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Comment by scottiebarnes | Hacker News Reader

> The idea that sophisticated investors have been putting their money into USD and need crypto people to explain inflation to them is ridiculous.

"Sophisticated investors" never had access to an asset whose supply was predictable (resistant to debasement), but also decentralized and permissionless to participate in. "Sophisticated investors" should probably know their monetary history, including why gold evolved as a world standard until Bretton Woods. And the types of money societies used before that.

> It is equally ridiculous that crypto people think that having a fixed supply of something makes it valuable. Oceanfront property in Miami is also limited, but crypto people are not pumping that because they are not invested in Miami oceanfront property.

Not sure what you mean, the lead up to 2008 was a pretty interesting time for real estate developers, why would crypto people be talking about condos?

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Sophisticated investors generally do not want "decentralized and permissionless" assets. They want government and legal protections.

Maybe you thing they are wrong for wanting that, because maybe you think the government is a threat to their wealth, and that is fine to have that opinion but the market for "decentralized and permissionless" isn't very big, which is why you don't see much money going into crypto anymore.

No, I understand why investors want legal guarantees. Actually, the endorsement and legal guidelines by the government for crypto would send its price soaring.

Being decentralized means no single party controls it, and thusly no single party can debase it or prevent its distribution. You need to understand why gold is still used as a store of value, and the role of government bonds as safe havens in the modern economy.

You have trust in a system because it works (for you) now, but you're not looking far enough into the future, and you're not weighting risk appropriately.

Crypto isn't just about sending money or making money. This is a completely new "thing", and part of the way its used is redefining what money actually is, based on programmatic protocols, consensus algorithms, etc.

This is exactly what I was talking about earlier in the thread. Crypto people bring up gold out of no where. I have never invested in gold. You are projecting the idea that I don't understand why USD and Gold are bad investments.

Why does gold have a $13tr USD market cap?

Why do governments hoard billions of dollars of gold bars in military protected bunkers?

Does it have something to do with store of value, and difficulty in debasing gold?

Yes some people like to buy gold because it seems like it may hold its value to those people. That is not a new concept that crypto invented. People bought Baseball Cards and Bennie Babies long before crypto in the hopes that those items would hold up in value.

So, I think you understand computers really well. I think you probably have a good enough understanding of investing, economics.

What I think you're missing the understanding of what money is, and the history of money. This is why gold gets brought up.

In the last some thousand years gold evolved as a world standard for trade. Why? It had some good properties; physically tough and lasting, common enough for people to find / rare enough to be difficult to debase (holds value), you can melt it and shape it (divisible), etc. Gold permeated all societies because it was the "winner" of precious metal monies, and good technology tends to spread, giving it network effects.

Your US dollars were originally just paper notes promising redemption for gold at your bank. We traded those notes around because we had enough trust in a system now for it to be convenient for us.

At some point, governments decided it wanted to they wanted more control over money/economy, and essentially forced a fiat standard on the population. This is the great monetary experiment we are living now.

https://en.wikipedia.org/wiki/Executive_Order_6102 https://en.wikipedia.org/wiki/Bretton_Woods_system

If you can contextualize what money is, the history of money dating back thousands of years, then you can start to see how crypto has a lot of advantages over metal money, as well as fiat money.

The most important money throughout history and still today is debt. "Debt the first 5000 years" is a good book on the topic. A shorter form explanation that is pretty good is "The DEBT Cycle Explained By Ray Dalio" on YouTube

Again I'm still not sure why you are trying to convince me that USD is a bad investment. I already said it was at the beginning of this thread.

Good, then you're on the path to figuring out what a better form of money could be.

Not really, I'm not looking for a new medium of exchange.

>> Being decentralized means no single party controls it

I suggest you have a look at how many people are allowed to merge bitcoins PRs in github

Its true, any specific open source project will have a limited and influential contributor base. But the fact that its open source code also allows it to be fluid and dynamic; ie. you and anyone who has different ideas about the direction of said project can build their own forks. You can convince people to support your network.

And then your network will compete with all the other open networks and protocols. And may the better ones win.

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