Comment of the Day: This is really nuts! When's the crash?: Spike: Ethereum! Blockchain! BitCoin!: "There is a nut of some interesting technology ideas involving blockchains that could potentially have applications that would be useful to explore...

...In short, by allowing for the synchronization of data structures across a multitude of systems without requiring any single one of those systems to be "in charge," the tech enables the development a unique class of applications, the properties of which we don't yet understand. The first of these applications to be developed involved a system for tracking and transferring the the ownership of digital pogs-aka, Bitcoin. This capability was latched on to by crazed Ron Paul fans who see it as a tool for overthrowing the Fed, as well as by online drug dealers.

It was the online drug dealers who found the most actual use for it, and for a time the thing actually worked as a semi-functional currency given that specific context. The Ron Paul fans, for their part, were content to just keep buy the stuff and never sell it. It's digital gold! However, it was not libertarians or drug dealers that actually created this wealth, except to the extent that many people from those groups also belong to the group that is now running the show: outright charlatans. These are the people who have basically figured out how to manipulate prices on the various cyrptocurrency exchanges, in large part by "printing money" in a way that would make the Fed ashamed.

The dirty secret that everyone knows is that a huge portion of the various cryptocurrency being traded is not being exchanged for actual money, but rather for something called "Tether," which have been created on the premise that every Tether in existence is backed by hard fiat currency in the form of a US dollar sitting in a bank account somewhere. Oddly enough, that bank account has never been audited, but the full faith and credit of the Tether Company seems good enough for teh market.

And yet, somehow a whole bunch of Tethers magically come into existence before every hike in the price of Bitcoin. So, these Tethers have been used to bid up the price of cryptocurrencies beyond all reason, and this has been magnified by a level of media hype that has brought in dumb-money "investors" out of the woodwork. This has had the infuriating effect of making Ron Paul fans very rich - at least on paper.

However, the cracks in the whole thing are showing as it becomes more and more apparent that actually extracting money from this system is very difficult. Bitcoin's usefulness as an actual currency went out the window months ago, as the price of conducting transactions has gone through the roof. And of course, the computers behind it use as much electricity as Ireland.

The whole thing is so goddamn unsustainable.


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