The Alternative Investments Thread

ParadiseLost

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SWIFT a) doesn't allow regular users to use it directly, b) is beholden to laws and regulations, c) is not in anyway decentralized, d) doesn't cut out middlemen, e) doesn't anonomyze, etc.

Crypto also doesn't do the first, is beholden to laws and regulations*, is not decentralized, does not cut out middlemen, and is not anonymous (not for regular users at least).

The second, and the ability to get rich off of it, is a good chunk of what incentivizes the first. That's capitalism at work: incentive driven innovation.

No it isn't. Crypto has real financial value, as I've described above. Now is AI useful? Yes, but there very much is a limit to that usefulness.

Everything has "real" financial value in the sense that its worth what someone, somewhere is willing to pay for it.

Crypto is no more really valuable than modern art pieces.
 

Abhorsen

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Crypto also doesn't do the first, is beholden to laws and regulations*, is not decentralized, does not cut out middlemen, and is not anonymous (not for regular users at least).
Um, you clearly don't know what you are talking about.

So the first one I slightly overstated, a regular user can use crypto directly, using any of a number of different apps that serve as wallets. Which is I guess a step away, but not really. In contrast, the only way to use SWIFT is to be a bank.

It very much isn't beholden to laws and regulations, because it is decentralized. Now companies doing crypto cannot afford to do completely ignore laws and regulations, but the crypto itself is decentralized and thus difficult to attack.

As for decentralization, that's fundamental to bitcoin, and original to Satoshi's design. This is what made me say you don't know what you are talking about. There is no one you can arrest that will stop bitcoin. That's because it is decentralized. A block chain doesn't have to be decentralized, but most of the prominent ones are.

As for anonymity, yeah, users are anonymous using the right crypto and right wallet app. That's decently anonymous for practical purposes. For example, zcash will anonymize your spending, and that's just one example.
Everything has "real" financial value in the sense that its worth what someone, somewhere is willing to pay for it.

Crypto is no more really valuable than modern art pieces.
Sorry, meant to say fundamental value here. But what you describe is not what I'm talking about. It's ability to reduce transaction cost and time alone makes it have a frankly phenomenal fundamental value. The original bitcoin network itself, which is slow as hell, can do massive transactions faster than SWIFT. Etherium can do exchanges in 30 seconds, for just one prominent example. SWIFT recently managed to make it so that it takes only 30 minutes, at least half of the time.

On top of that, the transaction fees are much lower than credit cards, although it is still slower. But with innovation and greater adoption, I expect that as well to shrink as prioritization shifts towards doing payment processing.

NFTs are also a great way to make assets more liquid. I'm not talking about the stupid digital art ones, but the ones that link the NFT with a real world good, like a property deed ownership, intellectual property to something valuable, or other real world non-fungible good. For example, one could sell add slots on a TV show through NFTs, with the holder of the NFT being allowed to submit the ad to be shown on the show.

Ways of doing trade are almost always among the most impactful innovations.
 

Agent23

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No it isn't. Crypto has real financial value, as I've described above. Now is AI useful? Yes, but there very much is a limit to that usefulness.
Nope, crypto is stateless fiat, there is no real intrinsic value to it, or alternate uses.
Gold and silver, on the other hand, are of some actual use.

Better a pet rock than a pet block of unintelligible ASCII, IMHO.
 

Sailor.X

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Nope, crypto is stateless fiat, there is no real intrinsic value to it, or alternate uses.
Gold and silver, on the other hand, are of some actual use.

Better a pet rock than a pet block of unintelligible ASCII, IMHO.
Sigh.... Look at the video and actually learn something.

 

Agent23

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Sigh.... Look at the video and actually learn something.


As I said, I am fine with distributed ledger technology, it is just that I doubt it will replace the existing tech any time soon, and most normies don't care if their payment app or credit/debit works through the regular banking system or some form of blockchain DeFi.

In any case, the protocols and the software are open-source, so the Russians and the Chinese don't need to be early adopters for potential benefits later down the line.

Proprietary innovation in blockchain tech basically means centralization, and that defeats its purpose.

Also, the whole field is massively overhyped, and it will end in a crash, that has happened with every single overhyped piece of tech, from dot coms to raiways in the UK in the 1800s and colonization in the 1700.
 

Agent23

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MORE GOOD INVESTING BOOKS


The Intelligent Investor (Mr. Market concept.)
One Up On Wall Street (probably the most entertaining and accessible.Explaining purely human factors regarding the stupidity of smart money)
This Time Is Different: Eight Centuries of Financial Folly (Very, very relevant now.)
Extraordinary Popular Delusions and the Madness of Crowds (Not an investing book per se, but covers some of the idiotic bubbles in detail.)

The Big Short: Inside the Doomsday Machine (Seen the movie? Now read the book!)
 

Abhorsen

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Nope, crypto is stateless fiat, there is no real intrinsic value to it, or alternate uses.
Gold and silver, on the other hand, are of some actual use.

Better a pet rock than a pet block of unintelligible ASCII, IMHO.
Um, no. Distributed ledgers can radically reduce both transaction cost and time, anonymize purchases, etc. You know, as I described in the post you quoted:
SWIFT a) doesn't allow regular users to use it directly, b) is beholden to laws and regulations, c) is not in anyway decentralized, d) doesn't cut out middlemen, e) doesn't anonomyze, etc.

It's nowhere near as useful

Yeah, all of those things that SWIFT doesn't do but crypto does is of actual use.

As for gold/silver, those have very little real use other than looking pretty (again, little, not none). Sorta like the value of NFTs: looking pretty. But they are much harder to do transactions with, and not as trustworthy (if you hand someone gold, there needs to be a way to confirm that you've actually given them the right amount of gold and not defrauded them, along with the cost and risk of lugging it around).
 

Agent23

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Um, no. Distributed ledgers can radically reduce both transaction cost and time, anonymize purchases, etc. You know, as I described in the post you quoted:


Yeah, all of those things that SWIFT doesn't do but crypto does is of actual use.

As for gold/silver, those have very little real use other than looking pretty (again, little, not none). Sorta like the value of NFTs: looking pretty. But they are much harder to do transactions with, and not as trustworthy (if you hand someone gold, there needs to be a way to confirm that you've actually given them the right amount of gold and not defrauded them, along with the cost and risk of lugging it around).
And I told you, the ledger can be of some use, but the current crop of tokens is pretty much meh.
People generate proof of work to get tokens, while the proof of work was supposed to signify that something of value was produced.
Bitcoin farming atm is just burning massive amounts of energy, and the larger the distributed system gets the slower and more energy intensive the consensus becomes.
If you want efficient bitcoin you'd need to, dunno, cluster the whole thing, then have parts of the cluster that have reached consensus talk to the 'top dog' nodes in other portions of the net.
Consensus in BTC for example required a proof of work, which gets increasingly more costly with each operation, and consensus of 70% of active nodes IIRC, which means that the time needed to "write" the transaction and have it seen as legitimate will grow slower and slower.

Pretty soon you will hit diminishing returns, IMHO.
 

Abhorsen

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And I told you, the ledger can be of some use, but the current crop of tokens is pretty much meh.
I was literally talking about ledgers, when you then came in and said:
Nope, crypto is stateless fiat, there is no real intrinsic value to it, or alternate uses.
Gold and silver, on the other hand, are of some actual use.

Better a pet rock than a pet block of unintelligible ASCII, IMHO.
So pardon me for saying "no, ledgers do have value". And if the ledgers have value, then paying to use the ledgers has value, which means that Ethereum has intrinsic value as payment for gas, for example.

On top of that, a currency has value based on the network of people who will accept it as payment. Which is why cash is more useful than gold, as more people accept the dollar than gold. Since people do accept crypto, that too has a similar inherent value.

People generate proof of work to get tokens, while the proof of work was supposed to signify that something of value was produced.
No, it's really not, it's about making sure it's hard to impossible to reverse a transaction.

If you want efficient bitcoin you'd need to, dunno, cluster the whole thing, then have parts of the cluster that have reached consensus talk to the 'top dog' nodes in other portions of the net.
They already something like this. It's called layer 2 on etherium.

Consensus in BTC for example required a proof of work, which gets increasingly more costly with each operation, and consensus of 70% of active nodes IIRC, which means that the time needed to "write" the transaction and have it seen as legitimate will grow slower and slower.
It doesn't get inherently more costly every operation. You again, don't seem to understand how it works. The difficulty is determined by a) the difficulty target, basically a number you have to get below by hashing the previous block and some junk data, and b) the amount of effort put into mining. Basically as people get better at mining, the difficulty target is adjusted so that the rate of blocks added stays semi-constant. But this could be raised or lowered if there is a vote to do so.

Pretty soon you will hit diminishing returns, IMHO.
Diminishing returns are by design. The payoff of new coins per block goes down by half every so many blocks. Hence the ability to pay for gas on Etherium.
 

Agent23

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I was literally talking about ledgers, when you then came in and said:

So pardon me for saying "no, ledgers do have value". And if the ledgers have value, then paying to use the ledgers has value, which means that Ethereum has intrinsic value as payment for gas, for example.

On top of that, a currency has value based on the network of people who will accept it as payment. Which is why cash is more useful than gold, as more people accept the dollar than gold. Since people do accept crypto, that too has a similar inherent value.

It has as much value as people put into the network and get back out of it.
About a quarter to half of the world population though, are iirc banned from using crypto by law and its status as a legitimate unit of exchange is quite uncertain, the price also fluctuates a lot more than that of, say commodities.
Whileas gold and silver have been universally valued since there was human civilization.

How many of the car companies that came into existence around the time when Ford created the assembly line and the model T for example, survived to this day?

What about the dot com companies of the 00s boom?

The Nifty 50?

If the technology actually catches on, which is a big 'if', and doesn't get regulated into nothingness or outright banned, do you think that a better technology won't appear, or that centralized financial institutions won't work to keep their positions?

No, it's really not, it's about making sure it's hard to impossible to reverse a transaction.


They already something like this. It's called layer 2 on etherium.


It doesn't get inherently more costly every operation. You again, don't seem to understand how it works. The difficulty is determined by a) the difficulty target, basically a number you have to get below by hashing the previous block and some junk data, and b) the amount of effort put into mining. Basically as people get better at mining, the difficulty target is adjusted so that the rate of blocks added stays semi-constant. But this could be raised or lowered if there is a vote to do so.

Diminishing returns are by design. The payoff of new coins per block goes down by half every so many blocks. Hence the ability to pay for gas on Etherium.
yeah, and as the returns diminish so does the payoff.

Frankly, I don't believe that Bitcoin and tech like it will replace the centralized financial system anytime soon, we have lots of speculation.

I'd say wait and see, but tbh I am very, very skeptical.
 

Abhorsen

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It has as much value as people put into the network and get back out of it.
Same with gold, silver, and fiat.
About a quarter to half of the world population though, are iirc banned from using crypto by law and its status as a legitimate unit of exchange is quite uncertain, the price also fluctuates a lot more than that of, say commodities.
It's status as a unit of exchange is quite certain. Many cryptos are used for this purpose. Now there's a question of which cryptos survive,

Whileas gold and silver have been universally valued since there was human civilization.

How many of the car companies that came into existence around the time when Ford created the assembly line and the model T for example, survived to this day?

What about the dot com companies of the 00s boom?

The Nifty 50?

If the technology actually catches on, which is a big 'if', and doesn't get regulated into nothingness or outright banned, do you think that a better technology won't appear, or that centralized financial institutions won't work to keep their positions?
I made no claims about a specific crypto surviving forever, but it is a huge change for precisely the reason I said before. The manufacturing line that Ford made had a huge impact on the 20th century. I'm saying that Crypto will have a huge impact on the 21st.

Lowering costs and speeding up transactions are both things that have a huge impact on everyone's life.
 

Agent23

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Same with gold, silver, and fiat.

It's status as a unit of exchange is quite certain. Many cryptos are used for this purpose. Now there's a question of which cryptos survive,


I made no claims about a specific crypto surviving forever, but it is a huge change for precisely the reason I said before. The manufacturing line that Ford made had a huge impact on the 20th century. I'm saying that Crypto will have a huge impact on the 21st.

Lowering costs and speeding up transactions are both things that have a huge impact on everyone's life.
Well, I guess we will have to wait and see, I am of the more pessimistic persuasion, and I am skeptical about any reliable short to middle-term gains, and lukewarm on the longer-term prospects.

You are obviously on the other end of the spectrum, IMO we can agree to disagree, and start a cryptos thread if we wish.

Me, I prefer my staples and my base and precious metals and services.
 

Abhorsen

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Well, I guess we will have to wait and see, I am of the more pessimistic persuasion, and I am skeptical about any reliable short to middle-term gains, and lukewarm on the longer-term prospects.

You are obviously on the other end of the spectrum, IMO we can agree to disagree, and start a cryptos thread if we wish.

Me, I prefer my staples and my base and precious metals and services.
Good point, this is about investments, and I would not recommend investing in any particular crypto. They're incredibly volatile.
 

Agent23

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Good point, this is about investments, and I would not recommend investing in any particular crypto. They're incredibly volatile.
Indeed, when the market bubble pops I might buy whatever crypto ETF looks most diversified though.
Antifragile barbell approach and all.
 

Agent23

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What goes up, must go down,
The firesale will probably start soon, my dudes!
I am sick and tired of being fearful and wanna switch to being greedy soon.


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posh-goofiness

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I'm very skeptical of cryptos in general because what they do isn't what people hope they will do.

But I find it very interesting that the globalist cabal doesn't want official adoption of a crypto they don't control.
 

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