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Comment by shunders | Hacker News Reader

> "I do believe it will go to zero. I think it's a great technology but I don't believe it's a currency. It's not based on anything," Jeff Schumacher, founder of BCG Digital Ventures, said during a CNBC-hosted panel in Davos, Switzerland.

I can't believe we are still arguing these incredibly rudimentary points. Let alone that these quotes still get press coverage. Really, you're talking about cryptocurrency on a panel at Davos and you still haven't taken the time to reflect upon the nature of money?

What does "It's not based on anything" even mean? What is a dollar "based on"?

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What is a dollar based on?

The need for the citizens of the most powerful nation on earth to pay their taxes in it; a legal and regulatory framework to support it; and the military and diplomatic might of the US to support it.

So it's based on a concept, a loosely defined one at that. Cryptocurrency is based on a strictly defined mathematical concept. It isn't a huge leap between the two.

All that math is not going to help you when your government puts you in jail for not paying your taxes.

Who isn't paying their taxes? Bitcoin can be sold for fiat and taxes can be paid.

Exactly. If I have to pay taxes in dollars, why should I accept anything but dollars in the first place?

>What is a dollar "based on"?

It's a coupon tradable against a portion of the future production of the entire US economy. As long as the country makes anything, and as long as the government is around, a dollar one owns is tradable for items produced there. For it to fail would take tremendous failure of likely the entire world economy, at which point all promises of future trade will be suspect. As such, it's quite stable for the foreseeable future.

What is a bitcoin based on? It's currently also tradable for goods to those offering to take BTC for goods directly (a tiny and shaky market), or more tradable to those willing to give dollars for BTC, which is bigger, but still tiny and shaky compared to a dollar itself.

BTC marketcap $62B USD, ~$5B daily trading volume. USD trades ~5T a dat, and likey does a few T more in business transactions/day.

You're probably right. But if I were to try and defend his statement, perhaps he means it's not based on factors such as convenience as a medium of exchange, or public confidence that it will have relatively stable value (so that it can serve as a medium of storing value).

> What is a dollar "based on"?

Faith in the US government

>What is a dollar "based on"?

This is a poor argument. Many real-life currencies had effectively "went to zero" via hyperinflation. I assume you meant US dollar, but whatever Zimbabwean dollar was based on was clearly not enough to support it.

How can anyone give this venture firm any money when its founder is so clueless on how currency works.

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