The core feature of any cryptocurrency is "money w/o state regulation", but when you're talking about selling it for any major currency (Dollars, Euros, Sterling, Yen, RMB) guess what, you're regulated. There is no way around this, regulators are wise (more than wise, hypervigilant) to it. As a result, this stuff is just cumbersome currency that roasts the planet. No thank you.
This is exactly like the argument that electric cars aren't actually any better because grid electricity is not currently very green in most parts of the world. The response of course being that as the grid gets greener (which it does every year), your car becomes greener also. If you have a gasoline car, it will be just as dirty in 20 years as it is today.
Same thing with crypto. Yes, currently a lot of people buy and sell crypto with government-backed currency. However, the whole point is to have currency that you can use in place of normal currency. Currency that you are paid in, that you shop in, that you pay your bills in, that you pay back your friends with. At the start, there is a lot of fiat <-> crypto. But the goal is to make it so that people can use crypto for everything, and therefore never need to sell it for any major currency.
If you use crypto, every year you will need to "drop out" into fiat less and less. Just like every year your electric car gets greener.
Ironically the analogy extends even better to your parting shot:
> this stuff is just cumbersome currency that roasts the planet.
Again, short-term thinking. As a purely digital currency, cryptocurrency gets greener every year as the grid gets greener. If you want to save the planet, the first step is to electrify everything. Step 2 is to make your electricity production as green as possible (preferably with nuclear).
Why would it be good to free currency from government regulation? This is something I often see crypto advocates blow right past as if it's self explanatory, but I don't think it is.
I like that the currency I use is managed by my government. Why should I want to switch?
So I hate to use the word I'm about to use, because of the modern connotations associated with it, but it does apply here.
There are billions of people who are abused by their government, who cannot trust their government, who's local money is debased by their government at a whim. You are privileged (there's that word) to have a government that you feel you can trust to control the value of your savings and your purchasing power. You do not see the value proposition because there is not much of one for you. Cryptocurrency doesn't exist for you. It exists for the people who do need it. And again, there are billions of people who need it, as much as half the world's population, possibly more.
There are billions of people who are abused by their government, who cannot trust their government, who's local money is debased by their government at a whim.
The United States inflated the money supply by many trillions of dollars in the past year, which decreases the buying power of the dollar. With savings accounts paying close to 0% interest, due to inflation, savers are losing money in these accounts each year.
And while the goal of the Fed is to manage the economy to have about 2% inflation, in reality, the things that people care about—higher education, medical care, real estate in many cities—has inflated much more than 2% annually.
The dollar is being debased gradually; one day it could be sudden.
People don't realize that at that target rate of 2% yearly, your savings lose half their purchasing power over a 10 year timespan. The number looks small, so people see that and say "oh, no big deal" but they don't realize how big of an impact it has on their net worth if their assets are mostly fiat currency. Additionally, most people don't notice how this affects their behavior and encourages people to save less and spend more, but from a macroeconomic perspective the effect is plain as day, most people have less than 1k in savings.
The 2% annual debasement rate of modern state currencies would have been a massive crisis in the era of metals. Imagine a king putting 2% less silver in the coin, year over year. We're just used to it.
But leave that aside, you said you like government-managed currency and I believe you. Venezuelans don't. The way I see it, what's stopping the EUR and USD from going down that spiral is momentum, rather than some law of nature.
I'm not convince the issuing schedule for BTC is ideal either. Grin, to pick a cybercoin which has some interesting technical innovations, issues one coin per minute, forever, and since coins are lost, this might be better.
But I like the idea of a transnational currency, where no one government is in a position to change the rate of issue, and I think Bitcoin has real potential as a refuge for value to flee to, in the event that the increasingly reckless experiments which Western governments and their central banks are making with their currencies come back to bite us.
Don't think it would spell the end of sovereign currencies, either. It would force them to be more honest, though, and that would be a good thing.
> The 2% annual debasement rate of modern state currencies would have been a massive crisis in the era of metals. Imagine a king putting 2% less silver in the coin, year over year. We're just used to it.
Say what? Coins were intrinsically valued and not used like currency as it is today. It wasn't until about the 1500s we even really see currency being used and it was hand waves a bunch of stuff thanks to the Dutch merchant class. In Rome people didn't spend money, they hoarded it, because the pile itself was a sign of wealth. Spending it was looked down upon. They instead purchased primarily through bartering of goods and resources. There was no middle class either to spend money, you were nobility, a solider, or a slave.
A lot of folks want to apply modern economics to historical contexts where it cannot be. There's too much missing when taking in only from the lens of Economics to evaluate or judge things accurately.
So first, you of course picked one of the very few deflationary growth periods in history.
Second, that deflationary period was caused by a huge increase in productivity... it is known as "the second industrial revolution", and global production efficiency took off during that period.
Third, the fact that there was only 4% actually shows that growth was artificially constrained by a limited money supply; productive efficiency increased so much, we should have had better growth than we did. We would have, if we were able to grow the money supply with the economy.
In fact, the only thing that kept the money supply from completely stopping economic growth is that there actually WAS a huge increase in the money supply caused by massive gold and silver mining.
Not OP, but they were bringing up a counterpoint to the "absolutely" destroys a nation. The counter example did not destroy the US, proving the original statement false.
Your third point also sounds like story-telling, or fitting a story to the evidence. Does that mean it is the only possible explanation for what occurred? If not, how can we determine which explanation is correct?
Yeah, you are right... it is a vast oversimplification and is not the only possible explanation.
I guess my point is that time period is clearly an outlier in a number of ways, which is why it is one of the only examples of high growth + deflation periods in history... it doesn't change the conclusion that you should aim for a small amount of inflation if you want economic growth. A single counter-example doesn't change the conclusion; just because we know there are people who have won huge jackpots in the lottery doesn't mean we stop suggesting saving money for retirement.
No, they really don't. Uninformed opinions will argue this because they're just that... uninformed. I'm sorry but no one who has studied economics will believe this there's zero evidence to support the idea a low-level of inflation is bad. There's only crackpots and idiots who don't have economics degrees, or even enough math to understand the fucking equations (which aren't hard but also don't always provide intuitive results).
In general, without some form of inflation, you end up with a deflationary spiral because people stop spending and the economy seizes up. No one will spend money if just holding it makes it more valuable. It then becomes a race to horde as much as you can for as long as you can. It's also, quite uhhh... perplexing for me, to not increase the money supply when populations are increasing; because, they're increasing the value of the money by increasing demand for it.
Central banks are the result and answer to reckless unregulated financial markets crashing, being manipulated, and destroying lives... Oh shit, kind of sounds like bitcoin, doesn't it? Everyone does this "central bank boogeyman" and thinks it should go away but they all absolutely ignore why they exist in the first place.
There's a ton of quality stuff to be debated in regards to economics-- this is not one of them.
People, and state economists, have confused inflation and deflation so much for their propaganda that right now is almost imposible to have a discussion around it primarily because different people don't mean the same things when they use those words.
Is the inflation you talk about consumer price inflation? is it assets price inflation? or is it money supply inflation? is the deflation caused by increases in productivity or is it caused by decrease in demand? Is inflation a product of regulations? of corruption? or was it caused by central banks and politicians' stupidity?
Those are all very different situations that require very different approaches, but because the "inflation-good deflation-bad" mantra has been repeated for so long (without any actual proof!) idiots now can't see past it, and think it's fine because they call themselves economists.
> no one who has studied economics will believe this there's zero evidence to support the idea a low-level of inflation is bad.
That's quite the number of negations you've got there. I assume you want to say that a mild inflation make economic sense, but I think you're actually saying the opposite due to the 3 negations (no one, zero evidence, bad).
I think it is two separate thoughts.
> no one who has studied economics will believe this - there's zero evidence to support the idea a low-level of inflation is bad.
This is like saying: "Opinions differ substantially as to whether man-made climate change is real". Yes, opinions differ, but when all mainstream scientists agree that deflation is bad, saying that "opinions differ" is quite misleading.
How do you define scientist, and who else isn't included?
Like, micro-economists do a lot of interesting experimental work that certainly seems like science.
Macro-economics is pretty much entrail-reading because we fundamentally don't understand how the modern economy functions, and is massively political and hijacked by a variety of interests, but that's a subfield that even economists agree is problematic.
They have most of the same issues as economics (modulo the political stuff), but everyone seems OK with it.
Also, Popper's falsification is a pretty unrealistic account of how science actually works, and it only really works as advertised where you can run effective experimental designs (which economics and geology, amongst other disciplines) have a problem with.
Geology definitely has more experimental falsification attempts going on than economics.
If you have a theory that is impossible to falsify experimentally, we're no longer talking about science (at least if your idea of science is the pursuit of objective truth). Modern "science" running amok with people more concerned with attempting to prove themselves correct than find the truth doesn't change that.
> Popper's falsification is a pretty unrealistic account of how science actually works
That's the rub though. A pretty strong argument can be made that "science" is not working and that "scientists" have lost their way, if you look at things like the reproducibility crisis.
Depends on the use-case. Bitcoin's current zeitgeist is digital gold/store of value and from that point of view deflation is a strength that complements inflationary currencies.
> Why would it be good to free currency from government regulation?
Obviously this is a huuuuge question, but it's such a good one.
The simplest compact answer, at least to me (and it may in fact be an oversimplification) goes something like this:
* Nearly invariably (and with a decreasing number of exceptions as technology advances), states which have control over both sides of the economic equation (ie, monetary concerns as well as national finance) find themselves unable to resist devolving into empire, and a specific type of empire called a "welfare-warfare" state, where the money supply is carefully controlled in such a way as to produce just enough support (often through pseudoscientific 'macro-economic' analysis and 'unemployment' prevention) to preclude revolution, while also projecting military power on poorer parts of the world in order to capture resources in a misguided effort to service the never-ending debt that accompanies the fiat money system.
In this view (and to be clear, it's one I hold), states with these powers (a clear conflict of interest, IMO) will continue to plunder the earth and attempt to enslave its people indefinitely, and can only be practically stopped by the economic adjustment that comes from the introduction of a hard currency (which causes the cycle of debt service to become impossibly onerous, even for an empire state).
* For a less oversimplified version, I might recommend Ron Paul's book "End the Fed", which is an introduction to the history of hard-money economics and can be read in a day or two.
* For an even less oversimplified version, you'll need to delve into the "Chicago School" and / or "Austrian School" of economics. Milton Friedman and Ludwig Von Mises are probably the best known scholars of each.
I'm not sure I understand the welfare-warfare model. It seems like it requires a bunch of preconditions:
* The cycle of debt needs to be bootstrapped. You need some initial borrowing well beyond current (expected) repayment capacity. This implies both some overspending and lack of due diligence by lenders willing to extend the rope.
* The debt is denominated in a currency the borrower doesn't control. If you're American borrowing dollars, or Russia borrowing roubles, you can always deflate the currency to moot the debt.
* The state has no legal leverage against lenders. A continuation of the tactics above-- I could imagine a desperate nation simply refusing to redeem its bonds, or even prosecuting people attempting to claim then.
There may be incentives and default-approaches that encourage the growth of empire to feed a debt addiction, but it's far from the only way. In the worst case, you end up with a default and limited to dealing with lenders who are legally required to deal with you (i.e. requiring pension plans or state-owned enterprises to sponge up government bonds) until someone else is willing to take a punt.
The problem with an argument that welfare states 'nearly invariably' devolve into empire is that even the most cursory examination of the world's welfare states makes it clear they nearly invariably don't.
The reverse argument actually works much better: throughout millenia of metallic standards countries regularly fought wars to plunder gold reserves from weaker states to repay their debts or boost their economy. And didn't even make enough from doing so to be able to afford welfare. Now they don't have to acquire shiny metal every time things are bad, they very seldom fight wars and even relinquished control over the empires they'd built under the gold standard. If there is a causal relationship between monetary systems and empire building, it's quite clear that it works the opposite way round and fiat money reduces the tendency to use military power in service of economic growth.
Obviously the biggest one is concern over things like hyperinflation, which has happened in the real-world many times.
Or, not quite at hyperinflation, but your government is enacting policies based on MMT or similar and you are worried that this could hurt you (as a holder of the currency) in the long-run.
Or, maybe you're worried about governments being able to dictate what you are allowed to purchase with "their" money.
Or, maybe you want to send your money somewhere your government doesn't want you to send it (or their government doesn't want the other party to get it).
Obviously there is a lot more to cryptocurrency than just "not being issued by a government" as well though. There is general privacy benefits (Monero) or the promise of innovation if you have programmable money / contracts (Ethereum).
I don't always agree w/ my government here in the US, but I do like that--while it's not a perfect process--as a democracy I can influence it. The reason it's illegal to buy certain things in the US (people, organs, drugs, assassinations) is that we all got together and thought people shouldn't do that. Many people disagree but, that's what voting is for. Subverting the will of a democratic people is... immoral?
The typical counterargument is something like "well what about Saudi Arabia", but I think it's pretty easy for an oppressive regime to just say "you can't use cryptocurrency" and punish you severely for it--to the degree you won't.
Anyway, I just don't think cryptocurrency is a solution to this, and even if it is it's antidemocratic.
You assume that government is good and prohibited uses are bad.
But your gov banned wikileaks bank accounts in the past and that is the perfect example of the case when the gov is definitely is a malicious actor (while their behaviour perfectly rational from their side of things).
Govs do war crimes, mass espionage and human rights violations. That should be addressed as well.
Yes, but it should be addressed democratically - protests, lobbying your representatives, even voting. Inventing a new currency that is, for a little while, hard to track by the government isn't a real solution, it's just pretending the problem doesn't exist.
The government is persecuting WikiLeaks financially because that is easy to do. Even if a cryptocurrency were to take off as a currency and still be untraceable, the government would just move on to some other form of persecution. The real problem to be addressed is the persecution of a useful legitimate organization by an ostensibly democratic government. The form that persecution takes is secondary.
> it should be addressed democratically - protests, lobbying your representatives, even voting.
That hasn't worked yet for Wikileaks. If this worked and/or was the best way to deal with the types of problems Wikileaks is exposing, there would be no need for Wikileaks to exist.
The reason Wikileaks does exist is because, typically, when we attempt to address atrocities "democratically" we get nowhere.
On the other hand...
> Inventing a new currency that is, for a little while, hard to track by the government
This _has_ worked for Wikileaks in the past. When the US persecuted Wikileaks, Bitcoin helped to heavily negate the immediate impact of this action.
> The form that persecution takes is secondary.
In that case, why can't the form that Wikileaks' solutions take be secondary as well? If we are in agreement that Wikileaks is an important organization, then when addressing atrocities "democratically" fails, what would be wrong with short-term innovation?
If you're assuming that you can work around an imperfect government, which you don't think can be fixed democratically, through cryptocurrency, especially for a core statehood domain, I have a bridge in Brooklyn to sell you :-)
> You assume that government is good and prohibited uses are bad.
Not quite. We assume that government is controlled by the people and thus I have some influence in its operation. The state often does truly horrible things, but so do plenty of organizations that I cannot control at all. I'll take the one that I have some degree of influence on.
All getting together and deciding on something is the rosy version of how our democracys laws come to be or how we decide to go to war, for instance. It feels like people "all got together" if you accept that the apparent consensus of the public you perceive through news and other media is a real reflection of their sentiments rather than a rudder on the boat of public opinion. See Chomsky's manufacturing consent. The "public discourse" is really always a mix of propaganda and real ground truth, and they're hard to separate, but there are certainly strong influences exerted by organized groups.
I'm not a finance expert, but I don't think those issues are caused by the kind of money used.
People make mistakes, some of them are greedy, powerful people want to keep their power, etc..
You can't fix people with a currency.
And humans are creative, if you switch over to crypto, they'll find a new way of doing the same old things..
My government not wanting me to send money somewhere: Well, this might be a clichè, but apart from slightly limiting my freedom this prevents bad guys doing nasty stuff aswell.
The end of the gold standard in the 70s meant the US could "afford" to fight infinite wars by just printing dollars and passing the real cost to the rest of the world, that is why the US is now the world's biggest borrower nation when it used to be the world's biggest creditor nation. The current state of endless military interventions is only possible because of the huge deficits in the US that are not possible with hard money.
>"...My government not wanting me to send money somewhere: Well, this might be a clichè, but apart from slightly limiting my freedom this prevents bad guys doing nasty stuff aswell..."
Bad guys get around it one or the other way. You do not.
I agree with you, but there are some people around the world that don't trust their governments. A use-case most people here would agree with is in the yellow economic circle in Hong Kong: https://en.wikipedia.org/wiki/Yellow_economic_circle
Using a cryptocurrency is kind of like a technological band-aid to a political problem. Viewed through the lens as a form of peaceful protest against the government, it makes sense. Otherwise, it's completely your call if you want to make transactions where the receiver has no obligation to provide the product or service you paid for.
I'm copying a comment I made earlier that answers this question:
So I hate to use the word I'm about to use, because of the modern connotations associated with it, but it does apply here.
There are billions of people who are abused by their government, who cannot trust their government, who's local money is debased by their government at a whim. You are privileged (there's that word) to have a government that you feel you can trust to control the value of your savings and your purchasing power. You do not see the value proposition because there is not much of one for you. Cryptocurrency doesn't exist for you. It exists for the people who do need it. And again, there are billions of people who need it, as much as half the world's population, possibly more.
> whose local money is debased by their government at a whim
How do you reconcile this with the wild speculation happening for Bitcoin, the only widely adopted cryptocurrency? It would definitely not be a solid investment vehicle. I mean, I understand the desire to use it out of desperation, but it's still not a solid alternative. You're just at the whims of the world's miners and speculators.
Well, if you look at the volatility of bitcoin in particular, you'll see that it is decreasing pretty steadily. The first big bull run was very significant, 1000x, whereas the last bull market was only about 100x. The current one who knows, but it's looking like it will be about 10x. This volatility is a part of the price discovery process for any new asset class.
Fiat currency may appear stable, but it is not. It appears stable because it is used as the unit of account for all other assets in a country. In the long run, any freely floating asset will be more stable than any fiat currency managed the way modern ones are managed, via a central bank, provided that the supply change of that freely floating asset is predictable. Gold, for example, has a supply increase that is predictable. Central bank controlled fiat currencies are by definition not predictable in their supply, and this makes assets that are more suited to saving/investment, regardless of short term volatility. Nobody can empty your savings into their own pocket by printing gold or bitcoin.
governments or their people try to tie prosperity and access to morality, in arbitrary ways outside of their constitutional framework in arbitrary conditions that change over time, and are different across borders
having an optional liquid payment system outside of their control solves that
and the existence of that optional liquid payment system has the possibility of making their controlled one redundant
Because the government will not always be on your side, as 2020 demonstrated so well what many peoples outside the US have know from experience for decades.
This is a valid concern, but what do you say to the current system that does not prevent all kinds of fraud. Perhaps even rampant with it. An easy search will show you that large regulated institutions participate and engage in fraud at all levels of their institution. Why is it that crypto must bear a larger burden of scrutiny against the status quo?
I believe that fraud is easier to identify and financially punish on public blockchains. Exchanges and other entities already have the ability to blacklist an address's assets and prevent them from off-ramping into fiat ms being used in future transfers. Businesses exist today to prevent payments of blacklisted assets.
Compared to cash, blockchain based cryptoassets have more choice in enforcement against fraud. Also, crypto assets can be seen by all publicly on chain. It fairly easy to trace the work of cryptoasset fraudsters
If the whole point of cryptocurrencies is to work around the government and cryptocurrencies are going to strip them of various tools they use (control over inflation and monetary mass, monetary controls in the sense of taking money outside of a country, etc), governments will most likely not allow that, for pretty solid reasons.
It's an interesting experiment, I'll grant it that. But I don't think it can have its cake and eat it, too. I guess we'll have to wait and see.
Las Vegas also has a shitton of electric waste, how about we start suddenly going green with that? How is it that people only care about green earth when the target is the smallest slice of the pie?
Oh I care about that too, and I also care about the draining of aquifers in the US Southwest, etc. etc. But this is a cryptocurrency thread so, here we are.
- Yes, but a significant portion of that is coming from renewables / excess generation. Additionally, work is constantly being done to improve the energy efficiency of crypto.
- Climate change is real, but I think it would need to be much worse than it is in order to justify halting human progress. In fact, continued human progress is our best bet for halting climate change.
That might work, until you need to pay your tax bill. Or sell to the public sector. These are large parts of the economy! And for most people (I know mot everyone or everywhere), do you really want to manage accounts and deal with tax returns for multiple currencies when one already is accepted everywhere in town?
How is there still so much of ignorance over cryptocurrency this far along after its inception?
Just because you buy and sell gold with major currencies doesn't mean gold is regulated. Crypto isn't much different. If you can get it anonymously, you can move it anywhere you want as long as you stay on the blockchain. Once you leave the blockchain, you aren't dealing with crypto anymore. Once you sell gold you aren't dealing with gold anymore.
I don't know about Diem in particular, but a state or corporate issued currency is not a general indictment of cryptocurrency.
You're talking about a commodity, not a currency. No one walks around with gold nuggets (or jugs of milk, or bales of wheat) in their pocket because our economy doesn't use the barter system.
The difference between cryptocurrencies and other commodities is that other commodities have intrinsic worth. You can drink milk, you can eat wheat. You can't do anything with cryptocurrency, it's just a long, meaningless number.
Well, its a long number that satisfies a simple predicate, set by fiat, that makes this class of numbers rare. It is the ultimate "artificial scarcity"! It's too bad there can't be a better way to add new values into the system that scales better with, say, how much the system is used, or how much utility it gives to people, instead of how much oil you can afford to burn to get one.
Money is backed by a central bank that is accountable to a government body. Crypto is backed by speculation and tech bros (shorthand for the hyper technocratic libertarian).
Accountable to a government body with opaque motives and capture over its citizens. Crypto has inspectable source code and miners and coin holders can jump ship if shenanigans are perceived
How’d that Ethereum DAO attack go? Some folks just decided to hard fork the chain. Much trust, such governance.
I’d elect for a suboptimal government over such mechanisms any day, which seems to be a global consensus when you observe the lack of volatility in reserve currency values.
Crypto is nascent and I would expect finger burning as part of the path to long term stability. I'm not personally wedded to any of the current implementations in their current versions, but long term the concept of crypto currency supplants governmental fiat money
Hence why crypto can't be taken seriously as a currency. Imagine explaining to a non tech family member or friend why their dollars have zero value now because they’re on the wrong chain.
If they had sold some items for Eth just before the fork, they will never recover the Eth, and they may be unable to recover the items either. So yes, in a fork people lose money.
forks set their genesis state as a snapshot of a block on the original chain. if anything you now have twice as much money since your account has funds on the old chain and the new one
Let's say you just sent someone 1000 dollars in exchange for 1 Eth, sometime close to the fork. Before the transaction, you have 1000 USD and 0 Eth. In the old block chain, the transaction goes through, your wallet has 1 Eth, and theirs has 0. In the forked block chain, their wallet has 1 Eth, your has 0. However, regardless of which block chain you choose to believe in, they have the 1000 dollars.
So if the forked chain becomes accepted, then they have 1000 USD and 1 Eth, while you have 0 dollars and 0 Eth, and you're never going to make the mistake of trusting a cryptocurrency ever again.
If the US or EU (etc.) valued their goods and services in BTC, banked in BTC, built monetary and foreign policy around BTC then you would be correct. It is all meaningless, and that's the definition of fiat.
What distinguishes one fiat from another is "do important people believe in it". There may come a day when that's true for cryptocurrencies, but that day is not today.
Further, I doubt it ever will come, because cryptocurrency's core scarcity hamstrings monetary policy. No competent government would ever accept such restrictions. This is a feature for cryptocurrency enthusiasts (digital gold bugs) but a huge shortcoming for everyone else.
Oh yeah, totally fair and an interesting difference between Diem and other cryptocurrencies. I still think volatility and transaction latency/costs are an issue, but assuming we fix those (and stipulating they can be fixed) it doesn't seem unwise for smaller countries to use cryptocurrencies. It would more or less be gold standard monetary policy in a box, and while that system has drawbacks, a nice thing about it is it's pretty hard to corrupt. It would be harder (not impossible, but meaningfully harder) to manipulate currency and politically choose winners and losers via monetary policy, which is a big deal especially for growing or newly stable countries.
But for those countries, it really seems like choosing Diem is the worst of both worlds. You're still pinned to the Dollar, you're still at the whim of unaccountable controlling stakeholders, and you have all the downsides of cryptocurrency on top of it. I struggle to think of a group outside of Facebook that Diem is at all good for, honestly.
a lot of people like that crypto isn't backed by a gov, but i'd like to believe that most people would agree that the government has some intrinsic worth.
It is literally worth trillions ($27t)! The credit-worthiness of the USD is so good we've sold trillions of them. It's just such an inarguable stat haha.
You're trying to make a semantic argument and say that cryptocurrencies aren't regulated until you sell them for other currencies that are. My counterargument--where admittedly I skipped some steps and didn't explain very well--is that that turns cryptocurrencies into a commodity, not a currency, and that cryptocurrencies are particularly valueless commodities.
FWIW, you're saying that while cryptocurrency stays on the blockchain it's not regulated. That's definitely not true in the US--people have gone to jail for not complying with financial regulation and reporting laws [1]--and is likely soon to be even less true [2].
Gold and crypto are hardly comparable. Start by factoring in all the crime & scams being done via crypto and you've got a general public practically begging for government intervention for cryptocurrencies.
10 years of debatable so-called-crimes with crypto VS at least 5000 years of wars, crimes and corruption with gold and government money...which side are we supposed to be on?
That is obvious, but that is not something especially unique to gold - pretty much everything physical is regulated at the border. Yours is more of a statement about border security than gold. To bring it back to crypto, you can easily cross a border without your crypto being touched.
No, but only if your suitcase will only open if unlocked by a cryptographically secure key and no one can open it through other methods. They can't steal the suitcase itself either. And you can instantly teleport the contents of your suitcase to an equivalent suitcase held by any other individual on the planet. And third parties can't arbitrarily devalue the contents of your suitcase by printing more of it.
> Q: Is this fundamentally different to having a suitcase full of cash?
Yes, government can't print bitcoin. If you store cash - in the long term you will lose buying power. If bitcoin gets adopted as a store of value - nobody will be able to print it at will.
It's very hard to take a suitcase full of cash across a border. It's very easy to take a private key for a wallet-account full of cryptocurrency across a border.
It's very hard to take a suitcase full of cash across a border.
Depends on the border.
As long as you declare the cash to the authorities, there are many borders you can cross with great flipping wads of cash. Some industries operate mostly on cash (restaurants, for example), and "suitcases full of cash" isn't just for mobsters and movie villains.
He's right about roasting the planet though. Scarcity without computational (and literal) power is necessary.
Maybe if we could use the inherent incalculability of the three-body problem as the basis for a cryptocurrency. You'd need to observe the universe to "find" astrocoins.
It would be Astrology on steroids.
Of course that leaves out verifiability, encryption, anonymous identity yet ownership.
What if you (somehow) knew both parts of the quantum uncertainty portions of a particle because you initiated the system. Then you could demonstrate ownership by being able to predict the location or the momentum at any time based on that.
But it would be fun to hold cryptocoins called Heisenbergs
...no? Diem/Libra is built on Cosmos, which is a proof-of-stake system, not a proof-of-work system. Validator nodes in a proof-of-stake system do not compete to work ever harder to mine the same resources.
There are a rather large number of such validator nodes (100+ at minimum), but that's also true of banks when you translate their Highly-Available mainframe stacks into equivalent Highly-Available commodity-PC stacks. (I.e. they're not spending any more electricity per tx than the ACH system is.)
I'll cop to hand-waving and painting cryptocurrencies w/ a broad brush here. But it seems like Diem hasn't really figured out what its system is gonna be: https://en.wikipedia.org/wiki/Diem_(digital_currency)#Implem.... Looking at their docs and such, it seems like it'll be centralized under the stakeholders until they implement proof of stake, which IMO makes it just another reserve bank.
Gold markets are most definitely regulated, especially if you’re doing any meaningful FX volume. And since we’re talking about crypto, it’s worth adding the gold mining tends to be too, perhaps more so.
> The core feature of any cryptocurrency is "money w/o state regulation", but when you're talking about selling it for any major currency (Dollars, Euros, Sterling, Yen, RMB) guess what, you're regulated.
Depends on the regulation type we're talking about. Yes, state may require KYC, AML, and taxes, but in case of bitcoin they can't regulate the inflation.
I think... it's a little tenuous because the price would based on like, math, algorithms and ASICs more than scarcity of fuel (or pollution, or what have you), but definitely an interesting idea.
the main feature it is not de-regulation but de-centralization, anyone could run a Bitcoin node and unless you own 51% of the network you cannot control it
Facebook is trying to create yet another world bank
