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Thread: Crypto Currency 2018 Blow Up Mess

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    Crypto Currency 2018 Blow Up Mess

    2018 will be the year of the crypto currencies blow up and degenerate into a mess of epic proportions. With so many crypto currencies coming online, the near total lack of regulation, framework, transparency, standards, insurance, dispute mechanisms, and a whole host of other problems and deficiencies including a whole new unregulated battlefield for cybercrime of every type imaginable, crypto currencies will break out into the ultimate, uncontrolled bar room brawl. Essentially all you have is a line of code that is not recognized by any government, you can't pay taxes with it, you can't pay for government services or contracts with it, plus a whole host of other problems. With more crypto currencies coming online by the day with now. staggering sums involved, the potential for serious damage is increasing in probability and size by the day. The only question is who will get hurt and how. Maybe they will survive, but the structure and how they are used won't be recognizable compared to what we have now. Crypto currencies will at the very least cause a whole host of problems that we can't even imagine caused by the wide variety of them and the political/financial systems crypto currencies function in. Crypto currencies will soon be considered the "Accountants and Lawyers Full Employment Act'. If anything we will see tangled math become the standard instead of block chain due to efficiency and speed. Increasing power consumption alone is becoming just one of many serious problems

    One aspect crypto bulls don't mention is countries have assets. The US has tremendous assets in infrastructure of numerous types from roads to dams to ports and a whole portfolio of massive assets such as a military. Then you include natural resources of government lands. Then you have the value of the organization itself like education, asset management and social management among many. All this with taxing power adds up to a staggering asset. All a crypto currency is giving you is a number on a poor, expensive, slow, inefficient platform with few assets and almost no barriers to entry. This is just the beginning of a whole host challenges facing the crypto currency craze. On top of these flaws, their are NO accounting standards, regulation, insurance protection or execution standards.

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    Last edited by Arthur Hanson; 2 Weeks Ago at 09:22 AM.
     

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    I'd guess the opposite. I think the top 100 cryptocurrency market cap will be larger at the end of 2018 than it is currently - although there may be blow ups in specific coins or tokens. Right now it sits just under $710b. Right now, people are still viewing this things as money, and blockchain based services and dApps are underappreciated. Plus, after a successful bitcoin futures launch, I'd expect futures to launch for Ethereum, Litecoin, Bitcoin Cash, and Ripple. So I see 2018 as a year of increased financialization of cryptocurrenies, and adoption and penetration of blockchain based services and apps.

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    I think the big problem with blockchain is that it doesn't scale. I'm told it takes an hour for a bitcoin transaction to go through, because it needs data on millions of computers to be updated. (Presumably that's how different exchanges can have wildly different valuations; arbitrage doesn't work on those timescales.) And a recently-published study reckoned bitcoin will need the whole of the world's current electricity generating capacity within a few years.

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    Quote Originally Posted by John Grant (Nine Tiles) View Post
    I think the big problem with blockchain is that it doesn't scale. I'm told it takes an hour for a bitcoin transaction to go through, because it needs data on millions of computers to be updated. (Presumably that's how different exchanges can have wildly different valuations; arbitrage doesn't work on those timescales.) And a recently-published study reckoned bitcoin will need the whole of the world's current electricity generating capacity within a few years.
    Bitcoin is just one cryptocoin (although the first and currently the biggest in terms of market cap). It has its own blockchain. There are plenty of other altcoins with different blockchains.
    Ethereum, Iota and Ripple are way faster and more efficient.

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    Quote Originally Posted by astilo View Post
    Ethereum, Iota and Ripple are way faster and more efficient.
    Is that because there are fewer total users/transactions or do they have a more scalable technology?

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    Warren Buffet said on CNBC this morning he wouldn't touch crypto currencies and they are just a bubble.

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    Quote Originally Posted by Arthur Hanson View Post
    Warren Buffet said on CNBC this morning he wouldn't touch crypto currencies and they are just a bubble.
    He said he wouldn't short them either, because he doesn't understand them. He said similar things about internet stocks during the dotcom boom, and indeed most internet stocks crashed, but that didn't make the internet any less relevant today.

    What WB did say is if he could, he'd buy a 5 year put on every single crypto currency, and I'd do the same thing if I could even if I think the cryptocurrency market cap is going to be 10 trillion in 5 years, because 90% of them will end up worthless regardless. Think of all the dot com companies that went bust, but the surviving companies like Apple, MS, Google, Amazon... those are the most valuable companies in the world today. Puts are asymmetric, so your losses on the 10% of coins that explode in value will be small, but your gains on the 90% of coins that crash will be huge. I'd do the same thing if I could buy puts on every singe startup company out there as well, but practically speaking it's not possible.

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    "In Buffett's defense, he has a good excuse for not investing in technology stocks. When approached by Google prior to its 2004 initial public offering, Buffett passed on an investment opportunity because he didn't understand how Google would produce a profitable and durable competitive advantage over its peers."

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    Quote Originally Posted by John Grant (Nine Tiles) View Post
    Is that because there are fewer total users/transactions or do they have a more scalable technology?
    Far way better and more efficient technology underneath. Bitcoin blockchain is already obsolete. Ripple network has been implemented already by many banks around the world.

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    Quote Originally Posted by astilo View Post
    Far way better and more efficient technology underneath. Bitcoin blockchain is already obsolete. Ripple network has been implemented already by many banks around the world.
    The reason it is more efficient and scalable is because it is not trustless, you need to trust Ripple Labs that it does not generate XRP out of thin air. For Bitcoin you can verify that is the case.

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    Trust me ...
    I know what I am doing.

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    Quote Originally Posted by Staf_Verhaegen View Post
    The reason it is more efficient and scalable is because it is not trustless, you need to trust Ripple Labs that it does not generate XRP out of thin air. For Bitcoin you can verify that is the case.
    You need to trust governments and banks at the moment. It cannot be 100% trust-less you are right. About the XRP supply, you are instead wrong.

    XRP Properties

    The very first ledger contained 100 billion XRP, and no new XRP can be created. XRP can be destroyed by transaction costs or lost by sending it to addresses for which no one holds a key, so XRP is slightly deflationary by nature. No need to worry about running out, though: at the current rate of destruction, it would take at least 70,000 years to destroy all XRP, and XRP prices and fees can be adjusted as the total supply of XRP changes.
    In technical contexts, XRP is measured precisely to the nearest 0.000001 XRP, called a "drop" of XRP. The rippled APIs require all XRP amounts to be specified in drops of XRP. For example, 1 XRP is represented as 1000000 drops. For more detailed information, see the currency format reference.

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