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Location: At the dude ranch / above the sea Gender:
Posted:
Aug 28, 2026 - 6:44pm
The fluctuations of the value of bitcoin are due toâ¦nothing.
Its only âvalueâ is a place to hide value and hope to reclaim it later. Itâs only for scams and fraud.
Nobel-winning economist Paul Krugman debated three bitcoin proponents and it was obvious that they were wrong. He found no real functionality.
I found this a few years ago on Reddit. I find it summarizes it pretty well.:
LEVEL 1: Bitcoin is a digital currency. Like Dollars, it can be used to buy things.
LEVEL 2: There is a record of all bitcoin transactions ever made (aka the ledger, aka the blockchain ). Everyone who runs a bitcoin node has a copy. Comparing all of these is how ownership of bitcoin is determined.
LEVEL 3: You have a private key (secret string of numbers too long to guess) that gives you the ability to send/spend your bitcoin. If you do, this is recorded in the ledger and you no longer have access to said bitcoin.
LEVEL 3.2: You have a public key (Not secret string of numbers that only one person can have) that allows people to send you bitcoin. If they do, this is recorded in the ledger and you will have access to this bitcoin.
LEVEL 4: You need a "wallet" to send and receive bitcoin.
*The keys don't have any identity assigned to them, which is why criminals like to use it.
**There is no intrinsic value, just like a dollar bill. But the community decides on it's value which fluctuates all the time, kinda like a stock on Wall Street.
The blockchain has some interesting possibilities. Think of it as a global ledger that has many independent copies that are all synchronized and validated against each other. This ledger is basically a global record where we can say 'this widget is Dave's, he bought it from Gene', then that record gets put all over the globe and the record is crosschecked. So we all can look at it and say "yep, that widget is now Dave's". This has all kinds of implications for decentralized record keeping which leads to a lot of clarity, and ideally transparency.
The money part is much harder (Fiat currency is pretty hard too, so this isn't really surprising). Basically, we say Dave's widget is worth $1000. But Paul has a widget too, and Gene wants his widget back, so he offers Paul $1100 for his widget because Dave is being stingy and won't sell his back to Gene. If Paul accepts, then Dave's Widget just jumped 10% in value (on paper). Now Cathy comes along and want's a widget and Dave wants a pizza... If he sells his widget to Cathy for $1150 (no one else has widgets around), Gene just got a pump too.
Blockchain is a technology, there are lots of them and some have some legitimate purposes. Bitcoin is one of the early ones to try and be money, and here we are. Then Elon Musk gets in on the action and uses blockchain to make Dogecoin (partly a joke, and partly because he was too high on ketamine to remember he was supposed to make it Xcoin). He pumps it, and because people have FOMO they buy it at increasing prices, then he bails and sells all of his widgets making an obscene profit and screwing everyone else. Basically big money brings in grifters and criminals (AKA tech bros), because you can't have anything nice. Also, money is complicated.
A key difference here is that money typically has a government/central authority controlling/backing it. Blockchain by it's nature is decentralized.
Location: At the dude ranch / above the sea Gender:
Posted:
Feb 25, 2026 - 9:27am
rgio wrote:
Kurt...we agree on something!
The current market cap is $768B for Bitcoin. I think the entire market will be almost worthless at some point, but that market cap makes it the 7th largest "organization" on the planet...just ahead of Berkshire Hathaway. Nobody is trading enough Bitcoin to front-run. They may gain some tiny advantage, but by the time the trade is complete, they could have lost more than any gain.
Well, it makes total sense, as long as the value of bitcoin is tied toâ¦
wait. What is its value tied to? What is it acting as a proxy for?
I listen to Paul Krugman: âItâs a cult.â He finds no legitimate reason for bitcoin to be used. This is in alignment with what we all know.
Even the bros canât really answer: is it an investment (HODL!) or is it currency that you spend actively? Itâs certainly not Shimmer floor wax/dessert topping. I donât fall for that twice.
An interesting read. Filled in some holes in my understanding of things. Ether has allegedly addressed some of the mining concerns mentioned with Etherium 2.0 coming this summer.
It would seem that front running would be dependent on a high rate of volatility. Stable or very slowly changing prices would take away the incentive, no ?
Kurt...we agree on something!
The current market cap is $768B for Bitcoin. I think the entire market will be almost worthless at some point, but that market cap makes it the 7th largest "organization" on the planet...just ahead of Berkshire Hathaway. Nobody is trading enough Bitcoin to front-run. They may gain some tiny advantage, but by the time the trade is complete, they could have lost more than any gain.
Do you know what front running is? Let's say you're a hedge fund and you put out a big order. Let's say: You buy 100.000 Adidas shares. Such a purchase increases the demand and more demand means that the price goes up. So if the broker, through whom your hedge fund places the order, sees the order, he can profit from it by buying Adidas shares cheaply, then making your big transaction, and then selling the Adidas shares again. This is, of course, illegal insider trading. And there are authorities that are supposed to uncover and punish something like that. Because of this kind of criminal activity, financial markets are regulated. You can probably guess where it's going now. With cryptocurrencies, there is no regulator. Can you do front running there? Well, sure you can! Bitcoin is not as vulnerable, but Ethereum with its smart contracts is tailor-made to make that possible! You can also generalize the whole thing and think about the concept of "Miner Extractable Value", i.e. value that a miner can extract by manipulating the fresh block. Oh, and once you have a model like that, you can look through the transactions to see if you can find any clues. You won't guess what you'll find! Read for yourself. Hey, all this cryptocurrency stuff, it looks like a super-solid investment! Makes you want to invest your money!1!!!
An interesting read. Filled in some holes in my understanding of things. Ether has allegedly addressed some of the mining concerns mentioned with Etherium 2.0 coming this summer.
It would seem that front running would be dependent on a high rate of volatility. Stable or very slowly changing prices would take away the incentive, no ?
Let's say you're a hedge fund and you put out a big order. Let's say: You buy 100.000 Adidas shares. Such a purchase increases the demand and more demand means that the price goes up.
So if the broker, through whom your hedge fund places the order, sees the order, he can profit from it by buying Adidas shares cheaply, then making your big transaction, and then selling the Adidas shares again.
This is, of course, illegal insider trading. And there are authorities that are supposed to uncover and punish something like that. Because of this kind of criminal activity, financial markets are regulated.
You can probably guess where it's going now.
With cryptocurrencies, there is no regulator. Can you do front running there? Well, sure you can! Bitcoin is not as vulnerable, but Ethereum with its smart contracts is tailor-made to make that possible!
You can also generalize the whole thing and think about the concept of "Miner Extractable Value", i.e. value that a miner can extract by manipulating the fresh block.
Oh, and once you have a model like that, you can look through the transactions to see if you can find any clues. You won't guess what you'll find!
Read for yourself.
Hey, all this cryptocurrency stuff, it looks like a super-solid investment! Makes you want to invest your money!1!!!
âPeople who play blackjack, according to research, are more likely to push you off a cliff while hiking and set your car on fire. Hereâs our graphâ¦â
"Our results do not support the idea that the high valuation of cryptocurrencies is based on the demand from illegal transactions. Instead, they suggest that the majority of Bitcoin transactions is linked to speculation"
"...the only reason for the massive carbon footprint of Proof-of-Work and the complexity and risk of the alternatives is to maintain the illusion of decentralization."
