On the collapse of cryptocurrencies.
In the last post, before the upgrade, I wrote about the cryptocurrency collapse , and the result is that I must have hit some nerve. After all, anyone connected to the internet receives spam from people who want to convince them to buy cryptocurrencies, and if Bitcoin is the new tool to enlarge your penis, there must be some reason.
In general, for a technology to be successful, three things are needed:
- good technology
- good budget
- good people
People, budget and technology is the triangle of success. But in the case of cryptocurrencies, there was both technology and budget. The problem was the people.
Cryptocurrencies, or rather THE cryptocurrency (because it was and remains Bitcoin) are born with different purposes:
- a system that does not allow central banks to decide rates and print money (hash mining)
- a system that does not allow speculators to cause disasters by "attacking" the coins.
- a free system accessible to everyone in the world, therefore without intermediaries.
To say that it has failed all along the line is an understatement: central banks, intermediaries and speculators have not only won: they have won. And why'?
Because it is believed that there is a technological solution that intends to solve people's problems without commitment.
Let me explain: if you ask cryptocoin fanatics what prevents someone from printing cryptocurrencies and creating inflation, they will stun you for hours on talk about computational complexity, convinced that it is impossible for a speculator, no matter how big, to print all the cryptocoins he wants. In reality, if we look at the number of cryptocoins, we immediately discover that the method exists and it is very easy:
just make your own cryptocoin, and you can print (because you are at the beginning) as many coins as you want.
Of course, it wouldn't work if there were no exchangers, which will allow your cazzocoin to be exchanged for Bitcoin. Because if tomorrow you screw up and do an initial mining of this cryptocoin for millions of euros, and then you exchange them for Bitcoin on an exchanger, in case you didn't notice it is as if you had printed millions of euros of bitcoin.
Of course, at that point, however, you will have to make sure that your cazzocoin is successful and traded. No problem, because at that point we invent a new bullshit: stablecoins, that is cryptocoins that are stable because they have an underlying in money, those issued by central banks. But this is even worse: you make your own stablecoin by putting money… where? In collateral, let's say, and then you trade it for bitcoin. So you created a derivative of the money you pledge, and then you swapped the derivative into bitcoin.
Obviously, anyone who knows the CAPM and all its subsequent models ( https://en.wikipedia.org/wiki/Capital_asset_pricing_model ) knows very well that this will produce cryptocurrency portfolios where those at zero risk are the stable ones, and from that moment on speculators are home again. Simply, cryptocurrencies are made:
it is not for nothing that their number is very similar to the number of Hedge Funds dealing with repeating coins: https://coinmarketcap.com/all/views/all/ . In general, that is, the best way to print money in the crypto world is to make your own cryptocoin.
And if you notice by scrolling down the list and expanding it, most of them are "not mineable". In practice, if they are made at home and bought them by themselves, then exchange them, because the more coins, the more you can play CAPM.
And this is the current state of those cryptocurrencies: it is an exotic derivatives market that no one in their right mind should call "money". They are simply exotic crypto-derivatives: if you don't believe me, try ordering a pizza using one chosen at random. Today. The name "cryptocoin", that is, is wrong.
And yet, believe me or not, at the beginning of bitcoin's expansion I myself, myself, bought some beers in Amsterdam. The problem is, in fact, that in those days Bitcoin was a cryptocoin. It is now an exotic OTC crypto derivative.
Basically, what do hedges do?
They create an IT company, which creates the "cryptocurrency".
They buy the coin themselves, in an ICO procedure, i.e. they give their money to themselves to buy this coin.
Having done the ICO and having Market Cap, they connect to an exchanger and exchange their new currency with Bitcoin or Eth, (which is as if they printed Bitcoin or Eth, but without the hassle of mining).
But repeat with them: “you can't print bitcoin like the central bank does”. Well, in a way, no: the central bank has rules. The creation of a new cryptocurrency, very few.
But then you will tell me: we can glimpse a technological solution to all these problems. After all, obfuscating some data could even prevent an exchanger from working, reducing the size of some fields in the blocks could allow only small exchanges, etc. Very true.
But I repeat: we are still trusting technology to solve a problem related to people.
When bitcoin was born and the first pioneers (i.e. shops and bars) started using it, there were not yet a million narcissistic assholes in silicon valley, with an undeserved and inflated bank account, a brain as big as the code of "Tinder for Cats ", And the presumption of" reinventing the future "even when they went to hell.
But at some point they moved (and when they move in silicon valley they all move together, because being innovators and creatives they march regimented like lead soldiers), and they invaded the sector.
Each of them had an undeserved amount of money in the bank, which luckily was taken out of their hands, and obviously all these fat chicks were too great an opportunity for the usual, classic financial wolves.
If speculators started creating cryptocurrencies it is because they knew that a pile of idiots over-excited by anything labeled "new" would throw all the money they had into the titanic enterprise… of becoming poor.
I can't blame the hedge fund that creates a cryptocurrency (but ours helps the monk seal, that's fun!) To pluck the silicon valley's balls. When you're a miserable, incompetent idiot and they fill you with money because you can program Tinder for Cats, losing everything in the cryptocurrency business is good news for the world.
Is this a technology problem? No. It's a human problem.
But there is an even worse type of hedge fund. He is the "evangelist". Knowing that he was dealing with an asset that is no longer a currency, he went to propose to his retired mother. The one who quit his job "to make crypto only" and sold crypto derivatives to all his friends and colleagues.
It's down the chain: but the spammer who opens a porn account on twitter to have it subscribed, and then changes it to an account that sells cryptocoins, is so low in the evolutionary chain that I would avoid really talking about it: and then , already existed and sold Cialis, Slavic girls looking for a serious husband (cit.), and Roger the Nigerian who has 35 billion in the bank and will give half of it if you help him.
But let's go back to the bomb, that is to the "evangelist". It is often a computer scientist. A person who must distinguish from "diverge", "converge", "and 'polynomial" from "with the sauce and' very good".
Yet, it was they who convinced relatives and friends, putting their face and their IT credibility into cryptocoin. The "evangelists".
Those who have eyes that turn red with anger if you just dare to say that taking your wallet and uploading it to an online wallet is idiotic because the private key of anything should remain in your hand. Those that blockchain is the solution to all evil. Those that anyone needs a blockchain.
Here, those there. Who have no excuses. They have no excuses because most of them are computer scientists. On the other hand, they have lent themselves to playing the game of speculators.
Did it take so long to understand that if there are "whales", had the intent to steal money from speculators failed? It took a long time to understand that if anyone can create their own cryptocurrency, is there no "scarcity by design?" . Did it take so long to understand that exchanges are a similar centralization to the Clearing Houses of finance?
Did it take long to realize that the project had ultimately failed?
The truth is that there is a way to save cryptocurrencies: that they fail. Because ultimately, if coins stopped being just an exotic derivative to make money with, there would only be to use them for what they were born for: buying things.
Can you buy a pizza in bitcoin? In very few places. Can you order online using bitcoin? In very few places. Can you really use it as a currency? The answer is no.
And this is why the sad reaper has finally arrived and cryptocurrencies are having a collapse in credibility: they are not coins, and the more the collapse is accentuated, the clearer it is.
And only by finding a sensible use of these technologies will they have value. Otherwise, they simply will soon become a historical discourse.
And it's not the technology's fault. It is the fault of the fact that an interesting technology has fallen into the hands of the same people that the technology had to fight. Only they were cool elements of Silicon Valley, and they seemed different to us.
The cryptocurrency did not create a new finance. It just created new financiers.
Or maybe they were already there.
What is certain is that in the hands of charlatans, snake oil sellers and scammers, as it is now, this technology CANNOT be "the future".