I don't feel this was your actual response, but I still need to address it because I don't understand how anybody ever can have that as a remotely legitimate, thought-out response.
How can any financial instrument/currency make everybody "rich", in any real terms?
If you gave everybody million USD tomorrow, it'd crash so bad that we'd be right back where we came from.
Is there anybody that believes that we could all invest fiat money into X.coin, and after some period of time, we'd all be rich? If so, how? What wonderful value does it produce, what mechanism would magically elevate all without disruption?
From where I'm sitting, any currency or investment is a re-distribution of wealth/money/value. A person who bought X.coin yesterday can only derive/extract value tomorrow if somebody else buys it for more. We didn't gain/extract/create value out of thin air by virtua of fintech, it's a simple exchange.
So what if everybody DID get some X.coin, so that nobody did "HFSP"? What'd happen then?
By organizing economic activity in a more efficient way than our present system of centrally planned debt supplies. That's what currency is "for" - organizing real activities.
Not saying those are good or bad, just aiming to quantify the market size.
BTC isn't even truly decentralized - it's Chinese.
https://www.statista.com/statistics/1200477/bitcoin-mining-b...
That speaks volumes about how resilient Bitcoin's ecosystem is.
Bitcoin isn't Chinese. Bitcoin doesn't belong to any country, nation, tribe, political party, institution, or person at all.
Of course, after price discovery is more or less complete, we can't all be rich as the value relative to goods and services will stagnate, and BTC will become as boring as gold.
> From where I'm sitting....if somebody else buys it for more.
Sure, and they will if the value of said coin keeps going up. Note that you don't need to sell it for USD, you could be paying for services in said coin directly. Point being that the exchange doesn't need to happen in USD, it can happen in any form of value.
Compared to that baseline holding literally anything else - including crypto - has a better theoretical chance of preserving your wealth. When measured in terms of US dollars, that has the appearance of everyone who owns it getting richer.
> How can any financial instrument/currency make everybody "rich", in any real terms?
You have resources, someone else has a really good idea for how to use them. Financial instruments let the situation play out sensibly (you lend them resources, get back resources + something) with easy-to-manage legal enforcement if something goes wrong.
More complicated financial instruments let that scenario play out in more abstract ways. All in theory, in practice most people are bad with debts and more complicated concepts.
I agree with that in general; however, that's not the current premise of most cryptocurrencies - I see them more like gold in that you buy them and hold on to them; not as a capitalist investment into anything specific or generic. I may be wrong...
I do think that BTC and its clones engender a certain dragon-cache hoarding mentality that aligns with either plans to eventually cash out at a higher price or some kind of apocalyptic vision where eventually USD is no longer used at all.
An asset - no matter what it is - is only going to have value in the future depending on how others are going to a value it.
This means does it survive war? National collapse? etc..
USD is a currency, not a store of value, it's designed to be slightly inflationary. That's policy and public information. Don't hold them for 'long term' but it will at least have some value.
Gold and Real Estate (to the extent you can control that real estate, which depends on rational social organization etc.) - will probably hold their value. As will some other things.
Crypto would be the last choice among many as a store of value, as they could all be wiped out in a second, forget the issues of what financial fashions might come into place in the future.
Crypto is still 100% experimental, and every dollar traded in crypto, is at least today, purely speculative, no different than trading Baseball Cards. But without at least the Baseball Cards. That's where it is today and while something might come along, nothing is quite on the horizon just yet.
To start with, I'll say that I agree with the mainstream view that cryptocurrency isn't actually creating wealth, in the sense of non-financial real goods that improve people's lives. It's redistributing it. Everybody's crypto gain comes at the expense of somebody else's crypto loss.
I'll also throw in that folks who say "HFSP" are often the losers, because they're the ones who FOMO in because of greed and ego at the top of the cycle and then panic-sell at the bottom when they actually become poor. The folks who are making millions in crypto are the ones who buy at cyclical bottoms - 2012, and 2015, and 2019 - and hold on to sell at the tops, when everybody else is making fun of the folks sitting on the sidelines.
However, they're on to something. Imagine that you're inside a group with superior military technology - the Mongols in 1200, for example, or an American settler in 1840 - and you're looking at the people you are about to conquer. Or less bloodily, you're going into software in 2002, aware that a computer program will replace the jobs of whole industries, and trying to figure out which profession to go into. It's much better to be on the inside of change than on the outside.
They aren't necessarily wrong, either - they're correctly perceiving that the fiat currency system is unsustainable and is its own Ponzi scheme, and creating an alternative Ponzi scheme to recruit participants into. Game theoretically, if you have an inflationary currency and a deflationary currency, it makes sense for everybody to spend the inflationary currency and save the deflationary currency (Gresham's Law) which further drives up the relative price of the deflationary currency so long as there's an excess of savings available. If we enter a time of shortages (which we might), then the value of the deflationary currency will collapse (since everybody needs to spend money, and merchants are accustomed to taking the inflationary currency) - but if that happens, Bitcoin and its electricity & Internet demands are screwed anyway. In the meantime, as long as labor and savings both remain abundant, holders benefit at the expense of new adopters.
The actual claim isn't that crypto is going to make everybody's life better. The claim is that it's going to make the life of holders better, at the expense of late adopters. People can't come out and say that directly - "Hi, I'm going to fuck you over and take all your wealth". I'm sure that'd go over great with the general public. So they say it in coded egoisms like "have fun staying poor", where you can write it off as somebody blowing off steam.
Someone invented a technology. Initially it was worth zero. Now it’s worth 1tn. The gains are from the gradual realisation that the technology has some merits. There are way more gains than losses… so far at least.
With technologies like washing machines and dishwashers and stoves, it's pretty easy to see the real gains in wealth: you save labor. Ditto cheap housing and automobiles: you can live places you wouldn't before, which opens up a yard and white picket fence to people who previously lived in tenements. The Internet opened up a whole new world of information, which let people start businesses, learn new skills, apply for jobs they wouldn't otherwise know about, plan vacations, etc.
With cryptocurrency, the product is money. Money isn't wealth though; it's something you can trade for wealth. And whatever money you get from cryptocurrency got paid in by someone who newly bought what you just sold. There are people who have bought houses with gains from crypto (more power to them!), but that's paid for by other people putting money into crypto and getting nothing tangible in return. For those other people to get tangible benefits, somebody else would have to put money into crypto, and so on.
Money is a measurement tool, not a thing in of itself. In a properly functioning economy you get money when you create wealth, but money isn't itself wealth.
I guess it pays to think of Cryptocurrencies other than BitCoin (which is in 90% of headlines), and imagine what CAN be / what superior systems are and can be out there.
If the price now plateaus indefinitely (obviously this won’t actually happen) then the early adopters made some profits and the more recent investors don’t lose anything. Everyone is free to buy and sell as they wish going forward.
Plus, if the crypto offers some people some benefits, such as avoiding large fees when sending money abroad or avoiding inflation, then it’s possible that the crypto invention is a net positive.