HALLIE EPHRON: Most of the time, I feel as if I’m keeping up, technology-wise. I worked in high tech starting in the 1980s and used early versions of email and browsers before most of us knew what the Internet was. I wrote about “groupware” for IBM and Lotus, and also about "middleware" for a short-lived tech start up (middleware allows programmers to access old ("legacy") databases with new user interfaces).
These days I manage my computer and cell phone reasonably well and update my own web site. But I find myself hitting a wall with terms like:
Cryptocurrency
Blockchain
Non-Fungible
Look up those terms and here we go, down the rabbit hole with explanations like:
Non-fungible tokens are, in a way, a lot like cryptocurrency. The record of NFTs’ existence lives on blockchains, they can be bought and sold using cryptocurrency, and there isn't necessarily a physical asset that ties them to the real world.
Individually I (sort of) understand (most of) the words. But… overall, my brain feels as if this is a huge pile of gobbledygook.
So maybe this is not something I need to understand? But it must matter, because a few days ago China banned cryptocurrency trading and mining. Leading to this headline in Forbes:
So, can I just tune out $150 Billion? After all, bitcoins aren’t tangible. I’m never going to physically encounter one.
And yet... and yet… come to find to cryptocurrencies like Bitcoin are “mined,” and that requires powerful, expensive hardware and lots of electricity which is contributing to climate change. How much? The answer seems to be “a lot,” but I invite you to go venture down that rabbit hole yourself and try to figure out what that means.
Plus cryptocurrencies are apparently used as a tool for facilitating criminal money laundering. See China’s ban.
I thought I was keeping up, but clearly I am not.
Now can someone help me figure out how to use that coin sorting machine in my supermarket? I've got jars and jars of pennies which, though tangible and fungible, have nearly no value.
How about you? Bitcoins, anyone, or are you sticking with cold hard cash and Krugerrands?
As far as bitcoins go, it’s all a mystery to me . . . I don’t understand any of it although I get the concept. But how do you justify spending good, hard-earned money to buy a non-tangible thing you will never, ever see or hold in your hand?
ReplyDeleteI really have no wish to explore any of it . . . I much prefer that cold, hard cash . . . .
... and plenty of it. Please.
DeleteI don't understand bitcoins, either. At all. And "mined?" How...never mind.
ReplyDeleteCan you get penny paper tubes and stuff them yourself while you're listening to a podcast (or a nice calming cantata, maybe)?
Penny paper tubes... I asked for them at the Citizen's Bank in my local supermarket and the teller refused to give me any because I didn't have a bank account with them. Seriously?
DeleteCitizen's is in Pittsburgh and I find them horribly unhelpful - unless you have an account or they're trying to get you to open an account.
DeleteAlso, some banks will take rolled coins and others won't. My bank has a coin-sorting machine in their lobby--it spits out a receipt which you then take to the teller.
DeleteAND there's now a national coin shortage, because no one is using them.
DeleteI don't understand the whole cryptocurrency thing. And I don't care to. I stick with cold hard cash (or the credit card) and the hell with all that stupid e-money.
ReplyDeleteThis probably further confirms that I'm an old fogey but I don't care.
I don't think it confirms anything of the sort. Confirms you as sensible and fiscally conservative, two very good things IMHOP.
DeleteMy brain has the same off-switch as yours Hallie! And I had the same niggling worry...if the Bitcoins caused so much angst, shouldn't I try a little harder? So far, not going there at all.
ReplyDeleteI'm right "not there" with you, Lucy.
DeleteDoes anyone else think of this as the Emperor’s new Clothes?
ReplyDeleteMore dangerous.
DeleteThat's what worries me.
DeleteHa! I got nothing! But you reminded me that my bank banned me from using their coin sorting machine because the dog hair (oops, sorry) clogged up their machine.
ReplyDeleteHa ha ha! A "real world" problem.
DeleteYou couldn't get me into Bitcoin if you paid me.
ReplyDeleteI had to explore this a little bit for next summer's Laurel Highlands book, LIE DOWN WITH DOGS. I learned just enough to scare me.
I'll stick to old-fashioned things like cash and my debit card, thanks.
Just be aware that debit cards are more dangerous to use than credit cards (Hank, correct me if I'm wrong on this.) IF the bad guys get access, it's to whatever you have in that account. Whereas your credit card it's charge by charge and limited... AND you can set up your credit card to alert you every time the card is used, also limiting the damage. Just sayin' ... I read somewhere that Paypal is safer still.
DeleteYes, exactly, debit cards allow access to your bank account, which does not have the same protections as a credit card, which just has access to your credit card "credit" account, with that span of time before the real money has to be paid, and a credit transaction can be stopped because of the time the transfer takes. You MUST dispute within 60 ays, though. But a debit crd transaction is almost instant and un...un-undoable. Never use a debit card for an internet transaction. xx
DeleteI think I have a grasp of these concepts, but they make my head hurt. Gimme the cash, please!
ReplyDeleteHave I the book for you, Hallie. "How to buy a Planet by D. A. Holdsworth. It is a sci-fi satire that opens with the G7 telling the world that they sold the planet to some alien land developers. The book covers the current fiscal/economic reality. Does it with hysterical brio, and convinces a reader to perhaps rethink current free flowing wealth. Anyone remember the dot.com boom? For me bitcoin is just another hustle. I will stay with the 'foreign princes' who have treasure maps.
ReplyDeleteLOL, Coralee!!
DeleteSounds irresistible! First cousin to How to Buy a Bridge?
DeleteMy son-in-law is a developer working with these concepts and is continually trying to explain them to the hubby and me. We are techies from way back in the '60's when the concept of the internet had the same effect. A "Shopping Mall" with no actual stores? I can't touch the stuff I buy and just have to depend on the mailman to bring me my goods? It seemed just as far-fetched as Non-fungible tokens seem today.
ReplyDeleteNot sure how it will all play out.
You are reminding me of how I tried to explain the Internet and a browser to one of my sisters. But we all made the 'leap' on that one. Eventually. Or most of us did.
DeleteBitcoin is now an acceptable word in Scrabble. Thus begins and ends my knowledge on the subject.
ReplyDeletea significant milestone! (I'm surprised because I thought it was a brand. Oh, well...
DeleteVERY significant!
DeleteI find plenty of drama and despair in my small town Ohio setting and don't need Bitcoin and its relatives to up the stakes.
ReplyDeleteLast weekend I ventured out to the hardware store, which has a post office in back. The man in front of me tried to break a hundred dollar bill for a four dollar purchase, which was declined. The clerk didn't have enough cash in the drawer to cover the transaction. We're a plastic society now.
we are, we are. The clerk at the post office last week couldn't make change for me. At least they no longer tell you that there's a minimum for using a credit card.
DeleteI live way out in the country. A couple years ago about this time I kept hearing what sounded like a very powerful fan. It was running 24/7 and driving me crazy because I couldn't imagine what it was or where it was coming from. I asked other people and they didn't hear it. Apparently you had to be at my house to hear it. I went exploring and discovered it was coming from the hunting camp next door. While I couldn't see what it was< I did see 6 things that looked just like what my clothes dryer uses to vent. Hot air was blowing out.
ReplyDeleteThis went on for almost a year! Even in the winter with my windows closed I could hear it. One day I happened to hear a vehicle next door. Because of all the leaves I can't see anything. I trotted right down there, planning to give those people a piece of my mind! The man said he had just turned it off and explained he was mining for bit coins and it used powerful computers that had to run all the time and "up here" (he was a downstater) the electricity is a lot cheaper. I had no idea if what he said even made sense but at least the noise had stopped. From what I have since learned he was telling the truth. Whether or not it was worth the price of electricity I can't say.
Uh oh, Judi - that's going in about 45 authors' books.
DeleteThen, one night, the hum stopped. Millicent jerked awake. She crept to the window. Down the hill, lights were on. Red lights. Tail lights. Her clock glowed: 4AM...
Judi--wow! Now I understand the surge in demand for electricity. Increased demand for electricity + noise pollution--just hope no miners move into my neighborhood!
DeleteWow, Judi - how awful. Glad the miner is gone, but wow!
DeleteOMG, Judi! Glad he turned it off, finally, but I'd have investigated it more. That is just creepy. Hallie, it'll be perfect in your next book;-)
DeleteYou had me at grok!
ReplyDeleteI, too, have tried to wrap my head around bitcoins and their ilk. Not happening. The closest I can come is thinking about it as virtual reality. You can see it, but it's not there and you can't touch it. Krugerands, Canadian Maple Leaves, and the like - Yep, understood. All the rest, not so much.
I'm with you and everyone else, Hallie. When Bitcoin first hit the zeitgeist, I tried very hard, again and again (and again) to understand the concept any time some knowledgable financial person on CBC explained it. Or purported to explain it. I'm still where I was then. It just doesn't compute.
ReplyDeleteAs for Non-fungible tokens... All it seems to indicate is, there's one born every nanosecond.
"there's one born every nanosecond" HA HA HA HA!
DeleteSusan, I'm currently reading a novel that takes place in Louis XV's reign in France, when John Law convinced the king to open a national bank to get the country out of bankruptcy by giving credit to everyone. It was a new concept that sounded great and created a mass fervor for all kinds of borrowing, but had disastrous results. I'm seeing the parallels.
DeleteWhat a coincidence, we were just talking about this with our energy consultant daughter a couple days ago.
ReplyDeleteThe energy used for cryptocurrency is massive, and becoming a real problem. The super servers needed require not just computing power, but enormous cooling apparatus because the process generates so much heat.
I can't wrap my head around what kind of data mining they are doing for all the value of the "coins". Everything I read about says they are solving math problems, but how on earth is that generating monetary value? Exactly what data is part of this? My suspicion is that's why all those Facebook quizzes are so prolific. You're not paranoid if they really are out to get you, right?
Karen, the Facebook quizzes! Just don't. Once they've got Spot, Fluffy and Roger, they'll have access to all your passwords.
DeleteExactly, Judy!
DeleteBitcoin sounds like make-believe money to me. And economics is just voodoo accounting. I am sorely mistrustful of both.
ReplyDeleteI confess, my mind wanders whenever anyone starts talking economics at me.
DeleteNope, zero, nothing nothing nothing. There was one day where I ALMOST understood it, but then, no.
ReplyDeleteAt one time, way back at the beginning, some people I know were very much interested in bitcoin. They did some minor investing in it. There were actual real coins at the time. They’re no longer involved, to my knowledge. One of my nephews received a $10 bitcoin as a gift when he graduated from high school. After he graduated from college and began working he cashed in that $10 bitcoin and he was able to pay off a lot of his college loans and buy a used car. I know nothing about it, but I have had the impression that if somebody invests in bitcoin, it practically becomes a job to stay on top of what’s happening with it. It holds no interest for me.
ReplyDeleteDebRo
Last tax season, my accountant asked me, "Do you have any bitcoin?" I just laughed. If i don't understand a financial instrument, I'm not going to buy into it. In addition, anything that acts as both a currency and an investment is not going to be great at either.
ReplyDeleteAfter I saw crypto bros online stating firmly that "If only the Afghan refugees had had all their resources in bitcoin/etherem/binance they could have escaped easily," I looked up 'how to buy an airplane ticket with cryptocurrency.' The hoops you have to jump through to do so make cashing out your mileage for a Christmas flight to Hawaii seem like a walk in the park. Also, food? A place to stay? A cab ride? Not until you've sold bitcoin for real money.
In contrast, when my daughter went to Kosovo in the summer of '19 (via London and Vienna) she only changed a tiny sum from dollars into euros and never saw a pound note. Her debit card was accepted everywhere, with the exchange rate handled by the banks themselves. Now that is an electronic currency I can get behind.
I'm remembering the days of traveler's checks, Julia. Could we have imagined a debit card that would work everywhere?
DeleteI kinda/sorta get the bitcoin concept, as my hubby has 'splained it to me several times. I can certainly see why people would be interested in a way to make untraceable financial transactions (many of them not legal.) Would I invest in it? Nope. It's a huge gamble.
ReplyDeleteOf course the fact that there is (supposedly) gold in a bank vault somewhere makes "money" any more real. It's pretty much all conceptual at this point, but what worries me the most about bitcoin is the terrible environmental impact.
NFTs just make my brain hurt.
I don't get it either, but I do have a brother who tries to patiently explain everything to me.
ReplyDeleteI am and plan to continue to live in blissful ignorance. Until I am forced to understand it and then I fully expect to have the Hooligans manage it for me. :) Jenn, the luddite
ReplyDeleteSo good to hear I'm not the only one completely baffled by cryptocurrencies.
ReplyDeleteAnd it's hard for this long-time techie to admit technology is passing me by. :-/
Over the hill? What hill? I didn't see any hill...
DeleteAnd in case anyone wonders, "grok" was coined by Robert Heinlein in one of the greatest reads ever, "Stranger in Strange Land."
ReplyDeleteI remember what a huge impression that book made on me as a teenager. I wonder how well it's held up.
DeleteI was intrigued when I first heard of block chain because it was a way to circumvent banks, and I'm not a fan of banks. On the other hand, it also subverts the ability of the nation state to control currency and that is a real problem. A problem appealing to people trying to hide their financial transactions from state authority. I may not like banks, but I like money launderers even less, so no Bitcoin for me. Besides, I'm fundamentally risk averse, and this stuff is off-the-charts risky. NFTs seem to me to be contemporary snake oil. There's a great podcast from the CBC called "A Death in Cryptoland" that might make good research for someone.
ReplyDeleteInteresting post. I heard of bitcoin and was there some kind of a scandal connected to bitcoins a while ago?
ReplyDeleteDiana
Shoot, I thought it was kind of time share in the ether which I also don't understand. How do you steal time? Where does stuff go in the ether. I will stick to my metal coins, debit card, checks, and credit cards. That those are spooky enough for me.
ReplyDelete