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These 7 Crypto Red Flags Are Really Red Herrings

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4 months ago

Tesla sold 75 percent of its bitcoin holdings. CEO Elon Musk says the company may buy more bitcoin in the future. Musk said his company is shoring up cash, which is typical for large companies in an economic downturn.

A former U.S. Coinbase employee has been charged with insider crypto trading. Meanwhile, Coinbase has filed a petition with the Securities and Exchange Commission (SEC) encouraging clearer regulation.

Binance.US is launching an affiliate program. This is in response to Coinbase shutting theirs downIt’s like your girlfriend’s best friend’s boyfriend dumps her before the senior prom, so you decide to take your girlfriend to the prom instead of the Green Day concert you’ve already bought tickets for. You better hope they’re selling t-shirts. NOTE: No girlfriends were harmed to bring you this bad joke.

TronDAO is looking at buying Tencent’s NFT division. Tencent is planning to shut it down.

Finder predicts Solana (SOL) will hit $512 by 2030Today, Solana is less than $45. Finder expects it to be at $166 by 2025. From there, it’s an upward trajectory. Interestingly, they predict further power outages, too. What do you think?

Minecraft is banning NFTs. But don’t write an obituary for NFTs just yet.

According to Forex Suggest, the largest companies in the crypto space are not diverse enough. The companies with the most equitable male-female split are Forte Labs and Chainalysis.

Web3 is becoming the most sought-after investing sector in crypto. Why interoperability is necessary in Web3. Here are some compensation options for Web3 developers in a down market.

SocialFi platform Torum is integrating Web3 wallet loginJust as many Web2 properties integrated OAuth, I believe Web3 logins will become the standard for all forward-looking Web properties.

Do you know where to find your NFT’s metadata?

The hit CBS comedy Ghosts is entering Decentraland. How to fight the dark side of the metaverse. How the metaverse will change the financial system.

A major NFT collector accidentally spent $150,000 on a joke domain name he createdPlay with snakes and you’ll get bit.

Usain Bolt is stepping into the move2-earn space with a new fitness app.

Pardon Our Dust

We interrupt this regular programming to bring you this rant:

Before you read my response, check out 7 red flags of cryptocurrencies.

I wouldn’t expect anything less from The Hill, the conservative right’s online rag. Almost all of these so-called red flags is a strength. For instance, argument #1 is that bitcoin has no “intrinsic value” because it isn’t backed by a government or central bank. Folks, if your fiat currency’s value is derived from the strength of a government or central bank, then it doesn’t have any intrinsic value. Quit arguing from the position of absence.

I’m not sure what the point of “Red flag #2 is, but thanks for the history lesson.

“Red flag #3” is such a dunce move that I can’t even believe someone had the courage to write it. The first sentence reads “The government earns a profit from seigniorage when it mints money.” True. The government profits from printing money. By extension, the wealthy elite (i.e. financial institutions and their owners) who rely on the seigniorage system also make money. Two sentences later: “The cost to consumers is zero.” False! The cost to consumers is the devaluation of the money in their pockets. If someone profits from an activity, someone else is paying the cost for that activity. This is classic economics. In the case of fiat currency, the government makes money but you pay the cost for printing it through its devaluation. Then the author goes on to compare the cost of mining bitcoin, adding “Someone has to pick up that cost somewhere in the chain of ownership.” Yeah, the miner! In the case of bitcoin, the cost of production is paid for by the person who profits from its minting. That’s not a downside; it’s a benefit. I’m astounded at the utter confusion of the people who go out of their way to prop up the status quo.

In “Red flag #4, the author takes aim at mathematics, concluding “Wouldn’t it be logical to carefully consider the implications of a business that relies on penetrating the kinds of mathematical puzzles that also protect our data?” What would be logical is to actually try to understand what you’re writing about before you write about it.

“Red flag #5” is about proof-of-work’s energy consumption. Sure, there are valid concerns about energy consumption, but in the minds of certain people who drive cars, bitcoin is destroying the planet all by its lonesome. (Pardon the hyperbole representing the truth it depicts.)

Oh, here’s a good one. “Red flag #6” is a sense of humor. Because, if you have to laugh about it, it can’t be good. Too bad the author doesn’t explain how accidental success is a red flag.

Finally, in “Red flag #7,” the author makes a decent point, albeit from an impure motive. In his mind, centralization is the key to paradise’s door. He doesn’t mention trust once. Rather, he takes aim at unregulated markets and “people in various locations around the world that are required to pass no litmus test to earn the privilege of safekeeping other peoples’ money,” both of which are red herrings. Here’s the thing: The only person responsible for safekeeping your money is you. Keep your crypto in a wallet that you own and control. Forget about custody, except in rare situations. Even then, trust your crypto to someone you can truly trust (is there anyone?). Regulation may not be a bad thing for the crypto space, but if your problem with crypto is that it is unregulated, then you must also have a problem with the free speech you’re exercising.

Nowhere in his polemic does the author of this piece mention scams, thievery, pump and dumps, or the myriad of real problems that exist in the crypto space. For him, the “red flags” are all the benefits of crypto. Hmmmmph!

Let’s title this little screed, Give Me a Damn Break!

Are you ready for a lot of dead DAOs?

The crypto sector fears an EU ban on NFTs.

Several Web3 companies have banded together to form the Open Metaverse Alliance for Web3 (OMA3).

Star Atlas is launching a science-fiction-themed game with NFTs and a DAO.

Is crypto privacy an important concern in 2022?

list of tokens the SEC says are securities.

As usual, snark and commentary are italics. See a lot of italics? That’s not an accident.

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Cryptocracy is a decentralized newsletter published several times a week. I curate the latest news and crypto analysis from some of the brightest minds in crypto, and sometimes offer a little insightful and snarky commentary. Always fresh, always interesting, and always crypto.

First published at Cryptocracy. Not to be construed as financial advice. Do your own research.

Image credit: Forex Suggest

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