‘Would you be happy if the crypto-utopia you bring up happens in the next 10 years, and all value is stored/transacted through a cryptocurrency, but it was a coin that you do not possess now, nor could you transfer any of you current currencies into it?’
Say tomorrow someone releases the one true coin, but no one notices. All other cryptocurrencies drop to zero value, then a crypto miracle occurs - the one true coin is uncovered and almost overnight becomes the defacto monetary standard. Would crypto fans be satisfied?
This is a long way of asking: do you want cryptocurrency to succeed if you knew that you could not profit from it doing so?
My family and friends said i was stupid, utopist, being conned, wasting my time, and so lany things.
Btc was banana money at first, and only people believing it would be a great thing as a concept made it work. We didn't expect to make banks, it was a happy side effect of a mad naive bet.
All great things start like that. Comics are now the thing, but 20 years ago were still for pationate nerds.
"But the fact that some geniuses were laughed at does not imply that all who are laughed at are geniuses. They laughed at Columbus, they laughed at Fulton, they laughed at the Wright Brothers. But they also laughed at Bozo the Clown."
-- Carl Sagan
Going to share another quote, which I think is relative here -
“Those who are crazy enough to think they can change the world usually do.” - Steve Jobs
Of course, if you don't ever try it, you can never be right for any reasons.
Bitcoin is IMO likely somewhere in between. It kickstarted a new concept in IT but money is a really simple (although powerful) usecase. I'm more interested what will be done with the concept in the future.
He wasn't even right. He was wrong in his estimation of the earth circumference, and lucky that America was there between both oceans...
That's really rude.
* Mining has become highly centralized, the opposite of its original intent.
* Transaction fees are too high to justify its use in every day transactions and small transfers.
* Very few merchants accept it for every day transactions, and the number has decreased over time.
As an idea, a hope, the starting point for iterating on the future of money.
As a way to make the society think and debate.
And as all that, I think it had been successful.
Generally though, merchants wouldn't bother accepting it. Alongside the fees and whatnot, adoption is too low, fees are too high, time to confirm is too high, and it can complicate some legal stuff (like issuing VAT invoices).
Despite being a dominant force in film, they're selling poorly today.
That is a brilliant question!
Instead of all the endless bickering between crypto-fans and -haters reaching from technology to fiscal policy to society, it reduces the conflict to one simple test, as a sort of precondition.
Anecdata, but just going through my set of acquaintances, personal profit was always a factor. And I never even thought to question it. In hindsight, however, it seems (1) such an obvious thing to do, and (2) makes it clear to me that my acquaintances probably wouldn't give a damn about crypto if there wasn't a chance to profit from it.
I mean, the only reason Bitcoin went mainstream in the first place is not because of the technology (which existed for a decade), but because there was a extreme bubble (again) and mainstream people wanted to get rich quick.
I'm talking just about the positive potential of Bitcoin as a technology. There are many downsides and the current landscape of cryptocurrencies is not so great.
My vision is that crypto is going to be used like credit/debit cards, as a way to use money digitally, but it will backed against fiat.
But the problem is not the technology (it is there and exists for decades), but the laws. Better concentrate on that problem.
There's no way the current system can have a stable and uniform API that works globally.
For example: https://www.coindesk.com/crypto-gaza-west-bank-bitcoin-pales...
* To those people who say, "You can't compare crypto to a company because companies pay dividends," that is specifically why I chose Amazon as an example, a stock that does not pay dividends.
As an example of a tech, if someone asked me would you want self driving cars to succeed if you could not profit off of them, I would say that's a resounding success. A lot of people are excited about this tech because of the improvement in their daily lives, not because of a profit motive. Compare that to crypto
1) I would want Amazon-like businesses to succeed -- in the sense of "someone who finds a sustainable way cut the fat out of retailing" -- even if I could not profit as a shareholder. But I still think I would benefit (as a buyer) from that success.
2) I would want decentralized, arbitrary-money-printing-proof cryptocurrencies like Bitcoin to exist as a shield against governments that inflate away their money (like Venezuela or Zimbabwe) or abuse their central bank status for bailouts (in the first world), even if I could not profit as a holder (sorry, HODLer) of the currency. But I still think I would personally benefit as a prudent saver and (non-politically-connected) investor.
I want a cheap, fast, decentralized solution for token ownership with a great user experience. I want to build back-end solutions for crypto-tokens representing digital collectables, in-game items, etc.
I need a critical mass of users before these services start to become viable as a business model. Thus I need a cryptocurrency for tokens to succeed in a meaningful way. And I want this regardless of whether I own the native token of this network.
It's interesting how something which was built on the idea of decentralization by design has given way to a clear power structure, where those who have the sway to control the fate of the technology have largely used it to pursue their own personal enrichment over the health and success of the system as a whole.
To me it's evidence that some form of governance is required to build something which can actually serve the greater good. I also would like to see a stateless currency work out, but there are clearly still quite a few problems to be solved before that will even seem like a possibility.
Care to elaborate? Some examples?
Another example would be exchanges: a vast majority of people do not use cryptocurrency in a peer-to-peer fashion, but instead go through a small number of centralized exchanges, which have been known to freeze withdrawals, have been riddled with theft, fraud, and a playback of all the financial schemes dreamed up in the last few centuries which have not yet been regulated against in cryptocurrency (pump and dump, Tether etc.).
On top of that, the crypto media sphere seems to be completely unreliable: I've seen many headlines which are deliberately misleading with the intent of stoking a one-sided, glowing narrative about cryptocurrency (I.e. a crypto startup opens their account at Chase bank and the headline reads: "X Coin Begins Partnership with J.P. Morgan Chase", and related online
communities are heavily moderated to support the official viewpoint while silencing others.
Long story short, when I bought a little bit of Bitcoin to play with a few years ago, I could buy a coffee with it, and I could even make purchases with it on Amazon. Since then it's gotten much less useful to the average user.
>Another example would be exchanges
Interestingly enough, with regards to bitcoin, there was a huge powerplay that happened a couple years ago. And this debate proved who had the real power.
A couple years about, almost every major exchange, bitcoin company, merchant payment processor, and bitcoin miner, wanted increase the bitcoin blocksize, in order to reduce transactions fees to users and help adoption.
(Even though this directly hurt the miners, the miners still wanted it, because they supported adoption. Crazy, I know)
But, this change didn't pass, because the 4 or 5 people who controlled the bitcoin core github repository, and reference client disagreed with the changes, it prevented it from happening.
And this was in spite of the fact that almost every single major player in the space wanted this change.
So crazily enough, the central authorities of the bitcoin protocol, are the couple people who hold the keys to a github repository.
This is blatant re-writing of history.
A fork was written, Bitcoin Cash, but most people/miners/companies didn't want to use it. It was widely known and the differences/advantages/disadvantages were discussed ad nauseum for months/years.
A Github repo can't force people to run it's code instead of another.
> And this was in spite of the fact that almost every single major player in the space wanted this change.
So why did they keep running Bitcoin Core instead of the fork?
Because it turns out that controlling a github repo is a very powerful power.
> A fork was written, Bitcoin Cash
This has nothing to do with Bitcoin Cash. This has to do with 2XSegwit. An initiative that was supported by every single major miner, all of the exchanges (coinbase, gemini, kraken, ect), as well as the major merchant payment processors (IE, bitpay, and all the others).
There are statements after statements made by all of these players, where they stated support for it. Unfortunately, it seems like the people who control the bitcoin protocol, the developers, had too much power, though.
Did you disagree that every major miner, and Bitcoin business like coinbase and BitPay, put out messages in support of the 2X Segwit agreement?
Example? Community decision making when forks occur.
> largely used it to pursue their own personal enrichment
I'll let someone else provide examples of that one :)
For example, if there are problems with scams or whatever (e.g. impure gold scams, or cryptocurrency manipulation), people may choose non-coercive governance, like banks (e.g. through something like GNU Taler with a bank-backed currency). You could do this with any currency you choose, so which currency you use has little impact on the structure of government and how it interacts with the population, provided the government stays out of it. Because of this, fiat and resource-based currencies are equivalently acceptable for libertarianism.
So yeah, maybe cryptocurrency is tangentially related to libertarianism in that many libertarians are interested in them as an alternative to central, coercive banking, but that's about where the relationship ends. Libertarianism doesn't care if you have governance, as long as that governance doesn't use force.
And since cryptocurrencies aren't really used for real transactions, we can't really see how they would fare in a competitive currency market.
They used to be. I made online purchases and bought coffee in real life using Bitcoin just a few years ago. The evolution of Cryptocurrency has been away from any real-world usefulness, and toward its current incarnation as a largely speculative instrument.
And I would argue that in fact this has been the result of a Libertarian experiment playing out. Everything about Bitcoin has been opt-in: in principal anyone is free to own a node, and the community would have been free to opt-in to a governance structure which would have discouraged actions which made Bitcoin less useful to the majority of users, but this is not what happened. Instead power was consolidated in the hands of a few, who chose their own self-interest to the detriment of the larger community.
I am not a fan of coercive government, but I struggle to see how the story of cryptocurrency to this point does not provide evidence that some strategy is needed, beyond maximal personal liberty, to discourage bad actors from causing disproportionate harm to the collective.
You say this like it's a fact but I feel like it's the opposite. There aren't many compelling examples of this. And to the extent that there are, they exist in a competitive market and their fate is determined by users and investors, who weigh the cost of the greed vs the benefit of the technology and reward/penalize accordingly.
It might not be worse but IMO it hasn't proven to be better.
That's the decentralisation of power that has occurred.
You don't have to prove your identity. You don't have to prove anything to anyone. You just download some software and generate a private key. Bitcoin is to money what the internet was to book publishing.
In that world, there would also be nothing to stop anyone else from just taking your money by force and without any consequences.
The loudest voices against government regulation of finance usually belong to those with the least understanding of it. Most of the regulation is just there to protect market participants.
If I am a victim of fraud and lose my money, I have the concept of the rule of law to help me get my money back. In a decentralized world there is no way to get my money back.
Besides, it is the government's job to help society function well, in part by making the economy successful. Money is just a tool to do that.
The governments ability to print money has absolutely nothing to do with its police force.
If someone steals money from others, then the police should go in and arrest them. The police don't need a printing press to do their job.
It is perfectly possible for the rule of law to exist, and for decentralized currencies, to also exist at the same time.
there are going to be consequences. It's just that they will be enforced by smart contracts instead of governments..
if that 's the only problem with cryptocurrencies, it can easily be solved with insurance
While I have invested in crypto and believe it has great potential, one of its touted benefits by its supporters is also one of its biggest pitfalls, namely that its money supply is predetermined. The inability to actively manage a money supply given exogenous shocks to the economy is a big problem.
Any supply of money will do, the idea that money should increase in supply along with population growth (or some other arbitrary metric) otherwise we’ll permanently live in a deflationary disaster is an imagined monster — we live in the here and now, therefore people have to spend some amount of money to live (food, housing, entertainment, etc) regardless of whether they perceive the purchasing power of money to increase in the future. By centrally planning (and thus inflating) the amount of money in circulation during financial crises the only thing that is accomplished is a re-inflation of the bubble — essentially they’re sowing the seeds of destruction again, causing the next bubble in an attempt to cure the last one.
Please read this explanation of the financial crisis, I’d be happy to comment further if you have specific critiques on this article (and no I didn’t write it):
> Any supply of money will do.
That is just nonsense. If you have a fixed money supply, given that economic growth is happening, would result in a naturally deflationary currency. That is a terrible place to be for the system as a whole as no one has any incentives to spend or invest in anything as money itself will simply gain value over time just sitting as cash. Thus, that money isn't being used / circulated. Having a ideal velocity of money has significant multiplier effects and deflationary currencies are fundamentally flawed.
The problem then is: if you want a low rate of inflation but there is a natural variation in the growth rate due to the cyclic nature of the economy, then how to create a system that could do that without a monetary authority.
In what world is this true? Time preference is a real thing, and it is unrealistic to assume that 100% of the population will put off non-essential consumption and investment because the price of a Ferrari will decrease by 2.353% next year. Time is a very important factor in the consumption/investment decisions that people take, and modern mainstream economics neglect this fact both on the micro-level and on the macro-level, which is why crazy theories about the neccessity of inflation-rate targeting are able to arise. Most people put their savings in a bank account which the bank lends out to businesses to invest in projects - if anything more savings will lead to more investment than otherwise, which is more important to the bedrock of an economy than spending on consumption.
Also worth pointing out that the period during which the United States experienced its most significant economic growth (mid to late 1800s) was during a period of severe deflation of the dollar.
Keynesian economics (and more generally monetary policy) and inflation-targeting (i.e. the neccessity of having a positive inflation rate) is both theoretically disproven by the existence of time preference (a time preference of zero is literally impossible, it means starving to death) and its heterogenous distribution in a population, as well as empirically by looking at the periods of deflation in the U.S. dollar during the 1800s and the associated economic growth.
Again, you HAVE to spend money to live (otherwise you die). It’s impossible to live without food and water, most people want to live in a house, most people want entertainment, etc. None of those things can be had without spending money.
Also, if your argument is correct, why don’t people put 100% of their money into the stock market (which reliably goes up over long periods of time) and instead choose to spend it?
Once it becomes too useful as a value store, it stops being used for trade, which hurts the economy.
So therefore some inflation is a good thing, it means the money keeps moving. If you want to store value you do that with assets other than money.
With the latter you're constantly guessing and tweaking the model and roughly every 10 years there's a crash and the economists say okay, NOW we have it perfect and we'll never get it wrong again.
Why do you need an unlimited money supply? The only thing causing these shocks is that the economy is doing whatever it wants and then the economic model collapses.
The difference here is that inflation is predetermined and set instead of printing money on demand like we do in the traditional financial system.
What, specifically, do you think the consequences of a stable money supply are?
It only makes sense to take on debt if you have a productive way to put that money to use (Eg a business) that has a higher rate of return than the interest rate.
This cycle can continue forever, and the faster this cycle occurs the higher our GDP.
That’s an interesting speculation, but it remains to be seen what will happen when inflation is near zero.
If people value transacting on the network, then they will pay the necessary fees to keep it running. If they don’t then it will go down.
I suspect this isn’t the big issue people think it is, regardless there’s no way to “prove” that transaction fees won’t be enough — everyone from miners to speculators by owning mining equipment and Bitcoin are specifically betting that transaction fees will be enough.
If the network is used more it will be more valuable, which means the reward value will increase as the inflation decreases. If nobody uses the network then it'll be worthless, which at that point it doesn't matter since nobody is using it.
The market moved on to other forms of money centuries ago.
Gold, which, by the way, has an extraordinarily high energy and environmental cost to extract.
Have we seen this to be a problem within the context of Bitcoin?
Indeed. And not just because they're absolutely terrible at it: giving control over money creation to a government is like giving a drug addict the keys to the heroin factory.
This is what traditionally legal system with the power of violence used to deal with before. Now we see it implemented as a code. This part is more exciting to me than trying to sidestep whatever misguided government (not just US) rules and actions are.
EDIT: Perhaps proof of work based on burning energy, which is expensive and tends to bring centralized parties, is not the best way to ensure rules are enforced, but the fact the whole thing is open source is great in my opinion.
As far as I can see, there's no significant incentive to mine other than money, so miners want money, so you can persuade them with money.
The "consensus" is fundamentally an auction.
Cryptocurrency doesn't do this.
The original statement was:
> I think there's value in reducing the politically privileged's means to dominate their power over the general populaced
We can argue whether there's value in that. But if you're asking /how/ bitcoin et al can do that, the answer is that it removes direct control over the currency from nations and parliaments.
They may still be able to wield indirect control through a variety of other means, but that /is/ less control than simply being able to declare 500 and 1000 rupee notes valueless.
So the question becomes, why should the supermarket or the utility company accept crypto payments instead of dollars, when they know the former can lose 20%-99% of its value overnight, while the value of the latter is guaranteed to be kept stable by the government?
People and companies want to have a central, stable issuing authority they can trust.
Absolutely true, see EcoCash. It's a fascinating case study.
>and crypto very explicitly doesn't solve the problem that businesses will need to trust the issuing entity before they switch to using a new currency.
Trust is a relative thing. EcoCash is issued by a mobile phone provider. That should be crazy (who would trust verizon to issue currency?) except that _literally no one_ trusts the Zimbabwean government to issue currency any more, so the phone provider won by dint of a) being in the right place at the right time and b) being relatively more trustworthy.
Actively building trust is something you need to do if you've got a pile of venture capital burning down that you need to pay back before you go broke. However, cryptocurrencies are usually not VC-backed products, and therefore don't have time-bombs strapped to them. Bitcoin is doing extremely well in Venezuela right now as faith in the bolivar drops through the floor. Cryptocurrencies are at this point extremely well position to be conveniently accessible any time people's faith in their national currency drops enough for them to start looking elsewhere. This is a slow burn situation.
>People and companies want to have a central, stable issuing authority they can trust.
I'd love to see a citation on that. People trust a wide array of deities and insist that the deities other people trust don't exist. This is a Homo economicus argument, it seems unlikely that we can quantify what people want and how they trust so easily. My anecdotal observation is that people want to have something that sounds plausible enough that they feel comfortable not researching the details. If people wanted a central stable issuing authority they wouldn't accept fractional reserve banking.
> I'd love to see a citation on that.
Didn't you just provide two examples yourself (Zimbabwe and Venezuela) that alternative currencies are being adopted precisely due to the lack of a stable central issuing authority?
Cryptocurrency doesn't diminish a government's ability to enact financial policies within their sovereign borders.
Payments are only relative small function of financial sector. Much more important is to act in credit markets, i.e take deposits and issue loans. How did you think that crypto removes need for fees (interest rate) and trust in those applications?
- Backed up dat file
- Backed up wallet password
- Recovery phrase
There, now you have 3 separate ways to not lose your btc!
All the more incentive to not lose them!
In other words, banks multiply money right now, but you cannot multiply cryptocurrency.
It's much more honest and clear.
If I do, there is practically zero difference how banks would work with crypto and fiat. And that promise can be used as money just like it can now with fiat. Thus banks would be able to monetarily multiply crypto at will as well.
If not, well, how exactly are you planning to stop me and my bank making such a contract? You know, the bank can pay me some interest on my savings is I let them lend the money forward, so both banks amd my incentive is to allow the lending of my deposit.
We use bank money now because it's more convenient than paying with gold. But imagine that paying with gold was more convenient and preferred. In that case, we would see money in the bank as an investment, not as a wallet.
Your employer does not wire transfers money to your bank, but to your wallet. He pays you "in gold" so to speak. Same when you go shopping etc. There is no bank involved in transferring money anymore.
If you put money on the bank, you cannot use those credits to pay other people, as you are able to do now. Because people expect "gold", not bank credits.
You are correct that in a cryptocurrency world, banks could still have fractional reserves. But the main difference is that there will be a clear distinction between "real money", which is cryptocurrency, and "bank notes", which are a promise of the bank to pay you cryptocurrency. Right now, you cannot make the distinction between the two.
This is also the reason why they were able to let the gold standard disappear, because nobody would notice. If everyone trades in gold, the gold standard cannot just be abolished.
Basically a cryptocurrency world is a gold standard, where gold is the preferred way of paying.
This would also mean that banks will go back to how they operated when there was no central bank. And even further back than that, because payments are more conveniently made with "gold".
The reason nobody does this is because there is no good reason to -- banks in the US are extremely reliable and trustworthy.
What if my real employer doesn't live close to me because he's in a different country? Should he send cash in an envelope? Which cash? The one from my country? From his country?
What if you live in Venezuela, would you still trust the government money?
So no, this is not possible with USD bills.
> banks in the US are extremely reliable and trustworthy
"Massive bail-outs of financial institutions and other palliative monetary and fiscal policies were employed to prevent a possible collapse of the world financial system."
If cryptocurrencies ever become mainstream, banking services will be built on top of them, just as they were originally built on top of gold.
The only thing I can think of that cryptos let you do cheaper than banks is rapid, relatively frictionless funds transfer, so I’ll admit their utility there. But other than that, what banking services do cryptos give you?
Besides, you're paying for the legal and institutional protection anyway. If crypto made money transfer more efficient, they'd use it and still have the value add of a large institution backing transactions.
$80M DAI issued so far...
They can also try to outlaw bitcoin, but they have a bit more trouble stealing it.
Can I transmit my gold in any quantity that I want to anyone in the world with an Internet connection for a few dollars in fees?
Because your alternative is to trust the crypto infrastructure, which is far less trustworthy.
actually banks have failed in the past, this infrastructure not yet
Man, what are you talking about? There's a new "$100 million in coins go missing" story every 6 months.
Coins go missing from exchanges, which break the basic private key rule. People use exchanges for convenience because as clever as cryptocurrency is, it has no answer to the exchange problem.
Bullshit. No "religious" following of rules can protect you against a zero day exploit somewhere in your system.
Actually, there are smart contracts which act as exchanges. Not for all currency pairs yet, but it's on the way.
As of now, paying for goods and services with cryptocurrencies is relatively risky; it's hard to get recourse if you're scammed; and the standard credit card infrastructure with chargebacks and fraud protection is comparably more trustworthy.
As of now, storing cryptorcurrencies is risky. And I'm not even talking about the shady brokers/exchanges that can steal or lose their customer's money. You can store it yourself as well as you can - but, as it turns out, most people aren't that good at storing it securely, so all kinds of risks and breaches (e.g. hacking your devices to get access to your secrets) are more common than for bank accounts but, also, the consequences are more severe - if your bank account gets drained in an identity theft attack, very often these funds are recovered or compensated, not so with crypto. So again, the existing financial infrastructure with regulation, FDIC or similar insurance in case of fraud or insolvency, mandated consumer protection in case of scammed credentials - it's more trustworthy than the commonly used processes&procedures&infrastructure of crypto storage.
In reality most of the exchanges and sites dealing with crypto were (and probably still are) built by absolute amateurs with no checks and balances on their apps from a security perspective. Its scary as hell that people trust those sites with their actual money.
What was stored on the encrypted laptop was all of the cold storage wallets containing the majority of the digital assets.
No less idiotic, but an important factual distinction.
Most cryptocurrency fans seem to be optimistic investors looking to join in on the massive returns seen by investors in 2016-2017. Most of them care more for generating 'hype' and seeing an increase in the value of the coin they hold, just so they can dump their holdings later. I don't think they'd be too interested in a coin that inflated in value that they didn't hold (they'd probably instead promote something they did hold). Most cryptocurrency fans do not hold one particular coin, and generally change which coin they advocate for pretty often.
Cryptocurrency communities are generally pretty toxic and non-constructive environments. I've been part of a couple, and I've noticed multiple times a massive decline in the quality of the community (and, sometimes, in development as well) as the cryptocurrency got more popular (and more people joined the community).
Plurality is the name of the game. History has endless examples. Yes nothing would last but...the better monies would move to a better monies. It's called competition. There is very little competition when it comes to monetary policies. Crypto will foster more of it. It can get messy but hopefully it won't get deadly.
The reason is that I think that while governments can be better at monetary policy, they need competition to keep them in check. Other currencies technically provide that competition, but they can be suppressed via legislation in a given jurisdiction, and this is, in fact, commonly done precisely where such competition would have practical sense (e.g. countries with hyperinflation often try to regulate and even outright ban currency exchange; or the various historical bans on private ownership of bullion gold in many countries).
Bitcoin is always there, available to anyone who has Internet access and can get past "great firewalls" (and when people's money are at stake, they are surprisingly good at learning such things). Consequently, the government can only do so much to its own money before it starts losing that competition - Venezuela is one ongoing example.
Those of us who have been here since the beginning just want cryptocurrency to succeed and flourish and fulfill its roles, and we already know Bitcoin won't be the answer so we're all waiting on The One True Coin.
Someone who is a fan of cryptocurrency itself is a fan of the ideas behind it and what it can bring to the table. People who are only satisfied in the outcome if they become rich are clearly not interested in the real benefits of cryptocurrency. So asking fans of cryptocurrency this question is a waste of time because the answer should be the same.
The point of my comment was to highlight to OP that they have a categorization problem. Just because a division exists doesn't mean you get to call No True Scotsman.
Similar reason people find gold appealing I suppose.
Hyperinflation is a symptom of economic problems, not the origin of it. If you find a way to prevent nominal inflation by crypto, it doesn't prevent the related problems. There's a good reason why we got rid of the gold standard, which had all the same problems as a crypto-based economy would have, and was unsustainable because of that.
Since you mention bond positions, if they'd were denominated in non-inflationary crypto, in any such scenario they'd drop anyway - if it wouldn't be possible by inflation, then it'd happen by defaults. Which would also mean a default of all credit institutions. Which would then mean the disruption of most businesses who rely on these institution. Which would then mean nonpayment of salaries. Which would then cause a lack of demand, causing even more economic problems. Compared to that, a semi-orderly inflation (up to the extent that is required) is preferable to a cascade of defaults. The vast majority of the money in economy is anyway in the "I owe you" form, and crypto doesn't change that; even if all the economy would move to a cryptocurrency, only something like 2-5% of it could be in the form of "hard coin that I control" and the rest of it is in debt relationships between various businesses.
It sucks to get paid in some paper that's now nearly worthless - however, the alternative isn't to get paid in hard crypto, in such a scenario the possibility to get paid in full doesn't exist. So if we don't have the possibility to get paid in a devaluated currency, then people either don't get paid at all, or have to suddenly invent a new worthless paper currency and build an infrastructure for it, at a time when they don't really have the time and resources to do it. This isn't a hypothetical example - such "currencies" have developed in e.g. various long-term conflict zones.
How so? For a net debtor, deflation is potentially ruinous.
I guess I put too much faith in law enforcement.
Personally the computational overhead makes me weep a fair amount; we're simultaneously trying to save the planet while making our payment methods several orders of magnitude more expensive in terms of power. But if there was a "coin" that was comparative in terms of energy expenditure with what currently exists then I'd be more than happy to "lose" my wealth in other coins. That is a very low price to pay for such a system.
and yes i think most cryptocoin loonies want any one of them to succeed , the potential is so crazy high, that wishing otherwise would be foolish
Anyway, I would love cryptocurrency to succeed, and in an efficient manner (say we get all the problems worked out of proof of stake).
I live in Argentina, work for an UK based company. been doing that for the last 10 years.
Before I could trade bitcoin in an almost frictionless way (I.e., before I discovered Localbitcoin.com) my routine was to go to the ATM after the payment got into my european bank account, do a few extracts per day, rinse and repeat until I got all the money I needed.
Rate per extraction was around a few euros if I didn't hit minimum, to a certain % (That at times could be 5%, but can't quite recall as last time was 6 or so years ago). Minimum depended on the current economic situation of my country at the time (I suppose I don't need to explain that).
So, why not wire the money to your local bank account, you might ask?
Well, last time I checked (I moved a year ago to Buenos Aires and haven't checked how it goes here because I don't need to) the process for wiring money to my local bank account was as follows:
(Argentina is not inserted into the international SWIFT system !!!) I had to wire the money to a specific bank account in the US, that belonges normally to the bank I was checking, but couldn't really say. I had to wire the money there from my european bank account with certain conditions, so it could be recognizable that the money belonged to me.
Then, after some time (Could be as short as 2 weeks, but no bank would assure it would work like that every time, and wait times of 1 month or more were totally possible, considering how the Argetinian banks operate, i.e., mob-like) I would get my money _in the local currency_ with the corresponding loss due to exchange rates. AND (that's kind a really big AND, I need bigger caps) the "charge" for the operation was around 100 bucks. PER OPERATION.
"Thats too much" I said. "Yeah, people tend to group operations in half years so transfer is justified" was the answer I got.
I tested this at 3 different banks, got the same reply in all 3. Seriously.
So, now I trade bitcoin. I buy them in the UK, transfer them to my wallet, and use a broker to get the money in my account. The broker takes 2% on all operations, plus their rate is around 2% below of the current BTC price, but I don't mind. At least I'm getting ripped by somebody I want to get ripped by.
And then we have the speed issue: Since Segwit, it can take as little as half an hour to do the whole operation.
2 months ago I woke up with the money in my EU bank account (I'm not an early raiser, may I say), and by noon I had completed all operations and was just waiting for the broker to deposit the money in my local bank account.
BTW, the reason for me using a broker, is that minimum operation volume in LocalBTC is 0.2 BTC, and with the price hike at the middle of 2017 that became a problem; that, plus mostly everybody in Argentina that deals in BTC are fucking histerical trying to do a quick buck, so they start getting nervous if they don't close the operation in under 30 minutes.
And just in case you want to know how the banks operate here, another anecdote:
The dollar fucking doubled it's rate between May and September last year. The measure the gobernment used to stop the rate rise was to take the credit rate to above 70% (Yes, that's a seven followed by a zero).
Then, a lot of people here manage their finances both with credit and debit cards, because it's a lot easier (Unless you want to be carrying a lot of bills in your pockets).
So, what do banks do? They fuck merchants over, by delaying as much as they can transferring the money, because they put that in the financial market (We're speaking in the weeks here, above 3 of them). Even with the fines and shit, they are making shitloads of money. So, that mean that merchants get fucked over twice: they don't get the money in time, and when they get it prices might have changed a lot, so in a lot of cases they end up losing money.
Regarding the questions re:cryptocurrency I'm here for a long time, not a fun time. I mean, I have no problem if I have some fun with it, but it's not the end goal. And it's going to be fun if crypto takes off, as countries / governments are going to have to deal with the implied loss of power.
The banks where I checked where #52, #55 and #77
All in all, I received the same information in all 3, even thought they all have a SWIFT code assigned (So that probably mean they don't even have a registered account for the bank).
Here's a page from a rather large bank, where the process is exposed:
It's in spanish, but if you click in either "Dólares" or "Euros" you get some bank icons below (3 in "dólares", 2 in "euros") with the details of the bank accounts where you could send the money. For any other currency, you have to call to get the instructions.
Can't get any more clearer.
Deposit in euros 
Deposit in dollars 
By the way if you are buying BTC, Kraken is much cheaper than 2% (more like 0.2%) and I think they take GBP.
It does sound like the banks are iffy.
I'm not sure you need a swift code, probably just a bank account number/sort code.
>The recipient gets money in their currency directly from TransferWise''s local bank account.
I have not tried Argentina as I have no business there but have sent money to Indonesia which is another tricky place and it worked fine. Fair enough re Kraken - they do GBP to BTC, not BTC to pesos.
Each country has their own way to sort stuff internally.
For instance "sort code" is not something you find in countries like Spain (I have a bank account there; sort code is something found in the UK).
Nor are they found in this country. Here, we have what it's called CBU (Uniform bank key).
Again, when you go to a bank branch, _IF_ there's any relation between your bank account and a SWIFT account, they never tell you that information
And, considering that even in the cases you agree to do the transfer, you do not do that to a bank account in the SWIFT system that belongs to the branch but to a bank account in another country, I doubt we are integrated.
An overnight crypto miracle won't happen, by the way. Money is too important and requires too much trust for an overnight success to occur.
Every year that the BTC network runs without a major exploit, is another year of confidence in the network protocol's security. Unlike some software categories that are prone to rapid disruption, money is not one of those things.
Disruption occurs a lot slower for very important reasons. People have to trust in a crypto currency in order to store value in it and exchange value for it. That takes time, to test in production if any major exploits exist.
It's not trivial what Bitcoin has accomplished this far.
You seem to be assuming that anyone interested in crypto is in it for the money.
I assure you, that's not the case. To me, getting the money supply out of the clutches of governments is the most important aspect of crypto-currencies.
To answer your question: Which crypto wins and how much it'll be worth are the last of my concern, as I will profit, along with all of society, from getting the govt to surrender management of something they're basically terrible at.
Deflationary tokens are not much good as a currency but they are good as a Ponzi scheme.
This is what most "blockchain" enthusiasts get wrong. They think it is just about technology, and thus, they can come up with "a better bitcoin."
They're missing that the predetermined monetary policy is the key innovation of Bitcoin, and that by creating a new "blockchain" which prints new money, they are shooting themselves in the foot, because they can't ever be "a superior bitcoin" when they have inflation as part of the parcel.
A free market does not really care about whether some people have the opinion that deflation is bad. At the end of the day, nobody can change Bitcoin's monetary policy, and it will be left to the free market to decide whether or not they are going to put their money in this, or whether they're going to bet on inflation.
I would have much more faith in a cryptocoin's potential as a currency if the predetermined monetary policy was something like Friedman's k-percent rule: https://en.wikipedia.org/wiki/Friedman%27s_k-percent_rule
Of course this would vastly reduce the Ponzi aspect for early owners which might remove most of the appeal.
And I still wouldn't have much faith in it since I doubt being decentralized is enough of a benefit for people to switch away from government currency and normal banking.
A majority of hashing power in the network could change Bitcoins monetary policy.
A majority of hashing power attempting to change monetary policy spins off a forked coin which does not have economic value because it does not have economic users.
If the overwhelming majority of bitcoin users (98%+) wished to do so, they could possibly change the monetary policy. Of course this will never happen, because there are die-hards like myself who will always stick with the non-inflationary bitcoin.
And then, the market decides whether to stick with the non-inflationary coin, or to use an inflationary one.
The worst that a majority of miners could do the the non-inflationary bitcoin is temporary denial of service, or attempted double spending of their own money. It's going to cost them an awful lot in electricity to try either, and they're not going to get that money back unless they're generating coins that are in demand to buy.
There was a brief moment where companies began paying employees in crypto.
If the cryptocurrency was at least somewhat open and efficient, then I would be extremely happy. If it was more like a payment layer that only a few large banks could use, I would be still be happy, but much less so.
$1000: Tough, but I'd do it if it meant the promised change to financial services
$10000: Unlikely, I'd rather keep my non-perfect coins
$100000: No way.
However if there is a slight chance I might profit from it, I'll gladly take those odds.
Imagine a currency that everyone is born with a certain amount of, with the only price of admission your ability to prove your identity. Suddenly, we have solved the problem of proof of work for allowing this to be a distributed ledger since the trust can be based on reputation. Also, we can impose limits such as perhaps a logarithmic scale of wealth interpretation, where ten million dollars isn't all that much more than one million, if it's all in the hands of one person.
The digital age could be an age of fairness, if we choose to use these tools to design a fair game instead of an unfair one. Note that I mean "fair" not in the sense of two people starting out exactly equal, but where the winner can use their advantage to win more over time until the "match" is over, but one that tends towards a fairness equilibrium, where the advantages gained by one person or group over others are minimized over time or at extreme scales.
This is how I write when I have gotten less than 4 hours of sleep, but hey, I can dream. :)
Would that be a new age of fairness?
The decline in rate of inflation is what prevents punishment of the older adopters. Inflation is inherently punishing of people who are saving an asset, because it steals value from them, or at least would do if demand didn't outpace supply.
If bitcoin offered the same reward to newcomers as it did to the people who adopted it 10 years ago, then nobody would've adopted it 10 years ago, and the result would be that everybody is punished, because the world at large would've ignored a great innovation.
You can't have both! Either you punish the savers by taking value from them and giving it to newcomers, or you let savers keep their value which pushes up the price for newcomers as demand increases. Socialist ideology fails to understand economics as usual.
Now you might argue that the rate of bitcoin's reduction of inflation is just too high, and should've been more gradual, or over a longer period of time. There might be some merit to that idea, but nobody could've accurately guessed the rate at which adoption would occur for a brand new technology.
After everyone is aware of what Bitcoin is, it doesn't really matter how long you make the halving. There will still be risk-takers and there will still be laggards. Some of the laggards will leave it until they can no longer go around with their eyes closed and must acquire some Bitcoin in order to make some purchases. Others will acquire it now (and 10 years ago) even when it is an extremely risky investment. Most people are somewhere in between.
So you have the option right now that you can either: Acquire some Bitcoin while it is apparently still cheap (relative to where it may be in a few years)
Or you can: Chose not to acquire some bitcoin because you think it is overpriced, and in a few years, complain again that bitcoin is overpriced, when it is worth significantly more than it is today.
Late adopters punish themselves by ignoring economic reality, either intentionally (because they are driven by ideology), or accidentally (because they don't take the time out to learn). Once you grasp it, there is only one direction which bitcoin can go over the long term.
A currency is just a measurement device, it's not a replacement for resources, I don't know why people forget that so often.
This means a new one popping up every month... Which in turn means that they are useless as currency.
Money isn't effectively and fairly distributed and it's obviously not a pipe dream.
it didn't pop-up from nothing
crypto currencies need to be acquired using either real currencies or through some form of mining, that requires real currencies to acquire the resources needed to bootstrap it
the crypto space is already a place where rich got richer, less rich got sometimes more rich, most of the times nothing changed for them, really poor individuals from really poor countries couldn't even get started
The point of cryptocurrencies wasn't to make people rich. Anyone can buy in at market value and start using coins for their stored value. That is the point. Your anger in the fact that crypto didn't magically create money where there was none before is misplaced.
Really poor individuals from poor, economically wrecked countries had quite a lot to gain from the accessibility of cryptocurrency. Look at Venezela's attitude towards Bitcoin.
On owning them.
> Anyone can buy in at market value and start using coins for their stored value
Not everybody can, that's the point.
Almost nobody can, expanding the first point.
It's not really a democratic and open process.
It involves a lot of prerequisites that are usually not met by the general population.
> Look at Venezela's attitude towards Bitcoin.
You mean Maduro's?
AFAIK Maduro made bitcoin mining illegal in Venezuela and arrested more than a few miners.
Or do you mean the Petro Coin (a total scam currency) that Maduro tried to force down Venezuelan's throats?
Now expand on this point. What about crypto is preventing people from owning some that isn't also preventing them from owning regular money?
> You mean Maduro's?
It's pedantic to differentiate between a State and its actors when discussing policy like this. I mean Venezuela.
I'm talking the Petro Coin, the raids, everything. The whole policy was a response to fears of increased economic freedom for Venezuela's poorest citizens at a time when the government was trying to offload the pain of its bad economic decisions onto them.
No, it was a scam.
Credit Suisse found that 97% of bitcoin is held by 4% of addresses (though some may belong to exchanges): http://www.businessinsider.com/bitcoin-97-are-held-by-4-of-a...
Still doesn't seem like a pipe dream.
Money is heavily regulated.
Crypto are not.
The internet is a technical embodiment of the First Amendment (freedom of speech, freedom of press, freedom of religion, right of peaceable assembly, right to complain about the government).
Bitcoin is a technical embodiment of some of the Fifth Amendment (due process -- protection against deprivation of property, and even life/liberty if you accept the unremarkable proposition that it's hard to live freely if you can't buy anything).
Having these technical protections in place are important regardless of their impact on or benefit to any one person.
How is it in any way different than having money in your bank account? If the government wants to, they can decide to take all your money from all your account, but they can also decide to throw you in jail until you hand over the keys to your Bitcoins. In the end there is no difference.
Meanwhile, the Technological Singularity people are working on the other half of the problem you describe.
And what's this Singularity nonsense of which you speak?
And if you want to have a discussion whether there are alternative ways to achieve specific valuable outcomes, count me out. This thread is about whether cryptocurrencies have any potential valuable outcomes besides the potential of lottery-style winnings for early adopters.
Ah, but this unwillingness to consider "why couldn't we do this without crypto", leading to rejection of study of centuries of useful economic and monetary theory development, is precisely what predicates the failure of cryptocurrencies to achieve potentially valuable outcomes.
That's precisely why I bring it up. If a thing is a) valuable/useful and b) possible without cryptocurrencies, why has it not been done before? The fact that it has not, suggests that either a) or b) is false.