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toonkee

Crypto is a giant Ponzi Scheme

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https://jacobinmag.com/2022/01/cryptocurrency-scam-blockchain-bitcoin-economy-decentralization

 

Critically, these purchases were not made with dollars, but with Tether, another type of cryptocurrency known as a “stablecoin” because its price is pegged to the dollar so that one tether is always worth one dollar. Many offshore cryptocurrency exchanges lack access to traditional banking, presumably because banks deem doing business with them too risky. Bitfinex, which shares a parent company and executive team with Tether Ltd (the issuer of its namesake cryptocurrency), struggled to find US banking partners after Wells Fargo abruptly stopped processing wire transfers between the exchange’s Taiwanese banks and their American customers in 2017 without giving reason.

This was a problem. Without traditional banking relationships for issuing wire transfers, exchanges cannot easily facilitate trades between buyers and sellers on their platforms — someone has to pass cash between buyers and sellers. Stablecoins solve this problem by standing in for actual real dollars. They allow cryptocurrency markets to maintain ample liquidity — the ease with which assets can be converted into cash — without actually having to have cash on hand.

Tether has become integral to the functioning of global crypto markets. The majority of Bitcoin trades are now conducted in Tether, 70 percent by volume. By comparison, only 8 percent of trade volume is conducted in real dollars, with the remainder being other crypto-to-crypto pairs. Many industry skeptics, and even proponents, see this as a systemic risk and ticking time bomb. The whole system relies on traders actually being able to exchange tethers for real cash or — far more commonly in practice — other traditional cryptocurrencies that can be sold for cash on banked exchanges like Coinbase or Gemini, both headquartered in the United States.

Should faith in Tether falter, we could see its peg to the dollar collapse in a flash. This would be a doomsday scenario for crypto markets, with investors holding or trading crypto assets on unbanked exchanges unable to “cash” out, since there was never any cash there to begin with, only stablecoins. This would almost certainly cause a liquidity crisis on banked exchanges as well, as investors rush to cash out their crypto anywhere possible amid cratering prices, and banked exchanges processing far less volume would almost certainly not be able to pick up the slack.

There is no reason to have any faith in Tether. Tether’s peg to the dollar was initially predicated on the claim that the digital currency was fully backed by actual cash reserves — a dollar held in reserve for every tether issued — though this was later shown to be a lie. The company has since continuously revised down claims about how much cash they keep in reserve. Their latest public attestation on the matter, from March of last year, claimed to be holding only 3 percent of their reserves in cash. The rest was held in “cash equivalents,” mostly commercial paper — essentially IOUs from corporations that may or may not exist, given that reputable actors trading in commercial paper don’t appear to be doing any business with Tether.

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Also, these f*ng ape NFTs. LOL. Yeah, people made some cash flipping beanie babies for a little while, too.  Nobody's going to want your bored ape in another few months unless it's for money laundering.

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7 minutes ago, toonkee said:

Also, these f*ng ape NFTs. LOL. Yeah, people made some cash flipping beanie babies for a little while, too.  Nobody's going to want your bored ape in another few months unless it's for money laundering.

There’s gambling and then there’s the nether nether world of crypto gambling. 

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If you need me, my boring ass will be over here socking money away in some low-cost Vanguard funds like a chump. Did just get a little crazy and bought some i-series savings bonds recently. I know how to party.

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1 minute ago, Bob said:

Crypto seems like a scam. The only thing that gives it value is you can sell it for actual money.

At least for now. Lots of people are going to be holding worthless paper somewhere down the road. Hopefully it won’t be the dollar bill with Brandon as president. 

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4 minutes ago, NVGiant said:

If you need me, my boring ass will be over here socking money away in some low-cost Vanguard funds like a chump. Did just get a little crazy and bought some i-series savings bonds recently. I know how to party.

you fool.  you'll never end up with a top hat, monocle, watch on a chain, white spats, and patent leather shoes that way!

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4 minutes ago, Bob said:

Crypto seems like a scam. The only thing that gives it value is you can sell it for actual money.

What if it is an illuminati-like entity that wants to crowd fund an efficient way to develop massive databases that are interconnected to elusively spy on you?  And those who are buying these are essentially investing in the production of such a system?  This whole blockchain thing is likely going to have some evil behind it.

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5 minutes ago, NVGiant said:

If you need me, my boring ass will be over here socking money away in some low-cost Vanguard funds like a chump. Did just get a little crazy and bought some i-series savings bonds recently. I know how to party.

I bought cardboard when it was 6 cents a ton....

In the beginning the Universe was created.
This has made a lot of people very angry and been widely regarded as a bad move.

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10 minutes ago, East Coast Aztec said:

NFT's, I seriously don't understand that one.  

hey do you remember when games had DRM?

well now you can just buy the DRM

Remember that every argument you have with someone on MWCboard is actually the continuation of a different argument they had with someone else also on MWCboard. 

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There is no underlying value. What are you actually invested in when you buy crypto currency.  The belief that something is valuable???

If I buy a share of say Apple I can look their balance sheet at the Equity section, and say yeah, part of that is mine. 

 

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Just now, bornontheblue said:

There is no underlying value. What are you actually invested in when you buy crypto currency.  The belief that something is valuable???

If I buy a share of say Apple I can look their balance sheet at the Equity section, and say yeah, part of that is mine. 

 

Information and information storage and distribution is what I believe crypto is tied to, and the prices are extremely volatile due to speculative markets?

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