I'm still confused. Like, why do you want a smart contract on a ledger to track ownership of virtual items in a game vs just a centralized database?
Take, I dunno, Everquest or whatever. How to you make a game that's both affordable enough for mainstream appeal and financially sustainable if you have to verify every item transfer and you have to pay to mint a new NFT for every trash item. How do you stop bottlenecks in block verification? People aren't gonna want to wait to trade. Seems super inefficient to me.
Why you would want to use blockchain is a good question too. Especially since some games that utilize blockchain don't actually want them to be decentralized. Some would say for security, some would say for interoperability, some would say specifically for the monetization. Solid question, and I would suspect if you asked 5 different developers you'd get 5 different answers.
Isn't the point of the block chain that it's decentralized? I'm not super savvy about this stuff, but I was under the impression that the benefit of using block chain was so you had to verify every transaction through a series of chosen machines or whatever you call the person that gets to verify the block?
I guess what I'm wondering now is what would be the functional difference between a centralized block chain ledger and a traditional database?
All depends on the usage. Centralized blockchain doesn't necessarily mean that all the nodes are in one place, it just means that the nodes or validators are all, basically, pre-chosen or known. For posterity most blockchains don't go this route because it's cheaper and more secure to decentralize. Centralization offers more control. That means that you can unilaterally make decisions on the amount of currency, and generally control pretty much every aspect of the chain. It's also why those that want "trust" (pretty much as much trust as you can get) decentralize. It's also why some governments are creating centralized blockchains for their own currency, so they control every aspect of it and are able to manipulate it to their needs.
Blockchains have a number of features, such as transparency, security, immutability, interoperability, and some protocols run very efficiently. They are just a different type of distributed ledger, but with more inherent features.
Like if you own Disney Dollars at the theme park, and lets say any item you buy they give you your change in Disney Dollars, as long as you're within the Disney property everything you buy uses that system, but the moment you step outside of it, what are the dollars worth?
So if I make millions in crypto, and then buy a Tesla, the money I made to buy the car is tax free because it never passed through USD?
That's different. A tesla isn't a virtual good within a closed ecosystem. You would then be taxed on the price of the car.
Equally so if you bought a sandwich with bitcoin. You'd be taxed on the cost of the sandwich.
Otherwise if you made "millions" on crypto today and the market crashed tomorrow, how many millions would you be taxed on?
Sales tax, yes, but I'm talking income tax.
So depending on where you live, this can completely change. In most areas crypto tokens are considered property. The same with NFTs in some countries, and it can vary based on states in the US too.
So, yes you would pay sales tax, but you'd also likely have to pay additional fees related to the amount you pulled out, AND the gas fees associated -- UNLESS you already paid taxes based on the initial amount you spent.
It's all about what your country requires, but generally, crypto currency and game crypto are different in a few different ways.
So in instances where NFTs are taxed as property, crypto you earn inherently doesn't have a floor price, so you can't determine a worth to claim until its sold.
There are areas where NFTs that are gifted or airdropped have instances where the governmet would attempt to claim property tax on those items, but in the event this happens, it's usually a floor price, which is usually extremely low.
You do pay income tax on crypto you cash out, and that includes for cars.
Sure, this is all subject ot change. But in play to earn games you only pay taxes when you sell or swap it for goods based on your profit.
Again I've been part of this crypto world for a couple years now and where I am, my tax accountant went through all of my holdings. Game crypto wasn't even a factor since I hadn't sold or swapped any of it.
I understand what you are saying and yes, in the US your STATE income tax liability will change, just like anything else related to your State, but your Federal will not. Also, I do not know if it is settled as to WHERE your item is earned. Did you earn it in Florida where you live or did you earn it in Seattle where the server resides, or did you earn it in Canada where the company's address is?
And remember, while what you are discussing is items you BUY with crypto... If there is an NFT drop (Sword of Doom) and if that Sword of Doom has a value that they can estimate, then you owe tax on that regardless of whether you sell it or not. These should be treated as Collectibles and taxed on perceived value at receipt.
You will 99% get away with non-reporting now... but in the future I am 100% confident that they will enforce it. Just like they mandate Amazon and online retailers collect sales tax now.
This is completely dependent on whether the "drop" was airdropped or a drop from within a game, and what the drop corresponds to.
For example, as I said I have several blankos and some of them are given through prime, but the most recent one given out hasn't even been listed or sold on the market at all. Not a single one. There would be no decisive taxable amount to pull from.
It could be murky, but as of right now, when I do my taxes, it is significantly less murky as long as I'm not selling them.
Now if I turn around and sell that blanko for 10 grand, well, yeah, that's going to cost me. Some gaming NFTs already do charge sales tax on an initial purchase, but they don't when you resell. You wouldn't have to pay sales tax on that, as it would be considered a "private sale" even if the sale is on a proprietary market.
Honestly I do hope they regulate it in the future.
The main issue right now for me isn't the costs, or the taxes, or the implications, it's how difficult it is for the average gamer to understand it and get involved.
Pretty much every blockchain game that tries to leverage NFTs or bridge to main net is so freaking difficult to understand with the multitude of wallets, main net changes, purchase prices with gas fees.
Even if everyone was on board with the idea of blockchain gaming, trying to get into some of these games is way too convoluted for the average gamer they would HAVE to pay you or it isn't worth the effort.
They always did collect sales tax for online shopping. The difference was whether you were an international or a domestic customer.
Now it no longer matters, I pay Canadian sales tax no matter the origin of the online retailer.
Not here in the US. We were supposed to "self-report".. umm... yeah
Do you guys have a federal sales tax?
No. Each State (and some local cities) set sales tax.
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I believe that a tru blockchain cannot be corrupted.
I believe that is the strength of blockchain and people are using that trait to sell snake oil.
Imho
what if it was designed corrupt from the beginning? A master hash or some other back door.
i agree with the snake oil but a system designed by snakes only works for snakes.
If the blockchain can be corrupted, than it’s not a true blockchain.
What do you mean by corrupted? Ethereum has been "corrupted" before when millions of Eth were stolen and developers and major stakeholders did a hard fork and invalidated those tokens. People did get screwed in that process. That's why there is "Classic Ethereum" (the prefork) and now just "Ethereum". What a nice rebranding job they did there.
The articles I posted in the Crypto Trust thread highlight how features of immutability and decentralization are both oversold and have inherent flaws to their design.
I wonder if you've read through the comments, and which ones you choose to believe over the others.
Immutability and decentralization haven't been oversold, and the flaws are not inherent in the technology at all. Blockchain protocols don't work like that.
I believe that a tru blockchain cannot be corrupted.
I believe that is the strength of blockchain and people are using that trait to sell snake oil.
Imho
what if it was designed corrupt from the beginning? A master hash or some other back door.
i agree with the snake oil but a system designed by snakes only works for snakes.
If the blockchain can be corrupted, than it’s not a true blockchain.
What do you mean by corrupted?
Is it possible for someone to defraud a true blockchain?
edit: I’m not a software engineer, usually when I talk corruption, I’m talking human. I realize that for guys in your trade you probably think I’m talking about something else
",,, Bitmart lost around $100 million in various cryptocurrencies on the
ethereum blockchain and another $96 million from coins on the binance
smart chain."
So what happens to the people who lost their assets? Are they insured? Can the hackers steal NFT's from a game too?
I believe that a tru blockchain cannot be corrupted.
I believe that is the strength of blockchain and people are using that trait to sell snake oil.
Imho
what if it was designed corrupt from the beginning? A master hash or some other back door.
i agree with the snake oil but a system designed by snakes only works for snakes.
If the blockchain can be corrupted, than it’s not a true blockchain.
What do you mean by corrupted?
Is it possible for someone to defraud a true blockchain?
edit: I’m not a software engineer, usually when I talk corruption, I’m talking human. I realize that for guys in your trade you probably think I’m talking about something else
It is possible. I mean, it depends on how you define a "true blockchain". If you're thinking of the true blockchain in the utopian "everything is perfect as it should be" sense, then no.
If you're talking about them defrauding blockchain as it stands now, it depends on the protocol and some are easier than others.
So the thread Torval brings up is about an instance back in 2016 with ethereum where a large amount of ethereum was stolen, and in order to fix it, ethereum was created into a hard fork, retiring the old blockchain with the fraud. The majority of the blockchain stayed the same as the fork transitioned into the ethereum we have today (but not ethereum 2.0 which is the next transition to proof of stake) and the old blockchain became a separate fork known as ethereum classic which contained all the data including the fraud.
The blockchain in that instance wasn't necessarily changed, because you could go back and reference everything that was written on that blockchain, while the new chain fixed the flaw and continued the chain, without any loss of transaction for legitimate purposes.
Is it completely possible for you to change blocks in a blockchain? Technically yes, but you would need a full consensus of all validators, which means that the blockchain in question would likely HAVE to be centralized, and all agree.
Which is why centralization comes into play and why he tries to state how blockchains overstate decentralization, but that's not necessarily correct.
decentralization basically means that you don't have a single authority that controls the validators of the token. Usually decentralization is done by giving anyone willing to validate the token through proof of work. This is essentially the cases that are explained in the thread and in the blog post. There are a number of validators required to validate a transaction, and if you control the majority of the hash rate you have a potential, however small, to rewrite parts of the blockchain, but it depends on the protocol and the expense, which usually far outweighs the cost to do so.
So with new technology and security protocols entering the market, and the increasing size of the blockchain, it is becoming far more difficult for something like that to happen, and really the only way to ensure that it doesn't is to fully decentralize the protocols, or have a mixed requirement of validators.
"Defrauding" proof of work is just part of the reason protocols are moving away from it, and it's not like after the 2016 ethereum hard fork they just shrugged and said "oh well, that's the protocol". Ethereum is working to move on from there, and there are plenty of other blockchains that have learned from the past failures.
So while I believe in the technology, that it has utility, I'm not going to lie and say all protocols are immutable and they are all completely decentralized, but there are instances right now of emerging protocols that fall into the immutable and decentralized category, even if they do have other problems.
I'll just repost this here from the Trust thread. This isn't about believing. The Molly White blog goes over the problems with immutability and decentralization and documents them with facts. The Preston Byrne tweet absolutely illustrates how crypto ecosystems can be, and allegedly have been, manipulated by a few rich and powerful individuals.
There are a couple of good article threads on Hacker News about
NFTs and Blockchain which illustrate why there are and will continue to
be trust issues.
This thread discusses an
article claiming "Blockchain based systems are not what they say they
are". There are some insightful comments by well informed posters.
The
thread topic is "Ethereum founder talks diguising purchases to make
them look like a legit ICO". The short of this explains how to make a
few super whale investors look like a slew of small investors to
artificially promote Ethereum as a popular investment. There are some
rather serious implications to this. The link to the tweet is in the
thread title.
This information I hope will help
people make cautious informed decisions before jumping head first into a
complex social and financial trend. It can also help provide
information for a more informed discussion regarding some of the
pitfalls and claims surrounding the technology.
And to think that all of this is over something that doesn't exist offline. Something that only has value because people think it has value. Something that will crash hard with the next wave of world-wide economic distress, when everyone needs real money to pay the debts they can't afford anymore.
The world has gone crazy. Not just with this. There's something akin to a "mass hysteria" going on that's fueled by the evolution and growth of "social media." But we'll get through this as soon as reality sets in again. After many people get hurt.
I'll just repost this here from the Trust thread. This isn't about believing. The Molly White blog goes over the problems with immutability and decentralization and documents them with facts. The Preston Byrne tweet absolutely illustrates how crypto ecosystems can be, and allegedly have been, manipulated by a few rich and powerful individuals.
There are a couple of good article threads on Hacker News about
NFTs and Blockchain which illustrate why there are and will continue to
be trust issues.
This thread discusses an
article claiming "Blockchain based systems are not what they say they
are". There are some insightful comments by well informed posters.
The
thread topic is "Ethereum founder talks diguising purchases to make
them look like a legit ICO". The short of this explains how to make a
few super whale investors look like a slew of small investors to
artificially promote Ethereum as a popular investment. There are some
rather serious implications to this. The link to the tweet is in the
thread title.
This information I hope will help
people make cautious informed decisions before jumping head first into a
complex social and financial trend. It can also help provide
information for a more informed discussion regarding some of the
pitfalls and claims surrounding the technology.
And to think that all of this is over something that doesn't exist offline. Something that only has value because people think it has value. Something that will crash hard with the next wave of world-wide economic distress, when everyone needs real money to pay the debts they can't afford anymore.
The world has gone crazy. Not just with this. There's something akin to a "mass hysteria" going on that's fueled by the evolution and growth of "social media." But we'll get through this as soon as reality sets in again. After many people get hurt.
Not entirely accurate, cold storage can store holdings offline. Technically if you were to hold the right stablecoins offline it essentially would be no different than having your funds in a bank to begin with.
I mean I was around when a bank in the US went kaput. I couldn't withdraw my funds at all, so if we're looking at worldwide economic distress I don't think that crypto would be the only one affected.
I'll just repost this here from the Trust thread. This isn't about believing. The Molly White blog goes over the problems with immutability and decentralization and documents them with facts. The Preston Byrne tweet absolutely illustrates how crypto ecosystems can be, and allegedly have been, manipulated by a few rich and powerful individuals.
There are a couple of good article threads on Hacker News about
NFTs and Blockchain which illustrate why there are and will continue to
be trust issues.
This thread discusses an
article claiming "Blockchain based systems are not what they say they
are". There are some insightful comments by well informed posters.
The
thread topic is "Ethereum founder talks diguising purchases to make
them look like a legit ICO". The short of this explains how to make a
few super whale investors look like a slew of small investors to
artificially promote Ethereum as a popular investment. There are some
rather serious implications to this. The link to the tweet is in the
thread title.
This information I hope will help
people make cautious informed decisions before jumping head first into a
complex social and financial trend. It can also help provide
information for a more informed discussion regarding some of the
pitfalls and claims surrounding the technology.
And to think that all of this is over something that doesn't exist offline. Something that only has value because people think it has value. Something that will crash hard with the next wave of world-wide economic distress, when everyone needs real money to pay the debts they can't afford anymore.
The world has gone crazy. Not just with this. There's something akin to a "mass hysteria" going on that's fueled by the evolution and growth of "social media." But we'll get through this as soon as reality sets in again. After many people get hurt.
Not entirely accurate, cold storage can store holdings offline. Technically if you were to hold the right stablecoins offline it essentially would be no different than having your funds in a bank to begin with.
I mean I was around when a bank in the US went kaput. I couldn't withdraw my funds at all, so if we're looking at worldwide economic distress I don't think that crypto would be the only one affected.
No, it wouldn't be the only thing affected, you are right about that. But there's a big difference between a few banks failing hard like that, and the entire system of something like Cryptos. Even gold sells off under distress of that nature, because big institutions need the cash immediately for loan payments and to reset their situations. But gold will always have value, and will always recover. Cryptos are a different story, exactly because they don't actually have any real value behind them. They'll be dumped and many will not go back to them with said reality check.
I'll just repost this here from the Trust thread. This isn't about believing. The Molly White blog goes over the problems with immutability and decentralization and documents them with facts. The Preston Byrne tweet absolutely illustrates how crypto ecosystems can be, and allegedly have been, manipulated by a few rich and powerful individuals.
There are a couple of good article threads on Hacker News about
NFTs and Blockchain which illustrate why there are and will continue to
be trust issues.
This thread discusses an
article claiming "Blockchain based systems are not what they say they
are". There are some insightful comments by well informed posters.
The
thread topic is "Ethereum founder talks diguising purchases to make
them look like a legit ICO". The short of this explains how to make a
few super whale investors look like a slew of small investors to
artificially promote Ethereum as a popular investment. There are some
rather serious implications to this. The link to the tweet is in the
thread title.
This information I hope will help
people make cautious informed decisions before jumping head first into a
complex social and financial trend. It can also help provide
information for a more informed discussion regarding some of the
pitfalls and claims surrounding the technology.
And to think that all of this is over something that doesn't exist offline. Something that only has value because people think it has value. Something that will crash hard with the next wave of world-wide economic distress, when everyone needs real money to pay the debts they can't afford anymore.
The world has gone crazy. Not just with this. There's something akin to a "mass hysteria" going on that's fueled by the evolution and growth of "social media." But we'll get through this as soon as reality sets in again. After many people get hurt.
Not entirely accurate, cold storage can store holdings offline. Technically if you were to hold the right stablecoins offline it essentially would be no different than having your funds in a bank to begin with.
I mean I was around when a bank in the US went kaput. I couldn't withdraw my funds at all, so if we're looking at worldwide economic distress I don't think that crypto would be the only one affected.
No, it wouldn't be the only thing affected, you are right about that. But there's a big difference between a few banks failing hard like that, and the entire system of something like Cryptos. Even gold sells off under distress of that nature, because big institutions need the cash immediately for loan payments and to reset their situations. But gold will always have value, and will always recover. Cryptos are a different story, exactly because they don't actually have any real value behind them. They'll be dumped and many will not go back to them with said reality check.
I mean... sort of? So stable coins are backed by government notes and securities and gold, but gold, or diamonds, don't really inherently have a value any more than four leaf clovers and seashells. I guess the inherent worth of gold in electronics might have some value there, but we could equally say herbs and food staples would fall into a more valuable territory.
It's kind of a sliding scale. If we start talking about the entirety of systems collapsing, a stable coin collapsing would mean the associated security, government note, or gold itself would also have tanked. I think at that point there's a much larger problem we'd have to deal with and crypto would be a very low priority.
I'll just repost this here from the Trust thread. This isn't about believing. The Molly White blog goes over the problems with immutability and decentralization and documents them with facts. The Preston Byrne tweet absolutely illustrates how crypto ecosystems can be, and allegedly have been, manipulated by a few rich and powerful individuals.
There are a couple of good article threads on Hacker News about
NFTs and Blockchain which illustrate why there are and will continue to
be trust issues.
This thread discusses an
article claiming "Blockchain based systems are not what they say they
are". There are some insightful comments by well informed posters.
The
thread topic is "Ethereum founder talks diguising purchases to make
them look like a legit ICO". The short of this explains how to make a
few super whale investors look like a slew of small investors to
artificially promote Ethereum as a popular investment. There are some
rather serious implications to this. The link to the tweet is in the
thread title.
This information I hope will help
people make cautious informed decisions before jumping head first into a
complex social and financial trend. It can also help provide
information for a more informed discussion regarding some of the
pitfalls and claims surrounding the technology.
And to think that all of this is over something that doesn't exist offline. Something that only has value because people think it has value. Something that will crash hard with the next wave of world-wide economic distress, when everyone needs real money to pay the debts they can't afford anymore.
The world has gone crazy. Not just with this. There's something akin to a "mass hysteria" going on that's fueled by the evolution and growth of "social media." But we'll get through this as soon as reality sets in again. After many people get hurt.
Not entirely accurate, cold storage can store holdings offline. Technically if you were to hold the right stablecoins offline it essentially would be no different than having your funds in a bank to begin with.
I mean I was around when a bank in the US went kaput. I couldn't withdraw my funds at all, so if we're looking at worldwide economic distress I don't think that crypto would be the only one affected.
No, it wouldn't be the only thing affected, you are right about that. But there's a big difference between a few banks failing hard like that, and the entire system of something like Cryptos. Even gold sells off under distress of that nature, because big institutions need the cash immediately for loan payments and to reset their situations. But gold will always have value, and will always recover. Cryptos are a different story, exactly because they don't actually have any real value behind them. They'll be dumped and many will not go back to them with said reality check.
I mean... sort of? So stable coins are backed by government notes and securities and gold, but gold, or diamonds, don't really inherently have a value any more than four leaf clovers and seashells. I guess the inherent worth of gold in electronics might have some value there, but we could equally say herbs and food staples would fall into a more valuable territory.
It's kind of a sliding scale. If we start talking about the entirety of systems collapsing, a stable coin collapsing would mean the associated security, government note, or gold itself would also have tanked. I think at that point there's a much larger problem we'd have to deal with and crypto would be a very low priority.
Stable coins? How much backing do they have? (Not much.) Where's the cost of that backing come from? And as it goes up because fools buy into it, how do they keep up with the backing percentage, and pay for it? Where's the real money come from?
Let me guess. They're going to buy their backing with their own Cryptos. The next question is, where are those Cryptos going to come from?
I'll just repost this here from the Trust thread. This isn't about believing. The Molly White blog goes over the problems with immutability and decentralization and documents them with facts. The Preston Byrne tweet absolutely illustrates how crypto ecosystems can be, and allegedly have been, manipulated by a few rich and powerful individuals.
There are a couple of good article threads on Hacker News about
NFTs and Blockchain which illustrate why there are and will continue to
be trust issues.
This thread discusses an
article claiming "Blockchain based systems are not what they say they
are". There are some insightful comments by well informed posters.
The
thread topic is "Ethereum founder talks diguising purchases to make
them look like a legit ICO". The short of this explains how to make a
few super whale investors look like a slew of small investors to
artificially promote Ethereum as a popular investment. There are some
rather serious implications to this. The link to the tweet is in the
thread title.
This information I hope will help
people make cautious informed decisions before jumping head first into a
complex social and financial trend. It can also help provide
information for a more informed discussion regarding some of the
pitfalls and claims surrounding the technology.
And to think that all of this is over something that doesn't exist offline. Something that only has value because people think it has value. Something that will crash hard with the next wave of world-wide economic distress, when everyone needs real money to pay the debts they can't afford anymore.
The world has gone crazy. Not just with this. There's something akin to a "mass hysteria" going on that's fueled by the evolution and growth of "social media." But we'll get through this as soon as reality sets in again. After many people get hurt.
Not entirely accurate, cold storage can store holdings offline. Technically if you were to hold the right stablecoins offline it essentially would be no different than having your funds in a bank to begin with.
I mean I was around when a bank in the US went kaput. I couldn't withdraw my funds at all, so if we're looking at worldwide economic distress I don't think that crypto would be the only one affected.
No, it wouldn't be the only thing affected, you are right about that. But there's a big difference between a few banks failing hard like that, and the entire system of something like Cryptos. Even gold sells off under distress of that nature, because big institutions need the cash immediately for loan payments and to reset their situations. But gold will always have value, and will always recover. Cryptos are a different story, exactly because they don't actually have any real value behind them. They'll be dumped and many will not go back to them with said reality check.
There is a lot more than that at stake right now.
Take advantage of the low rates, but be able to erase them immediately when you need to.
Read about the 1970's if you didn't live it.
The 1970's were a mild form of what we're going to go through. And we're being hit on two fronts, maybe three if you think about it.
edit: scratch that we're being hit on four fronts.
I'll just repost this here from the Trust thread. This isn't about believing. The Molly White blog goes over the problems with immutability and decentralization and documents them with facts. The Preston Byrne tweet absolutely illustrates how crypto ecosystems can be, and allegedly have been, manipulated by a few rich and powerful individuals.
There are a couple of good article threads on Hacker News about
NFTs and Blockchain which illustrate why there are and will continue to
be trust issues.
This thread discusses an
article claiming "Blockchain based systems are not what they say they
are". There are some insightful comments by well informed posters.
The
thread topic is "Ethereum founder talks diguising purchases to make
them look like a legit ICO". The short of this explains how to make a
few super whale investors look like a slew of small investors to
artificially promote Ethereum as a popular investment. There are some
rather serious implications to this. The link to the tweet is in the
thread title.
This information I hope will help
people make cautious informed decisions before jumping head first into a
complex social and financial trend. It can also help provide
information for a more informed discussion regarding some of the
pitfalls and claims surrounding the technology.
And to think that all of this is over something that doesn't exist offline. Something that only has value because people think it has value. Something that will crash hard with the next wave of world-wide economic distress, when everyone needs real money to pay the debts they can't afford anymore.
The world has gone crazy. Not just with this. There's something akin to a "mass hysteria" going on that's fueled by the evolution and growth of "social media." But we'll get through this as soon as reality sets in again. After many people get hurt.
Not entirely accurate, cold storage can store holdings offline. Technically if you were to hold the right stablecoins offline it essentially would be no different than having your funds in a bank to begin with.
I mean I was around when a bank in the US went kaput. I couldn't withdraw my funds at all, so if we're looking at worldwide economic distress I don't think that crypto would be the only one affected.
No, it wouldn't be the only thing affected, you are right about that. But there's a big difference between a few banks failing hard like that, and the entire system of something like Cryptos. Even gold sells off under distress of that nature, because big institutions need the cash immediately for loan payments and to reset their situations. But gold will always have value, and will always recover. Cryptos are a different story, exactly because they don't actually have any real value behind them. They'll be dumped and many will not go back to them with said reality check.
I mean... sort of? So stable coins are backed by government notes and securities and gold, but gold, or diamonds, don't really inherently have a value any more than four leaf clovers and seashells. I guess the inherent worth of gold in electronics might have some value there, but we could equally say herbs and food staples would fall into a more valuable territory.
It's kind of a sliding scale. If we start talking about the entirety of systems collapsing, a stable coin collapsing would mean the associated security, government note, or gold itself would also have tanked. I think at that point there's a much larger problem we'd have to deal with and crypto would be a very low priority.
Stable coins? How much backing do they have? (Not much.) Where's the cost of that backing come from? And as it goes up because fools buy into it, how do they keep up with the backing percentage, and pay for it? Where's the real money come from?
Let me guess. They're going to buy their backing with their own Cryptos. The next question is, where are those Cryptos going to come from?
Stable coins don't go up or down. That's their purpose, they are stable 1 to 1 with the USD.
Buying into USDC isn't going to make you rich, it's not going to fluctuate, it's not a speculative investment.
"USDC is fully backed by cash and equivalents and short-duration U.S. Treasuries, so that it is always redeemable 1:1 for U.S. dollars. Each month, we publish attestation reports by Grant Thornton regarding the reserve balances backing USDC."
They are one of if not the most compliant with audits and government regulations to attest to that.
Not all cryptocurrency and blockchains are created equal my friend.
I'll just repost this here from the Trust thread. This isn't about believing. The Molly White blog goes over the problems with immutability and decentralization and documents them with facts. The Preston Byrne tweet absolutely illustrates how crypto ecosystems can be, and allegedly have been, manipulated by a few rich and powerful individuals.
There are a couple of good article threads on Hacker News about
NFTs and Blockchain which illustrate why there are and will continue to
be trust issues.
This thread discusses an
article claiming "Blockchain based systems are not what they say they
are". There are some insightful comments by well informed posters.
The
thread topic is "Ethereum founder talks diguising purchases to make
them look like a legit ICO". The short of this explains how to make a
few super whale investors look like a slew of small investors to
artificially promote Ethereum as a popular investment. There are some
rather serious implications to this. The link to the tweet is in the
thread title.
This information I hope will help
people make cautious informed decisions before jumping head first into a
complex social and financial trend. It can also help provide
information for a more informed discussion regarding some of the
pitfalls and claims surrounding the technology.
And to think that all of this is over something that doesn't exist offline. Something that only has value because people think it has value. Something that will crash hard with the next wave of world-wide economic distress, when everyone needs real money to pay the debts they can't afford anymore.
The world has gone crazy. Not just with this. There's something akin to a "mass hysteria" going on that's fueled by the evolution and growth of "social media." But we'll get through this as soon as reality sets in again. After many people get hurt.
Not entirely accurate, cold storage can store holdings offline. Technically if you were to hold the right stablecoins offline it essentially would be no different than having your funds in a bank to begin with.
I mean I was around when a bank in the US went kaput. I couldn't withdraw my funds at all, so if we're looking at worldwide economic distress I don't think that crypto would be the only one affected.
No, it wouldn't be the only thing affected, you are right about that. But there's a big difference between a few banks failing hard like that, and the entire system of something like Cryptos. Even gold sells off under distress of that nature, because big institutions need the cash immediately for loan payments and to reset their situations. But gold will always have value, and will always recover. Cryptos are a different story, exactly because they don't actually have any real value behind them. They'll be dumped and many will not go back to them with said reality check.
There is a lot more than that at stake right now.
Take advantage of the low rates, but be able to erase them immediately when you need to.
Read about the 1970's if you didn't live it.
The 1970's were a mild form of what we're going to go through. And we're being hit on two fronts, maybe three if you think about it.
edit: scratch that we're being hit on four fronts.
Imho
I know. And yes, I entered the work force in 1971 so I know full well what it was like. My mother was making 18% on her CDs. And while her money was locked up for a couple of years, CD's went up to around 24%. Talk about inflation!
And here we are today, with the same kind of idiots (if not worse) running our country. That goes back to that "mass hysteria" like thing from social media that I mentioned.
I'll just repost this here from the Trust thread. This isn't about believing. The Molly White blog goes over the problems with immutability and decentralization and documents them with facts. The Preston Byrne tweet absolutely illustrates how crypto ecosystems can be, and allegedly have been, manipulated by a few rich and powerful individuals.
There are a couple of good article threads on Hacker News about
NFTs and Blockchain which illustrate why there are and will continue to
be trust issues.
This thread discusses an
article claiming "Blockchain based systems are not what they say they
are". There are some insightful comments by well informed posters.
The
thread topic is "Ethereum founder talks diguising purchases to make
them look like a legit ICO". The short of this explains how to make a
few super whale investors look like a slew of small investors to
artificially promote Ethereum as a popular investment. There are some
rather serious implications to this. The link to the tweet is in the
thread title.
This information I hope will help
people make cautious informed decisions before jumping head first into a
complex social and financial trend. It can also help provide
information for a more informed discussion regarding some of the
pitfalls and claims surrounding the technology.
And to think that all of this is over something that doesn't exist offline. Something that only has value because people think it has value. Something that will crash hard with the next wave of world-wide economic distress, when everyone needs real money to pay the debts they can't afford anymore.
The world has gone crazy. Not just with this. There's something akin to a "mass hysteria" going on that's fueled by the evolution and growth of "social media." But we'll get through this as soon as reality sets in again. After many people get hurt.
Not entirely accurate, cold storage can store holdings offline. Technically if you were to hold the right stablecoins offline it essentially would be no different than having your funds in a bank to begin with.
I mean I was around when a bank in the US went kaput. I couldn't withdraw my funds at all, so if we're looking at worldwide economic distress I don't think that crypto would be the only one affected.
No, it wouldn't be the only thing affected, you are right about that. But there's a big difference between a few banks failing hard like that, and the entire system of something like Cryptos. Even gold sells off under distress of that nature, because big institutions need the cash immediately for loan payments and to reset their situations. But gold will always have value, and will always recover. Cryptos are a different story, exactly because they don't actually have any real value behind them. They'll be dumped and many will not go back to them with said reality check.
I mean... sort of? So stable coins are backed by government notes and securities and gold, but gold, or diamonds, don't really inherently have a value any more than four leaf clovers and seashells. I guess the inherent worth of gold in electronics might have some value there, but we could equally say herbs and food staples would fall into a more valuable territory.
It's kind of a sliding scale. If we start talking about the entirety of systems collapsing, a stable coin collapsing would mean the associated security, government note, or gold itself would also have tanked. I think at that point there's a much larger problem we'd have to deal with and crypto would be a very low priority.
Stable coins? How much backing do they have? (Not much.) Where's the cost of that backing come from? And as it goes up because fools buy into it, how do they keep up with the backing percentage, and pay for it? Where's the real money come from?
Let me guess. They're going to buy their backing with their own Cryptos. The next question is, where are those Cryptos going to come from?
Stable coins don't go up or down. That's their purpose, they are stable 1 to 1 with the USD.
Buying into USDC isn't going to make you rich, it's not going to fluctuate, it's not a speculative investment.
"USDC is fully backed by cash and equivalents and short-duration U.S. Treasuries, so that it is always redeemable 1:1 for U.S. dollars. Each month, we publish attestation reports by Grant Thornton regarding the reserve balances backing USDC."
They are one of if not the most compliant with audits and government regulations to attest to that.
Not all cryptocurrency and blockchains are created equal my friend.
Ok, I wasn't aware of this. So, then, where's the benefit? It's just another extension of the US dollar, only put in blockchains. And that goes back to Torval's post, and the problems, at the top of this thread. In other words, another means to manipulate?
But I will admit that this particular Crypto info means I'm going to have to think some more. Pros and cons, you know. Gut instinct is that it opens a door we shouldn't go through.
First realization from the USCD (US Dollar Coin) is that there may not be a choice. If other countries are doing it, and if other Cryptos aren't nearly as secure, the US simply might have to participate for everyone's benefit.
I still don't want this stuff in my games. I want a great game, not a game that's built for PtE. Not anymore than I want CSs.
Edit: Scratch that. I just read Stizzled's post above, and agree that if it's not issued by the US government, that's a problem.
Stable coins? How much backing do they have? (Not much.) Where's the cost of that backing come from? And as it goes up because fools buy into it, how do they keep up with the backing percentage, and pay for it? Where's the real money come from?
Let me guess. They're going to buy their backing with their own Cryptos. The next question is, where are those Cryptos going to come from?
Stable coins don't go up or down. That's their purpose, they are stable 1 to 1 with the USD.
Buying into USDC isn't going to make you rich, it's not going to fluctuate, it's not a speculative investment.
"USDC is fully backed by cash and equivalents and short-duration U.S. Treasuries, so that it is always redeemable 1:1 for U.S. dollars. Each month, we publish attestation reports by Grant Thornton regarding the reserve balances backing USDC."
They are one of if not the most compliant with audits and government regulations to attest to that.
Not all cryptocurrency and blockchains are created equal my friend.
Ok, I wasn't aware of this. So, then, where's the benefit? It's just another extension of the US dollar, only put in blockchains. And that goes back to Torval's post, and the problems, at the top of this thread. In other words, another means to manipulate?
But I will admit that this particular Crypto info means I'm going to have to think some more. Pros and cons, you know. Gut instinct is that it opens a door we shouldn't go through.
So, thats a tough question to answer. I guess the benefit is to have a virtual USD, so to speak. USDC is generally safe to hold, and runs on a lot of different blockchains. You can stake it and earn APR like a savings account, you can participate in decentralized finance applications.
Mostly? People seem to use it as an intermediary currency. For example when bitcoin crashes, instead of pulling money out, a lot will transition it to USDC instead to hold the value. Could be for tax purposes, or other reasons. Another reason is, because USDC can be transitioned through a lot of chains, it is probably easier to bridge the currency to other protocols?
I guess everyone has their reason.
What Torval brings up is a different animal really. USDC's mints were initially minted on Ethereum, but now spans across many different blockchains, including proof of stake protocols where the fraud mentioned in the thread are not a problem. Mostly because proof of stake requires you stake a ton of currency, with the prospect of losing it if you don't validate the transactions as required. You would have to stake a bunch of tokens to get priority, on a lot of different nodes, and the risk of losing it is too high, much more than what you would gain.
There are other means to manipulate currencies. Can't really think of a way for fiat backed stablecoins to be manipulated that don't involve governments getting involved, which isn't out of the realm of possibility.
I mean... sort of? So stable coins are backed by government notes and securities and gold, but gold, or diamonds, don't really inherently have a value any more than four leaf clovers and seashells. I guess the inherent worth of gold in electronics might have some value there, but we could equally say herbs and food staples would fall into a more valuable territory.
It's kind of a sliding scale. If we start talking about the entirety of systems collapsing, a stable coin collapsing would mean the associated security, government note, or gold itself would also have tanked. I think at that point there's a much larger problem we'd have to deal with and crypto would be a very low priority.
Stable coins? How much backing do they have? (Not much.) Where's the cost of that backing come from? And as it goes up because fools buy into it, how do they keep up with the backing percentage, and pay for it? Where's the real money come from?
Let me guess. They're going to buy their backing with their own Cryptos. The next question is, where are those Cryptos going to come from?
Stable coins don't go up or down. That's their purpose, they are stable 1 to 1 with the USD.
Buying into USDC isn't going to make you rich, it's not going to fluctuate, it's not a speculative investment.
"USDC is fully backed by cash and equivalents and short-duration U.S. Treasuries, so that it is always redeemable 1:1 for U.S. dollars. Each month, we publish attestation reports by Grant Thornton regarding the reserve balances backing USDC."
They are one of if not the most compliant with audits and government regulations to attest to that.
Not all cryptocurrency and blockchains are created equal my friend.
Stablecoins aren't all sunshine and roses though. Stablecoins only have value because of the trust users put into the coin's issuer. Tether and Circle are not the U.S. Government and stablecoins do not offer the same level of security that fiat does to the end user.
You're basically just trading your government backed fiat for, well just another crypto. Cryptos that are, currently, pretty much only used to facilitate the trade of other blockchain based assets. It is nowhere near the same as having your cash stored in a bank.
Eh, doesn't matter though.
The digital yuan is backed by the chinese government, how much trust do you put in that? What about other governments that are outlawing decentralized currencies in favor of their own? Times are changing quickly.
For USDC you're trading government backed fiat for crypto backed by government backed fiat and securities.
The only major difference in the US is that banks have FDIC insured deposits of 250k dollars, which again, kind of falls apart in a massive global economic failure anyways.
I mean, complain it's not sunshine and roses, but I've earned more apr on my USDC than I have in a CD over the past 5 years. I mean 1% for a 5 year CD these days? Mm... staking USDC over the past year I had rates from 4% up to 13% apy.
Just pointing out areas where the premise of risk can be minimize with stable coins, where rewards can still be considered "safe" by investment standards.
To be fair, volatile coins can earn yields much higher that fluctuate daily, some of which will earn you 90% or more apy (but in those cases you'll never stay at 90% apy, they usually decline within a few months, and you'll incur fees if you pull out early plus transaction fees, usually totaling about 6 - 10% of earnings).
But I digress.
Yes, you're right that it's not a government currency, but I wouldn't put stable coins in a category with other coins, especially those that are audited by one of the most trusted tax and audit companies in the US. and one of the largest in the world. Kind of puts it in perspective.
Just trying to live long enough to play a new, released MMORPG, playing New Worlds atm
Fools find no pleasure in understanding but delight in airing their own opinions. Pvbs 18:2, NIV
Don't just play games, inhabit virtual worlds™
"This is the most intelligent, well qualified and articulate response to a post I have ever seen on these forums. It's a shame most people here won't have the attention span to read past the second line." - Anon
Comments
Blockchains have a number of features, such as transparency, security, immutability, interoperability, and some protocols run very efficiently. They are just a different type of distributed ledger, but with more inherent features.
All time classic MY NEW FAVORITE POST! (Keep laying those bricks)
"I should point out that no other company has shipped out a beta on a disc before this." - Official Mortal Online Lead Community Moderator
Proudly wearing the Harbinger badge since Dec 23, 2017.
Coined the phrase "Role-Playing a Development Team" January 2018
"Oddly Slap is the main reason I stay in these forums." - Mystichaze April 9th 2018
Immutability and decentralization haven't been oversold, and the flaws are not inherent in the technology at all. Blockchain protocols don't work like that.
edit: I’m not a software engineer, usually when I talk corruption, I’m talking human. I realize that for guys in your trade you probably think I’m talking about something else
"Be water my friend" - Bruce Lee
------------
2024: 47 years on the Net.
If you're talking about them defrauding blockchain as it stands now, it depends on the protocol and some are easier than others.
So the thread Torval brings up is about an instance back in 2016 with ethereum where a large amount of ethereum was stolen, and in order to fix it, ethereum was created into a hard fork, retiring the old blockchain with the fraud. The majority of the blockchain stayed the same as the fork transitioned into the ethereum we have today (but not ethereum 2.0 which is the next transition to proof of stake) and the old blockchain became a separate fork known as ethereum classic which contained all the data including the fraud.
The blockchain in that instance wasn't necessarily changed, because you could go back and reference everything that was written on that blockchain, while the new chain fixed the flaw and continued the chain, without any loss of transaction for legitimate purposes.
Is it completely possible for you to change blocks in a blockchain? Technically yes, but you would need a full consensus of all validators, which means that the blockchain in question would likely HAVE to be centralized, and all agree.
Which is why centralization comes into play and why he tries to state how blockchains overstate decentralization, but that's not necessarily correct.
decentralization basically means that you don't have a single authority that controls the validators of the token. Usually decentralization is done by giving anyone willing to validate the token through proof of work. This is essentially the cases that are explained in the thread and in the blog post. There are a number of validators required to validate a transaction, and if you control the majority of the hash rate you have a potential, however small, to rewrite parts of the blockchain, but it depends on the protocol and the expense, which usually far outweighs the cost to do so.
So with new technology and security protocols entering the market, and the increasing size of the blockchain, it is becoming far more difficult for something like that to happen, and really the only way to ensure that it doesn't is to fully decentralize the protocols, or have a mixed requirement of validators.
"Defrauding" proof of work is just part of the reason protocols are moving away from it, and it's not like after the 2016 ethereum hard fork they just shrugged and said "oh well, that's the protocol". Ethereum is working to move on from there, and there are plenty of other blockchains that have learned from the past failures.
So while I believe in the technology, that it has utility, I'm not going to lie and say all protocols are immutable and they are all completely decentralized, but there are instances right now of emerging protocols that fall into the immutable and decentralized category, even if they do have other problems.
Something that will crash hard with the next wave of world-wide economic distress, when everyone needs real money to pay the debts they can't afford anymore.
The world has gone crazy. Not just with this. There's something akin to a "mass hysteria" going on that's fueled by the evolution and growth of "social media."
But we'll get through this as soon as reality sets in again. After many people get hurt.
Once upon a time....
I mean I was around when a bank in the US went kaput. I couldn't withdraw my funds at all, so if we're looking at worldwide economic distress I don't think that crypto would be the only one affected.
Even gold sells off under distress of that nature, because big institutions need the cash immediately for loan payments and to reset their situations.
But gold will always have value, and will always recover. Cryptos are a different story, exactly because they don't actually have any real value behind them. They'll be dumped and many will not go back to them with said reality check.
Once upon a time....
It's kind of a sliding scale. If we start talking about the entirety of systems collapsing, a stable coin collapsing would mean the associated security, government note, or gold itself would also have tanked. I think at that point there's a much larger problem we'd have to deal with and crypto would be a very low priority.
Where's the cost of that backing come from?
And as it goes up because fools buy into it, how do they keep up with the backing percentage, and pay for it? Where's the real money come from?
Let me guess. They're going to buy their backing with their own Cryptos.
The next question is, where are those Cryptos going to come from?
Once upon a time....
Take advantage of the low rates, but be able to erase them immediately when you need to.
Read about the 1970's if you didn't live it.
The 1970's were a mild form of what we're going to go through. And we're being hit on two fronts, maybe three if you think about it.
edit: scratch that we're being hit on four fronts.
Imho
"Be water my friend" - Bruce Lee
Buying into USDC isn't going to make you rich, it's not going to fluctuate, it's not a speculative investment.
https://www.circle.com/en/usdc
"USDC is fully backed by cash and equivalents and short-duration U.S. Treasuries, so that it is always redeemable 1:1 for U.S. dollars. Each month, we publish attestation reports by Grant Thornton regarding the reserve balances backing USDC."
They are one of if not the most compliant with audits and government regulations to attest to that.
Not all cryptocurrency and blockchains are created equal my friend.
My mother was making 18% on her CDs. And while her money was locked up for a couple of years, CD's went up to around 24%.
Talk about inflation!
And here we are today, with the same kind of idiots (if not worse) running our country.
That goes back to that "mass hysteria" like thing from social media that I mentioned.
Once upon a time....
So, then, where's the benefit?
It's just another extension of the US dollar, only put in blockchains.
And that goes back to Torval's post, and the problems, at the top of this thread.
In other words, another means to manipulate?
But I will admit that this particular Crypto info means I'm going to have to think some more. Pros and cons, you know. Gut instinct is that it opens a door we shouldn't go through.
Once upon a time....
"Be water my friend" - Bruce Lee
I still don't want this stuff in my games. I want a great game, not a game that's built for PtE. Not anymore than I want CSs.
Edit:
Scratch that. I just read Stizzled's post above, and agree that if it's not issued by the US government, that's a problem.
Once upon a time....
Mostly? People seem to use it as an intermediary currency. For example when bitcoin crashes, instead of pulling money out, a lot will transition it to USDC instead to hold the value. Could be for tax purposes, or other reasons. Another reason is, because USDC can be transitioned through a lot of chains, it is probably easier to bridge the currency to other protocols?
I guess everyone has their reason.
What Torval brings up is a different animal really. USDC's mints were initially minted on Ethereum, but now spans across many different blockchains, including proof of stake protocols where the fraud mentioned in the thread are not a problem. Mostly because proof of stake requires you stake a ton of currency, with the prospect of losing it if you don't validate the transactions as required. You would have to stake a bunch of tokens to get priority, on a lot of different nodes, and the risk of losing it is too high, much more than what you would gain.
There are other means to manipulate currencies. Can't really think of a way for fiat backed stablecoins to be manipulated that don't involve governments getting involved, which isn't out of the realm of possibility.
The digital yuan is backed by the chinese government, how much trust do you put in that? What about other governments that are outlawing decentralized currencies in favor of their own? Times are changing quickly.
For USDC you're trading government backed fiat for crypto backed by government backed fiat and securities.
The only major difference in the US is that banks have FDIC insured deposits of 250k dollars, which again, kind of falls apart in a massive global economic failure anyways.
I mean, complain it's not sunshine and roses, but I've earned more apr on my USDC than I have in a CD over the past 5 years. I mean 1% for a 5 year CD these days? Mm... staking USDC over the past year I had rates from 4% up to 13% apy.
Just pointing out areas where the premise of risk can be minimize with stable coins, where rewards can still be considered "safe" by investment standards.
To be fair, volatile coins can earn yields much higher that fluctuate daily, some of which will earn you 90% or more apy (but in those cases you'll never stay at 90% apy, they usually decline within a few months, and you'll incur fees if you pull out early plus transaction fees, usually totaling about 6 - 10% of earnings).
But I digress.
Yes, you're right that it's not a government currency, but I wouldn't put stable coins in a category with other coins, especially those that are audited by one of the most trusted tax and audit companies in the US. and one of the largest in the world. Kind of puts it in perspective.
"Be water my friend" - Bruce Lee
A common problem these days for me, not just in cryptocurrency.
"True friends stab you in the front." | Oscar Wilde
"I need to finish" - Christian Wolff: The Accountant
Just trying to live long enough to play a new, released MMORPG, playing New Worlds atm
Fools find no pleasure in understanding but delight in airing their own opinions. Pvbs 18:2, NIV
Don't just play games, inhabit virtual worlds™
"This is the most intelligent, well qualified and articulate response to a post I have ever seen on these forums. It's a shame most people here won't have the attention span to read past the second line." - Anon
"Be water my friend" - Bruce Lee
I do try my best to stay honest with what I know of the tech. Can't always say I hit the mark 100% but I try.