A layperson's lesson ... how crypto currency works

[kenny]

Not long ago a merchant found a lot of monkeys that lived near a Village. One day he came to the Village saying he wanted to buy these monkeys. He announced that he would buy the monkeys at $100 each.

The Villagers thought that this man must be crazy. How can somebody buy stray monkeys at $100 each?

Still some people caught some monkeys and gave it to this merchant and he gave $100 for each monkey.This News spread like wildfire and people caught monkeys and sold them to the merchant.

After a few days, the merchant announced that he will buy monkeys at $200 each.

The lazy villagers also ran around to catch the remaining monkeys! They sold the remaining monkeys at $200 each.

The merchant then announced that he will buy monkeys for $500 each!

The villagers started to lose sleep! They caught 6 or 7 monkeys, which was all that was left and got $500 each. The villagers were waiting anxiously for the next announcement.

Then the merchant announced that he is going on holiday for a week, but when he returns, he will buy monkeys at $1000 each! He also said that his employee will be in charge, and would take care of the monkeys he bought pending his return. The Merchant went on holiday.

The villagers were frantic and very sad as there were no more monkeys left for them to sell it at $1000 each as was promised by the merchant. Then the merchant’s employee contacted them and told them that he would secretly sell them some monkeys at $700 each. The news spread like wildfire. As the merchant promised on his return that he would buy monkeys at $1000 each, they would instantly achieve a $300 profit for each monkey.

The next day The villagers queued up near the Monkey Cage. The employee sold all the monkeys at $700 each. The rich bought monkeys in large lots. The poor borrowed money from money lenders and bought the rest of the monkeys. The villagers took care of their monkeys & anxiously waited for the merchant to return! However nobody came! The looked for the employee. But he had disappeared!

The villagers then realized that they have been duped buying the useless stray monkeys at $700 each, and were now unable to sell them!

This Monkey Business is now known as Crypto Currency. It will make a lot of people bankrupt and a very few people filthy rich.

 

[Bron357]

Love this.
I worked my career in investment, lastly in financial planning and thought I’d see it all.
Nope.
The appalling and disgraceful “bad investment ideas“ like Pine Plantations at least had something tangible behind the investment but the premise was the same. The money was made by those who thought up the scheme, who created an artificial demand and a corresponding shortage and then sucked all the smucks into buying pine tree saplings.
Tragic for many people but it’s happened before and will happen again and again and again.
Greed does it.
Who cares or even knows about investment fundamentals when all those fast easy $$$$$$$$$$$$$$$$$ are calling.

 

[monarch64]

The second a 24 year old grad student at Kelley Business School here tried to talk my ear off about blockchains I knew it was a scam. That was 3 years ago, hope he's learned his lesson.

 

[Wink]

Long ago, one of my business friends advised me to join him in buying bitcoins for a few hundred dollars each. I thought it was a silly idea. Had I invested the ten thousand he suggested, I could have made millions. Even if I still held each coin, they would be worth WAY more than the $10,000.

If I had made the millions, I probably would have made many less reasonable investments and be wondering where it all went... (Unless I spent it all on some incredibly well cut diamonds, which might have happened.)

 

[kenny]

Long ago, one of my business friends advised me to join him in buying bitcoins for a few hundred dollars each. I thought it was a silly idea. Had I invested the ten thousand he suggested, I could have made millions. Even if I still held each coin, they would be worth WAY more than the $10,000.

If I had made the millions, I probably would have made many less reasonable investments and be wondering where it all went... (Unless I spent it all on some incredibly well cut diamonds, which might have happened.)

@Wink , I don't doubt what you say as been true for many people.

But if you got out and sold all your crypto currency when it was worth millions, would you eventually have felt any remorse for the people who lost everything because they held on to their share of the pyramid scheme till the pyramid crumbles?

You would have gotten their money.
They're broke, and you're rich.
And would you feel the people at the top (who made billions and billions off of many now-bankrupt folks) belong in jail?

 

[Wink]

And would you feel the people at the top (who made billions and billions off of many now-bankrupt folks) belong in jail?

If what they did was illegal, yes. If it was done legally, no. Anyone who invests money he cannot afford to lose is not an investor, he is a gambler. Gamblers always seem to lose in the end, it is what they do.

I looked at the crypto opportunity, did not like it, kept my money in the bank and actually did buy some wonderful diamonds with it. I knew diamonds and was comfortable with them. It was a better deal for me.

My friend made millions and has since spent much of it on things I would never consider spending a dime on. His choices. He is having fun with his choices and I applaud him for living large.

 

[alexcox788]

Not long ago a merchant found a lot of monkeys that lived near a Village. One day he came to the Village saying he wanted to buy these monkeys. He announced that he would buy the monkeys at $100 each.

The Villagers thought that this man must be crazy. How can somebody buy stray monkeys at $100 each?

Still some people caught some monkeys and gave it to this merchant and he gave $100 for each monkey.This News spread like wildfire and people caught monkeys and sold them to the merchant.

After a few days, the merchant announced that he will buy monkeys at $200 each.

The lazy villagers also ran around to catch the remaining monkeys! They sold the remaining monkeys at $200 each.

The merchant then announced that he will buy monkeys for $500 each!

The villagers started to lose sleep! They caught 6 or 7 monkeys, which was all that was left and got $500 each. The villagers were waiting anxiously for the next announcement.

Then the merchant announced that he is going on holiday for a week, but when he returns, he will buy monkeys at $1000 each! He also said that his employee will be in charge, and would take care of the monkeys he bought pending his return. The Merchant went on holiday.

The villagers were frantic and very sad as there were no more monkeys left for them to sell it at $1000 each as was promised by the merchant. Then the merchant’s employee contacted them and told them that he would secretly sell them some monkeys at $700 each. The news spread like wildfire. As the merchant promised on his return that he would buy monkeys at $1000 each, they would instantly achieve a $300 profit for each monkey.

The next day The villagers queued up near the Monkey Cage. The employee sold all the monkeys at $700 each. The rich bought monkeys in large lots. The poor borrowed money from money lenders and bought the rest of the monkeys. The villagers took care of their monkeys & anxiously waited for the merchant to return! However nobody came! The looked for the employee. But he had disappeared!

The villagers then realized that they have been duped buying the useless stray monkeys at $700 each, and were now unable to sell them!

This Monkey Business is now known as Crypto Currency. It will make a lot of people bankrupt and a very few people filthy rich.

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[LilAlex]

^ right on schedule!

 

[kenny]

... Have any of you guys had any exciting experiences with cryptocurrency?

No.

Just lots of filthy SPAM from scumbag trolls.

I get my money from honest work.

 

[Sunrises Sunsets]

Sadly, Kenny, Bitcoin is on the same level as the American dollar but maybe a little stronger than the dollar. There is no gold or silver backing the dollar now other than people thinking it has value and it could collapse anytime. It is printed nilly-willy and I, personally, think it is doomed eventually.

Let me state, we do not own Bitcoin and after I read the thread wish we would have invested in it with Wink's friend.

 

[LilAlex]

Oops almost reported that one, too ^

I'll give it another day...

 

[GemHunter369]

Back when I was working in South Korea, I bought myself a GPU miner from eBay for about 400USD. I mined about 1 bitcoin from the machine before it stopped working. At that time, 1 bitcoin was worth about 1000USD. My mistake was selling that 1 bitcoin so early so that I could buy an ASIC miner. I never should have sold the bitcoin, as I didn't recover the money from my purchase of the ASIC miner. Having a little experience with Bitcoin from mining with that GPU miner, I do wish I had held onto the coins instead of selling them so quickly!

 

[LilAlex]

Sure wish I'd bet on the Chiefs in the last Super Bowl.

 

[Sunrises Sunsets]

Oops almost reported that one, too ^

I'll give it another day...

I'm a little confused, are you referring to reporting my post? If so, why? I was commenting on the fact that gold and silver no longer support the American dollar and I find that disappointing because of the issues it has caused since then.

 

[LilAlex]

I'm a little confused, are you referring to reporting my post? If so, why?

Sorry -- I was just kidding! But it is dangerously close to those crypto-pumping bot posts...

There are (weak) arguments to be made for crypto but being "safer" than the US dollar is not one of them, imo.

 

[Sunrises Sunsets]

Sorry -- I was just kidding! But it is dangerously close to those crypto-pumping bot posts...

There are (weak) arguments to be made for crypto but being "safer" than the US dollar is not one of them, imo.

I'm sorry for the confusion, I'm not a young kid anymore and as a senior, throwing money at Bitcoin is the last thing I'd do.

That said, it's premise is pretty much as the dollar. When the gold and silver backing for the dollar was dropped back in the day, it created much insecurity. The only true value, in my eyes, at this point is bartering. Something for something provides a secure value but, of course, that's not practical for most situations. IMHO, the financial system is a mess. But I'm older and have seen a lot.

 

[jeaniefish]

Here’s my advice FWIT, which is nothing, zero, nada! Read Dave Barry’s book Money Secrets! You will find the answer to many important financial questions such as: (1) Why is there a giant eye hovering over a pyramid on the back of the dollar bill and (2) since we don’t actually have a Gold Standard any more, what is really being kept in Fort Knox to back up our paper money? Hint,hint… could be cheese Whiz for all we know!

 

[Karl_K]

rofl here we go again.
Its funny how this thread attracts spammers.
I guess its better than spamming the entire board.
I wonder how many spam posts have been deleted in it.
Bet its a lot lol,

 

[LilAlex]

^ It's like a no-pest strip! Or the sacrificial anode for a boat!

 

[kenny]

I think bitcoin attracts a group of people whom I'd think of as ... "THOSE PEOPLE".
Can I say that here, or does that wake up the woke?

Back in 2020 I happened to notice another group of, oh around, 70 million people I think of as ... "THOSE PEOPLE".

America is doomed.

 

[Gloria27]

I think bitcoin attracts a group of people whom I'd think of as ... "THOSE PEOPLE".
Can I say that here, or does that wake up the woke?

Back in 2020 I happened to notice another group of, oh around, 70 million people I think of as ... "THOSE PEOPLE".

America is doomed.

You still don't know what woke means.

It's exactly the opposite of what you think it means. If you proudly wear a red cap, you are the opposite of woke, just so you know.

 

[Chronosed]

This whole concept of "digital money" still feels like something out of a sci-fi movie to me.