Bitcoins and ilk have thriving communities of tin-foil-hat-wearin’ and Ponzi-scheme types, and also some actual business models. I run a one-person campaign to call enthusiasts for this tech cryptsters but it is not catching on. Or crypsters? Is that any easier?
Anyway, credit for the tagline on this page:
imagine if keeping your car idling 24/7 produced solved Sudokus you could trade for heroin
goes to @Theophite.
Despite the weirdness in the communities, cryptocurrencies have practical use. For example, they are sometimes the cheapest way to get money across the border. This has been useful even for me, as a normal non-gun-smugglin’ guy who happens to move country sometimes, and doesn’t like paying a 5% conversion tithe between countries with weak banking ties, such as Australia and … anywhere which is not Australia.
One could notionally do other useful things with cryptocurrencies, such tip me for my work on this site. This practical use is currently not viable, though, because cryptocurrencies are so very much viewed as an capital investment rather than a medium of exchange, and you do not tip people with capital investments. This is exactly one of the problems, as Ranjan Roy argues):
Shouldn’t the whole crypto community not be rooting for prices to keep skyrocketing?
Astounding price appreciation is a death knell for becoming a medium of exchange. As long as people care about the price they’ll never engage with the utility. But the catch-22 is the price appreciation is all predicated on these digital things one—day becoming mediums of exchange.
Practically they have well known deficiencies. For example, my exchange rate when buying cryptocurrency in Australia was terrible; I ended up paying about 8% on my last transfer after all the fees were deducted, which is worse than bank rates. My plain credit card came out better.
I am no expert in cryptocurrencies. Rather the opposite; my feeble intellect needs a n00b guide documenting the idiosyncrasies which trip me up and the weird terminology etc. This is that guide, or at least where I keep the links to the best guides. Cryptocurrencies have a vast number of hour of howto guides; the difficulties is working out which ones are current and compensating for the marketing biases in each.
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How to convert cryptocurrency to/from cash (or fiat currency as one must learn to call it when talking to a cryptster):
Use an exchange.
Some mainstream options I have tried include
- FTX (referral link for small discount) offers the most interesting markets.
- bitstamp (referral link) is the one I have used most. It is smooth, but expensive to deposit from Australia, only accepting SEPA and not the cheapest at 0.5% transaction fee.
- Binance, which has pluses (allows deposit in AUD) and minuses (glitchy website with unexplained errors which does not instill confidence in their professionalism)
- Kinesis (referral link) offers metals as well as cryptocurrencies
- localbitcoins facilitates peer-to-peer exchange and fiat/crypto exchange. I have used them in the past for basic Forex when moving countries, but they do take large relative effort.
Others I have had recommended include
- cointree vaunts their compliance with Australian law, but I have not tried for reasons I cannot remember
- Coinbase is the current dominant player as far as consumer-facing services AFAICT and supports a broad range of crypto currencies. They don’t seem that cheap.
- Metex - Crypto Friendly Exchange for Tokenized Metals
There are left-field options, built more upon decentralised blockchain-like systems themselves. One obvious one is bisq is a decentralised network for currency exchange. Openbazaar is a decentralised network for selling anything including currency.
I gather that there is a general push for Distributed Finance (“DeFi”) systems and so probably more of these p2p options will end up existing, and more of the existing mainstream centralised services will probably use that buzzword too.
NFT warm takes
Classic: Jordan Pearson, Inside the World of the Bitcoin Carnivores
The classic and still the biggest in terms of hypothetical market cap.
Bitcoin is what banking looked like in the middle ages — “here’s your libertarian paradise, have a nice day.”
That comparison may be subtler than the author intended.
Mr. Lee said the Chinese took quickly to Bitcoin for several reasons. For one thing, the Chinese government had strictly limited other potential investment avenues, giving citizens a hunger for new assets. Also, Mr. Lee said, the Chinese loved the volatile price of Bitcoin, which gave the fledgling currency network the feeling of online gambling, a very popular activity in China. […]
Peter Ng, a former investment manager, is one of the many people in China who moved from trading Bitcoins to amassing computing power to mine them. First, he mined for himself. More recently he has created data centers across China where other people can pay to set up their own mining computers. He now has 28 such centers, all of them filled with endless racks of servers, tangled cords and fans cooling the machines.
Mr. Ng, 36, said he had become an expert in finding cheap energy, often in places where a coal plant or hydroelectric dam was built to support some industrial project that never happened. The Bitcoin mining machines in his facilities use about 38 megawatts of electricity, he said, enough to power a small city.
A kind of infrastructural one upon which others are built. TBD.
Unlike bitcoin, seems to be oriented toward anonymity, which bitcoin is not especially good at apparently. I’m not sure that is what I need right now. Does it have other useful features? Can you even trade it as a normal person or is it only for drug dealers and dissidents?
Ripple is a (distributed?) ledger designed for cross-currency remittances, apparently. Once again it seems like this should be good for low-fee international transactions but I cannot seem to make that fly without a bank account in each country.
I don’t know anything about Stellar and their Lumens except for their flashy launch. Something something easy conversion something?
Decred is an open and progressive cryptocurrency with a system of community-based governance integrated into its blockchain.
Most blockchain mechanisms have a cryptocurrency buried somewhere in them.