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.
A fun Bitcoin card game that will help spread adoption to the masses!
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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.
Interesting financial instruments backed by cryptocurrency
I do not know if it is intrinsic to the idea of blockchains, or if it is just the newness of crypto that means that that regulation has not caught up, but cryptocurrency has made many interesting financial instruments available to the public. From my own perspective, this is the most interesting thing about crypto, that even with the meagre capital I have, I can participate in scheme that would formerly have required me to be something much higher up the capitalism totem pole. To put it another way cryptocurrency has democratised predatory lending.
FWIW I think this is probably a good thing, in the long run, if society survives into the long run. There is no distinction between enough rope to climb something and enough rope to hang yourself; we need to learn how to use rope. I think it is better that we all have rope, not just the rope wholesalers. In the short run, realistically I think many people will get strangled before our rope skills are better. 1
Anyway, for now, the cryptocurrency world has served as an incredible directed evolution scheme for financial instruments, breeding new variants of Ponzi scheme and MLM robust against our traditional defences. Can we get to herd immunity from the most virulent variants?
Some warm takes on 2021’s most irritating dinner table discussion after COVID.
- NFTs Were Supposed to Protect Artists. They Don’t.
- Applied Divinity Studies, Crypto is Stupid; Everything is Stupid; It’s All Okay
- How NFTs Create Value
- hic et nunc
- Getting Started with Tezos · hicetnunc Wiki
- Ian Bogost, The Sick, Refreshing Honesty of Web3: Let’s call things what they are: NFTs represent a first step in the securitization of digital assets. They turn digital data into speculative financial instruments. That shift has enormous implications because computers are in everything, and that makes anything a digital asset—your bank records, your Fitbit data, rings of your smart doorbell, a sentiment analysis of your work email, you name it. First the internet made it easy for people to conduct their lives online. Then it made it possible to monetize the attention generated by that online life. Now the digital exhaust of all that life online is poised to become an asset class for speculative investment, like stocks and commodities and mortgages.
Classic: Jordan Pearson, Inside the World of the Bitcoin Carnivores
The classic and still the biggest in terms of hypothetical market cap.
Ten years in, nobody has come up with a use for blockchain
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.
How China Took Center Stage in Bitcoin’s Civil War
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.
- Estimated costs of 51% attacks on various cryptocurrencies.
- Chris Mountford, a.k.a Blockzombie is a fun guy to follow on these themes.
- China launches national blockchain.
Democratising science probably has a similar problem; I think we will get more noise and overemphasises conspiracy-theory from that before we work out how to really integrate new members into the community of science.↩︎
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