Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!

[perseus]

Hello,

An ITW where we talk a little cryptocurrency but especially blockchain:

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[Christophe]

And here is the Crypto Candle:



Or how the smart kids surf on the "fashion" (which is not one in my opinion ... see arguments above) of bitcoins ... to boost their sales ...

[Christophe]

Now that bitcoins have scared a lot of people, there are more and more sharp criticisms, here is a "nice" one: https://www.lesechos.fr/idees-debats/ce ... 217824.php

The big blockchain scam
NOURIEL ROUBINI / President of Roubini Global Economics

The technology behind bitcoin is presented as a possible cure for all ills, from poverty to starvation to cancer. But behind a discourse of decentralization and digital freedom, the blockchain hides a profit race for a minority.

Since the value of bitcoin has dropped by about 70% since its peak at the end of last year, the mother of all the bubbles has now exploded. More generally, cryptocurrencies have an apocalypse that is not so mysterious. The value of major currencies such as Ethereum, EOS, Litecoin or XRP has, in any case, collapsed by more than 80%, with several thousand other digital currencies falling from 90 to 99%, the rest being exposed to pure and simple frauds. No one should be surprised by the following figure: four out of five initial offers of tokens (ICOs) were a scam from the start.

In the face of the public spectacle of a bloodbath on the market, the actors fled to the last refuge of crypto-manigance, defending the "blockchain" distributed registry software that underlies all cryptocurrency. The blockchain has been announced as a possible panacea for all existing ills, from poverty to famine and cancer. It is actually the most overrated - and the least useful - technology in human history.

Libertarian ideology

In practice, the blockchain is nothing more than a spreadsheet that we would have glorified. This did not prevent it from becoming the motto of a libertarian ideology that considers all governments, central banks, traditional financial institutions and currencies of the real world as so many evil concentrations of power, that it would be a question of destroy. Blockchain fundamentalists see an ideal world in which all economic activities and human interactions are subject to anarchic decentralization.

But far from concretizing an ideal, the blockchain gave birth to a familiar form of economic hell. A handful of interested white men (women or minorities are rare in the blockchain world), claiming to be messiahs to the poor, marginalized and unbanked masses, claim to have created billions of dollars in wealth from nothing. . But it is enough to observe the extreme centralization of power among the "miners", stock exchanges, developers and managers of cryptocurrency to understand that the blockchain has nothing to do with decentralization and democracy; it is only a race for profits.

Anonymous cartel

A small group of companies - mainly located in countries well known as bastions of democracy, such as Russia, Georgia or China - control between two-thirds and three-quarters of all "mining" activity, and regularly increase transaction costs to increase their generous profit margins. Thus blockchain fanatics invite us to trust an anonymous cartel free from any rule of law, rather than central banks and regulated financial intermediaries.

A similar trend has emerged in cryptocurrency trading. No less than 99% of transactions take place on centralized stock exchanges that are regularly hacked. And unlike real money, once the cryptorichesse hacked, it disappears forever.

Moreover, the centralization of the development of cryptocurrency already contradicts the expression "the code is the law", the idea that the software underlying blockchain applications would be immutable. The truth is that developers have the absolute power to act as judges and jurors. When something does not work in their usual "smart" pseudo-contracts of bugs, and massive hacking occurs, they just change the code.

As it should appear obvious, the claim of a "decentralization" is a myth peddled by pseudo-billionaires to the control of a pseudo-industry. Now that the private investors who have been sucked into the cryptocurrency market have lost everything they had, the latest snake oil sellers are sitting on a huge fake wealth, which will disappear instantly as they attempt to liquidate their "assets".

The claim of 'decentralization' is a myth peddled by pseudo-billionaires controlling a pseudo-industry.
Regarding the blockchain itself, no institution in the world - bank, corporation, NGO or government agency - will enter its balance sheet, its transactions, transactions or interactions with customers and suppliers in decentralized public peer-to-peer registers. demanding no permission. There is no valid reason why such exclusive and valuable information should be publicly recorded.

The return of centralization

In addition, when distributed register technologies are actually used, they have nothing to do with the blockchain. They are private, centralized and concern only a small number of controlled registers. Their access requires permission, which is granted by qualified individuals. And, perhaps more importantly, they rely on trusted authorities, who have established their credibility over time. In other words, these "chains of blocks" do not really carry their name.

It is revealing to observe that all "decentralized" blockchains sooner or later become centralized databases requiring access when they are actually implemented.

No serious institution would allow its transactions to be verified by an anonymous cartel operating in the penumbra of the most authoritarian kleptocracies. It is therefore not surprising that, in all cases involving a traditional "blockchain" driving environment, it was either thrown to the wind, or turned into a private database with permission, until become nothing more than an excel spreadsheet or database.

Nouriel Roubini is president of Roubini Global Economics. This text is published in collaboration with Project Syndicate 2018.

I bet some of these same journalists were praising cryptos in December-January ... How do you say? The rats leave the boat ...

I love the...

the blockchain hides a profit race for a minority.

Because classical finance is something else perhaps?

[Did67]

Certainly !!!

But I still remember that the hope was that it is not the same! That it would be "free" ...

So to admit that classical finance does not do better is a poor argument, from my point of view. It is even the admission of failure.

[Christophe]

Yes and the hope is still there: the blockchain is not dead and cryptocurrencies are only one use of it ... was not the title of this topic "what is a financial bubble"

This is not at all an admission of failure of the blockchain, since it is not limited to cryptos ... Gold the journalist equates the 2, it is there that there is deception! Writing that blockchain is a big scam is wrong! Even pretending that investing in cryptos is a big scam is wrong: we are cheated only when we are not aware of the risk we take! So the only scams it can have at the cryptos level is: hacking and trusting others!

As we said above (and we're right, I even think it was Didier you?): Often the man uses the tools he creates for bad purposes, especially in the beginning. So today the blockchain is dedicated mainly to financial speculation on crypto (I never say the opposite and yes it enriches a minority, but it's not the fault of the blockchain!).

The crypto bubble exploded ok *: the tool is accused and not the users? It's like condemning a gun instead of the shooter!

More seriously, has a specialized journalist ever dared to write? The stock market is a big scam after a crash? Real estate is a scam after a decline in the market *?

I do not believe!

In short, I think it's quite serious to read this kind of title from a journalist specializing in finance, rats I tell you

* Goldman Sachs went crypto in the spring ... but everyone knows that they are humanists and altruists ... of course!
** which is also a bubble in France in some places ...

[Ahmed]

... we blame the tool and not the users?

This is probably true for the tool, but not for the later stage of the tool which is the machine: between these two evolutionary stages is a causal reversal, because the machine manipulates the man who serves it (word oh so revealing).

It's like condemning a gun instead of the shooter!

In this particular case, one can legitimately wonder about another possible use of a weapon? On the contrary, it is certain that the intention to harm others is potentially inscribed in its conception, manufacture and possession ...

[Christophe]

In this particular case, one can legitimately wonder about another possible use of a weapon?

I can assure you that the man, in his wonderful lush imagination, has already used weapons other than to shoot ... kind of uh bin to shoot ...

Otherwise yes the example was not necessarily very well chosen, it is the big debate cause-consequence-responsablility ...

In the same way: if I hurt, can my parents be held responsible for the harm I have done?
Responsible for my education, my value ... and even for giving me life?

Legally of course not, but morally, well, that's another story ... but if we engage in this debate, we're not finished! I bet we would talk multiverse!

On the contrary, it is certain that the intention to harm others is potentially inscribed in its conception, manufacture and possession ...

Yes except that we also say that"being ready for war is the best way to keep the peace ..." It's from Jesaispluki ... but it smells a little sophism too

[Ahmed]

It's a Roman adage *, very peaceful people, as you know ...

* Si vis pacem para bellum "or: If you want peace, prepare for war.

[Christophe]

Ah that's why I felt a little (a lot) of sophism

Absolutely! Very peaceful they were!

By the way, do not we talk about the pacification of Gaul?

[Adrien (ex-nico239)]

Bitcoin could lead us to chaos in 20 years: info or intox?

https://www.developpez.com/actu/231290/ ... -critique/

https://www.nature.com/articles/s41558-018-0321-8.epdf

https://phys.org/news/2018-10-bitcoin-g ... cades.html