back to article Central bank: Crypto 'derives value based on make believe', threatens financial stability

India's Reserve Bank has offered a scathing assessment of cryptocurrencies in its latest financial stability report – saying the risks they create demand attention before they undermine established institutions. "Cryptocurrencies are a clear danger," the report baldly declares in its Foreword, penned by Reserve Bank governor …

  1. Anonymous Coward
    Anonymous Coward

    Its fraud.

    There's no value there.

    * All of them inflate, new tokens are mined, and there is an infinite number of new crypto variants continually made. They are NOT an inflation hedge.

    * None of them have sovereign backing, so none of them are backed by the borrowed future labor of a country.

    * Any claimed benefits like "privacy" are bullshit, the blockchain records everything.

    * Claims that governments cannot block transactions, again bullshit, the exchanges are trivial to block.

    * Cheap to transact? No, gas fees are big fees.

    * None of the variously claimed "values" for crypto are real.

    Nor is the price real.

    Just because "someone" buys 1 token at $1 million, does not make the 1000 tokens in existence worth $1 billion. Nor when they mine the next 1000 does it make it double in value to $2 billion. That's just the bait to lure in the punters.

    So you get punters to buy 10 tokens for $10 million and they, the conmen can cash out at a huge profit. Their $1 million investment returns $10 million. The price drops, but not to zero, crypto con men have no incentive to dump all the crypto. He's well into profit, he can use some of his $10 million to buy some more. Perhaps buy another 1 token, this time at $8 million, why not, he's still doubled his money, there are few sellers and he's most of them. Wow, now his crypto number pool is worth $16 billion!

    $16 billion, yet only $10 million of actual punter money. And his punters think they're holding an asset worth $80 million. They think their 10 million has multiplied to 80 million! Look at how quickly they got rich. They'll tell all their friends.

    His sockpuppets scream: "Punters, get into my crypto quick and buy in early to get rich! Look at how this token went from $1 billion to $16 billion!". So more suckers come along and buy 10 tokens at $100 million. Now our conman has yacht money.

    Yet there is nothing of actual value there, the money has gone, he's bought a mega yacht. All that is left is his collection of magic numbers. But heck, they're buying $100 million of a $20 billion "asset", so its not like all of that $20 billion could just disappear overnight?! Right??? As I said there is NOTHING THERE, right? There must be *something* there if it has a $20 billion value right? No, nothing.

    You need fake third party confirmation of "value", nobody will simply believe that a magic number system is worth $20 billion. Especially if the conman himself is the buyer. So they buy and sell each others "assets" it's not the conman buying his own assets, its a disguised chain of multiple crypto, 'stablecoins', NFT's all the same shit from the same group of conmen, but now you have long chains of obsfucated shit. Cycling around to hide the true nature of the transaction.

    And third party miners, mining the coins, these are not actual buyers, but in a sense they've "bought" into the con..... if all these miners believe its worth it, surely there must be something in these magic number systems???? It provides further fake third party confirmation. You can even charge these miners real money to register their new coins, and claim that as asset backing to your coin (they do this in stable coins). Once you've done that, take the real money and swap it for other fake crypto assets and you can extract that money too!

    None of it is has any value behind it. Just a few suckers buying in thinking there are lots of suckers already in, dumber than they are. You can see who and how people get rich off crypto, and why the "value" can be $20 billion one second and worthless the next.

    You can also see why it was not prosecuted. The conmen have the real money and the victims have worthless magic numbers, one can be donated to PAC and one cannot.

    1. Version 1.0 Silver badge

      Sure, it's fraud these days although when bitcoin and other crypto was first created it was just something interesting and an easy way to pay via the internet. In those days all bank based payments resulted in banks and credit card companies making money. Bitcoin was very low priced until the US started to consider it a legal "coin" - once the investors could legally play with it then we saw the value shoot up from $8k to $64k ... and now fraud and malware appear everywhere because it's so much easier to pay.

      Fraud is nothing new, crypto has just created a better environment for it.

      1. Anonymous Coward
        Anonymous Coward

        It wasn't easy to pay in the early days of bitcoin, except in bitcoin. Which made the use case, "um, what?"

        It's been a scam from the start, just one that's great at convincing people that it might not be.

  2. jmch Silver badge

    Choose a side!!!

    So, cryptocurrencies are inherently dangerous, says Indian Central Bank, as it prepares to launch it's own Central Bank Cryptocurrency!!

    Yes, anyone can jump into cryptocurrencies without 'Know your client' procedures, or other anti-money-laundering procedures that are imposed on every account holder. You know what? Billions of people worldwide don't have access to the banking system (and, more importantly, credit) because they are so poor that banks don't see it worth their while to service them, particularly if they have to jump through a gazillion Know Your Client hoops for a $1000 loan. Meanwhile you just have to look at property prices in London and other major cities, and see how many of them are bought through offshore funds and trusts, to realise that all the anti-money-laundering malarkey isn't working very well is it?

    It's not surprising that people left behind by the global capitalist system will find their own way. It's also not surprising that these same people are vulnerable to exploitation by sharks and conmen. How about waiving all paperwork for 2 accounts per client with total balances and total yearly transactions no higher than $10k? How about incentivize banks to give microloans to small traders instead of government underwriting te losses of multi-billion $$ corporations??

    No, let's set up a central bank cryptocurrency instead, so we can take all the shitty workings of the current financial system, and replicate them on a blockchain, because, blockchain! While you're at it why not make it a Quantum AI blockchain??

  3. Marty McFly Silver badge

    Also heard from the India's Reserve Bank...

    "The rupee is not make believe. It has value because we say so."

    1. Persona Silver badge

      Re: Also heard from the India's Reserve Bank...

      The 1.4 billion people living in India can buy things in shops in India with Rupees. Many need to pay taxes in Rupees and there is a judicial system with police to enforce it. I can also buy or sell Rupees at tens of thousands of FX businesses all around the world. Sounds a pretty convincing argument that is has value.

  4. Will Godfrey Silver badge

    I agree

    It's as bad as fiat currency. Well, slightly badder.

    1. nijam Silver badge

      Re: I agree

      Since the gold standard was abandoned, all national currencies are fiat currencies, of course.

      1. Will Godfrey Silver badge

        Re: I agree


      2. Anonymous Coward
        Anonymous Coward

        Re: I agree

        Bitcoin is a fiat currency, too. A different fiat from the usual one of "nation state", true, but still a fiat.

      3. The Sprocket

        Re: I agree

        While that is true, essentially national currencies are traditionally more stable, and overseen with a responsibility towards the well-being of said nation.

        Crypto is private, and has no regulations or oversight whatsoever. Hence, the opening statement: Crypto 'derives value based on make believe' rings very true. I absolutely refuse to endorse it, or go near it in its current state. I see it as currency for the dark web and criminals.

        Now, tell me that the G20 has come up with an 'international currency' that operates similar to crypto, but is much more stable and has iron-clad G20 oversight, there may be more of a mainstream appetite for the concept then—especially from the business world.

        Just my 2¢ worth.

  5. Harmon20

    "Anything that derives value based on make believe..."

    "Hey Kettle, sure are black, ain't cha?" - The Pot

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