Instead of having no points of control, cryptocurrency is run like middle school—everything is determined by what the popular kids like or don't like that day. If Elon Musk has a double espresso this morning, the price will go up, if he tweets after bong rips, it will go down.
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The decentralized part has failed entirely. Cryptocurrencies are mined by massive operations that concentrate power to such an extent that the raison d'être of the blockchain —no one participant is supposed to be able to monkey with it—gets really shaky.
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The promise of crypto as a stable store of value against inconstant fiat currencies has failed, too. The volatility on all time scales is extraordinary, and it's coupled with illiquidity, particularly in a crisis. If there's a bank run on crypto, good luck selling!
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For Bitcoin, the maximum transaction rate is something like four transactions a second, *globally*. And each transaction burns as much electricity as an American home does in four weeks.
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As I said on the show, these are not the growing pains of a new technology. We've had blockchain longer than we've had Pinboard! Imagine if you could only save one bookmark a day and it cost you $15 in fees each time, and also I stole your car
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The one area where crypto has been genuinely disruptive and innovative is in the field of ransomware. There's an entire industry around it now that could not exist without an underregulated way of moving large sums of money. That's the niche crypto fills
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Finally–and this is the part I feel like a yokel on TV—you can't buy things with it! If I built a bookmarking site and for 13 years it couldn't save bookmarks, I hope someone would call that out. The decentralized, unregulated currency is none of those things. It's a casino chip.
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The one thing *all* pyramid schemes have in common is that when you put your money into it, you've convinced yourself that this time it's different. Look at the story crypto boosters tell and compare it to the reality. Trust your own eyes, and don't be intimidated by the tech!
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And if you want to gamble on cryptocurrency, have at it! There are certainly fortunes to be made or lost, just like at any casino, and I don't want to step between anyone and their tendies. Just remember you're gambling, and not investing.
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Replying to @Pinboard
One of the things that has been blowing my mind is that, as far as fundamentals go, Bitcoin is useless, but I can't deny that it's *acting* like the stock of a company with strong fundamentals: It takes a hit on negative news, then recovers as people buy in.
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Very similar to GameStop and other meme stocks!
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Replying to @Pinboard
I'm honestly surprised how permanent the Gamestop boom has been -- I wonder if economists are looking at things like Gamestop and Bitcoin to adjust their theory of value generally
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