So you’re admitting it’s basically the same thing?
What’s the point of crypto currency if it’s just re-implementing the same system we already have?
I’ve always said cryptocurrency is just an exercise in teaching libertarians how economics work that involves wasting a lot of electricity and a lot of people losing a lot of money.
But it can’t be a real currency until people are comfortable with taking out loans denominated in it. But to accomplish that you’d need to have a slow but steady inflation so people will know they aren’t going to wind up owing more in real value than they originally borrowed. Perhaps there could be an overnight lending rate to the “biggest stakeholders” so the value of the currency can be controlled?
Its not the same thing, its just incrementally more decentralized than the current system but potentially less so then a proof of work one (and even then only in theory, in practice a lot of POS chains are more decentralized than BTC).
But the most important aspect of crypto is actually not decentralization. Decentralization is necessary but only to a point. What is more important is for the cryptocurrency to be permissionless. In that way, you are correct it is replicating a system we already have… cash. It basically taking the properties of cash and bring that into the digital realm. We lost so much when our money and other assets became digital and that it what crypto is trying to give us back. It crazy to me that people don’t want to see that happen and buy into these superficial critiques, which, even if true are just engineering problems that can be overcome.
But I am no stranger to seeing people completely sleep on radical shifts in technology. Hell the fediverse is just like that too and if you leave it for a moment you will see people trashing it in the same way. So whatever, keep your fiat. I hope the future is one where both systems an co-exist.
Blockchain is like a magicians trick where the distract you with something shiny in one hand so you don’t notice the other hand is taking something from your pocket. Blockchain may be an interesting technology and people seem to value their deep understanding of it. But what they’re neglecting is they’re sleeping on the economic side of of it. I’m no stranger to people sleeping on economic issues.
See crypto represents a fundamental misunderstanding of what money is. Money is debt. You do work and you’re owed something. The company you work for doesn’t provide things you want so bartering isn’t possible. So they give you a token that represents the value they owe you. You can redeem that token anywhere to receive the value that the company you work for owes you. Money is a token that represents what you’re owed. The transaction where you do work and receive something in equal value to that work is incomplete so long as you hold onto that money.
Incomplete transactions are an economic inefficiency. Inflation acts as an incentive to complete those transactions. Also it allows people to borrow money (which is more obvious that the money is dept) to buy things of value now and pay back that value later. So you can buy what you need to be productive (capital) and pay the debt with the increased value you’ve gained from that capital. Capitalism in a nutshell.
Crypto currency is popular with people that don’t have a firm grasp of money. People that are upset over the value of their money decreasing. Even people that have debt that exceed their bank balance will be upset over this. Wanting a gold standard (even when it’s completely not feasible). Wanting a digital version of a gold standard extends from this.
But in the end, money is simply an agreement to value some token that everyone in a society makes because we all recognize that a barter system isn’t going to work when people are in the specialized fields that civilization necessitates. Whether it’s an official looking piece of paper, a number in a database, a pretty piece of metal, or a magic number generated by a complex algorithm. It all depends on a society agreeing to value some token to represent things of real world value.
So crypto doesn’t represent any kind of improvement. In fact the opposite. You actually want small but steady inflation with real world currency. But that can’t happen in the crypto markets because people are investing in it. Crypto increases in value so long as more people invest in it. But inevitably that will stop. Even in someone’s fantasy where everyone in the world put all of their money into crypto, since money is finite, the value will stop increasing. Then what do the people that bought crypto as an investment do once there’s no longer a return on their investment? They sell.
And traditional money will still exist, it has to. People still need to take out loans and a “currency” that could potentially have double the value next year is not a thing you want to take out a loan in this year. You could end up owing double what you originally borrowed. So we have to maintain existing currencies to make loans possible. So when crypto reaches a point where it’s stable enough to consider using it for loans, it will also be the point where people buying it as an investment will sell, and they will be able to do so because traditional currency has to continue to exist until crypto is stable.
So there’s no mechanism for us to transition to cryptocurrency as a real currency without some major government intervention to accomplish that. But once you need the government to enforce this currency, what have you achieved?
So crypto is just wealthy people manipulating a market to extract money from people with an impossible dream. Given that it requires more investment to increase in value and people are buying into it as an investment, it’s just a pyramid scheme.
Sure and people who think you can’t have monetary policy with crypto are too uninformed to be worth discussing the merits of each system.
I’m sure we can all wax lyrical about what we think money is and lord knows whenever cryptocurrency is brought up the armchair currency experts are always there. So thank you for that!
Yes, I can’t predict any problems that might be caused in a “right by might” monetary system. /s
As opposed to a currency issued and secured by a central bank?
So you’re admitting it’s basically the same thing?
What’s the point of crypto currency if it’s just re-implementing the same system we already have?
I’ve always said cryptocurrency is just an exercise in teaching libertarians how economics work that involves wasting a lot of electricity and a lot of people losing a lot of money.
But it can’t be a real currency until people are comfortable with taking out loans denominated in it. But to accomplish that you’d need to have a slow but steady inflation so people will know they aren’t going to wind up owing more in real value than they originally borrowed. Perhaps there could be an overnight lending rate to the “biggest stakeholders” so the value of the currency can be controlled?
Its not the same thing, its just incrementally more decentralized than the current system but potentially less so then a proof of work one (and even then only in theory, in practice a lot of POS chains are more decentralized than BTC).
But the most important aspect of crypto is actually not decentralization. Decentralization is necessary but only to a point. What is more important is for the cryptocurrency to be permissionless. In that way, you are correct it is replicating a system we already have… cash. It basically taking the properties of cash and bring that into the digital realm. We lost so much when our money and other assets became digital and that it what crypto is trying to give us back. It crazy to me that people don’t want to see that happen and buy into these superficial critiques, which, even if true are just engineering problems that can be overcome.
But I am no stranger to seeing people completely sleep on radical shifts in technology. Hell the fediverse is just like that too and if you leave it for a moment you will see people trashing it in the same way. So whatever, keep your fiat. I hope the future is one where both systems an co-exist.
Blockchain is like a magicians trick where the distract you with something shiny in one hand so you don’t notice the other hand is taking something from your pocket. Blockchain may be an interesting technology and people seem to value their deep understanding of it. But what they’re neglecting is they’re sleeping on the economic side of of it. I’m no stranger to people sleeping on economic issues.
See crypto represents a fundamental misunderstanding of what money is. Money is debt. You do work and you’re owed something. The company you work for doesn’t provide things you want so bartering isn’t possible. So they give you a token that represents the value they owe you. You can redeem that token anywhere to receive the value that the company you work for owes you. Money is a token that represents what you’re owed. The transaction where you do work and receive something in equal value to that work is incomplete so long as you hold onto that money.
Incomplete transactions are an economic inefficiency. Inflation acts as an incentive to complete those transactions. Also it allows people to borrow money (which is more obvious that the money is dept) to buy things of value now and pay back that value later. So you can buy what you need to be productive (capital) and pay the debt with the increased value you’ve gained from that capital. Capitalism in a nutshell.
Crypto currency is popular with people that don’t have a firm grasp of money. People that are upset over the value of their money decreasing. Even people that have debt that exceed their bank balance will be upset over this. Wanting a gold standard (even when it’s completely not feasible). Wanting a digital version of a gold standard extends from this.
But in the end, money is simply an agreement to value some token that everyone in a society makes because we all recognize that a barter system isn’t going to work when people are in the specialized fields that civilization necessitates. Whether it’s an official looking piece of paper, a number in a database, a pretty piece of metal, or a magic number generated by a complex algorithm. It all depends on a society agreeing to value some token to represent things of real world value.
So crypto doesn’t represent any kind of improvement. In fact the opposite. You actually want small but steady inflation with real world currency. But that can’t happen in the crypto markets because people are investing in it. Crypto increases in value so long as more people invest in it. But inevitably that will stop. Even in someone’s fantasy where everyone in the world put all of their money into crypto, since money is finite, the value will stop increasing. Then what do the people that bought crypto as an investment do once there’s no longer a return on their investment? They sell.
And traditional money will still exist, it has to. People still need to take out loans and a “currency” that could potentially have double the value next year is not a thing you want to take out a loan in this year. You could end up owing double what you originally borrowed. So we have to maintain existing currencies to make loans possible. So when crypto reaches a point where it’s stable enough to consider using it for loans, it will also be the point where people buying it as an investment will sell, and they will be able to do so because traditional currency has to continue to exist until crypto is stable.
So there’s no mechanism for us to transition to cryptocurrency as a real currency without some major government intervention to accomplish that. But once you need the government to enforce this currency, what have you achieved?
So crypto is just wealthy people manipulating a market to extract money from people with an impossible dream. Given that it requires more investment to increase in value and people are buying into it as an investment, it’s just a pyramid scheme.
Cool tech tho!
Sure and people who think you can’t have monetary policy with crypto are too uninformed to be worth discussing the merits of each system.
I’m sure we can all wax lyrical about what we think money is and lord knows whenever cryptocurrency is brought up the armchair currency experts are always there. So thank you for that!