Caveat Emptor (investors beware)

Max Nozin, I am sorry to see you still advocating here on behalf of crypto currency, (blockchain could potentially be a different situation). Currencies of sovereign nations, as we know, have problems enough and can only be a strong as the "full faith and credit" of such a national entity. Cryptocurrencies have not even that to back them. They will be completely susceptible to market manias and even more so than say "tulip mania", which at least had an entry cost.... that is some tulip breed or another was being bid up to unsustainable levels. Cryptocurrencies, in other words, have all the defects of any currency and even more, since there is no underlying value, no backing asset, no "faith and credit", no 5000 year tradition of desirability as an asset such as gold... which still costs quite a lot to mine and hence "create" as a currency. No restraints on cryptocurrencies, in spite of the argument "out of nothing" you seem to propose. Public gullibility is the only restraint. Bitcoin supporters do NOT "have a valid point". This is completely self-serving blather designed to "pump" the market. We only need to wait for the "dump" phase.

Some aspects of blockchain as ledger technology may well turn out to have value to nation states, banks or international markets, but only after extensive development. Cryptography progress is always just a few of steps ahead of computational power and/or decryption algorithms-- it has always been and likely always will be... look at the history of cryptography and its important influence on the outcome of wars.

Max Nozin Agreed that the US dollar is over rated. But that is evidently not the consensus, which the foreign exchange markets surprisingly and continuously tell us that somehow US dollar is one of the few strongest currencies in the world today. Of course there are specific ad hoc arguments as to why the US dollar appears so strong. I personally believe it is essentially a passing phase and that the US dollar will eventually collapse (or be devalued) to reflect (as you point out) the immense debt the US has continued to accumulate.

I feel it is important that folks don't get to enamored of the value of any symbolic asset. Art, real estate, antiques, precious metals, historic manuscripts, all can be stores of value.... no currency is likely to be a reliable long-term store of value. Hence my vitriol against crypto currencies. They have all the deficiencies of traditional currencies and then some....

Quote from Max Nozin

Again, you myabe confusing particluar implementation of block chain i.e. Bitcoin with general concept of it.

There are no known instances of the block chain bien hacked. Only exchanges were and they ate totally different from the block chain itself.

Bitcoins accounts have been hacked, and hundreds of millions of dollars worth of bitcoins have been stolen. $500 million from Mt. Gax, and more than $500 million from another Japanese dealer.

https://www.cnbc.com/2018/01/2…0-million-to-hackers.html

I do not know how the hackers do it, or whether you are right about block chains, but it is obvious that bitcoin is a terribly risky way to keep money. I used to work with financial systems at a big company, writing user manuals for the equipment. If we had been responsible for losses on this scale, the customers would have sued and we would have been driven out of business in no time.

Quote from Max Nozin

What kind of assets are backing US dollar? The government debt is what 10T or something?

That's not the technical issue here. There are two relevant issues:

1. The U.S. government is committed to policies that will avoid disastrous inflation. Short of a full scale war, there is no chance money will suddenly inflate away.

2. It is not the government so much as the computers at the banks, credit card companies, automated purchasing, Amazon and other money transfer systems that are well protected. Credit card fraud is the worst of these. Fraud is widespread, but it will be greatly reduced by the new cards with chips in them. The other systems I listed are extremely well protected compared to Bitcoin deposits. First-world governments enforce rigorous standards, but it is the banks that implement them. Japanese gangsters have stolen more than $1 billion from Bitcoin accounts. I'll bet they have not stolen a single yen from conventional banks using similar hacking techniques. They steal huge amounts, but not by hacking.

Fraud in things like Medicare filing is a gigantic problem. Certain politicians refuse to grant funding to hire enough people or implement effective reforms that will reduce it, even though this funding will more than pay for itself. I suspect these people might be on the take.

Quote from JedRothwell

*Buffet admits he doesn’t have a clue about Bitcoin:

That's not what he said.

Buffet: “I get into enough trouble with the things I think I know something about. Why in the world should I take a long or short position in something I don’t know about?”

Don't know about = Not having a clue about. I think.

Quote from JedRothwell

https://money.cnn.com/2018/09/…-goldman-sachs/index.html

https://www.marketwatch.com/st…er-growth-miss-2018-07-25

Quote from AlainCo

cryptocurrencies is to avoid that "stealing" by law. some corporate crypto

Good luck to those suckers, and sorry for anyone believing that. The way banks operate today would give little confidence that any such scheme is other than some programmer's idea of how to sell "security" by incidentally opening up a whole new set of vulnerabilities-- whether by intention or otherwise.

Quote from Max Nozin

are you saying that banking system is imprevious to hacking?

Are you reading carefully? Quite the contrary. As you know even the Federal Reserve Bank of US has been hacked, at least once. The "take" was about 80 million $, although they were reportedly going for a billion. I have little confidence in any scheme to avoid hacking. That is why I drew our attention to the race between cryptography and code breaking. It has been going on since at least the Peloponnesian war, and certainly is ever present today.

Can we maybe start a Deneum TECHNICAL thread ... and leave the blockchain stuff here (since that applies to investors, who are suitably caveated.)

Ok!