Or just a bit thick to not understand cryptocurrencies?

[Iamnotminterested]

I'm an intelligent woman on paper but I just can't get my head around them, how they are produced, valued and how they are used etc, and now Elon Musk has coined his own (no pun intended), Dogecoin or something?

Can someone who understands them please explain in very simple terms?

Most modern country currencies are government backed. Essentially they are not backed by gold (although most western governments hold significant gold reserves) but by state assets, power/entitlement to collect tax revenues etc.

@ThenCatoJumpedOut

Barkypup, it’s easy to do, just make the equations longer/harder

Doing this makes existing bitcoin more valuable

All crypto currencies have a finite amount of “coins”, as without a limit, their value would lessen, the same way that money is worth less if the government prints more of it (=inflation)

Yes, but the potential number of cryptocurrencies is infinite. Any clever techie with a computer can create her own. She can create hundreds, if she has the inclination. Therefore, the market could potentially become saturated with supply of multiple cryptocurrencies, leading to a crash in the value of all of them.

Agelikewine

Exactly. And theres nothing really behind a crypto currency. Not state with assets, no intrinsic value.

@AgeLikeWine true, there are lots of them already

I wonder how it’ll go

Time will tell

I am mining one type, just so I don’t feel left out

@Mydogisagentleman

I’m glad I am not the only one. My DH has invested around £500 of our money in them in the past month. He has spread them around 4 types. So far it appears to be holding steady. According to him, once they halve (apparently in 2023), they will probably double in value

This is true. Every two years they go sky high then drop but to a much higher level than they were previously.

@JesusInTheCabbageVan they are worth about £25k each. Sadly we only have one now (well not sad but we did have 7 so everytime they go up in value it is bittersweet )

I agree with Thencatojumpedout

Crypto currency is indirectly tethered to cost of electricity (ie something tangible/real)

If you think about it most people get their "real money" digitally issued by am employer it them digitally goes to pay for rent and food and whatever else... So in that sense not wildly dissimilar.

Except for you can't quantatively ease the fuck out of crypto like you can with sterling.

Give it 5-10 years and you will see emergence of multiple cryptocurrencies

We stuck £5k in Bitcoin just to see and it isn't working out badly for us.
Honestly I can see it hitting 100k plus in the next 5 years or so.

@Titsywoo oh wow, that's still amazing!

There was a story in the need recently about a man who was trying to get his hard drive back from landfill as it had several million pounds worth of bitcoin Sort of thing you'd never be able to stop thinking about.

Just to add to this - anothere reason it has value or any potential is because it has infrastructure behind it, but which is crowdsourced (kind of)
The blockchain manages the currency and records transactions. Think of it like a public, immutable ledger. So it works, but doesn't have an institution or legal entity behind it, or controlling it.
It's used a lot in places like Venezuela where the local currency has collapsed, in Hong Kong to pay for anything anti CCP, or more nefariously for drug deals. Heard about people in Brazil running out, and sourcing oxygen from Venezuela? The word is a lot of those tanks were bought with crypto!
In the clean, legal world these currencies would have a place to make large transactions between giant corporations, eg banks but it thik the most promising use of the technology is the blockchain itself. I mentioned its an immutable ledger, and you can write rules into it. Theoretically important transfections could be handled in it, like buying a house.
You can set it to work so that when person A transfers 100k to person B , the title deeds for house C get swapped over. No need for notaries and less legal intervention.

Part of the appeal of crypto currencies is the decentralised nature of them. Rather than being controlled by a bank and relying on their record keeping to track your transactions, crypto currency transactions are independently verified so they're much harder to falsify.

If you listen to The Missing Cryptoqueen” podcast - which you should anyway, it’s extraordinary - it explains some of it.