Hacker News Reader

Comment by Zpalmtree | Hacker News Reader

boggles my mind how many people can't see any value in programmatic money

Everybody sees the value in programmatic money.

Nobody sees the value in your programmatic money, which might as well be Canadian Tire Money or Emperor Norton Scrip.

When a government issues a digital currency in exchange for the right to live there, people will use it. But nobody wants any currency that you drew with crayons. Even if you somehow convinced some other tech bros that someone else will pay even more for it some day.

I see huge value in the idea. The problem is nobody has yet demonstrated a token that doesn't get taken over by speculators. When that happens it becomes useless as money.

And don't get me started about the "stablecoin" myth.

The funny thing is that because the traditional finance systems were grandfathered in no one cares that they had been taken over by speculators long ago. And lets not even get started on the fiat pre-mine that is fractional reserve banking giving chartered banks the ability to mint new M0 currency, and only chartered banks. Which pragmatically means that ~4000 corporations in the USA get all the newly created currency.

When the value of the USD spikes to the point that a single dollar represents a year's worth of work at minimum wage, maybe then you can criticize it as being "taken over by speculators" in the same way that Bitcoin was.

... that's already happened? Cents used to be the dollar in terms of purchasing power. Inflation of the US fiat currency reached bitcoin levels a half century ago.

Being taken over by speculators is an unfortunate inevitability of any market.

We wouldn't claim houses are useless because the housing market has been taken over by speculators, at least in my city.

Houses aren't money, and volatility in the housing market doesn't impact it's utility as shelter. And furthermore, the use of houses as a speculative vehicle is a huge problem that makes it very difficult for younger people to buy homes.

Houses are useless as money because their value keeps changing and they're worth too much indivisibly. But we don't even try to use houses to buy a pizza, so that's okay.

Digital money should be small enough to carry on your person, be divisible into small chunks, and its value should not wildly fluctuate from day to day. Bitcoin meets the first two of those criteria, but it violates the third. That makes it impossible to use Bitcoin to buy a pizza. (Although it did work for pizza for a brief time in the early days before its volatility became outrageous.)

You can buy a pizza with it, you just can't price a pizza in it. You can't build business model and then say, "if I change X BTC for my pizzas, I will be profitable," because a.) You can't anticipate the price and b.) Your obligations are priced in dollars (or whatever currency)

Reply on news.ycombinator.com