> Crypto is a zero sum game
How come? The same network effects that work for social networks work here, as more people and businesses use crypto, it's value proposition raises quadratically.
How come? The same network effects that work for social networks work here, as more people and businesses use crypto, it's value proposition raises quadratically.
For 2020 in Mexico alone from Bitso: "Frida Vargas, head of business sevelopment at Bitso, told CoinDesk the company processed about $1.2 billion in remittances between the U.S. to Mexico in 2020. “Our main users are remittance companies, who use crypto technology to improve and make the remittance sending and collecting process easier,” she said."[1]
In Argentina: "Cryptocurrency penetration was at 12% in Argentina, vs. 29% credit card penetration, indicating impressive crypto uptake in that country"[2]
"There is high interest in receiving crypto remittances in various LatAm markets, such as Peru (33%), Argentina (19%), Mexico (15%), and Brazil (8%)"[2]
There is also chainalysis[3] data for small transfers in LatAm showing 1.5M monthly transfers at a total value of 300M monthly volume. https://pbs.twimg.com/media/FPCfq-LWUAEctzT?format=jpg&name=...
[1] https://www.yahoo.com/video/mexican-remittances-continent-la... [2] https://americasmi.com/pdfs_landings/220211_The_cryptocurren... [3] Page 42: https://go.chainalysis.com/rs/503-FAP-074/images/Geography-o...
bahahaha. the story never changes but bitcoin is always the proletariat fighting against the powers that be. Don't worry, El Salvador is accepting it as legal tender!
I agree. But I genuinely believe "bagholders" will be better off compared to saving in their own national currency - provided they manage their risk correctly.
This is because national currencies keep inflating, so even a decreasing demand might maintain the same price, given the supply inflation difference.
Since the pandemic, BTC has acted like the S&P500 with 4x leverage, but no margin calls (loss limited to what you invested).
https://www.macrotrends.net/1333/historical-gold-prices-100-...
Cryptocurrencies do not produce anything and any actual transactions done using them (as opposed to speculative trading) are a rounding error even after more than a decade. There is no mechanism for them to be anything other than a complicated greater fool scam because ultimately the only way you can make money from them is if you can sell them to someone else for more money than you bought them for -- which is what a greater fool scam is.
Definitely worse than most national currencies outside of select countries.
But I think leverage is insane with the volatility of the cryptocurrency market.
People and businesses are not buying crypto to spend on things. They are buying it to trade it back and forth. No value is being created except for the fees exchanges can charge for processing transactions, which is a markup on the fees already charged by miners.
A large percentage of Americans were onboarded to investing via brokerages in the 70s-00s. Did that make day trading any less zero-sum than before?
It is advantageous to Bitcoin. US M2 money supply grew 8.04% in the past year [0], while Bitcoin's grew ~1.75% [1].
Yes, demand has its 80% ups and downs, but each crash was to a level higher than the previous.
Good currencies are not stores of value. They are means of exchange. And crypto is a horrible means of exchange.
It may have some use as a store of value (i.e. digital gold), but it's not clear to me why I would store my value in digital gold, which will require people to altruistically spend money on energy after 2040 or so when no more Bitcoins are generated for miners (in practice much earlier as each mined BTC gets increasingly expensive), to maintain the blockchain, as opposed to investing in real gold, which can literally sit under my mattress and not require a network of planet burning computers for it to not vanish.
The fact that they thought M2 and its equivalents across the world could rise faster than inflation in perpetuity is just silly in retrospect. They're the same thing in the long run. It was used to get around the lack of ability to enact fiscal policy and to make old people rich, and you bought it, hook line and sinker.
Computing prices have been going down in the past half-century. Yet it's full of computers around us now. And the biggest companies are computing-related. I wonder why.
So, the assertion that crypto as a whole is zero sum hinges on the assumption that for the vast majority of people, the utility of crypto comes from capital gains (buying and selling for a higher price), rather than, say, the utility of buying drugs or paying off ransomware.
You may say that, no, hypothetically you are a privacy-enthusiast and like monero as a hobby money, but in reality most rational actors on Monero as evading taxes and using DNMs.
(I would also argue that Monero is the only crypto that is more currency than any other crypto today bc of this, but it's not a selling point IMO)
A simple example: you go to a store and buy something with BTC. All good so far.
But the store owner can see on the public blockchain that the wallet you paid with contains a lot of Bitcoin, and that you were in fact a crypto multi-millionaire. And he and his buddies will now target you in a nightly visit where they'll torture you and your family until you give them your coins.
Or another example: you're the business owner but the customer pays with tainted bitcoins, coming from child trafficking. Now your Coinbase account will be frozen if you send the coins there, or you'll be unable to use them in other ways because they're tainted.
The ability to transact privately is for your personal safety and to be able to transact with other people without being branded a terrorist or pedophile and have to deal with those false accusations.
Again, your hypotheticals diverge from the reality.