# Your Thoughts On Cryptos



## Gizmo (5/5/14)

I am personally not a fan of litecoin or bitcoin etc. What I don't understand is

Printing money causes inflation. Inflation means that it’s more beneficial to spend money than hoard it. Spending money IS the economy.

Meanwhile bitcoin is designed to be hoarded. People that got in early hold the power to collapse the usefulness of bitcoin. If a few big early investors were to dump, value would drop, they’d be rich just for being in early, and anyone who bought in later would have essentially fallen for a Ponzi scheme.

Your guys thoughts? Am I just being negative here.


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Reactions: Like 1


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## Rob Fisher (5/5/14)

I really don't have enough knowledge on this issue to comment Gizarama!


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## Alex (5/5/14)

Is it a ponzi scheme?. Well the US Dollar and all other fiat currencies sure are.


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## crack2483 (6/5/14)

I missed the boat. Tried a little litecoin/doge coin mining but became less profitable too fast. Now I don't really care about it. I don't think it's sustainable. As soon as a specific coin becomes too difficult to mine someone comes up with another. Doesn't make sense to me. Like you said it's printing money. People give something value based on want/need. 

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## johan (6/5/14)

All monetary exchange instruments are based on glorified ponzi schemes, but bitcoin and alike are the thing of the future and already very popular in certain circles. Irrespective if Mt Gox will be liquidated or not, it will become the next instrument to trade internationally. Bitcoin ATM's up and running in Dublin, Ireland (Video clip): http://www.irishtimes.com/business/...irst-bitcoin-atm-unveiled-in-dublin-1.1723737


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## crack2483 (6/5/14)

johan said:


> All monetary exchange instruments are based on glorified ponzi schemes, but bitcoin and alike are the thing of the future and already very popular in certain circles. Irrespective if Mt Gox will be liquidated or not, it will become the next instrument to trade internationally. Bitcoin ATM's up and running in Dublin, Ireland (Video clip): http://www.irishtimes.com/business/...irst-bitcoin-atm-unveiled-in-dublin-1.1723737



Sorry Johan but I have to disagree. The ratio of people who actually mine or buy/trade coins is very small compared to the average Joe who has heard of crypto coins or knows nothing of them. The future for who? The online shopper? Let's face it. SA is pretty much still in the dark ages when it comes to Internet and online services. There will still be a need for cold hard cash for many many many years to come. 

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## BhavZ (6/5/14)

@Gizmo hope this helps


Printing money only cause inflation due to supply and demand and is really only affected in an open market (i.e. trade beyond the country's borders). As more money is printed it shifts the equilibrium (in a perfect economy) so that there is more supply than demand. thus the only way to make the currency attractive is to offer more than what is asked for when trading for another currency, this is known as currency depreciation (eg the rand getting weaker against the dollar).

Bitcoins on the other hand is a bit of a gamble at this stage. The people invested in bitcoins are banking on it becoming the official trade currency of the world. At this stage by hoarding the currency there would be a great advantage to those hoarding when the currency becomes the basic currency of trade. As demand increases they would have majority of the supply, and as demand increases for a currency so does the value of that currency, i.e. the currency will appreciate (eg dollar strengthening against the rand).

Currency itself is not a ponzi scheme, interest on the other hand is a ponzi scheme.

Currency is nothing more than a mechanism to standardise appointing value to something. Originally currency was backed by gold reserves, the reason being gold was seen as the most precious metal back then. Originally the way items were valued (simplistically) was labour vs capital (technology and machinary). 

Lets assume and that in the economy there are only 2 countries, Country A and Country B. And there are there are only 2 factors of production (FoP), labour (l) and capital (k). Capital being things like machinery which is used to produce a particular commodity. Lets say that Country A is labour intensive and Country B is capital intensive. 

In Country A it would cost 2l and 1k to produce one bale of wheat. and in Country B it would cost 1l and 3k to produce one vat of e-juice. In Country A and B the (opportunity) cost of 1l is 1 bale of tobacco and 1k is 2 bales of tobacco. Thus in Country A the (opportunity) cost of producing one bale of wheat is 2bales of tobacco + 1 bale of tobacco = 3 bales of tobacco. Whereas in Country B the opportunity) cost of producing one vat of e-juice is 1 bale of tobacco + 6 bales of tobacco = 7 bales of tobacco. Thus in order for country B to break-even and/or make a profit, one vat of e-juice would have to yield 2.5bales of wheat from Country A, and that is how a country applies value to a commodity. However with currency it is a lot easier as there no longer needs to be a similar commodity being produced in both countries in order to appoint value. 

Hope that helps.

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## johan (6/5/14)

@crack2483 you're right in the sense that "gold/cash will always be king" and I agree it will never be 100% replaced by bitcoins and the like. What I am saying is that bitcoins will become more and more prevalent in international trading. There are already certain "commodities" on the international market that can only be obtained with bitcoins from the original vendor/s.


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## Gizmo (6/5/14)

I am seriously not a fan still. I also do believe gold is king. Anyway, thanks for all your inputs here guys


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## crack2483 (6/5/14)

Gizmo said:


> I am seriously not a fan still. I also do believe gold is king. Anyway, thanks for all your inputs here guys



You must of seen the amounts guys spent on gfx cards over at carb. Hell, the country ( suppliers) ran out of 280x's. Now asics have hit the script scene and everyone is dumping the 280x's. imo it's only the guys who adopted btc early on who will benefit. Otherwise it will just be another currency. 

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## Rex_Bael (6/5/14)

Something I have not seen mentioned is the fact that BitCoin has a built in scarcity factor that affects supply and demand. There is a limited number of BitCoins. Once they are all mined, which becomes increasingly difficult, that's it. That is the true brilliance of BitCoin in my opinion. If there was a limitless supply, they would not have had the appeal they have had thus far.

Reactions: Agree 2


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