Bitcoin 'rarely' used for legal transactions, on 'road to irrelevance', say European Central Bank

[brooklynite]

Source: Tech Crunch

European Central Bank officials alleged on Wednesday that bitcoin is “rarely used for legal transactions,” is fueled by speculation and the recent erosion in its value indicates that it is on the “road to irrelevance,” in a series of stringent criticism (bereft of strong data points) of the cryptocurrency industry as they urged regulators to not lend legitimacy to digital tokens in the name of innovation.

The value of bitcoin recently finding stability at around $20,000 was “an artificially induced last gasp before the road to irrelevance – and this was already foreseeable before FTX went bust and sent the bitcoin price to well down below $16,000,” wrote Ulrich Bindseil and Jürgen Schaaf on ECB’s blog.

The central bankers argue that bitcoin’s conceptual design and “technological shortcomings” make it “questionable” as a means of payment. “Real bitcoin transactions are cumbersome, slow and expensive. Bitcoin has never been used to any significant extent for legal real-world transactions,” they wrote.

Bitcoin also “does not generate cash flow (like real estate) or dividends (like equities), cannot be used productively (like commodities) or provide social benefits (like gold). The market valuation of bitcoin is therefore based purely on speculation,” they wrote.

Read more: https://techcrunch.com/2022/11/30/bitcoin-rarely-used-for-legal-transactions-on-road-to-irrelevance-say-european-central-bank-officials/

[elleng]

1. No surprise.

[ffr]

2. The number one Ransomware used currency denomination. Bye-bye!

What ever will Putin's mob do without this lucrative revenue stream?

Crash, mo-fo! CRASH!

[jmowreader]

27. It is also useful...

...for buying illegal guns, illegal drugs, contract killings and all sorts of things like that.

[Roy Rolling]

41. Did online security for a bank

Ransomware and DDoS attacks always asked for Bitcoin. Which kinda irritated the bank even further, they demanded payment (they never got) in a currency not recognized by legitimate financial institutions.

Told them politely “f*ck you” because, you know, I worked in a bank.
NSFW

[maxsolomon]

3. gold provides social benefits?

like jewelry?

[edhopper]

4. Just google

Uses of Gold

It's enlightening.

[CountAllVotes]

13. Gold is good

You can never have enough of it, never!

[groundloop]

14. Yep.... very important in electronics, for instance.

[CountAllVotes]

30. Great for dental work too!

I gold crowns!

[reACTIONary]

5. A limited quantity of nothing. nt

[LudwigPastorius]

6. These guys should release more press statements.

It went up 4.6% today.

[Justice matters.]

8. 4.6 % more future crash victims. eom

[oldsoftie]

19. Hey, now its only down about 70% from its high!

[Justice matters.]

21. Victims Claim Coinbase Didn't Protect Them From $21 Million Crypto Scam

https://www.forbes.com/sites/cyrusfarivar/2022/10/14/victims-claim-coinbase-didnt-protect-them-from-21-million-crypto-scam/?sh=4181a1cf2469

Looks like the crooks didn't care about their gullible victims potential suffering.

No retirement for you. It's their fault after all.

[Escurumbele]

44. It will go down again, BITCOIN is like a sine wave, it was once at $64,000.00 one moment

and a few minutes later went down to $59,000.00, then it went up again, but not sure it ever reached that high of $64.

A friend of mine wanted to invest in BITCOIN, I told him to wait, to not make an irrational decision, I started looking at it and saw how volatile it was, I recommended him to find something else to put his money on, I am hoping he followed my advise, I never spoke to him about BITCOIN again, I kind of forgot about it.

I have always had this bad feeling about cryptocurrency.

[moonshinegnomie]

9. im not surprised central banks disparage crypto currencies

they are a direct threat to them.
I look at crypto the same way I do gold. better to have a SMALL amount just in case than not have it if you need it.

Disclosure: I have a small amount of both bitcoin and etherium.

[ColinC]

11. I mean at least gold has some physical intrinsic value, I guess?

Crypto's value is literally just based on whether a ton of people are buying and selling. Makes it a great asset to gamble on (and I have made myself a quick buck or two from it), but I don't see it as much more than that.

[moonshinegnomie]

12. no different than any fiat currency

they have value because people say they do.

[ColinC]

23. Except people do not think crypto has consistent value like fiat

If that were the case it wouldnt drop 90% of its value on a dime and have no impact on the overall economy.

[Lucky Luciano]

24. Ultimately paper money evolved as IOUs. Contracts are based on fiat currencies.

No need to find solutions in search of a problem.

In retrospect, the currency backed by memes was bound to be less stable than the one backed by aircraft carriers.

[muriel_volestrangler]

39. National currencies have value because you have to pay your taxes in them

and sometimes other important transactions have to, by law, be in a certain currency. They have value because countries say they do. That gives them stability that a rapidly-evolving maelstrom of cryptocurrencies, and individuals trying to make a quick buck (and they want to get their money out into bucks to make it stable), are not going to achieve.

[NullTuples]

38. Except also: crypto systems become more expensive to expand as time goes on.

The earlier you get in, the more valuable your coin becomes. So it's important to get more people to buy into it. Ideally, get corporate decision makers to buy in so they decide to "help" the public use it at a huge scale to keep the system growing. They were so close to accomplishing that last step.

But the longer the system is up, the more distributed electric power it takes to keep the system running and expanding.

At some point the total cost is greater than the total value; this should be predictable.

But it's such an easy sell, too, because of the promise of easy riches.

So get in early - ideally at the start of a new coin. Understand or better still, understand and control the minute details of how it works so you can calculate the point of diminished returns, and get out before it crashes.

Oh, and maybe invest in electricity producers or the fuels they use, too.

Hey - I wonder what's going to happen to those towns in Texas where the civic leaders secretly signed agreements so crypto miners could build facilities next to the towns' power generation plants because the mining uses more power than the town itself?

Also, the era of being able to use graphics cards on many coins ended and only specially built chips & computers remained viable. Expensive ones, but miners were willing to pay. Maybe once crypto crashes chip fabs and computer plants can get back to making stuff for the rest of us.

And finally, what happens to NFTs (non fungible tokens) based on the blockchains of crypto coins that crash?

[ToxMarz]

15. And crypto has no threat to anyone, couldn't happen?

The possible threat scenarios are mind numbing. It's only spin, hype and MASSIVE marketing $$$ that props it up that diminishes them. It's not unregulated, the crooks are pretty much in control regulating it to their advantage.

[brooklynite]

49. "if you need it"

Whether or not its a good investment, what "need" for it can you imagine?

[ColinC]

10. It was never really relevant past making people several quick bucks

And it will likely stay that way.

[Justice matters.]

16. At the expense of the gullible gamblers.

Ransom takers doing all kinds of disruption, costing billions and potentially costing good-paying real jobs.

But it is what it is, I guess. Let the easy-to-defraud gullibles suffer the consequences. Let's get rich fast.

[ColinC]

22. It should be regulated

Like any casino or gambling operation.

[SouthernDem4ever]

42. Good Point.

It won't stop elite control of advantage to a few, but at least it will be more transparent.

[burrowowl]

50. And like

banks, Wall Street, etc. all legalized their from the little guy by the fat cats.

[ColinC]

54. ?

[Justice matters.]

17. Two Estonian Citizens Arrested in $575 Million Cryptocurrency Fraud and Money Laundering Scheme

https://www.justice.gov/opa/pr/two-estonian-citizens-arrested-575-million-cryptocurrency-fraud-and-money-laundering-scheme

That pocket-change money came from gullible victims, right? Who cares? It's their fault.

[LetMyPeopleVote]

18. I have yet to do a transaction with bitcoin

Crypto never made sense to me and I am not surprised that this scam is falling apart

[oldsoftie]

20. There are some here on DU who will say we just don't "understand" it.

[Orrex]

25. Oh for those innocent days when I was mocked for doubting Bitcoin & crypto in general

What gentle times those were.

[yankee87]

26. Same here

Old saying, too good to be true

[cstanleytech]

28. To be fair every currency really only has as much value as people perceive it has.

Just like metals such as gold or silver have value only because most people perceive that it does.

[ColinC]

31. But when something has no consistent value, how much value does it actually have?

[cstanleytech]

32. Nothing actually has a consistent value. Currencies have risen to great heights

in the past and then fallen because people stopped perceiving that they had value.
Take the US dollar, it is used in many countries because people percieve it to have value but eventually they will lose that perception and its "value" will evaporate.

[ColinC]

34. The US dollar is consistent though. It steadily increases or decreases, but reliably

Crypto is neither steady nor reliable

[cstanleytech]

40. "The US dollar is consistent though." It only appears that way but it to will eventually

lose its perceived value as its essentially paper with green ink.
Also I never said crypto was steady or reliable but it is a perfect example of what happens when people perceiving that something (in this case bitcoin) had value begin to lose that perception.

[SalamanderSleeps]

29. People please.

It's all zeros.

The ECB and the rest of the world banking system is so incestuous that it is the reason why bitcoin is actually valid in the first place.

A lie agreed upon is still a lie.

We are in for a serious crash because the 1% have created too much dead money.

[Yavin4]

33. Funny how interest rates go up just a little

and crypto, NFTs, and all other speculations go poof.

[Earth-shine]

35. This is what NFTs are for. To give you something vaporous on which to spend your vaporous crypto.

[LetMyPeopleVote]

36. Jim Cramer says crypto is a 'con' collapsing on itself

Link to tweet

[SouthernDem4ever]

43. Now there's a great source

They guy that said things were good before the real estate bubble burst in 2008. After that, I only like watching the segment of him with fart noises on John Oliver's show.

[William Seger]

46. True, but he's right about cryptocurrency

It's nothing BUT a confidence game played by speculators, with no practical use except for illegal transactions.

[riaria1100]

37. bitcoin

once this crypto reach high, then it will go to " 'road to relevance "

[William Seger]

45. My prediction about cryptocurrencies

After a career in software development, the reason I've never "invested" in cryptocurrencies (a.k.a. gambling) is because I expect that sooner or later, someone will find and exploit a flaw in the design, and their value will drop to zero overnight. At least Beanie Babies are cute, and you can still cuddle them after they lost value to speculators.

[cab67]

52. My mother used to give us Beanie Babies for Christmas.

She kept insisting that we hold onto them, because they were going to be worth something.

Then, a few years later, she visited and looked with horror at the Beanie Babies she'd given me. I'd taken them out of their packaging.

"But that will ruin their value!" she said.

"But my friends' children can't play with them in their packaging," I replied. She saw an investment; I saw toys. Toys that I later gave to my own daughter.

My mother passed away before my daughter entered the world, but I think she'd be smiling if she saw my now-6-year-old playing with her small stuffies. Seeing a child take joy from a plaything, and make whole imaginary worlds with it, is worth way more than an overpriced stuffed animal in its original packaging.

[honest.abe]

47. I think NFTs are typically purchased with Bitcoin.

Its legal but dumb.

[womanofthehills]

55. NFT's are typically purchased with ETH

I'm going to put some work on Open Sea just to play around. I just have a small amt of bitcoin and ETH just to learn about them. The amt I have keeps going up and down.

[brush]

48. Ponzi scheme, con game, casino...all apply to crypto.

Big drops in value are always around the corner. Invest only what you can afford to lose...just like in Vegas. If you have a high risk threshold, get in on a drop, make a quick profit and get out. Rinse an repeat if you have really high risk threshold.

It take research to know the low lows and patience to not jump in all at once as what you think is the low may not be. Proceed incrementally as the uptick will happen. Figure how long you want to stay in as the price rises. Make your profit and get out.

It's the same with day trading or low cost, self trading brokerages, but at least with them the drops aren't so extreme and you know it will usually come back. Not always the case with crypto, as we've just seen with FTX, and other earlier drops, or just outright thefts.

[iemanja]

51. I've had to use it recently

for a poker deposit. I bought it and transferred it immediately.

[Oneironaut]

53. Crypto becoming mainstream was the worst thing to ever happen to it.

The rise of annoying crypto bros and celebrity endorsements probably sucked a bunch of clueless people into investing into when they never should have.