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Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

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Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#1

Post by pgesmm »

Dear all,

I am aksing myself if cryptocurrencies provide ANY "real-economic value" AT ALL! I would be glad if anybody could convince me of APPLICATIONS where cryptocurrencies provide any real-economic value.

My thoughts:

- By "real economic" value creation I consider eg the introduction of the "SEPA Instant Credit Transfer" schemes (pan-European credit transfers in - Q1. What is the benefit of using cryptocurrencies over such schemes? I see none. On the contrary, cryptocurrencies add an ADDITIONAL (and therefore, if not yielding a benefit, by definition unnecessary) LAYER.

- Q2. Why should cryptocurrencies exist at all? Every country already has its native currency. Why introduce another one? (In fact, why MULTIPLE ones?) Suppose you want to transfer USD-->EUR. Why transfer USD-->BTC-->EUR instead? This incurrs (i) 2 instead of 1 currency trafo risks and (ii) 2 trafo fees.

- Q3. "Smart contracts". All (democratic) countries have courts in place to settle legistlative disputes between two parties. What's wrong with this arrangement. Again, blockchain-based "smart contracts" would just an ADDITIONAL (unnecessary) LAYER.

Conclusions:

- ALL you need for the creation of future "real-economic value" is the INTERNET. Currencies are in place. Legislative institutions are in place. You just have to further digitize. There is no need to add additional (unnecessary) cryptocurrency layers.

Comments:

- I am not anti-crypto (owned quite a bit until I came to above conclusions, and definitiely consider it valuable at least from a academic perspective). I just can't see how "it is useful" beyond "speculation".

- I don't accept explanations like "Bitcoin is Gold 2.0", "Hedge against inflation" unless they are really founded. To me these sound just like made-up hype narratives.

Best regards

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#2

Post by wheresmycraisin »

In controversial-but-legal industries (think adult entertainment, gambling, cannabis), it can be difficult to get traditional banking and payment processing services that are taken for granted by more normal businesses. I've seen crypto used in this context for B2B transactions (paying for IT services).

Also, it's a decent option for international transfers. International wires are more expensive (even when compared to current BTC tx fees) and slow (2+ business days). And if either the sender or the recipients doesn't have a bank account are reduces to Western Union or similar, which is simple robbery. I don't know what SEPA Instant Transfer Credits are, but I suspect you need a bank account.

The original use case related to international transfers was remittances... ie, immigrants sending money home. In reality I suspects it's used much more often for getting money out of certain countries like China that have set limits on outgoing transfers.

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#4

Post by jonathan_oberg »

Consider an NFT with smart contract which apportions a percent of each future purchase to the original seller.

Now consider a stock issued by a company as the NFT.

With traditional stocks, the issuing company only obtains funds one time. All future value gains are captured by traders.

Finally, consider issuing stock that as NFT with the contract above.

In this model, as a stock rises in value, both the company and traders gain.

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#5

Post by moksly »

I don’t think blockchain has much real world value in a legal sense.

We’ve been running various pocs on it, with major and minor suppliers, crypto-people? (not sure what to call those techie/artist/idealists or what they call themselves) and the universities for the better part of two decades now in the European public sector. We’ve never been capable of finding a reason to use it. I do get the argument about stuff like land ownership in more corrupt countries, but you it still sort of turns into an utopian dream, because no-one in those regimes really care if you’re right. All the proof in the world doesn’t stop people with guns from taking your positions.

I think Maersk and it’s containershipping business, and it’s blockchain based proof of container authenticity is one of the few examples where the technology actually works better than anything else. And that’s mainly because Maersk itself is big enough, and has big enough legal support, to refuse containers that are tampered with. Sort of like the corrupt government situation, but inverse.

For finance it has no real value for legal purposes, again because trust is sort of worthless when your authorities aren’t with it. You can’t deny it’s “get rich quick” schemes of course, and it’s extremely valuable for white-washing money, dealing with black-Market goods and various forms of fraud. Which isn’t really value to dismiss, considering how big a GDP international crime has.

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#6

Post by breck »

Time is more valuable than gold. Crypto saves time. Some experiments to test for yourself and measure the time elapsed:

pay someone in a foreign country. Do it again except at 2am on a Sunday.

Wire someone some money. Now do the same outside bankings hours. Now do the same but try and do a test transaction first.

Try setting up a new company. Add a vesting clause. Now handle actual distribution of dividends. Measure the time and legal fees in the non crypto version.

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#7

Post by lottin »

jonathan_oberg wrote: post #4

Consider an NFT with smart contract which apportions a percent of each future purchase to the original seller. Now consider a stock issued by a company as the NFT. With traditional stocks, the issuing company only obtains funds one time. All future value gains are captured by traders. Finally, consider issuing stock that as NFT with the contract above. In this model, as a stock rises in value, both the company and tr…

The company can buy its own stock and benefit if it rises in value. There is nothing to gain from using a smart contract to achieve the same result except in a more convoluted, less transparent fashion.
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