Cryptocurrencies Who Gets Your $$$ Money

Say you buy $10k of any crypto currency and you pay in cash / real money
Since that amount has to go somewhere (less costs)
where does your $$$ money go or to whom, it has to benefit someone.
Don't equate it to buying stocks as those makes you part owner in an asset.

Please don’t start telling me about the technology behind cryptocurrencies.

Comments

  • +11

    It goes to the person at the top of the pyramid, to pay for electricity and mining rigs.

  • +5

    The person or entity who previously owned that crypto currency.

    Much like if you sold $10k of crypto currency and received cash / real money for it - you would receive the money.

    • Yeah I don't see what's confusing.

      No different than going to a currency exchange and handing over $100 Australian and getting $70 US.

      You've given someone (an exchange?) $10k Australian and got 0.17 BTC in return.

      If the exchange owned the BTC, they now own your AUD (and may convert it to a different currency). If they were holding it for someone else, then that someone else will get the AUD (possibly converted to a different currency).

      Also similar (I assume) to foreign currency transactions. You buy an item for $10 US online through Paypal. Paypal pays the vendor and asks your bank or card for $10 US. Your bank will take their equivalent in AUD from your card/account and give it to themselves. They will take $10 US from their existing holdings and give that to Paypal.

  • +9

    Sounds a bit like a ponzi scheme
    1. Create virtual currency
    2. Pump up value on ticktok/youtube
    3. Sell essentially worthless virtual currency to hoards of Autists
    4. Disappear into anonymity

    • Pretty much.

      If you look at Solana.

      The team behind it raises money to do the dev work. Then they also sell tokens. Tokens are currency of the network to perform tasks (gas fees).

      So pretty much you can sell tokens, create the hype and run off with the money.

      People might get the technology because they are techies but they don't understand business.

      The network is maintained by strangers who install software into their PC to do POW / POS but if these nodes get too concentrated they control the network. It is like Uber gone wild where the drivers can take over Uber.

    • 90% of them are

    • Uh-huh, https://www.youtube.com/watch?v=S_dBKAWHHQI

      "Mummy, where does money come from"?

      • +1

        Stopped after a minute in when the guy started saying how no-one knows where money comes from, even the experts. But don't worry, within 20 minutes he'll explain the secrets of it all to us! Why go to uni for 3 years to learn when you could just watch his youtube videos? Oh and please buy crypto.

        Pseudoscience at its best.

        • No worries, I'm sure someone who doesn't already know everything might learn something, the guy is usually pretty rigorous in his analysis/explanations.

  • +3

    same as walking into a shop, it goes to who ever you buy it from

  • +2

    define cash / real money.

    cash is nothing more than just an IOU given to you by the bank/government. You use that cash/real money to buy crypto (which again is an IOU tracked in blockchain), you are just exchanging asset to another. Say you use that Crypto to buy a Tesla, again, you are exchanging the form of an asset.

    It's just who the asset is backed by. Government, blockchain + community, Tesla company.

  • +3

    Its not really any different to shares IMO, for the most part.

    You've bought bitcoin from someone who was selling their bitcoin.

    Just like you bought Telstra shares from someone selling their Telstra shares.

    • +2

      Except telstra shares perform based on business performance.

      Crypto is 100% hype or if someone thinks its cool

      Both are gambling
      Both require different types of educated guesses
      Both can be diluted at a moments notice

      Only one pays out dividends though ;)

      • holding fiat currency is still gambling you loose a set amount every year as it gets deflated.

        you're gambling that the government doesn't collapse

        • +3

          you're gambling that the government doesn't collapse

          Sure, if you live in a country with an unstable government (Africa, South America and so on). If USD collapses your crypto will not save you.

          • @Mistredo: we will find out soon enough, in the mean time it's an opportunity to make stupid returns

          • @Mistredo: Australians live in a country with a stable government. The government is so stable that the AUD has lost -97.62% of its value since 1923.

            https://files.ozbargain.com.au/upload/393946/90998/screensho...

            Inflation Expectations up 0.2% points to 4.3% in August; highest for nearly three years since November 2018
            September 21 2021 Finding No. 8791 Country:
            In August 2021 Australians expected inflation of 4.3% annually over the next two years, up 0.2% points and the highest Inflation Expectations for nearly three years since November 2018. Inflation Expectations are now up 1.1% points since the pandemic low of 3.2% a year ago in August 2020.
            Inflation Expectations are still 0.4% points below their long-term average of 4.7% but are now 0.8% points higher than the 2020 monthly average of 3.5%.
            https://www.roymorgan.com/findings/8791-australian-inflation...

            People can expect the government to keep doing a bang up job.

        • +1

          Chances of crypto like Bitcoin dropping at least 10-20% in the next few months? Close to 100%.
          Chances of it dropping to 0 value? Probably low, but not as low as chances of government collapsing.

          Chances of government collapsing? Close to 0%.

          Not exactly the same field of gambling as one another.

          • @DingoBilly:

            Chances of crypto like Bitcoin dropping at least 10-20% in the next few months? Close to 100%.

            months, probably days lol but where there is volatility money can be made

          • @DingoBilly: don't need to collapse the government as they make a useful front.

      • Isn't business performance only one input into the share price and dividend rather than being the only contributing factor?

        The share price is based on the market's willingness to pay for it, much like crypto. There is a correlation to business performance, but only to the extent that business performance impacts on willingness to pay by the market.

        The dividend too, is linked to business performance and availability of profits to be distributed as dividends, but ultimately the amount is up to how the board and c-suite decide to allocate earnings - notwithstanding that the board would get removed if they didn't pay out dividends.

  • The banks are the last link in any fiat for crypto transaction, so it would go to a bank account. This is validated, then crypto is released.

  • Slightly off topic - if my mortgage goes up $50 month - who get's that ?

    • +5

      The banksters. Wait till you find out where they got your mortgage money in the first place. :)

    • +1

      probably the banks shareholders

  • The Banker like a Casino.

  • Please don’t start telling me about the technology behind cryptocurrencies.

    then learn the simple basics, which your question is based upon!

  • where does your $$$ money go or to whom, it has to benefit someone.

    To whoever sold it to you.

    Don't equate it to buying stocks as those makes you part owner in an asset.

    Well, it's actually exactly the same as buying stocks … the money goes to whoever sold it to you.

    I'll leave comments on the qualitative value of the "assets" for another day.

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