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kleinbl00  ·  2430 days ago  ·  link  ·    ·  parent  ·  post: Bitcoin Cash starts today

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    So have any governments done anything about Cryptocurrency to either support it or stifle it, or is everyone taking a "Wait and See" approach?

A few examples:

The Federal Reserve's working paper on adopting Distributed Ledger Technology (blockchain)

Vladimir Putin discussing moving the Ruble to Ethereum with Vitalik Buterin

Singapore/D&T's wargaming of moving Singapore onto Ethereum

Japan and Thailand now using Ripple (XRP) as clearinghouse

47 Japanese banks adopting XRP

    Doesn't the fact that some currencies seem to be subject to crazy speculation and meteoric increase in value hint that things could be unstable and/or easy to manipulate?

The manipulation you see is entirely due to the low market capitalization in cryptocurrency trading. As of this writing, there's about 44 billion dollars in Bitcoin, about 21 billion dollars in Ethereum and less than 100 billion dollars in all cryptocurrencies. Apple, by comparison, has something like $250 billion cash on hand - they could buy all the cryptocurrency in the world (theoretically) more than twice over. By market cap, Bitcoin is worth about as much as Ford right now. But by volume, trading can get pretty active. Again, right now, 26 million shares of Ford have changed hands in the past 24 hours - a light trading day for Ford as Yahoo tells me they average 39 million shares a day. At $10 a share, that's $260m in Ford value changing hands daily. Right now there's 1.1 billion dollars worth of Bitcoin changing hands, and that doesn't include Bitcoin Cash, which didn't even exist two days ago. Multiply that by the fact that if you buy shares of Ford, you have a pretty good idea what you're getting. It's a car company. It's been around a hundred years. Bitcoin? Five years ago it was nerd poker chips. Now all of a sudden it's worth $2700 each. And contrary to popular opinion about financial prognosticators, they're a bunch of business majors with minimal understanding of the underpinnings of economics and cryptocurrency is a fundamental shock to the underpinnings of economics. We're in deeply theoretical territory and that amplifies uncertainty a great deal.

    Similarly, don't the block chain thefts and hacks we've read about this past year also point to the idea that maybe it's not as secure as we thought?

No. All the thefts and hacks you've seen relate to either the security of exchanges - services where cryptocurrencies are exchanged for fiat money or other cryptocurrency - or tokens - a subsidiary marker of value that uses an existing blockchain for infrastructure but has its own rules and utility.

We're in the wild wild west here, no doubt but where shit gets hinky is where people come in. The fact that "Magic the Gathering Online Exchange" had $450 million worth of bitcoin to lose says a lot about the naivete of many of the players in the cryptocurrency space. That the crazy cryptokidz went from "ICOs are the bestest!" to "ICOs are snake oil!" (the correct opinion) in the space of three weeks says more. Again, this is a space without the SEC or the FDIC. A fool and his money are soon parted and cryptocurrency is currently a wretched den of scum and villainy. The underlying technology, however, is of seismic import and it's possible that network effects are pronounced enough now that the cryptos we currently have will be the cryptos we keep. Nobody uses Friendster. Everybody uses Facebook. The trick is in knowing whether we're looking at Friendster or Facebook right now.

    Wouldn't the anonymous nature of transactions actually be a negative, because you don't actually always know who you're dealing with, which would cause concerns in accountability, legitimacy, etc.?

Anyone who has the cryptographic key to a cryptographic address for a cryptographic wallet is that wallet. To put it in Oldey-Tymey-SpyNoveley terms, dealing with cryptocurrency is effectively transacting with a numbered Swiss bank account. For better or worse.