As if there was any question before, would this degree of volatility indicate that “the wise” have completely lost their minds?
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Yep. And there are almost certainly some old-time Bitcoin die-hards that still do it that way. Part of the founding philosophy - the point if you will - of Bitcoin was to do away with intermediaries, whether banks or exchanges or what-not. I think a lot of folks have moved on from that, but I’m sure some remain. But since those folks tend to have opinions about Ethereum and other not-Bitcoin chains, I’m not sure they’re too much in the NFT business.
I am thinking that a lot of people are doing this on all the chains. Now it is becoming clearer. Take an NFT and hold an auction at any auction house, at the end of the auction the auction house receives your ethereum or bitcoin, then they transfer it to your wallet. All you have to do is pay gas fees.
Also if I was working in the U.S and looking to transfer money to South America I would buy my parents a wallet and just transfer bitcoin. Of course that gets a little bit stickier because I would have to buy bitcoin and put it into my wallet before transferring and it might be a little more hard for them to figure it all out.
Andy
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Indeed - that’s one of the reasons that crypto has faced some degree of pushback from regulators. By facilitating movement of wealth outside of regulated banking channels, it’s a very convenient method of money laundering (and other illegal activity).
The main downside is that while wallets are pseudonymous (it’s possible to set up a wallet without formally identifying yourself to any institution), they are not anonymous. Wallets don’t identify who their owners are, but it’s very easy to track movement of funds between wallets. Which is why crypto tumblers like Tornado exist:
…which just mix together gobs and gobs of Bitcoins (or other tokens) and then spit them out again, effectively randomizing which coins go to which addresses. Which is why Tornado (and others) have been subject to blacklisting and other enforcement actions by regulatory authorities as instrumentations of money laundering.
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One thing I’ve asked in the past and not received a satisfactory answer is - what happens if the price of bitcoin drops to a level at which it isn’t worth mining at the time? How are transfers done in that situation?
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That to me has always been the flaw. You supposedly get rid of the need for a trusted third party (like a major bank, or VISA, or the US Government) and trade it for a network of unknown and non-accountable volunteers…
But that is the essence of the question. Is it really a flaw?
If large holders of bitcoin see that transactions aren’t going through … because miners stop mining … then a price can’t be set (willing buyer/willing seller). If that happens, their large asset can’t be valued. So they have a very large incentive to crank up their processing power to mine a little.
That is a great question Mark. I think there will always be miners willing to mine because they will get processing fees. So even if all the coins are mined and they still need to process exchanges, they will still be able to get fees for doing it. But, there will be fewer miners willing to do it and so the processing will get slower. That is just my assumption because it still hasn’t happened.
On another note. I do not see how the governments can shut this down. This has just become to big. This is bigger than the Bartering system. It’s world wide. The only way the government is going to get a handle on this is to regulate it because even if they try to shut it down people will work around them.
Andy
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I guess for me, you have to trust SOMEONE. Its not like Bitcoin is truly peer to peer. You are reliant on a Blockchain that is kept up-to-date and kept immutable by a large network of who-knows-who. You see? Its just another third party after all.
Or, maybe, as FTX has shown, having a trusted third party turns out to be a very good thing after all.
Either way, I see crypto collapsing.
I think that’s right. That’s what’s supposed to happen after the last bitcoin is mined as well. The real problem happens if bitcoin falls in price and has minimal transactions being conducted - a cheap version of gold.
It’s not all that big. There’s barely a trillion dollars in crypto market cap, and the actual value is likely lower. When crypto went from $3 trillion to $1 trillion in a really short period of time, the global economy didn’t even notice it.
If all the world’s major economies decided to ban crypto - as in criminalize any activity involving cryptocurrencies and couple that with severe forfeiture provisions - I suspect crypto would be all-but-eliminated. Not gone entirely, but pretty negligible.
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Not sure how you measure the global economy noticing. But everyone knows that a 3 trillion to 1 trillion dollar loss in value is noticed by everyone. Even by you. Otherwise you wouldn’t be talking about it.
All the world’s major economies would never ban it. It’s already built into their economies. The only major economy that has banned it is China, which you would expect because it is an authoritarian government. The only people I hear of even talking about banning it have no hope of ever getting it passed.
Andy
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Excuse me but if I buy ten acres of land, hold on to four acres and develop six of them, it is not pump and dump if later I sell the other four acres at higher prices.
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It is about the blockchain. There is a public record of the transfers on the blockchain. The wallet has to be verified. The wallets have access the exchange to trade/transfer the NFT’s but the data/ID is going to be on the blockchain ledger.
If you want you can put in false data but this is where the exchange comes in. With false data you have no wallet and therefore you cant get an exchange to trade with you into USD for your NFTs or Eth. No USD? Why’d ya go to all that trouble. So yes there is crap on the blockchain left there as worthless. Like the Chinese protester on the BTC blockchain where China actually put a fork in the blockchain to bury the protest. Shortly before China kicked cryptos out of China.
BTW this discussion is not on target. You and Al are missing the point. The FBI can track all the transfers on the blockchain. There has to be an end point where the USD or other currency ends up in a bank account or financial institution from the Exchanges/wallets. The financial institution where the funds are going is what the FBI wants. Again usually there is a need to verify your ID to own an account in an institution. The taxman wants that. Remember Al Capone?
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Bitcoin has an upper limit in the number of coins which means mining will stop while transfers continue. Don’t know how it works but mining is not needed for transfers to happen.
The Captain
has no use for crypto currencies
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In this case “mining” is just a short way of saying “using massive computational power and electricity”. Either way, the amount of effort (“money”) spent doing it has to be less than the amount brought in by new coins and/or by fees.
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That has happened, again, this year. Some miners find it better to continue mining because they have some revenue to pay their debt. Just like gold miners. Some stop or go out of business.
I expect in 2024 the price of Eth and possibly BTC will recover.
Obviously he meant “It had no impact on the global economy.” Zero.
Also authoritarian governments: Russia, North Korea, Saudi Arabia, Iran, a whole slew of them in Africa, a bunch of South America, several more in Indo China, the Middle East, and… Well, probably won’t all ban it, but why shouldn’t they, except so their criminals can get payments for Ransomware?
Not everyone has an effective IRS.
The funny thing about a dictatorship banning it…is banning it for who.
That much I knew. 
What I don’t know is how transfers work but I figure that ‘mining’ is not needed. After the last Bitcoin is mined there will be no more mining but transfers will continue to happen…
The Captain
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BTC stops being mined in 2140.