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codegeek

Why is crypto still a thing ? I may be dumb but just don't get it.

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My wife has a saying "If you want to know why a thing is a thing, the reason is money"

Either poor(ish) people trying to get rich, or rich people trying to get richer.

Crypto literally cannot be stopped, turned off, banned, or otherwise censored. That is its entire purpose and design.

Whether that is good or bad is a different question.

(Yes, crypto can be regulated. Of course it can. The point is that it will continue to exist irrespective of regulation.)

As I understand it, the regulation is largely on how it interacts with a country's own currency or banking system, which indicates to me that users need to do this in order to have real-world use. You can have all the virtual currencies you like online and as far as I'm aware no government cares, the taxman isn't looking at your millions of gold in WoW or Eve-online ISK, but they would if it's used the same way crypto currencies have been in their jurisdictions.

It can certainly be banned, prohibited, and censored to an extent (current BTC gossip protocol is unencrypted via TCP, if I'm not mistaken), plus the on/off-ramps can be outlawed.

"You can't regulate it away"

"Of course, you can regulate it away."

Money laundering, ransomware, speculation/gambling, purchasing illegal goods and services

I coincidentally just came to HN looking for this exact answer following the headlines about BTC soaring. [1]

The use cases for it I see are:

1. Cheaply send large payments without having to pay a bank fee (instead you pay btc fees plus conversion to and from fiat fees).

2. Anonymously transfer money if using a washing service (illegal to offer one in the US) or if you spend rawly mined coins.

IMO, crypto is a US gov invention that was pushed to speculative theater to give threat actors huge incentive to break sha256/512 publically, as the best use of such tech atm is to steal massive amounts of money. It therefore acts as a canary for when someone finally does figure out how to crack it or easily solve prime factorization.

[1] https://www.zerohedge.com/crypto/bitcoin-soars-post-etf-laun...

weird how you discount the obvious use case espoused by the bitcoin community: an absolutely scarce digital commodity secured through energy itself

I have a hard time understanding what the value of that is in its pure form. What is the value of a scare digital commodity in and of itself?

apparently the value is $47k and counting

People need a way to store money. Sometimes, the government-approved ways of doing that have severe problems.

Gold would be worth much less than it actually is if people weren't using it to store money. It is easier to store bitcoin than to store gold. (E.g., bitcoin is easier to hide from thieves than gold is.)

I agree with both your statements. There is a tradeoff between friction of a nonapproved system and having your money in it. The US has tried to KYC as much as possible, and the psuedo anonymous addresses have mostly been linked to meatspace owners, so I have trouble completely believing that the currency is completely free of gov intervention.

Any sufficiently large state actor can simply buy a zero day exploit to try and remotely get into a target computer and then steal the pk of the wallet. There are mitigation techniques such as multiparty signing and hardware based keys/wallets, but nothing is perfect. And the most secured active users of it are likely already on gov radar.

Bitcoin doesn't seem particularly useful for evading government controls in the US or the EU, but it does in much of the rest of the world, where the governments are typically incapable of something like the US anti-money-laundering regime. A sensible reason for a US investor to invest in bitcoin would be to sell it in the future for more than he paid for it to some saver in some non-US non-EU country, and most US investors would have no particularly strong motive to hide such an investment from the US government.

Very interesting perspective. Thank you.

What is the value of physical currency, or a balance in a digital system? It's all supply and demand.

When physical currency used to be backed by gold reserves, then it could be argued that gold itself has material value, but nowadays it's all fairy dust[1].

[1]: https://www.youtube.com/watch?v=IiTfnpgNkmI

Agreed that gold's value was largely increased it's demand as a reserve currency, but it does have stand alone value. Jewelry, conductivity, etc. all contribute to a baseline market for it.

To me, store of value commodities are interesting when unpegged from a mainstream currency in that they provide no dividends. Their ownly roi is via speculation of the masses. Castles in the skies. That is where I have a hard time underatanding the value preposition of crypto.

Because most of it is held by a small number of people who have a vested interest?

having something like zelle on your phone makes it hard to understand.

I'd recommend reading "Check Your Financial Privilege".

contrarianism is a very powerful and often understated force within human culture

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