Pages:
Author

Topic: The Biggest Myth about Cryptocurrencies - page 2. (Read 366 times)

hero member
Activity: 952
Merit: 555
20BET - Premium Casino & Sportsbook
August 09, 2024, 09:40:40 AM
#8
The biggest myth about cryptocurrencies is that it is possible to invest in them. When you hear in the media or on social networks that someone has 'invested in cryptocurrency',

The word investment is what first motivated some for choosing bitcoin because they now its something that they can invest on and make profits later from it, this is how it all began, but you cannot use your fiat currency like this, and there are no opportunities like this in a centralized traditional monetary system as we have in a decentralized network like with bitcoin, that is why many were so eager to know and learn more about various opportunities they stand to derive from the adoption of bitcoin.
legendary
Activity: 1750
Merit: 1329
Top Crypto Casino
August 09, 2024, 09:32:03 AM
#7
People afraid to make an investment in bitcoin because of the different rumors they get like its complicated at all, you need to understand tons of thing related to bitcoin, there's a lot of coin to invest, which is the same if they make an investment with the stocks and other form of it that you need to understand how it works, how to gain profit with this, how to lessen the risk and what are the ideal business to invest, just recently people afraid to explore things that they didn't experience yet, all they want is to have a safe haven with their money and that secure their profit which in reality just the same in investing with crypto.
full member
Activity: 420
Merit: 120
August 09, 2024, 09:21:38 AM
#6
The biggest myth about cryptocurrencies is that it is possible to invest in them.
People can invest money in anything they see good for their capital but they always have to keep in mind a basic warning that, with any investment there are two opposite things exist at the same time, probability to get risk and benefit, loss and profit from your investment.

Make sure you do enough research before spending money for investment in anything.

Quote
When you hear in the media or on social networks that someone has 'invested in cryptocurrency', it is an oxymoron. Something like 'hot ice'. It is impossible to invest in cryptocurrencies. Namely, investing presupposes the existence of a source from which investors can profit.
It's their responsibility to quickly believe in something they saw or heard of recently but don't use allocate enough time for due diligent research. By spending money carelessly like this, if they get loss, they truly deserve that loss.

Investment sounds better and safer than trading but both of them, investment and trading, contain risk, risk of losing initial capital.
legendary
Activity: 3472
Merit: 10611
August 09, 2024, 09:11:01 AM
#5
Actually the only thing that makes an investment is the profit. You could give 10 bucks to me and I can place it my pocket. Then I start whistling for 1 minute and 20 seconds and after I'm done I give you 20 bucks back. In that scenario you will have made an investment because you made a profit. You invested in my pocket Cheesy

As for cryptocurrencies, aka altcoins, they are like pennystocks. There really isn't any company or any utility or product. There is only a game of chance that you play with your money to make a profit.
When it comes to bitcoin there is also the utility that gives it an intrinsic value and due to increasing adoption it gains value which makes bitcoin an excellent investment on top of being the only decentralized payment system.

Quote
A more complex example is fiat currencies. With them, the source of profit is debt.
That makes the debt an investment by your definition ("scam" bonds governments issue) not the fiat itself.

However with the definition I provided fiat is also an investment as long as it can give you profit. For example after the El Loco became president in Argentina the inflation went to the moon (260% and I Think it also went above 300% as well). In that situation any fiat currency other than Argentinian Peso has been an excellent investment because it gave an excellent profit (eg. 157% profit if you bag held USD instead of Peso).
hero member
Activity: 1344
Merit: 565
Leading Crypto Sports Betting & Casino Platform
August 09, 2024, 08:42:53 AM
#4
Cryptocurrencies, like Bitcoin, arent some pyramid scheme. The critics lack the whole picture. They hang on conventional ideas of value. Not about factories or tangible goods is crypto. Its concerns technical progress and a worldwide turn toward a digital economy. Investing in Bitcoin buys more than simply a "coin." You are funding the direction of finance going forward. The true revolutionary tool here, people, is blockchain technology. About security, openness, and efficiency.

This goes beyond mere money. It concerns our interactions in the digital environment. Its about realizing how technology can transform our existence.
copper member
Activity: 909
Merit: 2301
August 09, 2024, 06:05:35 AM
#3
Quote
That is, there is no business activity, equity, intrinsic value
There is some "instrinsic value", but you need to know some math, to understand it. For example: Bitcoin is the biggest source of low SHA-256 hashes in the world. It also shows everyone publicly, how strong this particular hash function is. The same with ECDSA: for example, because Bitcoin exists, you can see, that 130-bit public keys and 65-bit hashed public keys are unsafe. Without Bitcoin, you wouldn't know that, so you wouldn't know, how strong your keys should be, to not be stolen by some third party.

Also note, that SHA-256 or ECDSA is not something Bitcoin-only. It is also used in other places. Which means, if SHA-256 will fail, or if ECDSA will fail, then by having Bitcoin blockchain, which is public, you have any chances to observe in advance, and predict, when it will fail. Without Bitcoin, there would be no incentive for cryptographers and mathematicians, to share their observations, because they wouldn't be rewarded properly. Think about it: maybe humans didn't solve some millenial problems, because the rewards for solutions are too small?

Another thing is also the way of claiming the reward: if you have Bitcoin, then you can solve some complex math problem, and claim the reward, without revealing your name publicly. Without Bitcoin, you would be forced to use your real name. And not everyone wants to be written in the history as "the one, who turned off the Internet, by breaking SHA-256" or "the one, who invalidated credit cards, by breaking public keys".

Quote
And they have some nonsensical limitations. The Bitcoin system, for e.g.,  has a limitation that the maximum sum of numbers associated with the addresses of scheme members can be 21 million.
It is easier to pick some constant limit, than to properly adjust the number of units in the system. In case of fiat currencies, how do you know, if people behind the system produce enough coins? What if they produced too much or not enough? How can you measure that? In case of constant supply, you don't have to worry about it, because you can adjust a price for a single unit, instead of adjusting the number of units in circulation.
sr. member
Activity: 1579
Merit: 267
August 09, 2024, 05:34:04 AM
#2
Something about electricity. We stop the wind turbines when there is overproduction.

Rub that together.
jr. member
Activity: 183
Merit: 1
August 09, 2024, 05:31:54 AM
#1
The biggest myth about cryptocurrencies is that they can be invested in. Namely, to invest, there must be a resource to invest in and which serves as a source of profit for investors. Cryptocurrencies lack such a resource. Let's look at a few examples of traditional investment instruments to understand this.

In the case of stocks, that resource is the company's business operations or equity. Business operations generate profits, from which investors can benefit by receiving dividends. Equity can be liquidated or used to repurchase shares, allowing investors to profit from liquidation proceeds or share repurchases.

For real estate, precious metals, oil, wheat, etc., investors profit from their intrinsic value by using it for various purposes such as housing, making jewelry and electronics, obtaining energy and food products, etc.

A more complex example is fiat currencies. In this case, the resource is debt. Units of fiat currency are created when commercial and central banks lend money to businesses, individuals, and governments. This means they represent debt. Subsequently, investors invest goods, services, and labor into this debt through market exchanges with these entities. However, since the entities must return the units to the banks, investors profit from them. They profit from businesses and individuals through counter-exchanges, i.e., by receiving goods, services, and labor from them when they need units for loan repayments. And they profit from governments because governments allow them to pay taxes in these units. If businesses and individuals do not make counter-exchanges, they will default. Then investors will profit by banks selling them seized property of these debtors to obtain the units for closing outstanding loans.

With cryptocurrencies, nothing like the above exists. In other words, there are no business operations, equity, intrinsic value, debt, or any other resource that investors can profit from.

So, what are people doing when they say they "invest" in cryptocurrencies? What are cryptocurrencies if not investment instruments?

Well, people are simply participating in a scheme where they give money and other assets to each other in the hope of getting more back in the future. Cryptocurrencies are merely a numerical record of this scheme.

For example, a few moments ago, one member of this scheme gave another $61,066. The Bitcoin system recorded this by increasing the number associated with the first member's address by 1 and decreasing the number associated with the second member's address by 1. Initially, members gave each other $0.001 for the same numerical record (+1/-1). One can also enter the scheme by spending electrical energy, which is recorded by the cryptosystem through an arbitrarily predefined increment of numbers.

The aforementioned does not constitute investment because there is no resource: a) of which a value per unit can be determined; b) that serves as a source of profit for investors. Value per unit is actually the amount of profit that can be generated per unit of that resource. In other words, cryptocurrency systems do not have digital money or digital assets, as is commonly believed. This is because money and assets are actually resources that meet the above two criteria.

When someone tells you they have "invested" in cryptocurrency or hold crypto "assets," ask them the following: how much can be profited per unit of this "asset"? They will likely respond with something like, "well, the last price of Bitcoin was $61,066, so that's about how much it can be profited". However, this is not the profit we're talking about because those dollars did not come from a resource within the Bitcoin system but from the pocket of the last "investor". The correct answer is "zero" simply because there is nothing within the system that can serve as a source of profit for investors.

Therefore, cryptocurrencies are not about investing in assets, monetary transactions, supply and demand, or anything related to economy or markets. Instead, they are about digitally recording participation in pyramid-style schemes, storing that record in decentralized databases called blockchains, and wrapping it all up in economic jargon. That is literally all there is to cryptocurrencies.
Pages:
Jump to: