SEC Doesn’t See Cryptocurrencies Lasting Long
wsj.com
wsj.com
Currencies have historically worked that they’re stable (ish). And to become rich you have to acquire more units. Not hope your units grow in value. If you expect appreciation then your currency is deflationary which makes it unsuitable for a currency.
Nonsense. Until recently, we've seen the currencies of large empires like Britain and US do nothing but inflate, yet their currency and their economies function just fine.
I am extremely skeptical of cryptocurrencies in general, so you may take all of my claims with a grain of salt, but coinmarketcap.com tracks something like 6800 different cryptocurrencies. I very much doubt all but a tiny, tiny fraction of them have any use case at all.
After more than ten years, I still don't see a use case for Bitcoin (perhaps El Salvador will surprise me, but I doubt it!). There is nothing I'm aware of that I need to do financially which I can do with Bitcoin (or the like) which I'm not better able to do with the regular banking system. (I don't have much need for contracts in my life, smart or otherwise, but I would vastly prefer to deal with a real lawyer and the actual legal system, expense included, than rely on a smart contract.)
It could be that that amazing use for cryptocurrencies is right around the corner, but after a decade I don't expect to ever see one. Certainly it's not NFTs!
1)chinese were able to smuggle money out of china
2)venezuelans are using it in lieu of their failed currency
3) criminals are using it to launder money and buy/sell illegal products
4) people are using it to send money across national borders without paying fees/tariffs (e.g. to mexico)
I remember not that long ago when the money supply was about 6T. Now with 30T in debt that automatically becomes the defacto money supply. Crypto can act as a stable store of value because all fiat is inflationary, though it is incredibly volatile now.
I would suggest that your life experience may not be the best yardstick for every other human.
I will provide an example of a recent situation in which I would have loved to be able to use e.g. Bitcoin. I (US based] did some consulting work for a company in France and they owed me something like $6k. Arranging an incoming international bank wire was a huge pain (if you don’t do this regularly, you’ll have to navigate multiple layers at your bank to find someone who can provide the actual wire details to provide to the counterparty), it took many days to finalize, AND I was charged $25 by my bank for the privilege.
In contrast, I should have been able to provide the French company a BTC address, have had them transmit for pennies or a few dollars at most, and have payment secured and confirmed within the hour.
Companies are super risk averse. They’d rather use arcane tools with seriously battle tested guard rails. As an example, if someone hacked your email and sent them a fraudulent Bitcoin address, and they sent the BTC, they’d have no recourse. No way to reverse, nobody to even complain to. Corporations would much rather have those arcane layers to protect themselves.
That would be my prediction for cryptos: most of them aren't special enough to be useful, a lot are just pyramids schemes where the creators premined a big chunk and hope it will be worth something once they find users, but there's certainly some that are here to stay. I don't see the original Bitcoin disappearing, Ethereum is having a bit of a rough patch right now but has the potential to become a proper computing platform and I think privacy features like those Monero is offering are always going to be in demand. But we shall see.
As an example - say a famous artist decides to create 1 single sketch. I only create 1 item and sell it to you who now in turn owns that piece to do as you please whether it’s lease it out for commercial purposes, stash it away on a HD, launder money, etc etc. Sure it’s just pixels on a screen but the ownership of rights is what you are paying the artist for. (Now imagine the same scenario 10-20 years down the line when super VR is a thing and most of us spend more time in our digital lives than the real world). As the purchaser, you can now track the usage of your asset you’ve purchased through a blockchain.
So it makes sense, but the current state of small iterations of the same piece of artwork are akin to ikea pieces in real value and are completely just advantage of the current hype. There will be a correction at some point as things mature.
Well, right.
That's why all of the trading volume.
Bunch of no-nothings trying to figure out technological value via herd mentality!
Fortunately the government stepped in with its own currency to refuse to redeem for gold
The SEC picks and chooses which rules to enforce and which parties to police, monetary policy is decided by authorities with no input from or regard for 99.9% of the population.
It's not surprising that people would opt-in to building alternatives with transparent and programmatic rules. It's also not surprising that these alternative systems will be fiercely fought after being ignored and laughed at, and it won't be surprising when they win.
That's going to age like milk.
How many consumers will be willing to do currency conversions on a per transaction basis?
For example take Apple - you have the App Store , iTunes, app purchases, Apple Pay, the new Apple Card and more I probably forgetting. As time goes on, it’s not far fetched to assume that you might rarely leave the Apple economic ecosystem or even need to since everything you have is provided by one corporation. This applies to Amazon, Facebook (not as embedded as Amazon or Apple but has ambitions to get there), and more. So the idea of there being an Amazon coin or an Apple coin, once things mature in the cryptocurrency industry, is not totally out to lunch.
Why have the extra coins and conversions, as a consumer? Even if the companies want to use them like DerpCoin (see Hermitcraft), they will still have to take USD. So will they really ever gain sufficient usage to warrant the company time / people investment into supporting them?
I also suspect most people are involved in many more economic microsystems, which sounds like a business I transact with by another name.
I assume many people here travel (or did pre-covid) frequently and mostly don't even notice the currency that's being used when you swipe your credit card when making a purchase. The details such as whether the merchant gets USD, EUR, or GBP are abstracted away from you and all you care about is buying your souvenir and figuring out where to go next.
When abroad, prices are listed in the local currency, and I have to do some mental math, but yes the transaction does currency conversion automatically, with a fee that is typically higher than I would have realized if I swapped beforehand.
The point is, what currency will prices be listed in and do I have to jump through these mental hoops everywhere I buy things? Unlikely that most consumers will want this situation and extra layer. If it's listed in USD, why not just pay in USD and avoid the conversion stuff all together?
That is why a plethora of currencies will not pan out. It's not a out technology, it's about people's minds and behaviors.
For the buyer they can use any currency they want transparently and for displaying prices things can only get better.
I would call this best case. There would need to be significant (likely unattainable) effort to change the standard. How many laws, signs, and code would need to be changed?
He said he doesn't see viability for 5000 cryptocurrencies and not cryptocurrency in general.
Of course no one thinks every dust coins have a future.
I'd say they are bad because they just don't work right now. Scaling is a huge issue. Yeah yeah there are 100 theoretical ways to scale to 100000 tx/s with low fees, but until I see it, I will maintain that crypto is useless.