Get caught holding the last of the paper stuff just one day longer than the next greatest fool and you will be sorry. SWIFT knows this, governments know this and now the legacy financial industry (5 years too late) is starting to get it too.
These special entities need to record all transactions and verify them against this ledger. As a result you are now even more dependent on these entities than ever before. You basically just re-invented banking, only in a bad, uncontrollable way that is prone to takeovers (51% attack) by anonymous actors.
And yet here I am verifying the entire Bitcoin blockchain on an old crappy Toshiba netbook with a normal Internet connection and an old hard-drive. I use this one weird trick and big entities hate me: I have my node configured to prune already verified blocks, it only needs about 20GB of disk to store the last few months.
By the way, if you want to archive it all, a 1TB HDD can store roughly 10 years of completely full 2MB blocks. You can get one of those for less than $40, or $4/year.
It's great. They can use their powers to keep inflation at a small positive level, help smooth out economic bumps, and help the money supply keep pace with the economy.
A fixed amount, ever, would constrain economic growth, reward hoarders rather than investors, disincentivise spending and generally be a poor substitute.
As evidence I present ... the entirety of the Western world and it's multiple decades of unparalleled prosperity.
Evil triumphs only when good men do nothing!
Please do provide your reasons, but if they're just the usual libertarian tripe about inflation and taxes, I'm afraid I might not give them much credence.
If it gets hacked I get my money back.
Basically it does everything cryptos promised to do, except it actually works and it’s centralized.
Mean while I have a few cryptos sitting in a wallet with no real way of turning them into anything because nobody accepts them and no services currently let me turn them into fiat in my country.
It’s been 9 years and I think we’re further away from seeing a decentralized currency than we were 8 years ago. Back then you could at least buy coffee with BTC, you can’t even do that anymore.
I do think crypto helped the financial industry step up. We wouldn’t have had our bank app if there hadn’t been competition, but I don’t see us ever moving to a decentralized economy.
...that is also declared "money" by fiat, exactly the same as paper money. It has value because we say it has value. That's not the interesting property.
The interesting property of cryptocurrencies is that the supply of money is constricted and can't be manipulated by any nation's central bank.
I don't understand how people believe this is a good thing (not implying you do specifically). One of the leading factors in the economic recovery following the 2008 crisis was Quantitative Easing and expansionary policies by the fed. Without these tools at the government's disposal, if there was another credit crisis, the effects would almost certainly be much worse and prolonged.
Like any tool, sure, it can be abused. But getting rid of it entirely by switching to a decentralized ledger (ignoring the reality that total decentralization seems infeasible), eliminates the very tangible benefits of having a central bank.
It's probably the same people who think that the Gold Standard was a fantastic thing and abandoning it was the worst thing ever.
I think you're arguing on the side of "countries need monarchies because the people can't be trusted" and "printing presses allow seditious ideas to spread and must be outlawed or tightly controlled", but, again, I can't be certain.
How is it that we can have two totally different interpretations of the truth? Isn't economics a science? Why is it that there are such varying opinions? I think it's because economies are too complex for any one person to accurately model. What you need is markets to decide what works and what's valuable and what the prices should be. What you need is competition, and that's what cryptocurrencies provide.
Bitcoin is already competing with weak currencies of corrupt governments and winning. A lot of improvements need to be made before Bitcoin is anywhere close to making a run for the #1 currency in the world, but if you're watching the technology closely, there's still a lot happening in crypto and it might be sooner than you think.
Hard to imagine how you reached that conclusion from what I wrote.
I do somewhat agree that having the precedent of a prior bailout might encourage some potentially stupid behaviour that might not otherwise be considered. The alternative, however, is much worse (in my opinion). The point isn't to keep Morgan Stanley or Merrill Lynch or whoever in business, the point is to make sure that the rest of the country doesn't lose their entire life savings because of one recession. If the cost of economic stability is propping up a few rich people, it's probably worth it considering the alternative. Of course, I'm sure the anarcho-captilist blockchain experts might feel differently.
And which decentralized ledger would this be? Bitcoin, with its maximum of 7 TX/sec? Before you come back with the "but LightningNetwork will fix that!" argument, please do a back of the envelope calculation of how long it would take 1 billion people to open just one channel on the LN, and let that sink in...
My government denominates my tax obligations in my government's currency. This includes taxes based on transactions of non-currency goods.
So there's always demand for my local currency so long as my government exists.
What demand is there for a decentralised digital currency? What motivates stable demand for it compared to the currency I can pay my taxes in and which my employer can be legally compelled by the courts to settle debts to me in?
With things like state receipts, light clients can rely on other network nodes to provide the state of transactions that were recently confirmed, without giving up security.
This does require that some nodes are processing and storing the most recent N blocks and their transactions. Today, non-mining full nodes do this for free out of kindness, but in the future, this could be offered as a paid service instead.
Proof of work is only one option for securing a chain. Research into proof of stake and delegated proof of stake will hopefully make PoW a thing of the past and drastically reduce the energy requirements to secure a blockchain.
The Ethereum team has two main focuses right now:
1. Proof of Stkae transition (Casper) 2. Implementing sharding
At the same time, teams are working on sidechain technology such as Plasma, Plasma Cash, and Loom which will essentially allow transactions to happen on another blockchain whose state is persisted in the root chain.
This not only benefits blockchain users (higher scalability, little to no fees), but is also good for the blockchain network since the data persisted to the main chain is only a set of merkle roots from the sidechain, no matter how many transactions the sidechain has.