back to article US watchdog alert: Don't fall victim to crapto crypto-coin cons, people

America's financial regulator has warned investors to steer clear of shady alt-coin investment schemes. The SEC says that, following a rash of suspended initial coin offerings, people should take a closer look at the money-raising campaigns before parting with their money. Initial coin offerings are like business IPOs: when a …

Alien

Fake fake, or fake real, duh?

So now there are fake fake currencies, very obviously different from the fake real ones, or the real fake ones. What a time to be alive!

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Holmes

NO WAI!

The hell you say.

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Wait, What?

Isn’t the whole damn crypto-currency thing one big scam?

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Re: Wait, What?

I strongly believe that in 20 years people will be looking back and saying fiat currencies were one big scam

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Re: Wait, What?

People are already looking back and saying "I wish I had mined BitCoin in 2010, I'd have £10,000,000 by now". Those people are now investing in Crypto. Those saying Crypto is a scam will in 20 years time be saying "I wish I'd got into Crypto"

The point is you only know with hindsight.

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Happy

Re: Wait, What?

People are already looking back and saying "I wish I had mined BitCoin in 2010, I'd have £10,000,000 by now". Those people are now investing in Crypto. Those saying Crypto is a scam will in 20 years time be saying "I wish I'd got into Crypto"

The point is you only know with hindsight.

It is possible to make a lot of money out of short term fashions which aren't sustainable in the long term. The long term problem with crypto currencies is that they are a zero, or even negative, sum game, and the longer you are in a zero sum game, the greater the risk that you will be left holding the very expensive baby at the end. BTW Anyone wanna buy some tulips? https://en.wikipedia.org/wiki/Tulip_mania

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Re: Wait, What?

I know that conventional currency needs the crypto to fail. Efforts towards that might actually pay off. There is a difference between fiat (normal money) and gold. In my opinion neither are particularly valuable in their own right, the value is what people place on them. One is controlled by elites, you can't make your own money and the other is just very hard work to get hold of. I took some gold to the Council dump because it was too hard for me to scrape it off the circuit boards.

There is a lot similar between fiat and crypto. Both are electronic and can payments are made electronically. The difference is in where they come from.

Crypto is mined from numbers by anyone and recorded in the pubic global blockchain which cannot be corrupted or rigged. You simply can't press a button on a computer and create 50 billion.

Fiat is also mined but by creating a huge hole (debt) the same size or larger than the credit that you can spend. For every £1 there is a debt of at least £1. It is by it's very definition and method of creation THE ZERO SUM GAME you are so stridently warning of.

Mervin King Bank of England boss said in an interview on Radio 4 in 2008, "Oh no, we don't PRINT £50 billion each month, I simply type it into our computer and the money comes into existence"

BitCoin mining cannot magic £50 billion into existence with a push of a button. Ask any miner how hard it is to create money on a computer.

I dunno why I'm bothering to educate people. The gains speak for themselves and in the future you will either still be going on about Tulips or you will be wealthy.

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Anonymous Coward

Re: Wait, What?

I'm about to launch BubbleCoins - because that's how it will end...

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Re: Wait, What?

Wayland,

I don't think you understand either crypto or real currency.

Fiat currencies don't need crypto currency to fail. Bitcoin is a really tiny pimple on an elephant's bum. And it actually does no harm even if it succeeds. There are plenty of non-state backed virtual currencies out there. For example you can borrow serious money against Apple debt, or any other big corporate debt that's AAA-rated - making that as much a vritual currency as Bitcoin.

Or look at calculations of money supply. Only M0 is made up of notes and coins in circulation. By the time you get up to M4, you're adding in all sorts of other stuff, obviously including bank deposits, but also other ver liquid assets. Most of which is only controlled by governments in a very limited way.

BitCoin mining cannot magic £50 billion into existence with a push of a button.

How do you know this is true? The current updates and forks in Bitcoin show that there's a group out there somewhat in control of the system. If they get together and decide that it's in the best interests of the Bitcoin community that there not be a hard limit on the number of coins you can mine - they can update the system. There are a lot of miners in that group. As happens, it's probably the right thing to do for the long-term surivival of Bitcoin. Creating deliberate deflation is a really stupid idea - it's one of the main reasons the gold standard failed. Also how will the blockchain survive in a future where miners aren't getting paid for all that processor time? And why do we waste so much electricity on mining, what when someone creates a green argument for making mining easier?

All those things are possible.

In the end, currencies work from use. What makes something money is basically if enough people choose to use it as such. So where you get hyper inflation (say Zimbabwe or Venezuala), people start to barter, or use foreign currencies. As I understand it Zimbabwe is now very dollarised, because nobody trusts the government, or by extension the currency.

Money fulfills more than one role. The two biggies being "means of exchange" and "store of value". Both of those rely on trust. Will people accept my Bitcoins? If not, then they're useless as money. If some will, but others won't, then you can use it as a means of exchange, but only sometimes. As for store of value, that totally relies on trust. Can I keep my life savings in Bitcoin? When I retire, will it still be worth anything? That's bad enough when buying shares in Apple at age 20, which is why most people pay someone to manage their pension for them.

One of the things that damages crypto currencies, are the people who see them as investments rather than currencies. They're the ones who indulge in pump-and-dump and hoarding. And they're the ones who make them too volatile to be properly useful as means-of-exchange or stores-of-value.

The miners are another self-interested group. Who may not have users best-interest at heart. And the short-termists may not care about the long-term reputational damage they do.

Now we compare to your complaing about the Governor of the Bank of England. He did Quantitive Easing in order to promote stability. And it worked. It saved the banking industry, and kept the economy from deflation. I call it QE not money-printing by the way because they deliberately didn't print any money. They chose a rarely tried economic theory to attempt because it was reversible, so that it would have a short-term inflationary effect (which they wanted) but could then be reversed to avoid too much long-term inflation. One competing theory was "helicopter money" which is much more like money-printing, isn't reversible and has actually been tried more often, and actually less successfully.

But governors of the Bank of England don't become personally enriched by money-printing, in the way Bitcoin miners would. And they're public figures who'll get publicly sacked if they fuck-up. And they're also accountable to governments and Parliaments. So who's the real elite you should be worrying about? Central bankers only have more power than Bitcoin miners, because so few people use Bitcoin. But they're far more accountable than miners, or self-appointed online committees who issue the software updates.

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Happy

Re: Wait, What?

There is a lot similar between fiat and crypto. Both are electronic and can payments are made electronically. The difference is in where they come from.

A fiat currency is one without intrinsic value but whose value is backed by the government that issued it. Crypto-currencies have no intrinsic value but also lack any serious guarantor. That is the difference.

Small runs are contained by speculators, but when a large run occurs there may be individual owners of vast amounts of the crypto-currency ("elites") who will buy them on a freefalling market to maintain their value, but their enthusiasm and ability to run up stupendous losses is a lot less than a government's. Additionally, since their sole goal is to preserve their own personal investment, if they can't quickly stop the crash then they will simply add to it by cashing out. You can see the lack of a central bank in crypto-currency volatility, and ultimately there isn't much to stop a big run wiping their value out almost entirely. You may not like Dollars or Euros so much, but at least there is someone who can, and certainly will, step in to borrow ten trillion Yen to maintain their value when they need to.

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Re: Wait, What?

"

The long term problem with crypto currencies is that they are a zero, or even negative, sum game

"

Exactly the same is just as true of conventional currency, with the added problem that they are being controlled for the advantage of governments rather than citizens.

Money that exists as 1's and 0's in a block chain is just as real and viable as money that exists as 1's and 0's on your bank's HDD, as ink marks on some bits of paper, or as indentations in a metal disk. All of which are valuable only because lots of people have agreed to use them as a medium of exchange. If and when people lose confidence in the medium, it becomes worthless, which could happen to Bitcoin just as it has happened to many conventional currencies throughout history.

"Inflation" is a term that governments use instead of admitting that their currency has lost value.

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Re: Wait, What?

"

Can I keep my life savings in Bitcoin? When I retire, will it still be worth anything?

"

You could say the same thing about any currency. The £10 that was put into a savings account my parents opened for me when I was a child 50 years ago would have been enough for the whole family's weekly shop. Now it will barely buy one meal.

"

Central bankers only have more power than Bitcoin miners, because so few people use Bitcoin. But they're far more accountable than miners, or self-appointed online committees who issue the software updates.

"

But the bankers are accountable to the government, not the population. And anyone can become a bitcoin miner (large or small), while you cannot walk into a bank and become a banker for a few days.

It is certainly against the miners' interests (and committees who control the algorithms) to act in a way that screws the people who are using Bitcoin. Governments really don't care if your pension investment ends up being worth next to nothing by the time you retire, so long as things don't get so bad that there are civil riots. Poor people are easier to control (both because they are more dependent upon the government and do not have the resources to oppose control), so it's actually in the government's interest not to allow people to get too wealthy.

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Re: Wait, What?

Sparticas, you've not really said anything. Not actually refuted what I said, just spun it a little.

What you are saying about money being a store of value and a means of exchange is not refuting anything. BitCoin does that.

Saying that they might change the code of BitCoin is potentially true but you slate my example that the Bank of England print money. As if actually printing it would be any worse than what they did. The amount of actual cash in circulation is trivial compared to the electronic in bank accounts yet on the one hand you say it's important and on the other say Crypto is a feel on an elephants back.

They did say they created a new pound coin to combat fraud. Why bother? If quantitative easing is a good thing then so are more pound coins. Perhaps the system is more sensitive to alternative currencies than you claim.

No, Crypto is very important, more significant than people making pound coins in a workshop under the railway arches. What's not yet clear is if the governments are going to fight it or welcome it. I am not impartial in this, I am very much on the side of Crypto. I realize your top job in banking will crash if I'm right.

The volatility does mean you have to trade fast and it's hard to price things. This is because it's still young and relatively small. It is not inherently unsafe compared to fiat, it's just that it has enemies and no military to back it up. Crypto can't go and bomb Syria for some extra liquidity but then it seems neither can the $ which is losing it's military mojo. When was the last time the $ did some serious bombing?

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Re: Wait, What?

Wayland,

I promise you that there is a huge difference between QE and money printing. It's a matter of permanence. When they printed the money for QE, they used it to buy mostly government debt. The US Fed and the ECB bought a more varied mix of debt instruments, but it technically doesn't matter.

People get confused here, but we can basically ignore all the loans made to the banks, as they've been paid off. The only debt the UK banks still owe to the state is the RBS shareholding, which is currently worth less than we collectively paid for it. As that bank gets slowly turned around it can hopefully be sold at a profit. So on the bank bailouts the state will make a small paper profit - plus the bigger profit of them not going bust and causing a Depression like the 1930s. Ben Bernanke who was Governor of the Fed in 2008 was fortunately one of the foremost academic experts on the Great Depression, and did the right things not to repeat it.

In QE the Central Banks bought a mixture of bonds that will expire over the next 30 years. With money magicked out of their computers. The people holding that debt were then left with money that they needed to hold in safe assets at low interest rates - and this forced down market interest rates, as people wanting a bit more return on their assets were forced to take slightly more risk in order to get it - which kept the corporate bond markets from collapsing.

The bad side-effect of this was that lots of investment money was pushed out of bonds into shares and also property, causing inflation in their prices. The good desired effect was that the banks didn't go bust and there wasn't a sudden collapse in the ability of companies to borrow, forcing them to sack loads of staff. Thus we got a drop in GDP not too dissimilar from the Great Depression, but without the hideous 20% unemployment levels.

Now the point about QE is that it's ongoing. Every year something like 3% of these Central Bank held bonds mature. i.e. they're paid off. At the moment the Central Banks are taking that money and buying some more 30 year dated debt with it. Except the Fed in the US are tapering, every so often, they shift it into 1 year debt so that more and more of their debt takes on a shorter profile. At some point, when we have too much inflation, Central Banks will stop re-buying bonds and will destroy the money they temporarily created each time they're paid back. This will (theoretically at least) remove the excess liquidity permanently from the economy - and will allow them to sop-up any future inflation they've created with QE.

If they'd just printed money and given each taxpayer say £1,000 (helicopter money), that would have been more inflationary at the time, and impossible to reverse. The only way to kill off the inflation caused by that would be a rise in taxes or interest rates, which would have done more to damage the recovery.

The funamental point here though is that accountable democractic governments control Central Banks. They deliberately do this at arm's length to stop them being tempted to advantage themselves politically. And we can kick them out if we don't like what they do. It's also in their own interests for economies to do well.

Bitcoin has just split into two currencies because it's controlled by a much less accountable and transparent system. And there's been an argument over an update.

Bitcoin is not a reliable store of value. 3 years ago it went from being worth $1,200 per coin to $100 per coin in about 2 days. I think it had been sat at about $100 for the year before that, then briefly shot up, then collapsed.

It's also not a very good medium of exchange, because so few people accept it. That's less of a problem though, because it can happily survive being used by a small subset of people. Crypto is currently utterly unimportant, because it's so small. It may well become a valuable part of the modern economy, but that's not a problem, we already have lots of money-like things and can easily have one more.

However one reason we avoided the last recession turning into a recession was government. They didn't stop it happening, but broadly did the right stuff to not make it worse. Other than in the Eurozone, where they made a mess of it a bit first, because Eurozone governance was so badly set-up. When something horrible happens to Bitcoin, who'll fix the problem? People demonise Central Banks, even though they saved the word economy.

Bitcoin fans talk about the evils of inflation without seeming to realise that deflation damages societies as much or more. And Bitcoin has baked-in deflation. Deflation is why nobody will go back to the Gold Standard. Also 5% inflation is not wonderful, but not terrible either. Inflation only gets dangerous when it's above 10%, and if predictable is not that bad even then. It's hyper-inflation that's so destructive. 5% deflation for a few years can devastate an economy.

Deflation in Bitcoin is less serious, as it's not a whole economy and nobody borrows in Bitcoin. Debt becomes disastrous in a delfationary invironment. And while you might say that's good, without debt you get almost no investment, which means almost no economic growth. Hence QE. Deliberately created inflation to save us from the debt-deflation trap that made the 1930s so miserable and the 1940s so explodey. But reversable inflation.

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Anonymous Coward

Précis

Before: steer clear of shady alt-coin investment schemes

After: steer clear of alt-coin investment schemes

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Pot! Kettle!

"America's financial regulator has warned investors"

Don't fall for their scam, continue falling for ours. We're the guvmint y'all...

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Re: Pot! Kettle!

The US is one of the richest countries in the world, with some of the highest standards of living that humanity has ever seen. Exactly how is that a scam?

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Anonymous Coward

Re: Pot! Kettle!

The US is one of the richest countries in the world, with some of the highest standards of living eating that humanity has ever seen.

Modern Civilisation is starting to get a faint whiff of 'scam'.

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Re: Pot! Kettle!

"

... with some of the highest standards of living that humanity has ever seen.

"

Depending on how you define "standard of living". Most Americans have a comfortable home, enough food to support a huge waistline and plenty of gadgets, but most also spend a far greater percentage of their life doing work that they do not enjoy than people in "less well off" countries. And a sizeable portion of the population are living in poverty and excluded from mainstream society. They also "enjoy" having one of the largest percentage prison populations in the World and one of the harshest justice systems outside Sharia law. And despite that their crime rate is pretty high by Western standards (proving the fallacy that harsh punishment does not lower crime rates).

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Re: Pot! Kettle!

Cynic_999,

So what? US society is not perfect. It's still not a scam. It's one of the richest and most productive economies in the world. The Fed saved the US economy with QE. That wasn't a scam as the US economy is still one of the top performing economies in the world, and will continue to be so as they reverse QE.

There are reasons you might support Bitcoin. But these childish arguments about fiat currency being a scam really don't help. Bitcoin can have a place in a modern economy very easily. At the moment a whole lot of that place is for criminals to hide their activity and speculators hoping to make a killing. That doesn't mean there's something fundamentally wrong with Bitcoin, but it does mean it has huge problems, and is very prone to scams and outright theft.

So is anything of value of course. But if the Bitcoin community rejects government (and a lot of pro-Bitcoin arguments tend towards the libertarian or even the conspiracist) then it's going to have to sort out mechanisms to deal with those problems, or remain a very risky niche. Or just collapse.

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Re: Pot! Kettle!

It's a slowly deflating bubble.

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Processing Power

Given recent reports of the power of mining rigs these days and how many people are putting them to work to 'mine' Bitcoin or other currencies, I do wonder how much the human race could achieve were that computing power put towards solving problems that were actually useful. Rather than solving essentially pointless calculations to potentially generate a random, non-existent electronic token, what if we were running simulations of fusion reactions to better understand how we might successfully build a reactor, or mapping the human mind to better understand mentally degenerative diseases such as dementia?

But no, lets do something fucking pointless but potentially can score us some fake money.

I hate the human race these days.

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Re: Processing Power

You maybe aware that AMD built a supercomputer last month using their VEGA GPU. They say they are putting it to work on just those sort of worthy scientific problems. However it would make a stonking Ethereum miner.

AMD's supercomputer is a smart well made machine but it's nothing to the acres and acres of AMD based mining rigs in huge sheds that companies like Genesis in Iceland have. Iceland to keep it cool.

I'm sure they would sell compute power to the highest bidder. Right now that's miners. If curing cancer or solving Fusion was more worthwhile then it would pay better. All those OpenCL compute units have to pay for themselves.

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@Wayland

If curing cancer or solving Fusion was more worthwhile then it would pay better

Thank you for completely proving my point in one sentence.

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Re: Processing Power

> Iceland to keep it cool.

More likely Iceland for the cheap electricity. That's also the reason that much US alumin(i)um production has migrated to Iceland, at the same time as server farms in the US have pushed up the price of power.

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Re: @Wayland

@Kerplunk,

You're such a leftie. It's not the human race which means these expensive GPUs and expensive electric are used to make money, it's the nature of business.

Gamers buy these cards to play games and they are issuing death threats on people buying these cards for mining. It's hilarious. The gamers have in the past placed their cards on scientific research networks. SETI and something to do with FOLDING. The reward was your ranking but not money.

Gamers can afford to donate their GPUs for science but people who are in the business of mining have to get a ROI or else they have wasted a lot of money.

Perhaps we need a new type of society without money. However I think it's the way the current money system works which means that science does not have the cash to buy this level of computing power.

Here is where Crypto can help. Imagine a distributed computing platform like all those GPUs but rewarding with Crypto. That's the principle behind GridCoin

http://www.gridcoin.us/

It's had some problems but in principle it allows you to get paid for the computing power that's doing useful science.

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Re: Processing Power

to free us all from the depredations of private central banks (and their ability to create money from nothing, and then lend it out at interest), is not, as you put it, "fucking pointless".

You are totally and utterly wrong about this.

Central Banks aren't run for profit. They do make profits, but they're mostly notional. It's all accounting, that's not their job. I also don't know why you call them "private central banks" because they're not. They answer to government. Even the ones with notional independence have their targets set by legislation and can have their independence changed by legislation just as easily.

The reaon that you need to be able to have your central bank create electronic money at the press of a button, is in order to have a functioning banking system. There has never been a successful modern economy without a banking system. So though it may be possible to do, it's very much theoretical.

So banks perform a role known a liquidity transformation. This is massively useful to society. It allows all the few thousand quids that people have as day-to-day savings to be aggregated into useful money that can be used for long-term investment. Thus making the whole of society richer. However this has a risk. The banks suffering short-term runs on their short term deposits, that they can't meet from long-term money they've lent out. Hence we invented the Central Bank in order to keep solvent banks liquid long enough for them to survive the short-term crisis.

However Central Banks charge interest on that money, in order to punish the banks' owners (shareholders) for running their organisation so badly as to need this help. Thus they are not incentivised to free-load on this government bail-out and our economy is protected from the consequences when they mess-up. Basically everyone's a winner.

That's also why global central banks printed trillions to lend to the banks in 2008. In fact banks that didn't need it were forced to take it anyway, just so it didn't destroy confidence in those that needed it. And pretty much all that money was paid back in well under 2 years. And then destroyed (un-printed). So it had very little effect on the economy, other than the fact that it didn't collapse due to a global banking apocalypse.

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Re: Processing Power

"Genesis in Iceland"

Just had an image appear in my head of Phil Collins putting a packet of frozen peas into his trolley when I read this.

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Anonymous Coward

Re: Processing Power

@Wayland; "it would make a stonking Ethereum miner."

Is Ethereum still at the point where it's economically viable to mine it using standard x86 hardware? Bitcoin reached the stage several years ago where the cost of the electricity needed to run the CPU doing the calculations would have outweighed the value of the Bitcoins created.

Once that's the case, it doesn't matter how many x86 CPUs you have, you're just magnifiying your losses.

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Re: Processing Power

Mr Anon,

To quote from your own source:

The Federal Reserve Banks are not a part of the federal government, but they exist because of an act of Congress. Their purpose is to serve the public. So is the Fed private or public?

The answer is both. While the Board of Governors is an independent government agency, the Federal Reserve Banks are set up like private corporations. Member banks hold stock in the Federal Reserve Banks and earn dividends. Holding this stock does not carry with it the control and financial interest given to holders of common stock in for-profit organizations. The stock may not be sold or pledged as collateral for loans. Member banks also appoint six of the nine members of each Bank's board of directors.

So the answer is that Fed is an odd mix of private and public, but set up by an act of Congress, has its remit set by the government and its boss appointed by the government and the shareholders are neither allowed to sell their shares, nor even use them as collaterol.

They do get the profit from those shares, but seeing as the only profit central banks make is from lending money to banks (or sometimes each other) this basically means that the less prudent banks are slightly subsidising the more prudent ones.

In what way can you justify calling that a private company?

By calling them private companies you're trying to imply that they're somehow profit-driven, and acting as a law unto themselves. This is basically no better than a lie.

The actual truth is that they're creatures of government. But given enough independence that it's politically costly to try to use them for short-term political advantage, such as say cutting interest rates just before an election.

The same is true of the Bank of England. It was nationalised. However, the government have used creative ambiguity. One journalist reported a rather grumpy silence from the Treasury in 2009 about what would happen if the Bank of England made a paper loss on QE. Basically because the answer was that we'd try to ignore the losses and just treat it as a paper exercise, but if forced to deal with them, then the Treasury would have to come up with the cash. Both uncomfortable answers they didn't wish to give.

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Re: Processing Power

"

Rather than solving essentially pointless calculations to potentially generate a random, non-existent electronic token, what if we were running simulations of fusion reactions to better understand how we might successfully build a reactor, or mapping the human mind to better understand mentally degenerative diseases such as dementia?

"

Do you really believe that lack of processing power has any bearing whatsoever on not solving such problems? If you could write a program that anyone could download to do either of those things, I am quite certain that more than sufficient computer power would become instantly available.

Tell me, when you are not using your computer yourself, what important simulations are *you* running. After all, it would be pointless to waste all that processing power by switching it off or letting it sit idle ...

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Re: Processing Power

Sparticus, yet again you write a lot of words without actually refuting anything.

" I also don't know why you call them "private central banks" because they're not. They answer to government. "

So perhaps you could tell us the correct term? Companies under the control of the government? Mmmm, Communist? No, Fascist? Yes. Fascist central banks!

Yeah sure the banks play a useful role. Are you refuting anything? No.

Personally I find PayPal the most useful and then Cash. Crypto I have used in conjunction with PayPal and between friends.

The banks have two choices, either get good at crypto or hope it dies. You can bet they are already playing with it.

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Re: Processing Power

Cynic_999 such programs exist. Harnessing distributed computing power. The GridCoin hooks the power up to a currency so the currency is proof you spent time crunching the cancer virus or the mental illness cure or whatever the scientists pushed out on the Grid network.

I agree, I'm not sure to what extent such problems get solved with huge computing power

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Re: Processing Power

Anon,

The x86 CPU long ceased being powerful enough to mine crypto currencies. I've been mining a NeoScrypt based coin which mines on a CPU or a GPU. A RYZEN 5 has a hash rate of 25KH compared to an AMD RX560 with a hash rate of 220KH. This is pretty much the case across the board a mid range GPU is about 10 times a mid range modern CPU. So the most powerful device in your computer is not the CPU it's the graphics card.

In terms of Ethereum that's a very profitable coin to mine with say a £130 RX560. It kicks out about £1 per day so will take over 4 months to break even. But here's the crucial bit. The coin will probably rise in value from $300 to $1000 during that time so the most profitable mining is when you first start. Plus if it all goes tits up you still have a nice graphics card. The same is not true with BitCoin ASIC mining, those things are just expensive fan heaters now.

There is always this thing of whether is better to invest in the coin itself or the mining. The market forces tend to make this decision a much closer match. It's the popularity of mining which puts the price of the cards very high and makes the coin intrinsically more valuable by way of it being harder to mine. More miners = harder to mine.

Miners do want to be paying for their card with a ROI of a few months but the profit is in the increasing value of the coin.

There was a mining company with thousands of GPUs who decided to stop mining because the cost of mining was the same as the money they were making. However it probably would have been worth them continuing if only for the future value of the coin they were mining. Hindsight is 20/20.

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Terminator

Re: @Wayland

>If curing cancer or solving Fusion was more worthwhile then it would pay better

It's pretty plain to see that curing cancer will turn whoever leads the charge (and collects the patents, etc) will undoubtedly wind up being so unimaginably wealthy as to put the oil sheiks to shame. The problem is, it's a really tough nut to crack. Ideally, something along the lines of the 'folding@home' would be run on those mining rigs, as it's the sort of problem where you need to run a bunch of very similar experiments. This can be done in parallel, so it scales nicely with lots of smaller units--GPU's are good at this sort of load.

The problem is, 'cancer' as a single disease is a misnomer. In reality, there's a zillion kinds of cells and as many ways that their propogation can get wonky, but they still fall under the big C umbrealla.

In a true and just world, we'd be putting this kind of processing power (and more besides!) against figuring out how living cells work at an atomic level. When viewed close enough, life is just chemistry, and chemistry is just physics. So the answers are clearly there, but because the problem is so unendingly vast, it's far cheaper to scrape moss from previously undiscovered tree trunks and test for the chance of a therapeutic effect instead. It sucks a lot, because if we properly could understand how our insides work, we could in theory solve cancer as well as pretty much any non-traumatic problem (autoimmune problems, genetic problems, and microorganism-induced problems would be easy--but if your head falls off, odds are you'd still be dead, though developing optimal cell control could theoretically reattach and regrow things if you survived long enough to get stable and have the treatments).

But it's a comparable problem to any green problem. I've yet to see evidence to the contrary that the planet simply has too many people on it, and no environmentalist's concerns that cannot be fixed by removing people. The planet can very comfortably handle a couple hundred thousand humans, but a few billion is another story. Removing most of the people solves all those issues, but the problem is which ones, and that's where the arguments start. :)

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Bronze badge

Re: @Wayland

My mum died of the Big C, Chemo. No one ever dies of natural causes in hospital because they try very hard to cure you using potentially deadly treatments.

As for curing cancer how do you know that it's not already been cured in most cases. If it's true that the cures have been suppressed and people just keep going out looking for cures then it's been solved many times over.

No shortage of people claiming to have cured cancer. The usual problem is it has to be cured in the early stages but people usually have to undergo conventional treatment until that's almost killed them. So not much chance of the alternative cure working at that point.

The other problem is that it's illegal to try and cure cancer unless you're approved to do so. I don't know if GcMaf is effective but it has a legendary status as the miracle cure and the establishment come down so hard on it, it's worse than The War On Drugs. Obviously that just increases it's legendary status.

If the treatment was simply offered by the NHS as an alternative to Chemo etc along with warnings that it might not work then it would soon be established if it was a good choice.

So no, I don't think that providing scientists with more computing power will have any impact on curing cancer. Been there, done that, had it illegalized.

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jjk

A company for carrying out an undertaking...

...of great advantage, but nobody to know what it is.

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Big Brother

The big flaw in Crypto Currencies

The biggest flaw in cryptocurrencies is the assumption, well its the statement that backs up these currencies, is that they are protected because they use encryption.

In the main, they may well be correct. But cryptography is only secure if the cost of breaking the crypto scheme exceeds the benefit from doing so. At present, with standard trap-door algorithms, this makes current crypto currencies safe. But as soon as these get broken then the currency is at danger.

This is not true of commodities (gold, diamonds) or fiat currencies. In the former, the value is set by physical supply and demand. So, my private diamond horde is protected provided some company decides not to flood the market. My fiat currency is protected provided the country that backs it is trusted.

On the otherhand, my cryptocurrency is protected only so long as the algorithm is not broken. But if it is, then my currency can disappear, literally in o the ether, and not only am I not protected, but no-one can even tell me where it has gone. They can only tell me that it has.

All it requires is one major breach of Bitcoin or Ethereum and the whole pack of cards will fall.

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Re: The big flaw in Crypto Currencies

"

All it requires is one major breach of Bitcoin or Ethereum and the whole pack of cards will fall.

"

And similarly, all it takes is a serious enough hack of your bank's computer system, and all your fiat currency is gone.

Or a major cock-up of the system that devalues your fiat currency to the point of worthlessness. As happened in Germany, Zimbabwe and more recently Venezuela. Don't think your country is immune.

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Anonymous Coward

"As happened in Germany, Zimbabwe and more recently Venezuela"

Germany has learnt the lesson.... I guess the other two never will.

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Bronze badge

Re: The big flaw in Crypto Currencies

Sparticus, it's a common theme you writing lots of words but saying very little.

Of course it's a claim that the Crypto can't be cracked. Crypto protects your bank account too. You're not making Fiat sound any better.

It would take more than half the world HASH rate on one currency to crack a wallet. The risk might be that a botnet is created with enough HASH to crack a smaller currency. However a botnet of that size might be better deployed mining the currency. Which incidentally makes it's value increase. Or worse yet all that crypto HASH could be used to crack open your bank account.

One of the uses of OpenCL and GPUs is to break passwords and WiFi keys.

As for gold and diamonds, if you have possession of these then they can be stolen from you. If you don't have possession then you're just back to fiat money. They could be sold to someone else and you would not even know. Provided they were still in the vault they might even let you look at them, just not at the same time they were showing another customer the same gold bars.

You might say none of this is important because your gold will always be honored. Well obviously on a small scale but lets say something happened in the UK that meant masses of wealthy people who thought they owned gold decided to leave. They might find the bank has frozen their money and none of the gold in the vault belonged to them.

We see little glimpses of coming problems when the cash machine networks stop working over the bank holiday. I suspect it's the banks holding on to the cash. The effect on small businesses can be huge. No cash purchases and maybe the card network is broken too. No sale!

We see other types of fraud with the conventional methods of accounting that Crypto like Ethereum may solve. For instance people on pre-pay energy meters think they are paying off part of their bill each time they top up. What they don't know because they have no reason to look at their bill is the company has increased their debt by a couple of thousand pounds.

Why? Factoring. If they can make it look like debtors owe them millions they can get cash from a lender. If anyone does notice then the company just say ooops, computer error then they set that particular account straight. In an ideal world this sort of corruption would be spotted by the big auditing accountancy firms. The trouble is it's probably them who set up the scam. They might get a slap on the wrist with a write up in Private Eye and Knighthoods all round from the Queen.

A blockchain based transaction system would mean an end to such creative shenanigans as every transaction would be set in stone and fully tracable.

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Re: The big flaw in Crypto Currencies

Wayland,

I'm not Spartacus. Different user. He's I am Spartacus, I ain't. You can tell the difference by the badge after the username.

I used lots of words to make my post above, because I was explaining something complicated. Your answer was to say I'd proved nothing as I'd used too many words, rather than to actaully demolish my argument.

Weirdly you then argue with lots of words yourself.

If Bitcoin's crypto goes, then it's dead and you're sunk. If your bank's crypto goes then you have a government guarantee that they'll pay you back your first £85,000 of savings. The rest you'll get out of the remaining assets of said dead bank, along with the other creditors, if there is any.

So here's the difference. Yes governments interfere with our lives and sometimes stop us doing things we want to. But they also have the power to regulate our econony and stop it going pop. That's the reason fiat currency is worth something. The economy of the country that issued it.

These bank guarantees are part of the lessons learned from the 1930s. If you don't back up your banks with government, then you'll get bank runs, bank collapses and depressions. Along with doing QE to avoid deflation.

Bitcoin's value derives from the fact that a lot of people believe that it will be worth more than it is now in 5-10 years time. So long as that continues, everything will be fine. If ever something horrible, on a par with say the 2008 crash, happens - that belief may collapse. At which point, there's no central authority with the ability to do something to save it. And the whole thing may disappear virtually overnight.

As an example mortgage backed securities. What nearly destroyed our banking system. The banks were bust because they held these, and nobody knew what they were worth, so trust broke down and they became literally worthless. You couldn't sell them. Banks stopped lending to each other because trust broke down, and Central Banks had to step in.

Almost all those AAA rated mortgage backed securities are still paying out, the mortgages are still being collected and they're still basically worth the 95% of their face value they always were on paper. So the panic was needless. Nonetheless it was real, and a massive threat to our economies. Without government intervention that fuck up would have destroyed our modern banking system and created another 1930s Depression.

Once confidence is lost, economic collapse can be amazingly swift. That's why we have Central Banks.

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Re: The big flaw in Crypto Currencies

OK fair enough. That always happens when you shout Sparticus, loads of people jump up claiming to be Sparticus.

I doubt that if all bank accounts were stolen that the gov could bale people out. Maybe after reducing it from £100k to £85k they think they can? I'm pretty sure the gov would wriggle out of paying me what they owe me even if you are confident they would pay you.

If I lose my BitCoin wallet or someone hacks my computer then that's my own problem. Knowing you have no safety net improves safety. Thinking you have one and expecting it to save you is dangerous.

I agree money is a house of cards.

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Anonymous Coward

Re: The big flaw in Crypto Currencies

OK fair enough. That always happens when you shout Sparticus, loads of people jump up claiming to be Sparticus.

To be hilariously fair, you were making that statement in reply to the one person registered with a handle that implicitly indicates otherwise.

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Silver badge

Main use of cryptocurrencies...

.. seems to evade governmental control, either not to pay tax (which is used to pay for education, hospitals, infrastructure, police, justice, and so on) or to make crime pay by enabling ransomware scum to collect money without risking to be caught.

Is there any morally defensible reason for cryptocurrency?

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Re: Main use of cryptocurrencies...

"

Is there any morally defensible reason for cryptocurrency?

"

Yes, plenty, but they are well published and so you are obviously being wilfully blind.

I'm also not sure how you claim that crypto currency is being used to evade taxation to any significant extent.

If you are concerned about crime, then you should be advocating the elimination of cash, which is used for the vast majority of criminal enterprises.

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Re: Main use of cryptocurrencies...

Did they happen to mention the new Burger King WhopperCoin?

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