RIP Gamers, not even the 1080 Ti will save you now.

[BSim500]

Warning - long post that actually involves economics...

The FUD is thick in this thread.

^ Yes and half of it comes from blindly repeating the #1 fallacy of those talking up Bitcoins to infinity - you're mixing up two completely different things : 1. The theoretical advantages of using blockchains in a number of future applications and 2. The absurd punch-drunk la-la-land hyper-deflationary "valuations" of Bitcoin based on perma-liquidity-crisis "economics" being seen as the "second coming" by a few geeks who are good at explaining the potential future utility of blockchains, but totally cr*p at economics...

In order to function as a serious currency you need three things : 1. Long term trading faith in the currency, 2. Value stability from day to day / month to month (neither rapidly inflationary nor deflationary), and 3. Liquidity (enough units that it's actually widely usable beyond a novelty currency without shortages "spiking" prices, deflation kicking in or even triggering off a depression). Not only does Bitcoin fail miserably at all three, but real currencies are supposed to be stable not massively change in value up or down. Why do you think the Chinese under-pegged the Renminbi vs the USD? (Hint : Appreciating currencies destroy export economies...)

This is why nothing is priced natively in Bitcoins, it's priced in USD / EUR, etc, and the Bitcoin equivalent is simply accepted then rapidly converted back to USD's (more like a Paypal / charge-card transaction than a "currency"). To price it natively in Bitcoins (vs in USD's) would be the equivalent of a baker selling bread for $1.50 in 2010 then see nothing wrong with $0.000002 "prices" by 2018 whilst the cost of making a loaf of bread / purchasing flour, etc, remains static over 8 years and bread remains priced at £1.10 / €1.30, etc, elsewhere. The currency no longer fulfils its purpose in reflecting reality vs what the actual goods cost to produce from even one week to the next. Literally every good under $2,500 at 2010 BC values would fall to 0.00BC when rounded under the near-universal 2-decimal place retail system. The "currency" would be so totally useless for any stable day to day reference of apparent price vs actual manufacturing cost of relatively static real-world goods that it would be instantly dumped in favor of pricing it in something more stable (if not shatter the illusions behind the "valuations" themselves). Those figures ($0.03 March 2010 to $17,900 Dec 2017) are literally the deflationary equivalent of +59,000,000% inflation over 7 years (ie, "full on" 3rd world banana-republic failed-state territory), and it is utterly laughable people are suggesting this is some "evolution" to fiat changing value by only a few percent per year...

Bitcoin is even more intrinsically worthless than the US Dollar, as every govt-issued "fiat" currency actually does have a lot of intangible backing (Forex reserves, currency swaps, trade demand, and not least the entire national economy / military) which far exceeds "well you can use it for ransomware against hospitals, so there's that!". The "mining" and blockchain merely guarantee that a Bitcoin unit is "legally" valid they don't actually give it any intrinsic value. That's the equivalent of arguing "the US Dollar derives its value from the existence of USD banknote verification machines and accounting ledgers (which exist solely because the US Dollar exists)". Money doesn't derive value from simply not being counterfeit or not govt issued, nor can any currency be "backed" with an aspect of itself via circular logic. That's why central bank foreign exchange reserves hold every currency except their own.

The fact there's a max cap of 21m Bitcoin units (preventing Zimbabwe style hyper-inflation) doesn't make it any more "valuable" than if you created your own private currency and paid De La Rue to print 21m unique high-security notes, then handed them out on the basis of who wasted the most electricity / owned the most expensive GPU's, then destroyed the printing plates and deleted the templates. Exactly the same economics and anti-inflationary effect as "fully mined" Bitcoin without all the absurd intermediate wealth destruction (blowing billions on wasted electricity which unlike physical metal mining, produces zero tangible end product for high industrial demand). The rest is techophiliac novelty bubble hype from those constantly confusing the potential utility of how a blockchain could be mated a more stable future currency vs today's junk economics of hyper-deflationary digital "coins" being some "cure" for mild ordinary inflation usually churned out by over-zealous "gold bugs" and the usual crack-pot prepper / conspiracy theorists and their "The Evil Fed (tm) / Worthless Fiat (tm) / Rothschilds & Rockefellers / Illuminati / The Queen of England is a shape-shifting Reptilian Anunnaki lizard alien from outer space" (no really), that all common sense goes out the window.

If you truly want to hedge against a "post reserve status" collapsing inflationary USD, you buy tangible stuff (real estate / land, high-demand international commodities (oil, wheat, etc), metals, and stocks in foreign companies natively valued in another currency that deal in tangible high demand essentials (utilities, food, etc). Stuff that's either permanently "consumed" or "produces".

Bitcoin is ironically the ultimate in fiat currency when "mining" = GPU's "printing" money from nothing. If mining hardware were 100x less powerful, those who created the coin would have just changed the complexity factor of the mining formula to be 100x easier. If radical quantum / DNA computing was developed tomorrow and we had a 1 trillion fold leap forward in computing power, every existing XXXcoin would be mined out within a very short period and new XXXcoins would spring up with you guessed it - arbitrarily 1tn more complex equations. Deciding XXXcoin should be ASIC resistant is a "fiat" dictat too. All of this is no different to central banks deciding how fast to print. That's why 96% of Bitcoins are "coincidentally" in the hands of the 4% who created them (of course they get to mine all the easy units no different to being Tier 1 creator in any pyramid scheme) - a laughable "decentralized people's currency" 'cure' for exactly the same current 95%/5% "centralized elitist" system, or why the "cure" for paper fiat notes losing value over 100 years isn't thousands of half abandoned / fragmented digital coins variants all suffering from unsustainable runaway +500,000% deflation before their 10th birthday.

tl:dr - Bitcoin is literally the equivalent of a imaginary gold-mine that never produces any gold and whose market cap is 100% self-speculation of maths equations that do not really have any measurable economic value attached to their "solutions" outside their self-justifying circular logic. The key to seeing the fake valuation bubble is not "BC vs paper money" - it's BC vs relatively static everyday commodities and real-world goods and the Bitcoin super-bubble is blatantly obvious when you plot "price of wheat / bread / oil / silver / iron ore / coffee / rice in Bitcoins" and you'll see those exponential speculative bubble curves completely divorced from reality as clear as 17th Century Dutch Tulip Bulbs...

 

[tamz_msc]

Also if people are saying that they're inclined to "invest" in Bitcoin because they don't trust their government with their savings, lest their country turns into another Venezuela - because "hurr, durr! socialism!", then maybe they should exercise their democratic options to not elect a government that makes over half of their economy dependent on oil in the first place. Not allowing both official and black market exchange rates to exist concurrently would be immensely helpful as well.

"Diversify your portfolio" is valid for both the individual and the economy.

 

[Madpacket]

Warning - long post that actually involves economics...


^ Yes and half of it comes from blindly repeating the #1 fallacy of those talking up Bitcoins to infinity - you're mixing up two completely different things : 1. The theoretical advantages of using blockchains in a number of future applications and 2. The absurd punch-drunk la-la-land hyper-deflationary "valuations" of Bitcoin based on perma-liquidity-crisis "economics" being seen as the "second coming" by a few geeks who are good at explaining the potential future utility of blockchains, but totally cr*p at economics...

In order to function as a serious currency you need three things : 1. Long term trading faith in the currency, 2. Value stability from day to day / month to month (neither rapidly inflationary nor deflationary), and 3. Liquidity (enough units that it's actually widely usable beyond a novelty currency without shortages "spiking" prices, deflation kicking in or even triggering off a depression). Not only does Bitcoin fail miserably at all three, but real currencies are supposed to be stable not massively change in value up or down. Why do you think the Chinese under-pegged the Renminbi vs the USD? (Hint : Appreciating currencies destroy export economies...)

This is why nothing is priced natively in Bitcoins, it's priced in USD / EUR, etc, and the Bitcoin equivalent is simply accepted then rapidly converted back to USD's (more like a Paypal / charge-card transaction than a "currency"). To price it natively in Bitcoins (vs in USD's) would be the equivalent of a baker selling bread for $1.50 in 2010 then see nothing wrong with $0.000002 "prices" by 2018 whilst the cost of making a loaf of bread / purchasing flour, etc, remains static over 8 years and bread remains priced at £1.10 / €1.30, etc, elsewhere. The currency no longer fulfils its purpose in reflecting reality vs what the actual goods cost to produce from even one week to the next. Literally every good under $2,500 at 2010 BC values would fall to 0.00BC when rounded under the near-universal 2-decimal place retail system. The "currency" would be so totally useless for any stable day to day reference of apparent price vs actual manufacturing cost of relatively static real-world goods that it would be instantly dumped in favor of pricing it in something more stable (if not shatter the illusions behind the "valuations" themselves). Those figures ($0.03 March 2010 to $17,900 Dec 2017) are literally the deflationary equivalent of +59,000,000% inflation over 7 years (ie, "full on" 3rd world banana-republic failed-state territory), and it is utterly laughable people are suggesting this is some "evolution" to fiat changing value by only a few percent per year...

Bitcoin is even more intrinsically worthless than the US Dollar, as every govt-issued "fiat" currency actually does have a lot of intangible backing (Forex reserves, currency swaps, trade demand, and not least the entire national economy / military) which far exceeds "well you can use it for ransomware against hospitals, so there's that!". The "mining" and blockchain merely guarantee that a Bitcoin unit is "legally" valid they don't actually give it any intrinsic value. That's the equivalent of arguing "the US Dollar derives its value from the existence of USD banknote verification machines and accounting ledgers (which exist solely because the US Dollar exists)". Money doesn't derive value from simply not being counterfeit or not govt issued, nor can any currency be "backed" with an aspect of itself via circular logic. That's why central bank foreign exchange reserves hold every currency except their own.

The fact there's a max cap of 21m Bitcoin units (preventing Zimbabwe style hyper-inflation) doesn't make it any more "valuable" than if you created your own private currency and paid De La Rue to print 21m unique high-security notes, then handed them out on the basis of who wasted the most electricity / owned the most expensive GPU's, then destroyed the printing plates and deleted the templates. Exactly the same economics and anti-inflationary effect as "fully mined" Bitcoin without all the absurd intermediate wealth destruction (blowing billions on wasted electricity which unlike physical metal mining, produces zero tangible end product for high industrial demand). The rest is techophiliac novelty bubble hype from those constantly confusing the potential utility of how a blockchain could be mated a more stable future currency vs today's junk economics of hyper-deflationary digital "coins" being some "cure" for mild ordinary inflation usually churned out by over-zealous "gold bugs" and the usual crack-pot prepper / conspiracy theorists and their "The Evil Fed (tm) / Worthless Fiat (tm) / Rothschilds & Rockefellers / Illuminati / The Queen of England is a shape-shifting Reptilian Anunnaki lizard alien from outer space" (no really), that all common sense goes out the window.

If you truly want to hedge against a "post reserve status" collapsing inflationary USD, you buy tangible stuff (real estate / land, high-demand international commodities (oil, wheat, etc), metals, and stocks in foreign companies natively valued in another currency that deal in tangible high demand essentials (utilities, food, etc). Stuff that's either permanently "consumed" or "produces".

Bitcoin is ironically the ultimate in fiat currency when "mining" = GPU's "printing" money from nothing. If mining hardware were 100x less powerful, those who created the coin would have just changed the complexity factor of the mining formula to be 100x easier. If radical quantum / DNA computing was developed tomorrow and we had a 1 trillion fold leap forward in computing power, every existing XXXcoin would be mined out within a very short period and new XXXcoins would spring up with you guessed it - arbitrarily 1tn more complex equations. Deciding XXXcoin should be ASIC resistant is a "fiat" dictat too. All of this is no different to central banks deciding how fast to print. That's why 96% of Bitcoins are "coincidentally" in the hands of the 4% who created them (of course they get to mine all the easy units no different to being Tier 1 creator in any pyramid scheme) - a laughable "decentralized people's currency" 'cure' for exactly the same current 95%/5% "centralized elitist" system, or why the "cure" for paper fiat notes losing value over 100 years isn't thousands of half abandoned / fragmented digital coins variants all suffering from unsustainable runaway +500,000% deflation before their 10th birthday.

tl:dr - Bitcoin is literally the equivalent of a imaginary gold-mine that never produces any gold and whose market cap is 100% self-speculation of maths equations that do not really have any measurable economic value attached to their "solutions" outside their self-justifying circular logic. The key to seeing the fake valuation bubble is not "BC vs paper money" - it's BC vs relatively static everyday commodities and real-world goods and the Bitcoin super-bubble is blatantly obvious when you plot "price of wheat / bread / oil / silver / iron ore / coffee / rice in Bitcoins" and you'll see those exponential speculative bubble curves completely divorced from reality as clear as 17th Century Dutch Tulip Bulbs...

You make a lot of great points about the economic and intrinsic value of money, but your lack of Bitcoin and Blockchain knowledge is apparent.

I'll just link you to the whitepaper and I emplore you to read through it carefully before commenting further on a topic you know very little about.

https://bitcoin.org/en/bitcoin-paper

 

[tajoh111]

Also if people are saying that they're inclined to "invest" in Bitcoin because they don't trust their government with their savings, lest their country turns into another Venezuela - because "hurr, durr! socialism!", then maybe they should exercise their democratic options to not elect a government that makes over half of their economy dependent on oil in the first place. Not allowing both official and black market exchange rates to exist concurrently would be immensely helpful as well.

"Diversify your portfolio" is valid for both the individual and the economy.

People are using way to many false equivalencies to prop up bitcoin as something much better than it is. When I look at a list of why a decentralized currency is better than a centralized ones, it makes me laugh how bad they are. Particularly when they conveniently leave out any cons.

It's ridiculous that these list include the great depression on why centralized currency is bad or even the recent financial crisis. What people don't realize that both of these are the result of a free market without enough government involvement. During the great depression, you only needed to put 10% down on an investment in terms of real cash. The rest could be debt. This caused people to over leverage themselves much like the great recession. In addition, the prices of commodities were collapsing all around the world which sent prices downworld which caused deflation causing many businesses to fail. But to why a government system is needed, we need to look at liquidationism. A economic theory that was popular at the time was liquidationism that the government should not step in even when things get bad and let let the banks fails. According to the theory, these are temporary setback that was part of a business cycle and the economy would be shortly restored and come back stronger. The problem is the financial panics from so many companies failing and banks failing caused everyone to pull their money out of the bank. These are called bank runs. Because the banks do not have enough money to fullfill these deposit and withdrawal obligations(banks don't store all your money in the bank), banks ran into liquidity issues and the banks were forced to go bankrupt and took people deposits with them. This is why the Federal deposit insurance was established along with FDIC. As a result, it was the free market that caused the great depression. The government was only indirectly responsible because they were too passive in stopping it and not doing enough regulation They let the economy fail and the result was the great depression.

A centralized government doing its job prevents things like the the great depression and 2008's great recession from happening. Just because the government exists at the time, doesn't meant it's entirely their fault. The great recession happened mostly as a result of the economy and world markets.

People comparing economies with massively unstable ones and incompetent ones is laughable. Corruption is only one reason why these governments run into hyperinflation. If the GDP and economy are not healthy and borrows too much money from other countries to run, this creates a leverage risk. Countries often run deficits to fund operations. But when they are so in the hole but need more money for operations and want to reduce their debt, they print more money.When a country prints too much money to cover debt obligations, it leads to hyperinflation. Particularly today, Venezuela economy is really bad because it was too reliant on oil prices and high production. Yes corruption is part of the reason why the economy runs a deficit and is forced to print more money, but it is not the only reason. If greece is ever separated from the EU and is forced to go back to the greek Drachma, they will go through the same thing. Their economy is not producing enough and their social programs are too expensive.

A mostly competent government will control their money supply to be stable with modest inflation because it benefits them. USA and China are good examples. China is a bit more complicated because they want to keep their currency a tad under-valued because they want to encourage exports and make themselves more competitive vs countries like India. And this is the irony. USA and China are some of the biggest producers of bitcoin. Your money is very safe in USD and Renminbi. But why are people doing it? It is simply too easy to make money because of how overinflated the market is.

How many businesses are there where are zero factors relating to competition, the equipment cost is basically the only start up cost, money could be back in 2 or 3 months and generates money that is untaxed. It is simply too easy to make money at present values because the currency is overinflated. I wonder how many people are iconoclast(truly believe central governments are bad) and how many are simply too greedy and love how easy it is to make money off bitcoin because it is not regulated.

 

[DrMrLordX]

^ Yes and half of it comes from blindly repeating the #1 fallacy of those talking up Bitcoins to infinity

Full stop: Bitcoin is crap. It has no remaining value to the expanding blockchain market. It fails as virtual currency, and it does nothing else of value.

Few if any of the people here defending cryptocurrency in general, or even crypto mining, are defending Bitcoin. It's the same stupid mistake so many other people make: Bitcoin != all cryptocurrency.

Hell you can't even mine Bitcoin with video cards anyway thanks to ASICs, so why does that even come up in here? I've personally mined ETH, ZEC, DCR, and XMR with my equipment. I wouldn't touch Bitcoin ASICs with a ten foot pole, even if I got a chance to buy discounted used gear being hastily shipped out of China due to the mining crackdown there.

It's hard to take seriously any commentary centered around Bitcoin in this thread of all places. Wake up! Bitcoin is not the only crypto! Learn something about Ethereum for crying out loud. Go read some of Vitalik's work and/or check out the Ethereum Foundation.

 

[PeterScott]

Full stop: Bitcoin is crap. It has no remaining value to the expanding blockchain market. It fails as virtual currency, and it does nothing else of value.

Few if any of the people here defending cryptocurrency in general, or even crypto mining, are defending Bitcoin. It's the same stupid mistake so many other people make: Bitcoin != all cryptocurrency.

Hell you can't even mine Bitcoin with video cards anyway thanks to ASICs, so why does that even come up in here? I've personally mined ETH, ZEC, DCR, and XMR with my equipment. I wouldn't touch Bitcoin ASICs with a ten foot pole, even if I got a chance to buy discounted used gear being hastily shipped out of China due to the mining crackdown there.

It's hard to take seriously any commentary centered around Bitcoin in this thread of all places. Wake up! Bitcoin is not the only crypto! Learn something about Ethereum for crying out loud. Go read some of Vitalik's work and/or check out the Ethereum Foundation.

People are often using Bitcoin as generic term, much like Band-aid has become a generic term for adhesive bandages, even though technically speaking band-aid is a specific product.

Crypto-coins share the same flaws. The valuation is nothing but hype and market sentiment. There are no underlying financials. They are not backed by anything other than that sentiment.

The fact that there are over 1000 different crypto-coins highlights the problem. It is essentially all hype and popularity.

None of these are currencies. They are essentially shady get rich quick schemes.

Everyone wants to get early and catch the rise. If you are lucky and catch the right currency at the right time in it's bubble, you might make money betting on crypto-coins.

But there are no financials to check, no logic to use on placing your bets.

Hell even in Vegas you can at least know the odds.

You really have nothing to go on with crypto-coins.

 

[DrMrLordX]

People are often using Bitcoin as generic term, much like Band-aid has become a generic term for adhesive bandages, even though technically speaking band-aid is a specific product.

The problem here is that all pre-packaged bandages like that have the same basic function. Bitcoin does not have the same basic function as many of its crypto-competitors. So that doesn't hold water. Using it as a generic term, at best, shows that the commentor has no clue.

The fact that there are over 1000 different crypto-coins highlights the problem. It is essentially all hype and popularity.

It does? Seen how many ETFs there are? Here's a taste:

http://etfdb.com/etfdb-categories/

Everyone wants to get early and catch the rise. If you are lucky and catch the right currency at the right time in it's bubble, you might make money betting on crypto-coins.

But there are no financials to check, no logic to use on placing your bets.

I started investing in and mining Ethereum in June-August 2016. By Dec. 2017 I was up ~5300% over my total DCA. Do you think it was all luck?

You really have nothing to go on with crypto-coins.

The hell you don't.

Unlike Bitcoin, most crypto-related assets have an intended function outside of serving as digital cash. You are expected to examine the proposal, assess the value of the proposed solution, and determine whether or not the assembled team can get the job done. Then you buy or don't buy the token/coin.

I invested in Ethereum. Ethereum is meant to be a global computer by way of smart contracts that are stored on and executed by its own custom blockchain. Ethereum's value is currently backed by its present and future functional value (things were more nebulous back in 2015/2016 when people started getting involved in it). Like a commodity, its value is based on what you can do with it. Have a look at the basics:

https://ethereumbuilders.gitbooks.io/guide/content/en/what_is_ethereum.html

Here's the proposal:

https://github.com/ethereum/wiki/wiki/White-Paper

Here's the team:

https://www.ethereum.org/foundation

Plus some of their backers, the Enterprise Ethereum Alliance (EEA):

https://entethalliance.org/members/

Think it's a scam yet?

 

[PeterScott]

I started investing in and mining Ethereum in June-August 2016. By Dec. 2017 I was up ~5300% over my total DCA. Do you think it was all luck?

That is essentially like a lottery winner asking if it was luck?

It does? Seen how many ETFs there are? Here's a taste:

http://etfdb.com/etfdb-categories/

False equivalence. What do the categories of legitimate trading funds, have to do with Crypto-coins (which are not).

I invested in Ethereum. Ethereum is meant to be a global computer by way of smart contracts that are stored on and executed by its own custom blockchain. Ethereum's value is currently backed by its present and future functional value (things were more nebulous back in 2015/2016 when people started getting involved in it). Like a commodity, its value is based on what you can do with it. Have a look at the basics:

https://ethereumbuilders.gitbooks.io/guide/content/en/what_is_ethereum.html

Here's the proposal:

https://github.com/ethereum/wiki/wiki/White-Paper

Here's the team:

https://www.ethereum.org/foundation

Plus some of their backers, the Enterprise Ethereum Alliance (EEA):

https://entethalliance.org/members/

Think it's a scam yet?

Etherum Coin monetary value is NOT based on what people can functionally do with. That is the biggest lie told by crypto-coin pumpers.

It's based on people chasing the value with early in pumpers like yourself trying to convince others to buy in in a drive the price up. Classic pump and dump.

As far as block chain technology. Sure that is useful no one argues otherwise. But Ethereum coins are not funded and increasing in value, on providing the technology. That is given away freely. Quoting your own link:
"... open source, free to use blockchain solutions that will be the foundation for businesses going forward."

Blockchain is open source, free to use tech. It is not charging for it. This is not the source of Etherums value or any coins value. There are many legitimate business solutions using blockchain. IBM has Hyperledger.

But again. A useful technology that is open source and free to use, is not generating revenues for the coins. It is not a basis for their trading value. The trading value of coins is Pump and dump style hype. And with your early position, your are here to pump...

It's essentially a Ponzi scheme. Where if you get in early, pump your coin, you can cash in, the later entrants end up as bag holders.

 

[TeknoBug]

People here (in BC, Canada) are putting up their houses for sale for bitcoin. That is a pretty braindead thing to do if you ask me.

 

[BSim500]

You make a lot of great points about the economic and intrinsic value of money, but your lack of Bitcoin and Blockchain knowledge is apparent.

Given how many times you posted the same link as a dismissive non-answer, I already read that and it perfectly validates what I said - a lot of geeks are so obsessed with the technicalities of block-chain that's all they can talk about as a distraction tactic to the obvious valuation bubble. It's like starting a conversation on "Is the US dollar overvalued?" and what you've done above is little more than link to a page describing the technology behind banknote security features like intaglio printing, guilloché, watermarks, magnetic ink, EURion, micro-printing, holograms, etc, before moving on to "explain" how BACS and SWIFT work, etc, whilst trying hard to not address the actual subject - the real reason why value has changed by 10 million percent when the exact underlying blockchain and P2P transaction mechanism has remained exactly the same all along and the utility value from that has been "priced in" right from the start.

As mentioned, it's a plain and simple speculative bubble, very obviously so when you start pricing goods / services / commodities *natively* in Bitcoin. If people used 2010 BC pricing for commodities then in order for 2018's BC's current value to be "right" and all paper monies be "wrong" you're basically saying it's normal for economies to work by selling products for several hundred thousand times less than what it cost to make / grow / build them 7 years later. That single sentence alone show how utterly broken the junk hyper-deflationary economics are behind "exponential curve mining" and why unlike proper currencies, literally nothing on the planet is natively priced in Bitcoin. The fact it uses P2P, etc, doesn't change a thing about its value as the problem isn't the blockchain that geeks are "tunnel vision" obsessed with, it's the deeper core design of the "exponential unit creation curve" itself, ie as long as the mechanics are based on "easy to mine at first then get exponentially harder", you will always end up with the same artificial deflation over time giving the same fake valuations in "coin" after "coin" based on the same exponential mining curves.

 

[BSim500]

I started investing in and mining Ethereum in June-August 2016. By Dec. 2017 I was up ~5300% over my total DCA. Do you think it was all luck?

Unlike Bitcoin, most crypto-related assets have an intended function outside of serving as digital cash. You are expected to examine the proposal, assess the value of the proposed solution, and determine whether or not the assembled team can get the job done. Then you buy or don't buy the token/coin.

I invested in Ethereum. Ethereum is meant to be a global computer by way of smart contracts that are stored on and executed by its own custom blockchain. Ethereum's value is currently backed by its present and future functional value (things were more nebulous back in 2015/2016 when people started getting involved in it). Like a commodity, its value is based on what you can do with it. Have a look at the basics:

Ironically you're proving the point yet again. 5,300% inflation in a year does not make a serious currency. It doesn't matter how much you hype the peripheral functionality of "contracts", that's the bottom line of the crypto hype. A thing doesn't have to be a "scam" to be overvalued in a bubble. You agree about how bogus Bitcoin valuation is (you even call it "cr*p"), but it's blatantly obvious that all crypto are being "pulled upwards" by Bitcoin on the back of raw hype in exactly the same way all dot-coms were simply for having "dot-com" in their name regardless of how good / bad their individual business models were.

ETH vs USD = $13 Jun 16 to $1172 Jan 18

ETH vs BTC = 0.025 Jun 16 to 0.09 Jan 18

In short, out of 9,000% price increases, only 250% of that was any tangible utility value of ETH contracts vs BTC, and once that's factored in, all the rest was exactly the same blind crypto hype as what's driving BTC... ETH does have marginally more functional value (about the same as any digital escrow service given a similar "IF x THEN y" contract to fulfill), but make no mistake for those not in extreme denial, 90% of ETH valuations are exactly the same crypto-bubble hype as Bitcoin and nothing ETH specific relating to "smart contracts". That is literally what ETC/BTC vs ETC/USD charts show.

And "Like a commodity" is utterly laughable when like Bitcoin, Eth's $0.4 to $1400 (3,500:1 in 2.5 years) is no more a stable measure of value for static commodity prices than BTC. As previous example, if things were *natively* priced in ETH, and treated "like a commodity" you're basically arguing the equivalent that the "real" price of a loaf of bread priced natively in ETH 2016 vs ETh 2018 is $0.004 or that the TRUE price of a $450,000 house is $328 (many hundreds of times less than what it cost in raw resources to make) which is flat out delusional nonsense. No matter how much it upsets its advocates, ETH is just as much a catastrophic failure as BTC at reflecting prices of static goods from one year to the next without people having to calculate through the deflationary equivalent of "banana republic" class +5,000% compounding annual inflation rates...

Again you're yet another person stuck on the wrong argument - it's not the blockchain that's the issue, it's the exponential curve of how ALL crypto's (including "Eth") are "printed" into existence in the first place that's giving them all universally fake apparent soaring "values" over time when most of that is just artificial chronic deflation, and nothing to do with the blockchain.

As far as block chain technology. Sure that is useful no one argues otherwise. But Ethereum coins are not funded and increasing in value, on providing the technology. Blockchain is open source, free to use tech. It is not charging for it. This is not the source of Etherums value or any coins value. There are many legitimate business solutions using blockchain. IBM has Hyperledger.

^ This. People arguing the fake argument that "it's the blockchain that gives magical 10,000,000% value" need to look long and hard at the multiple applications where blockchains are already being used outside of crypto-"currencies" for exactly the same reasons but without being linked to totally bogus exponential crypto-currency "mining" curves. Gee, I wonder why IBM's stock price hasn't increased 10,000,000%, let me think what else is different...

You'll quickly figure out the reason XXXcoins are moving +5000% per year has very little to do with the blockchain and everything to do with "exponential mining curves = exponential deflation" which gives the illusion of "growth" vs paper money as "coins" get more difficult to mine, but that illusion of "value" completely falls apart and the bubble becomes more apparent when you start natively pricing almost anything in the real world into the "currency" (food, real estate, etc) and trying to compare it even week on week let alone year on year, and realise how completely divorced from reality the "exchange rates" of current deflationary crypto "coins" all are.

 

[DrMrLordX]

That is essentially like a lottery winner asking if it was luck?

Do you understand the term "calculated risk"? Nobody playing the lottery takes calculated risks. They just throw away money for fun.

False equivalence. What do the categories of legitimate trading funds, have to do with Crypto-coins (which are not).

It means that your initial point - that there are thousands of crypto coins and therefore that they have no legitimacy - is fallacious. Something being numerous to the point of ubiquity says nothing about it other than to reveal its popularity with investors.

Etherum Coin monetary value is NOT based on what people can functionally do with. That is the biggest lie told by crypto-coin pumpers.

It's based on people chasing the value with early in pumpers like yourself trying to convince others to buy in in a drive the price up. Classic pump and dump.

I did not "pump" anything. I paid a fairly small amount of money compared to what I got. If you know your whale games, you understand that the pumping requires priming the pump sooner or later, and that takes some cash. Cash which I did not (and for the most part, still don't) have in my possession. I also do not troll/brigade forums or participate in pump groups. I don't post and pull buy or sell walls to move prices. I don't post memes either, though some of them are kinda funny.

That being said, it is obvious you didn't read anything I linked to you, aside from a few lines that seem to suit your argument (but don't really). Notably:

As far as block chain technology. Sure that is useful no one argues otherwise. But Ethereum coins are not funded and increasing in value, on providing the technology. That is given away freely. Quoting your own link:
"... open source, free to use blockchain solutions that will be the foundation for businesses going forward."

Blockchain is open source, free to use tech. It is not charging for it. This is not the source of Etherums value or any coins value. There are many legitimate business solutions using blockchain. IBM has Hyperledger.

Ethereum tokens are required to make any transaction on the blockchain. You can not summon ETH "for free", nor can you move ETH from one address to another nor interact with a smart contract without paying fees. All fees are paid in the form of ETH tokens (or more realistically, with fractions of ETH tokens). That's where transaction costs figure in.

The value of ETH is that the current systems it can/will replace along with the new systems that will be built on top of Ethereum blockchain technology will drive demand for ETH tokens. That is the value proposition. It is the fuel that runs Web 3.0 . Some people are calling it the digital oil to Bitcoin's digital gold.

The fact that Ethereum is based on open-source code only allows outsiders to develop their own private blockchains based on Ethereum or contribute to the Ethereum project as a whole without obtaining special licenses. The blockchain itself is not, and probably never will be, free to use.

But again. A useful technology that is open source and free to use, is not generating revenues for the coins.

Of course it is. If the only thing Ethereum did was replace a single payment network, its value to ETH holders would be roughly equal to the existing cost to operate the payment network replaced by Ethereum. Of course the better a job Ethereum did in replacing that network, the more the blockchain (as a whole) would be worth. Now divide that by the ~97 million ETH currently in circulation. That's the value one ETH token brings to the market, based on that one application. Now imagine thousands, if not tens of thousands of other applications available to the blockchain. Sooooo much potential for value.

My DCA for the tokens I obtained was $11.81 . I figured at that price, why not? I can see Ethereum tokens being worth that much or more just on the basis of people needing them to use the associated blockchain. Smart contracts are a really good idea with enormous potential. So I decided to buy the fuel people would need to run their shiny new dApps. Oh, and when I read about Proof of Stake . . . that really got me.

Now, I will concede that there is probably a realistic price level for ETH, and that right now we may have rocketed well past that price level. People are desperate for returns, the stock market is long overdue for a correction (those PE ratios, ugh), bonds are flat, CDs are flat, real estate is ballooning again, etc. So people are willing to FOMO when they see potential for value. It is getting a little out of hand. Personally I did not expect ETH to go past $40, where I figured it would either stabilize or slowly increase over time, thanks to Proof of Stake (PoS). These price levels are surprising.

your are here to pump...

Of all the ETH I have acquired since 2016, how much do you think I still have left? Or any other crypto currency for that matter.

Honest question.

Ironically you're proving the point yet again. 5,300% inflation in a year does not make a serious currency.

Ethereum was never designed to be a currency. It can serve that function, but that isn't what it's for. If you want a "serious currency" based on the Ethereum Blockchain, I will point you to DAI Stablecoin:

https://makerdao.com/

It doesn't matter how much you hype the peripheral functionality of "contracts"

Okay, hold on.

Since when did me pointing you to the fundamental documentation of Ethereum, it's leadership, its vision, and its core functionality count as "hyping" anything? I'm trying to show you the same public documentation that has informed millions of people who do and don't own ETH about what potential it has for the future. That's it. Is that hyping?

Are you saying that I can't even describe Ethereum to you without "hyping" it?

A thing doesn't have to be a "scam" to be overvalued in a bubble.

Ethereum and all other crypto may be overvalued. Or it might not. I'd sure love to see someone calculate its actual value, though.

You agree about how bogus Bitcoin valuation is (you even call it "cr*p"), but it's blatantly obvious that all crypto are being "pulled upwards" by Bitcoin on the back of raw hype in exactly the same way all dot-coms were simply for having "dot-com" in their name regardless of how good / bad their individual business models were.

That's one of the problems with Bitcoin, actually. I would like nothing more than to see the rest of the crypto-verse delinked from Bitcoin. Until exchanges stop using BTC as a major "onramp" for the purchase of other crypto assets, we're stuck with what we've got.

I criticized Bitcoin because it can not fulfill its intended function. Period. I would not pay $14k or $4k or even $4 for a Bitcoin, so long as it continues to fail as a digital cash system.

ETH vs USD = $13 Jun 16 to $1172 Jan 18

ETH vs BTC = 0.025 Jun 16 to 0.09 Jan 18

In short, out of 9,000% price increases, only 250% of that was any tangible utility value of ETH contracts vs BTC, and once that's factored in, all the rest was exactly the same blind crypto hype as what's driving BTC... ETH does have marginally more functional value (about the same as any digital escrow service given a similar "IF x THEN y" contract to fulfill), but make no mistake for those not in extreme denial, 90% of ETH valuations are exactly the same crypto-bubble hype as Bitcoin and nothing ETH specific relating to "smart contracts". That is literally what ETC/BTC vs ETC/USD charts show.

. . . what?

I don't see how that makes any sense. Because BTC went up in value by yay much, and ETH went up by a little more, the value of ETH tokens is only constituted within that price delta? To put it nicely, that is a poor analysis of market valuation and buyer incentive. Try comparing total market cap for BTC and ETH; you will see that BTC's total market cap is still higher than Ethereum's. The crypto market as a whole still hasn't bought in to the Ethereum vision, at least not to the extent that it supports Bitcoin.

There's plenty of "stupid money" pouring into the crypto space, and as I said above, I'm not sure that ETH's current valuation has any basis in reality. But that does not make it a Ponzi scheme as others assert, since it can/does/will perform its intended function. That gives it a utilty value, which backs the value of ETH tokens, as opposed to it being a unit of fiat currency.

And "Like a commodity" is utterly laughable when like Bitcoin

Who said anything about the commodities market?

Again you're yet another person stuck on the wrong argument - it's not the blockchain that's the issue, it's the exponential curve of how ALL crypto's (including "Eth") are "printed" into existence in the first place that's giving them all universally fake apparent soaring "values" over time when most of that is just artificial chronic deflation, and nothing to do with the blockchain.

But the blockchain is the issue, at least for Ethereum, and potentially for other cryptocurrency tokens (NEO, NEM, and many others). As long as it has a value and people need the tokens, the tokens have value. As demand for the tokens increases (for whatever reason; presumably due to demand for services on the blockchain increasing), the tokens gain value. It all goes back to the blockchain and its capabilities.

The minting of new tokens is a contentious issue in the cypto world. Bitcoin maximalists constantly criticize other blockchains for allowing (apparently) limitless currency issuance, declaring those tokens to be inflationary (which in and of itself is a joke, since many of those tokens aren't meant to be currency at all, so inflation/deflation is a moot point).

If you knew anything about Ethereum, you would know that it currently has a 14% rate of token issuance annually. Buterin has declared that token issuance should drop to 0-2% once Proof of Stake is implemented. The blockchain may even go through periods of "ETH burn" where fees are not 100% distributed as block rewards to stakers. But that is in the future.

For now, most crypto is actually inflationary in its capacity as a currency, at least with respect to currency supply. The major crypto projects are constantly issuing more . . . just not enough to meet demand, and for good reason. Nobody in the crypto world wants to repeat the disaster that is a central banking system that can and will drop the value of everyone's holdings to fill its own coffers with newly-minted coins.

Except XRP buyers, but they're an odd lot.

WRT utiltiy tokens like ETH, currency issuance is handled through a "mining" process (and soon to be a "staking" process) to reduce centralization of power wherever possible, as opposed to having one authority handle all issuance and distribution of tokens according to its whims.

Gee, I wonder why IBM's stock price hasn't increased 10,000,000%, let me think what else is different...

Projects like HyperLedger are interesting, but they are intentionally limited in application and deployment. If IBM could alone do what projects like NEO, ETH, XMR, etc. hope to achieve in the future, you damn well better believe the hype around their stock would be crazy.

You'll quickly figure out the reason XXXcoins are moving +5000% per year has very little to do with the blockchain and everything to do with "exponential mining curves = exponential deflation" which gives the illusion of "growth" vs paper money as "coins" get more difficult to mine, but that illusion of "value" completely falls apart and the bubble becomes more apparent when you start natively pricing almost anything in the real world into the "currency" (food, real estate, etc) and trying to compare it even week on week let alone year on year, and realise how completely divorced from reality the "exchange rates" of current deflationary crypto "coins" all are.

The above is why you need to stop looking at token price and start looking at market cap. Market cap would be the same whether there are 90 billion or 90 quadrillion tokens for a particular blockchain. It doesn't matter how many tokens they issue, so long as the blockchain fulfills its function and so long as people have a relatively equal chance to obtain tokens.

People are going to put their money into crypto either because

a). they think the project has merit or
b). they're following the money of people in a).

Either blockchain will deliver lasting value to the market or it won't. Currently people have invested this much money in blockchain:

https://www.cryptocompare.com/coins/#/usd

If someone asked me if I thought Ethereum was "worth" $106 billion, I would say that sometime within the next ten years or so, definitely. Today? Maybe. The market may be ahead of itself.

Regardless, that investment remains the same whether there are 97 million or 97 billion tokens in circulation.

 

[Artorias]

Its only a matter of time until governments crack down on crypto currencies, unless it becomes a "to big to fail" type scenario in which case God help us all.

 

[PeterScott]

Do
Ethereum tokens are required to make any transaction on the blockchain. You can not summon ETH "for free", nor can you move ETH from one address to another nor interact with a smart contract without paying fees. All fees are paid in the form of ETH tokens (or more realistically, with fractions of ETH tokens). That's where transaction costs figure in.

Who wants to move ETH around except Etherum proponents?

If you just want to use blockchain to secure transaction, you can build your own blockchain without Ethererum.

Which is why you see legitimate companies like IBM building their own blockchain products (Hyperledger).

Remind me again, which "Initial Coin Offerring" get quick rich scheme is Hyperledger blockchain based on? Oh Yeah, None.

https://www.ibm.com/blockchain/hyperledger.html

"No cryptocurrency
Does not require mining and expensive computations to assure transactions"


Blockchain doesn't require a get rich quick scheme mining/betting on coins to secure transactions. It's completely absurd to think it does.

But this is what all the Crypto Coin schemes are really about. Doing ICOs (initial coin offerrings) and getting people in on the frenzy, but none of this is a necessary part of using blockchain technology. But it is a necessary part of "getting rich quick".

 

[Yakk]

Bought some real stuff on the Bitcoin Lightening Network after opening a channel; Torguard subscription & such for $0 transaction fees and transaction time was instant.

Looks like we're there once it's released from beta.

 

[tamz_msc]

The above is why you need to stop looking at token price and start looking at market cap. Market cap would be the same whether there are 90 billion or 90 quadrillion tokens for a particular blockchain. It doesn't matter how many tokens they issue, so long as the blockchain fulfills its function and so long as people have a relatively equal chance to obtain tokens.

Everybody knows that in practice, this isn't true at all.

Besides, BSim's fundamental point still stands - that to ascertain whether a currency has any value, one has to compare the amount of essential commodities you can buy with that currency over a long period of time.

If I plot how many kilograms of potato one ether can buy vs time, then from current trends I can say that if I zoom out far enough, then the graph would have such a large negative slope that it would be totally worthless to trade in potatoes for ether if I were to be a potato farmer.

 

[BSim500]

I'd sure love to see someone calculate its actual value, though.

^ Well isn't that precisely the problem? Literally none of the current crypto's are based on any valuations of post-mined blockchain utility. Here's the challenge - "show me". Show me the valuation maths behind say 1,000x Ethereum smart contracts being deemed 350,000% more "valuable" after 24 months vs exactly the same 1,000x contracts arranged via either say 1. An alternative non-mining blockchain-based solution that successfully delivers exactly the same end result using exactly the same technology with exactly the same advantages but without the fake deflation-based mining "economics" tacked on, or 2. A trusted confidential digital escrow service. This is where the valuations falls apart - they're driven almost constantly by the persistent false belief that coin "mining" has a monopoly on blockchains (or even that secure confidential escrow services were invented yesterday).

In reality +95% of the price inflation of Ethereum isn't coming from the "smart contract" related stuff, it's being "adopted" from the general mining craze, (proof of which is seen very clearly in ETH vs BTC charts). ETH vs BTC would very definitely behave differently based solely on blockchain utility, but instead both move very clearly and almost exclusively on the mining "economics" (chronic deflation + almost constant liquidity crisis), not what the currency is "intended" for after you've "mined" it. I agree with you the blockchain has great potential, but so too do non-mining blockchain systems offering exactly the same thing without the ridiculous intermediary wealth destruction (gargantuan waste of electricity), at which point the "penny will drop" for a lot of people.

Now, I will concede that there is probably a realistic price level for ETH, and that right now we may have rocketed well past that price level.

I'm not sure that ETH's current valuation has any basis in reality.

^ Well, we're pretty much in agreement there. The blockchain may have utility in a variety of applications (no one disputes that), but the laughable valuation prices right now are "dot-com 2.0 and then some". And that's why currencies were invented in the first place - to maintain a stable pricing mechanism that doesn't radically change if the underlying goods don't. The current comical "economics" consisting of taking Zimbabwe's hyper-inflationary currency chart and "flipping it" to a hyper-deflationary one are still laughable and yet many ALTcoins are based on the same fallacy. And the entire market is being "pulled" up as a whole based on that group fallacy rather than individual coins being valued according to blockchain utility, let alone compete with significantly more useful, price stable and energy efficient potential future blockchain-without-deflationary-mining solutions.

 

[zubbs1]

Warning - long post that actually involves economics...


...snip...

If you truly want to hedge against a "post reserve status" collapsing inflationary USD, you buy tangible stuff (real estate / land, high-demand international commodities (oil, wheat, etc), metals, and stocks in foreign companies natively valued in another currency that deal in tangible high demand essentials (utilities, food, etc). Stuff that's either permanently "consumed" or "produces".

I agree 100% with your entire statement, but especially wanted to highlight this paragraph. I'm sure most miners aren't actually in it because of a "prepper" mentality, but rather just another easy money grab. Which brings it all back to how the hobbyist pc gamer gets screwed over because people are so incredibly gullible and easily directed by pandering to their greed.

 

[frowertr]

Its only a matter of time until governments crack down on crypto currencies, unless it becomes a "to big to fail" type scenario in which case God help us all.

I'm not sure what this even means. Existing tax laws are already in place the U.S. and most everywhere else in order to tax crypto mining and trading so there is no reason for them to "crack down" on it.

 

[whm1974]

I'm not sure what this even means. Existing tax laws are already in place the U.S. and most everywhere else in order to tax crypto mining and trading so there is no reason for them to "crack down" on it.

Haven't a few countries banned cryptocoins? I know that Bitcoin was banned at least.

 

[lupi]

https://www.techspot.com/news/72854...cs-card-retailers-prioritize-gamers-over.html

 

[thilanliyan]

Haven't a few countries banned cryptocoins? I know that Bitcoin was banned at least.

I think maybe youre talking about the exchanges?

 

[whm1974]

I think maybe youre talking about the exchanges?

No I'm not.

 

[DrMrLordX]

Who wants to move ETH around except Etherum proponents?

Anyone moving around ERC20 tokens, needs to spend ETH fees to do it. ERC20s are currently where most of the action is at in the Ethereum blockchain space.

Example: Raiden is setting up a payment network. I'll go conservative and assume they can handle maybe 100k transactions/second using Raiden (OmiseGo claims they can do billions, not sure if that's true), which will take two transactions on the main Ethereum blockchain (one to "open" the channel, and another to close it). The "full" Raiden spec mandates that you would use ERC20 tokens - RDN - as payment to the person running the full node who is going to host/confirm the opening and closing of the channel; in addition, moving the RDN tokens will cost you a blockchain fee assessed in ETH tokens. Once sharding goes online, the combination of Raiden as well as the main blockchain's tx limit will enable somewhere in the ballpark of 1 billion transactions per second utilizing a combination of full Raiden and sharding. Each 100k transactions or so will require a certain amount of RDN (probably fractional) and a certain amount of ETH (definitely fractional).

Once someone codes the frontend, it will be the ultimate replacement for nearly every payment network out there - Paypal, Visa, MasterCard, AmEx, and yes even SWIFT - assuming those guys don't jump in the way with their own solution. Any guy rolls up to a point-of-sale unit at a store or on a website or . . . really anywhere, buys something, and sees $USD removed from his bank account in realtime. What's going on behind the scenes? Multiple transactions, including conversion of a small amount of USD into RDN and ETH to cover fees, opening of a payment channel or inclusion of the transaction in a payment channel that's already opened, bundling of the transaction, closing of the channel, and completion of all transactions on the main chain. The recipient gets their cash in seconds. No more "pending transactions" listed in your online banking app. Fees are in the ballpark of a few cents, maybe less, regardless of the dollar value of the transaction. No more percentiles.

Are all those people Ethereum proponents? They won't even know what Ethereum is, but the plan is for all of them to use it all the same.

And that's just ONE thing Ethereum can do. Unless Omise and Raiden Labs both drop the ball, we should see the back end functioning by the end of 2018. Sharding - one of the major on-chain scaling solutions needed to make this vision a reality - is already on the way:

https://themerkle.com/what-is-sharding/

We should see a functioning sharding solution this year. In 2019, I expect to see early frontend tech rolled out. After that it's a matter of adoption. Merchants should love the low fees.

If you just want to use blockchain to secure transaction, you can build your own blockchain without Ethererum.

Which is why you see legitimate companies like IBM building their own blockchain products (Hyperledger).

Remind me again, which "Initial Coin Offerring" get quick rich scheme is Hyperledger blockchain based on? Oh Yeah, None.

HyperLedger is, as I stated, a limited solution with specific tasks in mind (and they cost money to design and establish, which has to be funded on-site). What crypto investors invest in are public blockchains, and the ICOs are there to attract investors to advance the technology. Invest and you get to reap the rewards of blockchain tech, and developers get backing to make their products a reality. Private blockchains CAN be serviced by public blockchains as well. Blockchains relying in dissimilar proof algorithms can interact with one another through oracles:

https://blockchainhub.net/blockchain-oracles/

(that isn't their only function, but they effectively allow communication between dissimilar blockchains)

Private blockchains based on similar algorithms/tech do not require oracles. The current assumption is that many businesses and governments will establish private blockchains with centralized governance, and that public blockchains using the same basic code base will allow transactions between blockchains. And of course, those transactions will all require tokens to pay blockchain fees . . .

Blockchain doesn't require a get rich quick scheme

Agreed. ETH, NEO, probably IOTA (we hope), NEM, and other utility blockchains didn't require "get rich quick" schemes either. You seem to think they do, but they don't. Buterin in particular seems to think ETH is worth a lot less than its going market rate, and all the existing ETH research would still be happening, at least for the core blockchain. People are seeing value in there though, and nobody's stopping them from investing.

mining/betting on coins to secure transactions. It's completely absurd to think it does.

The problem here is that you - and other critics - do not appreciate how hard it is to assure decentralization on a public blockchain. That's where all the mining/staking and token stuff comes in. Without some sort of proof system, you risk either centralization or tx spoofing. Private blockchains without a distributed, decentralized tx verification system are more vulnerable to attack than public blockchains where numerous participants are incentivized to verify txns. The major advantage of a private blockchain is that your attack surface is small.

But it is a necessary part of "getting rich quick".

Sorry, but no.

Besides, BSim's fundamental point still stands - that to ascertain whether a currency has any value, one has to compare the amount of essential commodities you can buy with that currency over a long period of time.

I said it once, and I'll say it again - cryptocurrency designed to be a utility token does not represent currency whose value is assessed in the same manner as fiat.

No matter how many times I make this point, people keep coming back to it as though we were discussing Bitcoin. You can't mine Bitcoin with video cards, so Bitcoiners aren't even a factor in this thread. Why is it so hard to figure that out?

^ Well isn't that precisely the problem? Literally none of the current crypto's are based on any valuations of post-mined blockchain utility.

Yes and no. Those investing in the tech are banking that the utility value will be massive - as great as, or greater than, the value of major stock exchanges today. ETH and RDN together have a current market cap of around $110 billion. Would you pay that much for a payment network that can handle 1 billion transactions/second? Now what if I told you it could do something else?

It's that something else that gets you. Stuff like Bitcoin, yeah, you could probably come up with a market valuation of it based on how many transactions it can handle per second, versus existing payment systems. With NEO, IOTA, NEM, ETH . . . how do you know for sure? Can you accurately predict everything people will do with those blockchains? And which blockchain will win? THAT's one of the major risks: that a good project may die on the vine, or may simply be supplanted by superior tech in the future. Crypto moves quickly.

Haven't a few countries banned cryptocoins? I know that Bitcoin was banned at least.

Mostly it's FUD. China has banned mining crypto. They want tight currency controls so they can manipulate everything. The last thing they want are their nouveau riche hiding money overseas, which is the favored contact sport among said nouveau riche.

 

[Paratus]

While arguing about the potential fates of various cryptocoins is obviously engaging, I found this video by Gamers Nexus to be very interesting.

The cost increase isn’t just directly caused by mining. There’s some indirect effects and there are some other serious issues.

• Mining has drive up price
• Memory prices have also caused a large percentage of the problem. ($30 increase in component costs to board makers - before it gets marked up to consumers - normally board makers expect memory prices to fluctuate by $5 per quarter
• Several manufacturers think Nvidia could provide more GPUs but they are not asking for more
• Significant concerns from manufacturers on being left with a lot of product on hand if the mining market crashes. Since ramping up takes a few months they are too concerned about unsellable product if mining crashes and floods the market with cheap cards between now and then.