
Ask HN: Cryptocurrencies value depends on existence of transaction ledger. Risk? - brighterbeat
The following question has been wandering my mind for quite some time and I am highly interested in HN communties thoughts, since I don‘t find this question discussed anywhere:<p>If I buy any kind of asset (e.g. gold, stock etc.) basically the worth of the asset is independent of the exact transaction ledger. That is I can buy it offline or online, P2P or via a broker or an exchange etc., and in each case no matter what happens to the transaction ledger - e.g. broker &#x2F; exchange &#x2F; counterparty - it doesn&#x27;t impact the worth of my asset once I own it.<p>However with cryptocurrencies their value is interwined so closely with the transaction ledger &#x2F; blockchain, that basically I have no choice but to transact via the transacation ledger &#x2F; blockchain of the respective cryptcurrency. As soon as the transcation ledger &#x2F; blockchain becomes unavailable (for whatever reason) my individual coin ceases to exist.<p>Isn‘t this a huge drawback and risk related to cryptocurrencies that is hardly discussed?<p>tl;dr: All other assets&#x27; value is independent of transaction ledgger. Not Bitcoin et al. Isn&#x27;t this a large downside &#x2F; risk of cryptocurrencies that is hardly discussed?
======
nostrademons
The transaction ledger is just a permanent record of who owns each Bitcoin or
other cryptocurrency.

Other assets values are _not_ independent of their respective transaction
ledgers. For example, the transaction ledger for real estate is the deed to
the property, filed with the appropriate local authorities. If the paperwork
is never completed, you're in for a helluva time when you try to sell or
upgrade the property, and could easily find that you don't actually own the
property you think you do.

The transaction ledger for a stock is the cap table of the company, and then
once it gets to be publicly traded, the stock certificate (very often kept
electronically for you by your brokerage). If the company goes under and gets
liquidated, all of those stocks are worthless.

The transaction ledger for a currency is the government that backs it. When
the government falls, so does the currency. Try paying for things with
Continental or Confederate dollars, or Reichsmarks, or Rhodesian dollars. In
the U.S, we haven't experienced a government collapse since 1865, so there's
nobody with living memory of what it's like to have all your assets become
worthless and your property forcibly seized from you.

But in much of the rest of the world, these are common occurrences. I suspect
a lot of the demand for Bitcoin is coming from geographic locales where there
are people alive who know just how unreliable other forms of asset ownership
are. The blockchain is significantly more secure than many governments around
the world.

------
brighterbeat
Thanks for your responses. But basically in many cases mere ownership of
assets can be proven by my physical ownership, e.g. a $50 dollar bill in my
wallet or a paper stock certificate in my drawer.

And the main advantage is: With all these things I can exchange them from
online (digital account balance) to offline (paper bill) and back at will
without someone necessarily documenting this, e.g. when I gift someone $10 by
handing him a $10 paper bill. And where and how I exchange any of these assets
is my choice. With cryptocurrencies I am forced to transact via their
respective ledger / blockchain. Isn‘t this a setback in consumer choice and
make me more dependent on one specific technology and set of actors?

Edit: Corrected a spelling error.

------
sharemywin
US Stocks are dependent on SEC/US.

USD is dependent on US.

Real estate depends on County/Govt.

Some places on earth the internet/blockchain nodes are probably more stable
than local government.

