Right Wendy the only one who works on Scarcity is BTC. Ethereum is used to run it’s platform. They use the coin to provide payments to the miners that provide the ability to keep the platform running. As far as the other coins I am not sure because I would have to go through each one and look at them.
Andy
Again, I think we need some definitions. In an earlier discussion we talked about how while the Fed hasn’t made a decision yet, in a research paper they concluded blockchain was not suitable for a possible US CBDC.
European Central Banks are not interested in blockchain for their possible CBDCs:
And in a practical example, China has constructed a CBDCs, the digital yuan, and is testing it in some locations. It does not use blockchain. The reasons why blockchain isn’t a preferred solution to these applications are pretty straightforward.
So I’m failing to understand how a centralized token that doesn’t use blockchain is a cryptocurrency? Seems pretty much the opposite.
There’s no scarcity of crypto currency as long as multiple, new sources of unlimited crypto currency can be created without control.
To give an example, the guy who ‘invented’ dogecoin IIRC took the litecoin code and just changed the timer so it ran every minute instead of every 10 minutes. Tada!
Crypto-proponents would have a two part answer for that:
Bitcoin and Ethereum have a first mover advantage. They have the branding, name recognition, user base, and liquidity such that a new crypto won’t ever be able to gain traction.
Bitcoin has a hard limit of 21 million coins total so there is enforced scarcity–the value cannot be inflated away. 18 million Ethereum are minted each year. So in theory, there is enforced scarcity there too, just not as much.
The implied assumptions though, are that just because something is scarce, it is also valuable. And that if something has value now, the enforced scarcity will protect that value in the future.
Both those assumptions can be true, like DeBeer’s enforcing scarcity on the diamond market, while also promoting diamonds to maintain their value. But things that were once valuable due to scarcity can fall out of favor. Beanie Babies, for example.
There are several contrasts between CBDCs and cryptocurrenci …
Read more at:
Central Bank Digital Currencies (CBDC) utilize tokens, or digital representations of value, and function in the digital realm the same as hard currencies. Tokenization and decentralization are critical to meet new demands for money and establish more direct, transparent and efficient payment systems. Tokenization has emerged as a format to represent goods, assets and rights. It offers new financial utility and attributes, promising greater flexibility and liquidity. CBDC or tokenized central bank money leverages the decentralized and secure advantages of blockchain. Enabling peer-to-peer transactions, CBDC offer a more resilient payment infrastructure, reduce transaction costs, enhance information sharing capabilities and facilitate data reconciliation. Blockchain enabled payment solutions have been rigorously tested by central banks across North America, Europe and Asia.
The problem with the two articles you cited is that they haven’t been implemented yet. They both are working on the process and in the one article they haven’t even written a white paper on it. So until they actually write the paper and implement it how can anyone know exactly what they are doing. Maybe they won’t even let us know what they are doing, but if you read the link I sent you India has seemed to started a CBDC on a private blockchain.
Andy
There has to be someone interested. But stay away from the day trading guys. I know day traders you hold for more than a day, amazing.
There is a half life for mining BTC and Eth. Meaning as time passes only half of the coins are mined, then half again and then half again.
As far as other Crypto currencies they generally are not catching on so much. There are possibilities in the next three of the top five but mostly they were replace Eth and really few are interested in that.
Cryptocurrency is not a collectable. This does not compare.
But like collectables, the price is set by supply and demand. For example, dogecoin was started as a joke by “Shibetoshi Nakimoto,” essentially a Litecoin copy. No one took it seriously until Elon Musk started pumping it on Twitter. Based on Musk’s schilling, many people who were not aware of the joke jumped in and the price shot up 800%. Since then, the price has plummeted with Musk presumably laughing all the way to the bank. Not a collectable perhaps, but certainly a speculative asset.
So you are saying that the Dollar is like a beanie babie? Or corn is like a beanie babie? Or the whole economy is like a beanie babie. Oh my mind is blown. Supply and demand is just like a beanie babie.
Andy
You must have missed the part I quoted from the previous poster where the discussion was about cryptocurrency, not dollars.
No I understood that but what I am pointing out is that you could say everything is just like a beanie babie, if you don’t look past the supply and demand.
Andy
The Federal Reserve influences the price of dollars by setting interest rates. USDA uses subsidies to keep the price of corn from being too high or too low. There is no central government agency supporting the price of Beanie Babies. People buy them because they want to own them. It might be worthwhile to look at what I originally wrote:
I don’t see why your “mind is blown” by this statement. Are you willing to argue the price Beanie Babies is still high and remain high forever?
No I prefer to keep studying Crypto and understanding what it is doing. I just like pointing out useless statements that don’t help anyone understand Crypto.
Andy
My initial reaction is that is a good thing.
But then I started thinking a bit more. I would actually pay to avoid seeing such a thing. However, the scarcity of the item makes it highly unlikely I would ever run into it randomly. So I would not pay very much at all right now.
But if the item were not scarce - if there were millions of copies running around - the odds of me running into it become much higher. So I would be willing to pay more to avoid it.
Therefore, to monetize this currently valueless asset, you need to distribute it widely, creating a distaste for it in the general public. Then you could take advantage of that distaste by providing a service that would check for this distasteful item and block it if found. Then you could charge for that service.
Your item is valueless because of its scarcity. To unlock the value, you need to distribute it widely.
…
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Wait. I just described a computer virus, didn’t I?
–Peter
PS - Oh yeah, the on topic part of the post. I see crypto in the same way I see a computer virus or a photo of luxmain’s bottom. I avoid them all.
When everyone begins talking about a bottom on TMF, it’s a clear sign that market capitulation is near.
Or maybe its just a clear sign of luxmain capitulation.
Andy
Just saw this and thought it may be applicable to this thread 
http://archive.today/2022.12.22-015337/https://dilbert.com/strip/2022-12-21
'38Packard
A capitulation is V shaped. Don’t bet on it this time. This bottom will probably be a straight line.
A capitulation is V shaped. Don’t bet on it this time. This bottom will probably be a straight line.
It was a joke. Bottoms and bot… never mind.