crypto increase in value , they haven’t seen a down cycle, not until now . Down markets can provide  great learning opportunities , they have allowed me to become a wiser investor. Crypto may make sense for some of the nimble and knowledgeable, but others should be very careful with their hard earned money.

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