Bitcoin is spiking again, what are your thoughts on cryptocurrency in general?

[Proud90sKid]

Cryptocurrencies have been around for a while. Bitcoin, monero, ethereum, and others. I believe that bitcoin got started around 2008 or 2009. The first purchase was when someone agreed to send a pizza for 10,000 bitcoins! Back then the price of bitcoin was very low. It finally reached parity with the dollar around 2011(ie. a dollar was worth the same as a bitcoin). Its first big run was in the end of 2017, when prices increased by several hundred percent in a month, and then it crashed just as quickly in 2018. In the 2021 market economy, there was another major spike and that was when we saw popularization of the phrase "to the moon!", crypto inspired cafes, crypto inspired art, etc. "Crypto investing" was all the rage. Many people had the vision that it would be the major currency of the future with advances in tech but that has yet to happen. Many people with no knowledge of investing made bank that year from catching the bubble in time. Just as many though bought at the peak and saw a huge loss of real dollar funds when it crashed again in 2022. While all currency is merely backed by the value that people think that it has, crypto is MUCH more volatile than most other currencies (countries experiencing hyperinflation notwithstanding). Yet at the same time, if you catch it at the right moment, you can catch a spike and theoretically make very good money. If you decided to buy two dollars worth of bitcoin in 2010, you would be a millionaire today. The US has not had a gold standard since the 70s, so the dollar is not backed by gold like many think but by the US economy as a whole and what people are willing to give for a dollar. Even gold though is not a perfectly stable currency because it doesn't maintain a constant value. Gold speculations would alter the value of the dollar continuously. Ultimately, just like the dollar, the value of gold is determined entirely by what people think it is worth. Yet it is a rare element with utility, so has intrinsic worth. People are paid a relatively fixed amount, so people spend a limited amount of dollars per year, and contracts and bonds are written in dollars- providing additional backing. Crypto doesn't have that. Purchases made in bitcoin are often for a dollar amount that is equivalent to the bitcoin (ie. pay this many dollars worth in bitcoin), which provides much more limited backing as those people are constantly exchanging their coin back to paper currency. In addition, one cryptocurrency, FTX, collapsed due to fraud on the part of the founder. As its entire value was determined by speculation, when the speculation became bad and fraud uncovered, FTX completely collapsed. Sam Bankman-Fried- only in his 20s and recently the richest 20-something in the world, suffered the most severe loss of money in a single day by any person in all of human history. He still has more money than me, but it is no longer anything special. He has a net worth of 3 million and $100k in his bank account. Down from 10s of billons. Convicted of several big time felony charges and another trial coming up along with sentencing on the first trial as well, it may be possible that he loses quite a bit more.


To the Moon!

[Ennui.]

Cryptocurrency makes me wary but I don’t really know much about it. Its volatility has me hesitant.

[Proud90sKid]

Originally Posted by Ennui.

Cryptocurrency makes me wary but I don’t really know much about it. Its volatility has me hesitant.

What does the existence of cryptocurrency make you wary about?

[Dawn.]

I personally don't like cryptocurrency and haven't felt the need to invest in them.

[Butterscotch.]

Like Dez, I am wary of cryptocurrency including Bitcoin. It's typically used in darkmarket for illegal purposes.

[Ambedo.]

I'm definitely wary of cryptocurrency, but my lack of education about it could be part of the reason for that. The volatility of cryptocurrency also makes me hesitant to invest in it.

[Butterscotch.]

I also want to add a couple other things about cryptocurrency.

Bitcoin mining contributes to a significant amount of global energy consumption.

Bitcoin will max out by the year 2140, what will be used in place of that then?