If you look at it conceptually, not technologically, “mining” is simply a mechanism to ensure a slowly growing supply of currency units (“coins”). One whose growth rate is inherently incontrovertibly capped and is slowly declining, eventually to be forced to zero.
In essence it’s a bit like the old (real) gold standard, where how much gold was known to exist was pretty much common knowledge in the financial world, gold wasn’t lost or destroyed (much), and the rate at which new gold was dug out of the ground was fairly predictable, at least over timeframes of a decade or so. All of those things contributed back then (and still contribute some today) to gold’s reputation as a reliable store of value and something more stable in true value than fiat currencies controlled mostly by politicians concerned with re-election and dictators concerned with becoming insanely rich.
Absent some sort of metering mechanism on coin creation, either there has to be a permanently fixed supply, or the supply can be inflated like crazy by any actor empowered to do so. And everyone who could create coins would be incentivized to create as many as possible as fast as possible and then sell out before the others caught on / caught up.
The family crypto venture comes as Trump enters the home stretch of an election in which Democrats have sought to paint him as corrupt, with Vice President Kamala Harris comparing him to fraudsters whom she targeted as a prosecutor in California. Trump has for years lobbed similar accusations at Democrats, including by saying that President Joe Biden’s son, Hunter Biden, has profited from his father’s actions in government.
I bought a few thousand dollars with of Bitcoin some years ago, just because. I bought a lot more stock in NVIDIA because while there is huge demand for their chips because of cryptocurrencies, they also have other practical applications for gaming and AI.
I don’t think crypto-currencies are a “scam” in that they don’t purport to do anything other than what they do. I get what they do on a and how they do it on a certain level. I’m just not sure what problem they are actually supposed to solve.
And everything about crypto currencies and the people who support them screams “speculative hype bubble” to me.
Agree. Anything that appears to be propped up by a large proportion of participants who are all looking for the “greater fool” is something I will definitely avoid. I mean, good on anyone who manages to get out in the black, I guess, but I’m staying far away.
It’s not that the whole concept of crypocurrencies is a scam. They are what they are.
But many cryptocurrencies are set up as scams. You come up with a virtual coin, you hire one or more influencers to promote it, people line up to buy it, it goes live and the price shoots up as folks buy it, and then the people who set it up (and the promoter(s), and anyone else on the “inside”) sell off their currency, cashing out, and tanking the price so that the unsuspecting investors who believed the hype are left with nothing. (This is usually called a “rug pull”.) It’s straight-up theft. And since cryptocurrency is unregulated there’s not much anyone can do about it. It’s like joining a game of craps in an alley, and then after you get lucky and win, the people running the game snatch up the cash and run away. You’re never going to see that cash again and you’re not going to get any justice.
It happens so often that it’s a cliche, to the point where new cryptocurrency projects are advertised based on promises that no, they aren’t going to pull the rug out, and the core people involved will “HODL”. (That’s slang that started out as a misspelling of “hold” and then later became the backronym “Hold On for Dear Life”.) It’s like Lucy promising Charlie Brown that this time, she swears she will hold the football for him to kick. (If the comic strip “Peanuts” were started today, Lucy would definitely be running a crypto scheme.)
For the Bitcoin transactions that are strictly for goods and services, what is the breakdown for what it’s spent on? Don’t consider all the transactions which are just about speculative investment. Specifically, what goods and services are people using Bitcoin to pay for? It seems like the majority of the non-investment transactions I hear about are for illicit goods and services, like drugs, trafficking, and ransomware. That alone is one reason I wouldn’t want to invest in it. No matter how good the returns are, it seems like my investment would be propping up the currency which is used for a lot of harmful activities. Certainly regular currency is also used for illicit activities, but it seems like that’s just a tiny percentage of all the transactions a traditional currency is used for. With Bitcoin, it seems like 90%+ of the goods and services transactions I hear about are some kind of illegal activity.
I just don’t understand why the market would support more than a handful of cybercurrencies that are differentiated from each other for some technical reason or another.
They’re fads. It’s like when the Franklin Mint puts out a new commemorative coin or a dinner plate with Elvis’s picture or whatever. Only a few of the more prominent coins (Bitcoin and Etherium mostly) are actually used in financial transactions.
I think most investors treat them like stocks. If you think of them that way, they make a bit of sense, I guess. (No pun intended there.)
Except stocks at least hypothetically have something tangible (a company that makes stuff) behind them. If you buy a collector’s plate, you can put your sandwich on it. You can fidget with other “collectibles”
The mining game I’m using these days is just that: a game. In theory I’ve been awarded 20ish bucks worth of bitcoin in the past month. I don’t know when or whether I’ll ever cash it out. I treat it as entertainment.
When I was first doing this, a few years ago, I’d crow to the family about how yippee - I can afford a trip to Starbucks!!
honestly, anyone who “invests” in crypto needs to go in with the attitude that profit us unlikely. The only way to make a fortune is to have gotten in 10 years ago
Oh, and state laws in some states (NY, MA and others) prohibit or strictly limit crypto platforms. We were in Vermont recently, and for some reason our IP address said we were in Massachusetts - and I could not launch the crypto app for several days. I could play the mining game - and was eventually able to get to the crypto app and verify that I was getting credited, I just couldn’t do anything else.
I have actually been able to send crypto from that app to my Coinbase wallet. While crypto in general is kind of scammy vaporware, at least so far the game seems legit enough.
Agreed, people treat them like collectibles or stocks but like you said, they aren’t. They are more ephemeral than either. I’m just saying how people treat crypto, I’m not saying it’s justified.
I mean, you can make money with crypto, and people have, but people also make money gambling in Vegas, that doesn’t mean it’s financially wise to do so.
I do rather wish I’d put a bit of real money into Bitcoin back when I was mining it, because THAT part has gone up massively in value (something like 8 times what it was worth when I first got it).
But if I’d done so, that would have guaranteed it went nowhere. The stuff I’ve gotten recently from the game is not really increasing (nor is it decreasing…). I expect it won’t go up much.