Cryptocurrency

[GMDino]

I know virtually nothing about it.  To me it sounds like people are copying Monopoly money and then trading it for goods and services with people who are willing to collect more Monopoly money but that it does no good in the real world.

In fact I've never tried to learn about it but I have friends that post about it all the time and today I was reading about a "bitcoin crash" which got me thinking (again) about all the "millionaires" and "billionaires" in the crypto world.

Where can they spend it? Are they buying houses and jets and boats?  Can they use it for their retirement like a 401K?

(The one friend I have looks like he lives in a homeless shelter the way he dresses normally so I'm not sure how he's making money. )

Anyway is anyone here deep into it and can explain how you get "rich" off of it?

[KillerGoose]

(12-04-2021, 12:20 PM)GMDino Wrote: I know virtually nothing about it.  To me it sounds like people are copying Monopoly money and then trading it for goods and services with people who are willing to collect more Monopoly money but that it does no good in the real world.

In fact I've never tried to learn about it but I have friends that post about it all the time and today I was reading about a "bitcoin crash" which got me thinking (again) about all the "millionaires" and "billionaires" in the crypto world.

Where can they spend it? Are they buying houses and jets and boats?  Can they use it for their retirement like a 401K?

(The one friend I have looks like he lives in a homeless shelter the way he dresses normally so I'm not sure how he's making money. )

Anyway is anyone here deep into it and can explain how you get "rich" off of it?

The best way to think about crypto is to categorize it as an asset that has currency abilities. Most people that are in crypto are just treating it like they would a stock. It is very volatile and the returns can be astronomical. You may have heard people talking about a coin called Shiba Inu, and this coin genuinely doesn't do anything. It is a meme coin. However, the 1 year return on this coin is 59558748%. The popular story is a guy who threw $10k into Shiba last year and that $10k is now worth $6B dollars. 

There are many other coins that have ridiculous return rates, but even more that have ridiculous drops. Like I said, it is very volatile. Now, some coins do have a genuine purpose. Some can be used as a currency (Bitcoin, NANO, Monero) and others are technology platforms (Ethereum). There are plenty of in-betweens there, but the coins do have usable technology. Where they can spend it just depends on the vendor, whether or not they accept the coin. It isn't widespread right now due to the volatility, but you will find vendors that take the coin. Otherwise, people cash out their coins for USD/whatever currency and use that. 

The best way to get into it is to sign up for an exchange and start accumulating coins after you've done your research. You can keep your coins on the exchange or take them off into cold storage by using a hardware 'wallet'. These wallets are safer from hacks but you become your own bank, so if you lose the money, it is gone. This can be easy to do, because in order to access the contents of the wallet, you have to have a password of sorts, called a seed phrase. If you lose that seed phrase, there is no way to get it back. 

[Goalpost]

There are regulation issues and some countries won't accept it but many corporations will now accept bit coin as currency. To me the problem with countries accepting it is with the volatility of the currency itself. The US for example uses a dollar as currency which is much more stable to be tied to. I think Bitcoin is harder to trace also which could lead to criminal ways to hide money making things more difficult to track. It has acceptance to many who invest but it has resistance to say people at the Fed how monetary policy could be affected without some form of regulation. It's kind of like Gold, a hard currency, with value, yet becomes speculative without, as stated how it is to be regulated. It hasn't passed that threshold yet.

[KillerGoose]

(12-04-2021, 01:46 PM)Goalpost Wrote: There are regulation issues and some countries won't accept it but many corporations will now accept bit coin as currency. To me the problem with countries accepting it is with the volatility of the currency itself. The US for example uses a dollar as currency which is much more stable to be tied to. I think Bitcoin is harder to trace also which could lead to criminal ways to hide money making things more difficult to track. It has acceptance to many who invest but it has resistance to say people at the Fed how monetary policy could be affected without some form of regulation. It's kind of like Gold, a hard currency, with value, yet becomes speculative without, as stated how it is to be regulated. It hasn't passed that threshold yet.

Bitcoin is pretty simple to trace. Blockchain stores all of the data like a ledger, so data can be tracked back to your wallet. A coin like Monero, though, is much more difficult to trace. It is a privacy coin.

However, these issues are no different than what occurs with standard currency. Cash presents the same problem and is widely used for criminal activities. Currency will always have nefarious deeds tied to it, no matter what form.

[*TheLeonardLeap*]

(12-04-2021, 12:20 PM)GMDino Wrote: Anyway is anyone here deep into it and can explain how you get "rich" off of it?

Not deep in, but the method seems to be....

1. Purchase whatever crypto early.
2. Make tons of memes and hype about it all over the internet so other people recognize it and want it.
3. Wait for it's value to rise from all the building hype.
4. Sell your early bought cyrpto it to people who are trying to get into it late based off of the hype.
5. Be rich with the real money that you got from the late-coming suckers who gave you real money in exchange for your nothingness money.

[CKwi88]

(12-08-2021, 10:31 AM)TheLeonardLeap Wrote: Not deep in, but the method seems to be....

1. Purchase whatever crypto early.
2. Make tons of memes and hype about it all over the internet so other people recognize it and want it.
3. Wait for it's value to rise from all the building hype.
4. Sell your early bought cyrpto it to people who are trying to get into it late based off of the hype.
5. Be rich with the real money that you got from the late-coming suckers who gave you real money in exchange for your nothingness money.

Crypto has always given me this weird MLM vibe. Buy this thing, hope to profit off this thing by other people buying this thing (but not buying from you.)

It all seems like speculative bs to me, but there's probably a reason I ain't getting rich off it.

[Au165]

There is a lot to unpack but there is something interesting recently occurring. Tether is what they call a "stable" coin it is supposed to be backed by real assets so it could potentially be useful. Many exchanges use it to essentially convert various coins back into easily moveable and convertible currency. Like most things crypto things weren't as they appeared as, Tether was supposed to be cash backed but they actually are cast and cash equivalent backed...which means cash and Crypto (mainly Crypto). Tether was essentially issuing coins to back it with other crypto which then allowed it to issue more coins because the value of their back increased, essentially setting up a large house of cards. The belief is the recent BTC crash was related to this and essentially some believe a tether collapse could bring down the whole crypto economy.

The reality is that the whole crypto economy is propped up by people trying to get rich and not based on utility purpose or "a new decentralized currency". Many projects say they are, so many followers lie to themselves that what they have is the real golden ticket, but they are simply investment tools that are there to create wealth. Some may point to Etherum and NFT's, but NFT's are new age expensive art crap (valuable for the sake of value). Buy a digital picture of something say it's worth a ton of money sell it for a ton of money rinse and repeat. It all needs to be far better regulated because it really takes people like 3 days to make a coin now and they simply pump it on forums and social media abandon it and do it again.