What is cryptocurrency all about?

[Theolittle]

I really don’t understand cryptocurrency. How would you spend it? What can you spend it on? If you can’t use it to buy normal stuff what’s the point?

But even more I don’t understand why someone would buy it when it all seems to be marred with seediness and corruption- look at Trump making $12.5 million a day from crypto - that money comes from somewhere and probably from the pockets of this much poorer than him. Then Farage and his dodgy donors. Why would people fall for it?

It’s a totally different world and if anyone had a simple explanation I’d love to hear it!

I don’t really get it either in the practical sense you’re talking about of how to actually spend it, and would love an explanation. But all responses seem to be heavily biased in one way or the other.

My (fairly uninformed) feeling on it is:

1. Like AI, it’s an environmental disaster due to the energy involved in mining and storing it. Like AI, no one seems to care.
2. At least a few years ago, most people pushing this were rattling on about how it was going to replace the old corrupt elitist banking system with some kind of democratic and feminist revolution. Which was clearly always nonsense because the main people with time and resources to learn about and profit from it were always going to be the existing elite. As the Trump thing proves.
3. A lot of people are oblivious to how many poor people are already excluded by the digital revolution. Happy to criticize poor people for buying the latest iPhone but not recognizing that smartphones stop working effectively after about 7 years and you absolutely need one for most bureaucratic stuff nowadays. Crypto will be the same.

Look for Ben McKenzie (weirdly from the OC!). He’s great and has some easy videos.

It’s a Ponzi scheme, which means the early adopters make money and everyone else pays.

I don’t understand it all but I know it’s getting more and more mainstream.
before if you had any and you wanted to spend it you would’ve had to exchange it for GBP/EUR and then transfer to your account and then spend from your normal debit card. Now there are companies/crypto wallets that are creating their own spend cards WITH Visa and Mastercard (fully regulated) and you can buy your coffee/Sunday lunch/holiday with crypto directly. The exchange happens automatically at point of sale.
you can transfer money to any account that anywhere in the world as easy as sending a text message.
I think it may be the way of the future, though sadly I don’t have much spare cash to invest in it at the mo!

I don't understand it either. It's all going to crash to nothing eventually. But I've been saying that for years and it hasn't yet.

It is incredibly simple.

If you can't explain it to your parents, best steer clear. It's not for you.

The blockchain that these toy currencies are based on is sound useful technology. However "investment" ? Do me a favour.

Yes, another energy-guzzling environmental disaster we can ill afford. https://www.sciencedirect.com/science/article/pii/S2666188825003570

This is interesting although I’m still not sure what advantage there is except perhaps if the currency of your own country is more erratic than the c-word. I can’t think of any other advantage 🤔

I don’t understand the world nowadays - the greed and lack of responsibility of some people/companies is depressing

The idea is that no one "owns" the currency (unlike a fiat currency). And that transactions are opaque, as they are protected using the technology of encryption. If you haven't got the key, you don't get in.

As I say, it's the blockchain that's the serious bit. Not the shiny hanging off it.

Which is why el salvador 🇸🇻 chose dollars and i believe bit for their currency. Batshit.

money laundering

Well I’d never heard of blockchain so that’s a new one for me. Seems that’s the platform it allows it all to happen. But who owns that platform and what if the platform goes wrong? Who is liable? Couldn’t someone who runs the platform pilfer some of the cash? How is it regulated?

I probably do need to that recommended book😂

Why would you not hold gold bars in your hand? Anyone I know who invests in gold buys it in hard form.

There's nothing rapid about Bitcoin. It's incredibly slow to process transactions and horrendously inefficient. It's fundamentally incapable of handling even a tiny fraction of the transactions the international banking system routinely handles every day.

Bitcoin will be viewed as a store of wealth ie digital gold -however newer blockchain technologies allow instant decentralised 24/7 asset transfer. We are moving away from the dollar being the global default currency. Just look at the current war, Iran wanted payment in Yuen or crypto not the dollar controlled by the USA and devaluing due to the huge USA national debt.

I’m a liberal lefty hence I hang out on Mumsnet….I’m no fan of Trump/Farage/Blackrock global mega corporation but I recognise they have financially astute self-interest! Ask why they are all heavily positioned in crypto, it’s more than a ponzi scheme. Read about the Clarity act in the USA.

Crypto is coming, with a move to tokenisation of real world assets on block chain. We are at the bottom of a crypto bear market, read about Warren Buffet and the ‘fear and greed cycle’ we are at extreme fear where mainstream billionaire owned media paints crypto as some sketchy Epstein related scam. Meanwhile the billionaires and global corporations buy at a great discount price.

I hope for a crypto bull run soon, like the previous posters husband I’ve heavily positioned in crypto related assets, I’ll admit I’m currently down, maybe I’ll revisit this post in a couple of years and think how daft I was….or just maybe I’ve paid off my house and sons university.

Time will tell.

No one "owns" the platform. It's a distributed ledger spread across any number of nodes that process the blockchain.

As the first out the gate, Bitcoin - which is based on proof-of-work (hence the electricity costs of mining if) - isn't a great implementation. Also there are only a finite number of BTC around, getting harder to mine (much like real gold).

More recent currencies use proof-of-stake, which is less volatile and more suited to real life applications.

When BTC was a thing, and I was doing IT strategy for a financial outfit, I spend over a year messing around and setting up Ethereum applications. All of which convinced me that it's a grifters dream. Much easier to lose than make money.

Yup. Zeke Faux's book Number Go Up about Sam Bankman-Fried and the scores of crypto crooks like him is illuminating. It's a scammer's paradise. While it's true there are some people who made a lot of money off of buying and selling crypto at the right moments, there are more who lost the lot. Let's not forget that Bernie Madoff made a lot of money for some people too.

There's nothing magical about blockchain technology. It's just an absurdly inefficient distributed logfile that you can (usually, but not entirely) trust to be accurate.

While it's true there are some people who made a lot of money off of buying and selling cr*pto at the right moments,

You could do the same for unicorn farts or Trumphones, as they are called.

You can have a market for anything.

Blockchain is a state machine. With all that means.

That said, it's well known that in a goldrush, the safest way to make money is selling shovels.