If everybody in the US had access to bank accounts with easy electronic transfers within 5 seconds for no charge, no chargebacks and so on, as people are used to in the EU, would people still be excited about Bitcoin?
A bigger motivation, and perhaps the most quixotic one, is financial security.
No, I don't mean that cryptocurrencies haven't been highly unstable in value.
But the more that the cabal chooses to truly enter the 21st century, the greater the danger of that technology being used as a means of coercion. This has already been seen in the porn industry (both amateur and commercial) and, say what you want about the possible ethical issues with it, but people have the right to produce pornography in the United States and also participate in the same economic system as everyone else. The danger of companies like Visa and Paypal exercising political control over their customers for other reasons is non-zero, and I would even predict that the danger is at least moderate.
Whether you agree with that perspective is another thing. Many crypto enthusiasts, whether they are explicit about it or not, like the idea of creating an economic system that everyone can participate in that doesn't involve countless middle-men. If that wasn't the case, there wouldn't be a big push to create the Lightning network.
The other part of the desire for crypto, from my perspective, is a desire to be a part of a new frontier. We had the personal computing revolution, the internet, the web, web 2.0... and for those who missed out on those or merely miss them, crypto fills that void and provides a new realm of possibilities to explore.
Correct me if I'm wrong, but doesn't the whole blockchain thing depend on an uncountable number of middlemen to verify transactions? They just don't have to trust them. Not to mention they have to count on a market existing for the coins to give them value.
Read, as distinct from our current champion middle-men, chosen by favor, regulation, and access to capital.
To add to this idea of mining, theres a more grandiose theory that smart contracts are the additive tool that we can use to build all sorts of incentives in our society for people to collaborate effectively. You don't have to force people to collaborate towards the greater good if you can just incentivize them to build the thing you need. This allows them to mine out the value and build a better and more trust-less community at large. It's like a bug bounty but for problems in society.
Wouldn't it be just as possible then to incentivise them to build things to the detriment of society (but that are to my benefit, of course)? We do that today with regular old money and regular old contracts.
With collective possession you can increase users stake in making sure that negative incentives don't exist. It's all in the game theory of realigning incentives, but before you do that you have to break down how the current system we live in at its foundational root is flawed.
My theory is that we don't understand the economic systems of the crypto economy because they aren't rooted in the same type of economics that exists in our current system. They are completely different incentive systems and are not correlated at all. We just confuse Capitalist values with crypto-economic values, thus leading to entire new schools of thought in how we organize ourselves manage systems.
It's not that crypto enthusiasts don't like middle men, it's that they want to be the middle men.
With banks, money can be secretly and arbitrarily transferred by individuals of power and in some cases even gate-kept from the initial depositors. With crypto I never have to worry about my money being falsely spent under the cryptographic security guarantees of something like Bitcoin. Even with > 51% attacks it would be practically impossible to rewrite significant portions of history and are mostly limited to reorganizing and deleting recent transactions.
A set yearly inflation rate incentivizes actual investment instead of currency speculation. Basically the system we have now exists to prevent what crypto enthusiasts are trying to push on us: a return to a super volatile currency that when it crashed wasn’t able to be fixed by just printing more money temporarily.
When you hear about things as complex as Monetary Policy, it is best to assume that lots of people have thought about why it is the way it is and why that’s preferable. The “gold standard” and the hoarding of wealth allowed things like feudalism to exist where lords just sat on their land and gold and were richer every year.
Yeah you can pull the “the rich get richer today too” card but so do poor people if they invest in assets, and the difference is that every wealthy person has almost all of their wealth invested in the US economy in order to beat the risk free and inflation rate.
I really, really am sick of the bullshit around the big L Libertarian party (and the crypto enthusiasts who identify with them.) Spreading lies about the evil fed and the evil inflation rate, both of which are a huge improvement over the constant depressions we had prior to this century.
It took thousands of years for people to develop the sophisticated monetary policy we currently have that allows our economy to be extremely stable and continuously grow, generations of very bright people, and anarcho-capitalists want to throw that away to go back to “basics.” At the very least you could do all those people, and the citizens of the world, the courtesy of understanding why were all in favor of yearly inflation (even if we bitch about prices going up.)
> We have pro-inflation, anti-deflation economic ideology because the elite fund the economists' "research."
Suppose USD deflated; what would happen? Some people would move some money from other assets (stocks/bonds/etc) into currency and hold it for risk-free returns. What would that do? Reduce the amount of money in circulation. What does that do? Deflate the currency even more. What does that do? Incentivize even more people to move money into currency, which makes the currency deflate even more.
The whole point of a currency is that people spend it or invest it in something useful. If it's going up in value, they're incentivized not to do that, and it stops being used as a currency. This is an unambiguously bad outcome. I don't believe shadow elites are trying to convince economists of this, because they're already convinced.
Money is created when it is borrowed from a bank or banking institution. Even that is an oversimplification but it is still much more accurate than saying money is created by "printing" it because it isn't. One of the really key things to understand is that the money supply is created by government but it is also created by businesses and individuals.
I don't have a dog in this fight, but it always drives me crazy when people talk about economics in a sloppy way.
Money printing dilutes wealth if you hold it in cash, but every other asset appreciates. Moreover if you have more debt than wealth, money printing reduces that burden.
How many people actually have more wealth than debt but keep it largely in cash? I never understood who exactly has this problem.
Can you cite some evidence that there are people keeping long-term savings* in cash and has adequate internet access and computing resources to participate in cryptocurrencies? I'm still not buying this.
* (I believe people do hold short-term savings in cash, but those are not the type of savings that money-printing erodes significantly.)
If you're in the majority of people who don't have those things, life just gets harder and wealth gap keeps getting larger and larger.
Home ownership in the US is around 65% [0], so the majority do have an asset and mortgage. There are also some people who choose not to own a house but have other types of assets. Things really aren't as dire as you seem to think.
And for those people who actually are harmed by inflation, I think the consensus is that they would be harmed by the other option--deflation--even more, mostly because the disincentive to invest leads to fewer employment opportunities. The Great Depression, a deflationary environment, was not good times.
[0] https://en.wikipedia.org/wiki/Home-ownership_in_the_United_S...
According to the US Census in 2020, 139.68 million homes in the US with a 64% owner-occupied rate means 89.395 million homes are owner occupied. Let’s say 85% of those are dual-owned (by couples) which I could not get a solid statistic on but several policy websites seem to cite, and we will assume the other 15% are single owners. Then about 165 million people either own or partially own the house they live in, or roughly 50% of the population.
That is the slimmest of majorities, far less than the 65% implies.
[0] https://www.census.gov/quickfacts/fact/table/US/PST045219
Of course, the minute you add another transaction layer or exchanges or other third parties, then that wipes out most of that advantage and generally the more it facilitates cheap and fast transactions the more power is given to the third party and/or more fee is taken.
I’m still a fan of first layer transactions and just making the blockchain much faster using brute force increases in block frequency and block size. Might be able to keep transaction fees low enough to be a useful alternative. But as long as more people are interested in cryptocurrency (and related tech) as a Ponzi get rich quick scheme than as a practical way to facilitate transactions, I don’t see it making a significant dent in the regular financial system.
This is partially true, but I think a bad blanket statement.
Bitcoin has outperformed all other asset classes over the last decade.
You can get crypto credit cards that remove all complexity you aren't forced to deal with anyway. And even if that wasn't the case. Banking is hard, too, so that's a moot argument.
Ethereum and others are moving away from proof-of-work.
Upgrades like taproot and zkrollups improve privacy and can be used today.
Literally none of this is true except maybe "riskier".
Crypto is increasingly being used as a digital payment workaround for areas that Visa and MasterCard try to avoid, like pornography and donations to controversial organizations. It's probably just a sliver of overall crypto transactions, but this is very much the use case that justifies the bitcoin-as-a-currency model.
Pornography is to Bitcoin as "Linux ISOs" are to BitTorrent.
To be blunt, they fucking love it. Like they’ll build an entire city in the middle of an uninhabitable desert just to do it. They’ll give up their kids future for it. People making $7.25 an hour will spend hundreds of dollars a week on scratch off lottery tickets in order to participate in it.
An endless demand for new ways to gamble is the least fucking confusing cultural development to ever happen.
Put people in a prison and they’ll do it with cigarettes. Give a bunch of construction workers a lunch break and they’ll bet on which pigeon is gonna to take off first. Hand a group of people a round ball or a deck of cards and they’ll figure out how to do it.
Beanie babies, little ceramic figures, baseball cards, coins. The desire for people to speculate on synthetically created scarcity is boundless, spanning generations.
Speculation is common to every culture in every era of human history. It's an amazing use case for a new technology with billions and billions of dollars in pent-up demand.
Crypto (and NFT's) are a gambling fad. People will keep doing it until it’s banned, matures, or gets replaced by the next gambling craze.
And it’s a core motivation for cryptocurrency, in the original Satoshi paper.
This is a microcosm of most of my issues with crypto discussions. In a (quite naive) vacuum, the arguments sound great. If you wanted to run Earth 2.0 with crypto, have at it. It doesn't fit in alongside the existing systems and, by the time it becomes "the main system", you can be certain that those in power have modified it to have the same issues as the original system we all hated.
As a matter of fact, their search volume is higher than US.
This is certainly not the case everywhere in the EU. In Germany for example it usually takes days. Not sure about other countries.
I can get money from Germany to Colombia in under a minute via n26 and transferwise. Maybe we're not talking about the same country.
Fees however, are around 1EUR
Anyway, still seems inferior to nano.
For the longest time, real estate was assumed to be 100% safe until 2008, etc.
You can also use some of them, like live in a house asset.
Many assets don't even have to appreciate. A car is an asset if I have paid it off. I don't expect someone to pay me more than I paid for it unless it is a collectible or I live in the year 2021.
On your last sentence, I don't know who thought real estate was 100%, because nothing is 100% safe as a store of value, but I guess they paid for it in the end.
Does this mean that I'm not speculating all of a sudden because I've done research and came up with a reasonable forecast?
Whether or not your forecast is reasonable or even useful is not within my sphere of knowledge. I can also almost certainly say that the USD wont be the global reserve currency forever, but making decisions based on a forever timeline poses a wide range of risks.
I spent some time researching the best low transaction fee easily accessible crypto for making a sort of crypto Patreon, but the vast vast majority of all crypto information available was folks speculating what was going to go "up", nobody seems interested in what is actually a decent form of money (cheap&easy to exchange, cheap&easy to transfer, and stable).
I suppose it makes some sense from a game theoretic standpoint. If we consider the decision making entities in the game to be the massive crypto exchanges and miners, the best way they make money is by transaction fees and exchange fees, so they aren't likely to come up with a great micro-transaction and micro-exchange fee system. Oh well.
Yes. A transaction is a network-scale operation. It needs to be broadcast and confirmed by at least half the network. Otherwise it wouldn't be decentralized.
As that network increases in size, the resources required for that operation increase proportionally.
"Decentralization" is a bad meme that seems to work at small scales but its adherents refuse to zoom out and accept how technically ridiculous it is at current scales (millions/billions of people).
Now, I don’t know how to translate that to the digital world, but there’s no clear reason why a decentralized network must inform the entire network of everything that happens in it.
- Lightning network on bitcoin. Super cheap and fast transactions, makes micropayments a reality (this is what Twitter is using)
- Layer 2 solutions on Ethereum. There are two optimistic rollups currently on main net (Arbitrum and Optimism). Reddit has recently committed to building on Arbitrum. There are also ZK rollups (starkware, zksync) coming in the next year or so.
- Less decentralized layer 1 chains like Solana, Avalanche, BSC, Fantom
It's unfortunate that people looking to enter the space have a hard time finding real and relevant info. Not sure what the solution is for fixing the information problem, but there are lots of people building real tech in the space
Things like the Twitter solution aren’t great, Twitter owns all the currency and is kind enough to let you have some sometimes. If I were to make my app I wouldn’t want ownership of any of the currency, too much liability.
I’m not very interested in the promises of bleeding edge crypto startups, in my experience they almost never pan out, and certainly aren’t accessible to the masses.
I agree that the twitter solution isn't great. Just pointing out that Lightning network is a tech that can be used for cheap transactions.
100% agree that none of these solutions are accessible to the masses. Tons of UX issues, most people don't want to self custody, layer 2s can require bridging, etc. But, I don't think it's terribly hard to see how these issues will be addressed and they are actively being worked on
Edit: put more simply, a hundred people each want to give $5 to a single person. What path do they follow to ensure that the person can get as close to $500 in their bank account as soon as possible. Bonus question: what is the relation between how much they can get into their bank account and how long they wait?
Not sure about the amount of time between exchange and bank account, I think that is going to depend on each exchange.
You mean with one centralized authority you have to trust?
What are yields a product of with crypto? If not productivity of underlying assets, it must be speculation, which isn't sustainable. You eventually run out of greater fools.
The history of banking is replete with unsustainable arrangements involving the quest for yields deriving from speculative assets. Banking systems are continually expanding, exploding, and then expanding again. If we want to make the normal banking system competitive, it has to pay yields even though doing so means risk. The crypto explosion is best understood as a technologically enabled resumption of the usual cycle of banking despite the industrial west's attempt to suspend that cycle through extraordinary regulatory action.
Bitcoin is better in those unstable currency countries. The market will decide (has decided in some cases). So maybe inexorably bitcoin will be the reserve currency for a large portion of the planet. And at some point there will be a tipping point where it's going to be attractive enough to all other central banks.
It turns an everyday person worldwide into equals with central banks. That's pretty radical.
I'm not even trying to be super-negative here - after all, if it does become a lasting store of value, accepted as money in the long term, then early adopters will be holding something valuable. It could happen. But right now the hype is self-perpetuating.
As someone born in the EU (now living in South-East Asia) I am still excited about Bitcoin. Because I feel it's the only safe haven for my honestly earned money out of reach of governments and banks. I feel Bitcoin is a too important technology to fail, especially as the world will slowly move towards Central Bank Digital Currencies that will have the same problems as fiat right now.
I view inflation as something bad for society (a hidden tax and form of theft) and CBDCs will be inflationary currencies. I also don't like that governments and central banks will get even more control over people's lives once physical currencies are gone. If you behave bad through the eyes of governments or banks (e.g. using too much electricity, eat too much meat, work as a prostitute, etc...) they might be able to take restrict your earning potential or spending. That is not a world that I'd like to live in.
Because I believe in the long term Bitcoin will always go up, as it has done in the past. Especially if central banks keep printing money at high volume, which -at this point- seems unavoidable for the Fed & ECB.
I don't care too much for short term volatility. And as Bitcoin adoption grows, volatility should reduce anyways.
Secondly, people in the EU are also excited about bitcoin regardless of the fact that they have what you mentioned.
Um, no. I'm not used to that. My latest online German-bank-to-German-bank giro transfer took the usual two-to-three business days.
But right now, that market is fully open.