Personal Finance

4351 readers

6 users here now

Learn about budgeting, saving, getting out of debt, credit, investing, and retirement planning. Join our community, read the PF Wiki, and get on top of your finances!

Note: This community is not region centric, so if you are posting anything specific to a certain region, kindly specify that in the title (something like [USA], [EU], [AUS] etc.)

founded 2 years ago

MODERATORS

WandererLagomorph799@lemmy.ml

nieceandtows@programming.dev

nieceandtows@lemmy.ml

141

Cryptocurrency’s transparency is a mirage: New research shows a small group of insiders influence its value (theconversation.com)

submitted 3 weeks ago by otters_raft@lemmy.ca to c/personalfinance@lemmy.ml

23 comments fedilink hide all child comments

TLDR: meme coin rug pulls, among other issues around centralization

Crypto-believers often blame greedy financiers as the cause of the Great Recession in 2008. But we argue that crypto is not immune to these same risks.

Public blockchains operate on a distributed peer-to-peer network. This network provides each user a complete record of transactions that is updated in real time. Users can send digital cash between themselves without relying on a centralized authority.

Since each user has a full record of transactions, the system promises full transparency. But our research demonstrates that public blockchains, and the cryptocurrencies that run on them, do not actually replace trust with transparency.

Speculation, manipulation and market crashes remain very real dangers, regardless of whether the financial system is centralized or decentralized.

Centralization of power in the hands of insiders is still a major issue in the cryptocurrency space. This is particularly an issue for emerging cryptocurrencies like memecoins. Memecoins are a type of cryptocurrency named after internet memes or similar jokes. They draw their value entirely from speculation.

you are viewing a single comment's thread
view the rest of the comments

[–] Wilco@lemm.ee 12 points 3 weeks ago (1 children)

Well ... DUH. It is a nonexistent "currency" that only has value because people can be tricked into thinking it has value.

[–] Flagstaff@programming.dev 1 points 5 days ago (1 children)

Like USD, which the gov can print an infinite amount of whenever it wants, therefore proving it's worthless? BTC has a limit hardcoded into its programming. Anyone can always ascribe value to anything, but scarcity is no mere illusion.

[–] Wilco@lemm.ee 1 points 5 days ago (1 children)

The USD cannot be printed in an infinite amount. It is printed and secured by debt. It has value, but the value is basically a loan that has to be repaid.

[–] Flagstaff@programming.dev 1 points 4 days ago

Sure, but as a result we've been seeing it balloon to epic proportions before our eyes for the past few decades. This next decade is not gonna look pretty, thanks probably mostly due to the greed known as fractional reserve lending. Brace yourself...