Cryptocurrencies

[mrandyk]

The US dollar is backed by the US economy. A cryptocurrency is backed by.......

 

It's a neat idea but fundamentally flawed.

[BigRedBuster]

37 minutes ago, mrandyk said:

The US dollar is backed by the US economy. A cryptocurrency is backed by.......

 

It's a neat idea but fundamentally flawed.

Yep. 

[RedDenver]

15 hours ago, mrandyk said:

The US dollar is backed by the US economy. A cryptocurrency is backed by.......

 

It's a neat idea but fundamentally flawed.

Technically the US dollar is backed by the US government, not the economy.

 

Whether the US dollar is useful as a currency (or any currency for that matter) is dependent on whether people will accept it as a form of payment. Right now far more people will accept US dollars as payment, but cryptocurrencies are gaining in acceptance. One thing that cryptocurrencies provide that government currencies do not is a secure transaction record. In the US we rely on documents for records and the courts and legal system for enforcing transactions, but in other parts of the world the secure transaction record is vitally important, which is why I think cryptocurrencies will eventually become the norm - probably not any of the current versions but once more of the inflation/deflation and other valuation issues are worked out.

[BigRedBuster]

1 hour ago, RedDenver said:

Technically the US dollar is backed by the US government, not the economy.

 

Whether the US dollar is useful as a currency (or any currency for that matter) is dependent on whether people will accept it as a form of payment. Right now far more people will accept US dollars as payment, but cryptocurrencies are gaining in acceptance. One thing that cryptocurrencies provide that government currencies do not is a secure transaction record. In the US we rely on documents for records and the courts and legal system for enforcing transactions, but in other parts of the world the secure transaction record is vitally important, which is why I think cryptocurrencies will eventually become the norm - probably not any of the current versions but once more of the inflation/deflation and other valuation issues are worked out.

The dollar is backed by the government and widely accepted because of our relatively stable economy. 

 

Crypto currencies are backed by absolutely nothing.  

[Moiraine]

Many big banks are now not allowing cryptocurrency to be purchased using credit cards or debit cards. Paypal could potentially decide to do this as well; not sure how that works. A quick search tells me it's difficult to buy it with Paypal.

 

This can be seen as self-preservation, but it's also very risky to let people use credit on something so volatile. In addition to that, banks are legally required to look out for and try to stop illegal activity using their accounts. Cryptocurrency is another easy way to hide illegal activity.

Edited April 8, 2018 by Moiraine

[Landlord]

On 4/7/2018 at 6:38 PM, mrandyk said:

The US dollar is backed by the US economy. A cryptocurrency is backed by.......

 

It's a neat idea but fundamentally flawed.

 

 

right now. Nobody is claiming that cryptocurrency is a great thing to have right now. Right now, it is flawed, because society doesn't have faith in it to be a reliable currency. That's not at all the point. The point is the future.

[BigRedBuster]

 

[BigRedBuster]

 

[RedDenver]

 

[Big Red 40]

Good video Red. I made it 3/4 of the way through it gonna come back to it. (long video lol)

I come from a day when all transactions were done with cash, or hand written checks. No debit cards, ATMs, internet transactions etc. I got a paycheck from my job , had to go to the bank and cash/ deposit it , then take care of bills with cash, or mailed check.

Now i have direct deposit, Online billpay, use my debit card at the ATM for cash , and shop online at mostly large, trustworthy retailers. It seems like bitcoin is good for transactions between individuals? on the web. I rarely do that kind of transaction.

I like to make decisions based on Risk/Reward type of thinking. What would be the risks, and rewards, of cryptocurrencies , for someone like me?

 

[Landlord]

Right now the risk/reward is all in investing in it, the way you would stocks. It's not viable as a currency, but there are a lot of cryptocurrencies with a good probability of increasing in value that you can get in on some ownership of, hoping it pays out. Same with any investment - do the research and don't invest anything more than you're willing to lose.

[RedDenver]

For the record, I don't use/own any cryptocurrencies nor do I advise anyone else to do so. But I do think they'll be the currencies of the future once the bugs have been worked out. Third world countries that have internet access but don't have reliable banks or governments is where I think this will really catch hold before moving into the more developed countries.

[Enhance]

More from Buffett/Munger's conversation

 

Quote

Some bitcoin backers have said Buffett doesn’t understand the new currency, including one person in a news report who said he bought a house with profits from bitcoin.

Buffett said that person did the right thing — selling bitcoin — and said investing in shark’s teeth, seashells or tulip bulbs follows the same principle: hoping someone else offers a higher price. He said it’s better to invest in a business that generates wealth.

 

[BigRedBuster]

 

[Nebfanatic]

11 hours ago, BigRedBuster said:

 

Ehhhhh, I would say your bigger problem with the opiod epidemic is how are these pills getting out of big pharmas system and on to the black market in the first place. Crypto isn't fueling anything. If they had to use cash they would, this is just better for them.