Maybe the cryptocurrency sceptics on HN who live in stable western countries without any fear of their savings disappearing overnight can now understand why it is a valuable invention.
I feel like that addresses the Ruble.
>but that’s a pretty unusual thing to happen.
Is the larger point. If you can magic 8 ball your country's future with all certainty, then yes, it is a good idea. Otherwise it's just speculative investment with your actual savings?
Edit: previously I used the example USDC which you can argue can be controlled by Coinbase.
"They" didn't solve that problem, it is not the solution to all problems in finances. So, whats your point? Vaccines does not prevent 100% of infections, does that means that they are worthless?
Nirvana fallacy: https://en.wikipedia.org/wiki/Nirvana_fallacy
You said that the contract, i.e. the software, is immutable. This means that it can't be patched. If it can be patched it's not immutable, excepting semantic trickery like each version of the contract being immutable while what "the contract" points to can be changed in order to patch it.
I wanted to address that in the world of crypto there are stable assets pegged to some other FIAT if you want that.
Sorry if this becomes long but I need to explain my point of view. I live in a country that is not as authoritarian as Russia but is not a free economy like the US, people don't trust on FIAT and on banks because it had happened before that they took all our savings [1]. Even if this might seem like an isolated event, it happens every day. For example, if you work remote for a company abroad, the gov will exchange your USD on a wire transfer for the local currency and then not allow you to buy back USD. Our currency had a 60% of inflation last year.
I don't like the speculative aspect of crypto currencies, its volatility creeps me out. I wouldn't want to put my life saving on this. But I can see its value to circumvent corrupt governments and to make a free world. I do believe in humanity, the Putins are an exception and when you give people the opportunity to collaborate, most of them will choose to have a peaceful living.
Now, going back to your Turkish bonds vs DeFi. The difference is you can't buy those anonymously and at any point the gov. or exchange. They actually pay that much because no one wants to buy them, primarly because they don't trust they are going to pay that much. In a way, you can think of DeFi protocols are immutable math functions [2].
[1]: https://en.wikipedia.org/wiki/Corralito [2]: https://en.wikipedia.org/wiki/Decentralized_finance
So, yeah we can call it black market but I like the term “free market”.
https://en.m.wikipedia.org/wiki/Argentine_currency_controls_...
This automatically creates a “black market” of USD where the price is whatever the people are willing to pay, in the end the free market finds its way.
It is a market where prices are self regulated by supply and demand, without coercion. It perfectly suits for the exchange of of FIATs (or crypto) between parties.
You can call it whatever you want, anyways.
I recommend “Free to Choose” from Friedman as starting point.
"In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority other than those interventions which are made to prohibit market coercions. Examples of such prohibited market coercions include: economic privilege, monopolies, and artificial scarcities."
Further, a market in which fraudsters can commit fraud with impunity is also not a free market but a dysfunctional market.
At any rate, the notion of free market is only vaguely defined, as it's not an important theoretical construct in economics.
As far as crypto-currency markets are concerned, these are not a single market, but many different markets, some of which are heavily regulated, so it's hard to argue that it's a free market.
The cicle which I am most familiar with, goes by like this: gov destroys private enterprise and free economy thru regulations and expropriations, unemployment goes up and people gets dependent on hand outs, the remaining jobs bears all the costs. Unemployed sees gov are they gods, they will kept voting for them forever, even if they live in complete missery, it is all they have.
They become a “cyst”, it is very hard to go back.
You might think that any country controls their money supply, that’s a fact. But can Biden for example, double the monetary base with his sole signature?
People in those countries could have great aspirations, to have a fair system, a working democracy, a better government and all that… but don’t forget they also need to live in the meanwhile, while fixing all those problems.
I’m not a user of crypto currently, but I see it as a way of shifting power. Similar to what the internet did for information.
crypto ain't it
A) "non-state currency"
B) currency that "rival state-backed ones"
C) "solves problems"
One could argue cryptocurrencies don't solve any problem (good luck convincing Russians and Argentinians, but anyway). But they are "non-state" and they "rival state-backed" currencies.
In the soviet era, there was a period of political persecution focused on people suspect of having gold or hard currencies. People would be held indefinitely, and subject to harsh torture, until they let go of their assets. Good if you have some, worse if you actually don't. See Aleksander Solzhenitzyn, somewhere near the end of the first volume. And of course, the people torturing were part of the same organization that brought up Vladimir Vladimirovich Putler.
Using the middle name (unlike finger) is a high praise in Russia, though.
There's no reason to believe that it can handle the kind of pressure the ruble is facing.
Trust between trade partners is one of the most important element of an economy but for ideological reasons crypto-currencies enthusiasts believe that should instead be delegated to a protocol. I think it's a fundamental mistake.
Not to mention crypto can help the wealthy targets skirt sanctions.
On balance, given that we are dealing with a war of aggression and loss of life, I'm grateful for these tools. And, even to the extent it causes some pain for the Russian people, that further erodes support for the regime's unjust campaign and turns up the heat on them.
IMHO the most interesting change they did is to become self-sufficient regarding their food production, and even net exporter of wheat, corn, and other cereals. They correctly identified that was a risk and made necessary changes to reduce it to the point where they can leverage their position against other actors.
I think its more likely Putin is having to deal with a complex internal financial crisis which could affect Russian national stability. Putin may have something personal to gain from this, but there are bigger problems afoot if Russia descends into chaos. Something, mostly likely financial in nature, has happened to trigger the invasion into Ukraine. Raw access to resources?
So, whether a small portion of economic value is locked up on chain (or not) is unlikely to be relevant at this point.
> Trust between trade partners is one of the most important element of an economy but for ideological reasons crypto-currencies enthusiasts believe that should instead be delegated to a protocol.
Trust (assets) shared between trade partners which is not on-chain can be more easily manipulated as needed in a perceived crisis. We can see the US backed sanctions against Russia's interest are not being applied to Russian fuel exports, but instead target the wealth holder's stored assets. That implies a desire for control over the decision making process itself.
Cryptocurrency based assets would be more resistant to being influenced in this way and would limit the ability to manipulate the wealth holders, but only if their assets were on-chain.
I don't see how cryptocurrency changes this much, given the trust in raw assets relies on physical control of the asset, not a protocol that defines (or limits) how the asset is controlled.
It is in everyone's best interest this crisis in Russia and adjacent regions is addressed. How it is addressed, philosophically, is the real debate here.
I think he believe parts of his rhetoric. Of course the majority of what he communicates is posturing and lies but we can see recurrent themes in his speeches and articles. My understanding is that he really sees Ukraine as part of the Great Russia empire he wants to build and saw an opportunity to take action following events in the Western world from the past decade or so: instability in the US before and during Trump, Brexit and other fragmentation of Europe, NATO seen as weak and useless, US switching its focus to Asia instead of Europe, the way US left Afghanistan, rise of US and European isolationism, etc.
Regarding the ideology driving the Kremlin you can see those two Wikipedia articles: - the book "Foundations of Geopolitics ": https://en.wikipedia.org/wiki/Foundations_of_Geopolitics
- its author and "philosopher" Aleksandr Dugin: https://en.wikipedia.org/wiki/Aleksandr_Dugin
Those people aren't just cynical crony capitalists who want to make money for themselves. They have a clear fascist view of the world, with an ideal based on a "natural order" of the strong dominating the weak and dreams of a lost glory of the past. They developed a historical, spiritual, and political view of the world that defines their culture as the one that should dominate.
In the last month I have watched my crypto holdings fluctuate by something like 50%. There is no way in hell I would use crypto as a store of value for anything I cared about under those conditions.
What you are saying would be similar to: there's no way I would use the financial system, look how the futures exchange is volatile!
Just keep it in cash, then, but you don't have to ditch the entire system because parts of it are volatile.
Sure the smart ones use a stablecoin. But what about everyone else?
I imagine it would be a lot more convenient to have some hard currency at hand when fleeing a conflict zone. One might need to bribe border guards at some remote location with unreliable (or non-existent) internet connection, to get to safety.
Both are quite valuable tools to defend oneself. They have different balances between risk, convenience, liquidity, anonymity.
Because that is essentially what has happened now with the SWIFT sanctions.
Cutting off internet from outside world is much more drastic measure, highly unlikely to happen for a prolonged period of time.
Even if it does happen, you can still use telephone lines to connect. [1] [2]
[1] https://www.dw.com/en/european-activists-offer-dial-up-inter...
[2] https://www.france24.com/en/20110201-speak-to-tweet-egypt-tw...