Rather than use their equipment for work that's useful to humanity like Folding@Home or BOINC these mining operations are running what amounts to a foundry of space heaters trying to compute a lottery number in return for poker chips at a speculative casino.
That's reaching. Just because some people use it for that doesn't mean that's what it's designed for.
Stalin was also quite sure he knew what was useful for humanity.
You could argue that having currency transactions based on distributed trust is useful to humanity.
> You could, but no one ever seems to do a good job of [making such an argument].
Bad job by a bunch of idiots. Some of them get paid by the system, most are high calibre and can milk the teat of corporate inquisitions. They absolutely know their subject material, so it comes down to opinion....
or
Bad specs from a bunch of profiteering idiots?
Why would anyone who was ahead of the curve ever give this stuff away? The path for Bitcoin and all other cryptos actually lies far away from the 'internet money" crossover dilemnas we have today. Big blocks of silicon heating snowdrifts is already out of date
Linking a currency to wasted energy isn’t great, but what solution would you put forward? A few countries out there have tried to go back to gold or use their oil but it doesn’t end well for them
Which is why USD backed up by the worlds strongest economy are used for vastly more international transactions than all cripto coins combined. Coins have nothing but belief in their value backing them up and are thus extremely unstable.
At the end of the day people need to pay taxes and debts and that’s what gives nation states currency value. As long as the nation does not go on a long term printing spree things stabilize.
In what sense do you believe USD to be 'backed' by the US economy?
Indirectly, messing with your currency risks economic harm creating a huge incentive for governments not to do that while things are going well.
That is absolutely correct. But nowhere does it demand that you conduct these transactions in USD. USD ends up getting used because it's convenient, which is because people have to pay their tax debts at the end of the year. However, that is a problem that can be trivially solved by software now, especially as society becomes more and more cashless.
As long as the US government accepts payment for taxes in USD, there will always be some demand for it. However, there is nothing actually stopping people from using other currencies for their normal transactions, which would substantially decrease demand for USD, and thereby reduce its value.
There is no sense in which the US government 'backs' dollars, except insofar as they are incentivized not to do anything to actively destroy them.
So, if by ‘some’ you mean multiple trillions of dollars of demand every year then ok. But, that’s rather trivializes what a trillion dollars means.
Which is why I am saying the economy backs the USD not the government.
True, though that's simple enough to hedge.
> So, if by ‘some’ you mean multiple trillions of dollars of demand every year then ok. But, that’s rather trivializes what a trillion dollars means.
Absolute numbers don't matter, relative ones do. The demand may go to trillions, but that would be down from tens of trillions.
Even record setting sustained inflation of say 2% per month in the middle of some horrific economic issues would still be a bastion of stability relative to many currency’s throughout history. So, as long as the economy stays steady and the USG does not do something monumentally stupid the US economy really does back the USD.
But nowhere does it demand that you conduct these
transactions in USD.
USD ends up getting used because it's
convenient
Why would anyone bother taking their money, going through all the steps to convert it into the foreign currency or software tokens that they need to buy from someone else (who's siphoning wealth from you) just to find out merchants don't even accept it due to the volatility. And what happens when the merchant turns out to be a fraud? No customer protection by design.
[1] https://steamcommunity.com/games/593110/announcements/detail...
I'm arguing that USD is not backed by the USG in any meaningful sense. Not that Bitcoin is a good alternative. Just that the "Bitcoin isn't backed by anything, but USD is" argument is unsound.
> Why would anyone bother taking their money, going through all the steps to convert it into the foreign currency or software tokens that they need to buy from someone else (who's siphoning wealth from you) just to find out merchants don't even accept it due to the volatility. And what happens when the merchant turns out to be a fraud? No customer protection by design.
Are you arguing that volatility is an inherent property of cryptocurrencies? Because if you're not, then I don't see why your point here is relevant. If you are, then i'd like to hear that argument spelled out.