Lost money on NFT

User232002

Aegis said:

Scottex99 said:

The Bitcoin blockchain uses a lot of energy, so does the ETH one but neither use as much as the traditional finance industry.

Setting aside the other issues for the moment, this is hardly a fair comparison because this completely ignores the fact that traditional finance is used by basically the entire planet, while blockchains are used by a very small minority.  This chart summarises the energy cost per transaction between Visa and BTC:

https://www.statista.com/statistics/881541/bitcoin-energy-consumption-transaction-comparison-visa/

Looking at it per transaction, it's clear that BTC is woefully inefficient, and this problem would only get worse with wider adoption.Even if you assumed that the cost for a BTC transaction is exaggerated by a factor of 1000, it would still be far worse per transaction than Visa.

If everyone adopted bitcoin as their de facto standard currency, the cost of the network would just be astronomical.  Multiple redundant systems all doing the same calculations will inevitably lead to energy inefficiencies - as I keep being told, this is by design rather than by accident, which makes me believe that bitcoin must have been designed to fail before widespread adoption.

Again demonstrating that you don't understand the thing you are discussing and creating more strawman arguments.

Even if we accept your axioms, which are incorrect but on a more subtle level, the energy usage of the Bitcoin network is put towards the security of the chain - its not allocated per transaction. Adding incrementally more transactions does not cost any (meaningful) additional energy for the network. And lastly, the Bitcoin network isn't meant to be used by your average person to buy a coffee, as we have pointed out many many times in many many threads.

Scottex99

Deleted_User said:

Scottex99 said:

The Bitcoin blockchain uses a lot of energy, so does the ETH one but neither use as much as the traditional finance industry. Plus ETH is moving to POS. All new coins are also POS so this energy point is barely relevant.

As Aegis said, traditional finance handles vastly more transactions; bitcoin is incredibly wasteful of energy per transaction. And this is not some statistical fluke: it is wasteful by design - that's what proof-of-work means.

And darren-bunchofnumbers' claim that energy costs are not allocated by transaction, but "put towards the security of the chain" is just meaningless. That energy has still been wasted; if not for the transactions, for what? Nothing. It's true that bitcoin isn't going to be used for things like buying a coffee - that's because it's incredibly inefficient and couldn't handle that kind of volume of transactions! You're not helping yourself with that argument.

You personally can see no value, doesn't mean there isn't value there in terms of ownership an transferablitity for the in-game items.

I've explained why adding NFTs to games is negative for gamers. Its only purposes are speculative purchases for people who aren't real gamers, and cynical cashing in by games companies. You have no rebuttals or counter-arguments.

Standard boring boomer chat about only illegal cases. You know what's used for the most illegal stuff in the world? USD.

You've ignored my main point, which was that the use cases of cryptocurrencies, apart from pure speculation, are very very limited. That most of them are illegal was just an aside. And you have no answer to either the main point or the aside, but have resorted to (inaccurate) name-calling. How embarrassing for you.

People use crypto every day as an inflation hedge, as a store of value, because it's decentralised, because you can move large amounts of value around the world in minutes and for many other reasons. That's why some of them are the fastest growing assets of all time and the industry as a whole is growing, generating value and sucking up all the best talent from every other type of work.

People trade on it and speculate, for sure. Doesn't make it a ponzi

Let's accept Malthusian's argument that it should be called a zero-sum game, not specifically a ponzi. I.e. the point is that the only way that some people can make money from trading cryptos is by other people losing money. There is no new value created, so there is nowhere else for profits to come from.

Your example uses are all either nonsense or different ways of saying that people are taking part in the zero-sum game and hoping to be among the winners. E.g. it's nonsense to call something a "store of value" when it's wildly volatile in price (both up and down). And moving large amounts around the world is done far more efficiently and safely with traditional banking (except for a small number of illicit uses, as already mentioned).

One problem with the traditional finance industry, especially in the UK, is that there is so much money to be made in it that it sucks talented people away from other sectors where their talents would be more beneficial for society. If that is also happening in the crypto finance sector now, then it is not improving on the traditional finance sector, but replicating the same problem.

The energy and the algorithms are used to secure the network. Satoshi built it that way to solve the double spend problem and mean you dont need a central middleman and you can then trust strangers. It's a work of art that spawned a whole new asset class. Yes it uses a lot of energy but people are already looking at way to mine with free/clean energy as the financial reward is obvious.

And you've played more games than me so you know? Or you know the roadmap of every single NFT project that has launched? Sweeping generalisations are pointless in this discussion. Yes there will be people jumping on the bandwagon, but there will people that will build cool stuff that gamers will like too.

Wow yeah super embarrassing, I feel so silly. There are plenty of use cases that are outside of just buying drugs, most of them in the financial space, hence why DeFi projects have trillions of dollars parked in them already.
 
Umm no, move $1m of JPY from Bank of Tokyo to your Barclays account in London and see how long it takes. My guess is slightly more than it took for one of my clients to send my company 250k USDC earlier today (approx) 40s or the 120 seconds it took another client to send us 4.5m USDT on Friday. 

And, it's not the price of BTC day to day that is the actual store of value, it's the future potential when govs print our way to oblivion. BTC has no top because fiat has no bottom. Ask the peeps in Venezuela or Argentina.

Yeah except teams and people our out of the rat race young, if they make it in crypto then they become philanthropists (or maye do) and that's next positive.

This is about NFTs though so we should get back to that:

https://opensea.io/account

Aegis

Umm no, move $1m of JPY from Bank of Tokyo to your Barclays account in London and see how long it takes. My guess is slightly more than it took for one of my clients to send my company 250k USDC earlier today (approx) 40s or the 120 seconds it took another client to send us 4.5m USDT on Friday. 

And, it's not the price of BTC day to day that is the actual store of value, it's the future potential when govs print our way to oblivion. BTC has no top because fiat has no bottom. Ask the peeps in Venezuela or Argentina.

Oddly enough this isn't an everyday issue for me, as I don't have any JPY, let alone $1 million.  I suspect the number of people that do have this problem is relatively small.  Nevertheless, when I worked for HSBC, it was possible to send money between HSBC accounts in different countries pretty much instantly, so as long as the individual is happy with the offered spread, the facility is already there if instant speed is the desired outcome.  Otherwise I imagine most people sending that amount would be prepared to wait a day or two for higher exchange rates, so I would imagine that the possible saving in time and exchange rate is fairly modest even for this far larger than average case.

With regard to the idea of no top, technically this is true of all long investments, with a maximum loss position of 100%.  This means that the bottom for any given fiat currency is zero, and the expectation is that over an arbitrarily long time, the value of any fiat currency will tend to zero because of inflation.  That's why investments tend to be into assets which, over the long term, will grow faster than inflation.  Only in the short term do you select investments which won't outperform inflation in the long run, and usually the reason to do that is because of the need to spend the proceeds of those assets in the short term.  Funding income is really tricky because the best growth tends to be found in assets which either don't provide an income or which have unacceptable levels of volatility.  The idea that holding GBP in the very long term is a bad idea because GBP will lose its value isn't new, it's very well understood and the dangers of inflation are talked about at length with all advised clients looking for anything other than long term capital growth.

That said, there's no reason to expect that crypto assets will continue to expand to the real value of fiat currency, which seems to be the implication here. 

Scottex99

Yeah well my clients do. Plus my client's clients who are in payments industries and can't get any money moved even though they bank in Europe.

So they use stablecoins and it doesn't have to be millions either. You could move $50 in the same time although that would cost you about $20 in fees. You could also move $200m, same time, same fee.

There's no reason to expect it except they already have. The good ones obviously, most of them are going to 0

User232002

Deleted_User said:
 

As Aegis said, traditional finance handles vastly more transactions; bitcoin is incredibly wasteful of energy per transaction. And this is not some statistical fluke: it is wasteful by design - that's what proof-of-work means.

Proof of Work is not wasteful by design. Its a solution to a fairly obvious problem; How do you get self interested parties to come to a consensus when their self interest would ordinarily incentivise them to be dishonest? This is the Byzantine General's problem in computer science, and its been an academic problem since the 70's. In non-geek speak, if there is a ledger that contains the account balances of everyone in the world and you give sole control of it to me, I am highly incentivised to change my own account balance to a very high number. This is essentially what Bitcoiners would argue has been happening in the modern financial system since the turn of the century.

Contrary to popular belief on forums such as this, Bitcoin was not the first attempt at digital money; it was the first one that worked. The reason it succeeded was because of proof of work.

Deleted_User said:

And darren-bunchofnumbers' claim that energy costs are not allocated by transaction, but "put towards the security of the chain" is just meaningless. That energy has still been wasted; if not for the transactions, for what? Nothing. It's true that bitcoin isn't going to be used for things like buying a coffee - that's because it's incredibly inefficient and couldn't handle that kind of volume of transactions! You're not helping yourself with that argument.

The Bitcoin hashrate is what people are referring to when talking about its energy usage. The collective hashrate is a use of energy that grants a miner the right to make a block containing a number of transactions. Crucially, the number of transactions in the block is not related to the hash rate used to obtain this right. This hashrate is independent of the number of transactions that are processed. Please read that sentence again, because it is important and, on a reading of your current posts, you don't understand this.

This is a simple problem of a fixed cost infrastructure with negligible cost for additional transactions compared to a incremental linear cost one. Today I wanted to run some probabilistic simulations. I used my laptop, which would have been running anyway, and ran 100M simulations in 8 seconds. The power to run the laptop is the equivalent of the hashrate powering the BTC network. I could have chosen to run 7 simulations or 1 trillion simulations, which would have greatly changed the energy usage per simulation calculation. But the point is that the main energy usage was the laptop actually being on, so using energy per simulation here and taking in to account the power being used by the laptop is a poor representation of the situation. If you doubt the veracity of this, I will remind you that people using cost/transaction models in 2017 predicted that BTC would be using all the worlds energy usage in 2022 with the number of transactions it is currently processing. I believe we still have the lights (mostly) on, which shows the folly of such an approach.

So, lets imagine a miner spends hours running his ASIC, only to mine a block with no transactions... This energy is not wasted, it goes towards securing the chain. That is to say that all the previous and future transactions on the Bitcoin network, and the assets that I hold on it, are secured by the hash rate which prevents nefarious actors from amending that network (and for example pretending there was a transaction that transferred all my BTC to their address). In order to have the right to amend the blockchain, you have to expend resources to get that right. This ensures that you can only destroy the chain by expending considerable resources to do so, colloquially referred to as a 51% attack, or that those who spend appropriate resources will act in an honest manner because their self interest is now aligned with that on the chain. Hence, a solution to making self interested parties come to a consensus.

Since Aegis loves to bang on about valuation models, there is some good data showing that the BTC hashrate (yes, that 'energy wastage') is correlated with price. The recent dips in May/June and Dec correspond to the loss of mining power from China and Kazakhstan. This would be reasonable given that a more secure chain should encourage the market to give it a higher economic value.

The post has gone way off from NFTs, but the same arguments can be used to point out that NFTs are not boiling the oceans too.

Aegis

Deleted_User said:

Scottex99 said:

And, it's not the price of BTC day to day that is the actual store of value, it's the future potential when govs print our way to oblivion. BTC has no top because fiat has no bottom. Ask the peeps in Venezuela or Argentina.

You know who else talks like this? Gold bugs. You are just gold bugs with GPUs.

Yep.  A major positive is that we see far fewer goldbugs in the last 5 years or so.  The price didn't do much between the run-up to 2012 and the bottom in 2016 ish, but even then with the price rising fairly strongly in the last few years, it's been much quieter on that front, I assume because many of them have made the switch to crypto assets instead.

User232002

Deleted_User said:

Proof of work is a real solution to a theoretical problem, which is not a real problem in the modern financial system. Nobody goes into their bank to withdraw money from their account only to find that the bank pretends they never had an account with them or the balance was always lower. I notice you say that "Bitcoiners would argue" this kind of thing has been happening, which is sensibly cautious on your part, because the claim is complete bullsh*t. There are many things seriously wrong with the financial system, but this is not one of them, and many people are shooting at the wrong target.

It uses real energy to solve a non-problem, and that's why I called it wasteful by design. Just like if I put massive heaters at the bottom of my garden to keep the pixies warm.

I'm not being cautious; I agree with them wholeheartedly. Human beings are corrupt and generally act in their own self-interest, especially those that have the capacity to do well in modern political systems. I'm not sure you can really make a good counter argument against this.

Firstly, your post is factually incorrect. In the GFC of 2008/9 some banks confiscated money above a certain threshold in customer accounts to bail themselves out. Going further back, in 1933 the USA legislated for all its citizens to hand over their gold at $20/oz, then repriced it to $35/oz. I'm sure there are many many similar stories between these two events as well.

However, I made a point of saying essentially because this mostly takes place through obfuscated means because its just better to keep the plebs passive via ignorance; way better to have an inflation rate of 7% and an interest rate of 1% and let the masses believe that their account is just fine whilst you are essentially stealing 6%/yr from them. And lets talk about how the entire global economy blew up for the best part of a decade because of the immense greed of a few, only to have the printing press turned on to bail them out thereby introducing moral hazard in to an already over-leveraged system. The current QE program benefits those closest to the printer at the expense of the unconnected. 

Bitcoin is a trustless system. I don't have to trust that you won't manipulate CPI prints, alter the money supply by 40% in a year because you can, use some of that stimulus money to give overpriced contracts to your mates, or even use that printed money to pay the wages of your staff when you are a premier league football club. All symptoms of the same problem - a lack of value backing the notes that we transact in. And to cycle back to the original point, this trustless system is enabled by the proof of work mechanism. Previous iterations of digital cash failed because their proof of work systems were not robust enough.

Bottom line here is that history is pretty clear on the matter. Fiat currency only ends up one way due to human greed and corruption.

Deleted_User said:

That is true but very misleading. What you've omitted is that bitcoin's transaction rate is limited by the number of transactions in a block and the time it takes each block to be added to the chain. The combination of those 2 limits puts the maximum at about 3-7 transactions per second. And the actual number of transactions has been close to that estimated maximum for about the last 5-6 years. The transaction rate can't go up unless the rules are changed, which has been rejected so far.

Lightning network. Thousands of TPS right now, potentially orders of magnitude more over time. Good arguments within the community right now that the future isn't multi-chain, but will be based around L2 solutions like the lightning network. The L2 solutions aren't as secure, but do benefit from the security of the underlying L1 chain. Non bitcoiners love to compare BTC to VISA, but banks aren't using VISA payments to settle between themselves. The relatively fast VISA payment rail sits on top of something much slower. 

And in hindsight, the rejection of the block size change was the best thing to happen to Bitcoin, both from a theoretical POV (greater decentralisation and confidence in unchanging monetary policy) and a market one (lol BCH).

Deleted_User said:

It implies that a lower bitcoin price would reduce the energy wasted. And yet all the bitcoin fanboys want the exact opposite: higher bitcoin price, more energy wasted, and yet no more transactions processed (because we're already bumping around the maximum).

It also suggests that measures that discourage bitcoin mining (whether bans, taxes, or whatever) have a positive effect, in reducing the energy wasted. Without needing to stop the continuation of the blockchain (which may not be do-able).

Its not wasted energy, it has a purpose. 

Yes, I want humanity to use more energy in the future. Its incredibly short sighted to suggest otherwise. Most environmentalists aren't sharp logical thinkers though. 

The Bitcoin hash rate has rebounded to every dent ever put in it and quite quickly too. Game theory incentivises old miners to return if the network hash rate falls. Exactly the kind of responsive system you want to set up, but this is done by giving participants the right incentives and not ordering them or trusting them.

Deleted_User said:

You know who else talks like this? Gold bugs. You are just gold bugs with GPUs.

I mean, pretty much the entire thesis of BTC has been that its a better gold than gold for the last 3 years, even though other digital assets have some way more interesting features. Gold showed that it was not resilient to state attack in 1933; its pretty hard to hide a load of gold in your garden or move it quickly and inconspicuously. Bitcoin does not have this vulnerability. 

lozzy1965

darren232002 said:

However, I made a point of saying essentially because this mostly takes place through obfuscated means because its just better to keep the plebs passive via ignorance; way better to have an inflation rate of 7% and an interest rate of 1% and let the masses believe that their account is just fine whilst you are essentially stealing 6%/yr from them. And lets talk about how the entire global economy blew up for the best part of a decade because of the immense greed of a few, only to have the printing press turned on to bail them out thereby introducing moral hazard in to an already over-leveraged system. The current QE program benefits those closest to the printer at the expense of the unconnected. 

Bitcoin is a trustless system. I don't have to trust that you won't manipulate CPI prints, alter the money supply by 40% in a year because you can, use some of that stimulus money to give overpriced contracts to your mates, or even use that printed money to pay the wages of your staff when you are a premier league football club. All symptoms of the same problem - a lack of value backing the notes that we transact in. And to cycle back to the original point, this trustless system is enabled by the proof of work mechanism. Previous iterations of digital cash failed because their proof of work systems were not robust enough.

Bottom line here is that history is pretty clear on the matter. Fiat currency only ends up one way due to human greed and corruption.

But as has been said before, would you rather be 40% worse off or have 40% more money printed?

User232002

lozzy1965 said:

But as has been said before, would you rather be 40% worse off or have 40% more money printed?

You realise these two things are the same?

Market crashes 40% but money is printed which makes prices reinflate. You're still 40% down in real terms, you just feel better because the number hasn't changed. 

Actually, I think the printing is worse because when money is printed it only goes to the people that own assets which results in increasing wealth inequality. As you've seen for the last decade.

HCIMbtw

Scottex99 said:

Emmia said:

NFT's are scams in my opinion. 

I appreciate that there are lots of NFT fans out there. But honestly I don't understand the attraction in paying to have a link to a thing (that can be taken down at the drop of a hat), rather than the actual physical ownership of that thing. 

I'd rather have/buy a raisin, than have/buy a link to a picture of that raisin. 

That doesn’t make it a scam.

The value in the punks and apes is clearly subjective but right now that “art” is being traded for millions.

For me a huge utility is in gaming, items and property etc in game. Skins already trade for millions. Imagine your gun in COD or your player in FIFA is now and NFT and it’s very rare. Suddenly it has value to other players…

I kind of don't understand how NFTs are essential to this.. Steam operated a market place for years which included things like CSGO skins, which carried values based on a whole range of factors, including which event they were issued at

I see NFTs potentially much more valuable as ownership of licensed content, like digital games, and the creation of secondary markets