On anti-crypto toxicity • Hacker News Board

Re: On anti-crypto toxicity

#631

Post by imtringued » Wed, Apr 20, 2022, 7:57 PM UTC

LargeWu wrote: post #461

scottLobster wrote: post #412

Earlier quoted context omitted.

Bitcoin will only be "sound money" when I can pay my taxes in it. Or at least pay for my oil change. Sure it's artificially limited in quantity. Great! Doesn't make it money. It's a commodity like any other.

In addition to that I would add it needs to be a real store of value. Over any moderate timescale (a few years, say), it should reasonably maintain its value over that period. Swings of 40% purchasing power are unacceptable for a useful currency. Sure, bitcoin maximalists love to point out that if you bought it a year ago, it's up XXX%. But what if I bought near its high value? Not so good a proposition then.

Please stop with the money illusion. Numbers on a balance sheet don't store anything. People do. Companies do. Governments do. Agreements between those sectors are needed to store value. Real value is stored in the warehouse, in the sewer pipes and roads, in the heads of the government officials and so on.

Re: On anti-crypto toxicity

#632

Post by imtringued » Wed, Apr 20, 2022, 8:01 PM UTC

pjc50 wrote: post #530

n_io wrote: post #484

Earlier quoted context omitted.

Is the money in your bank account a real store of value? Do you not notice what’s been happening to it at an accelerated pace over the last 30 years? I’m not arguing for bitcoin either way. But I implore you to take a hard look at your definition of real value in a system with inherent inflation that forces you to speculate in order to preserve any “real value.”

I feel that the value of my bank account has been far less relevant than (a) my salary and (b) my mortgage. And I suppose my pension, but since that's a government tax exempt deferred income mechanism it's not "mine" in quite the same way. It always feels strange talking to people for whom the hoard of cash is the important bit. For many people it would be far more useful to stabilize house prices - which are affecte…

I am honestly surprised that so many people care about what they earned in the past and did not spent, aka the portion of money they need the least, instead of what they are going to earn over the course of their life.

Even pensioners are still dependent on a young population that is earning/producing.

Re: On anti-crypto toxicity

#633

Post by imtringued » Wed, Apr 20, 2022, 8:07 PM UTC

reedjosh wrote: post #548

pjc50 wrote: post #530

Earlier quoted context omitted.

I feel that the value of my bank account has been far less relevant than (a) my salary and (b) my mortgage. And I suppose my pension, but since that's a government tax exempt deferred income mechanism it's not "mine" in quite the same way. It always feels strange talking to people for whom the hoard of cash is the important bit. For many people it would be far more useful to stabilize house prices - which are affecte…

I think this is because the hoard of cash is obviously useless today due to inflationary pressures. Today you get a loan (if you can) to start a business. It used to be you saved to start a business. But today savings is literally penalized. This debt based system makes you depend upon it. I wouldn't need a home loan (or at least not such a large one) if the government didn't subsidize loans and cause inflation.

>I wouldn't need a home loan (or at least not such a large one) if the government didn't subsidize loans and cause inflation.

You are mixing up money and land. Those are completely different topics. You need a land value tax for land. Your monthly payments are going to be limited by your salary. A higher interest rate means the bank takes a bigger cut. You're spending the same amount of money either way. A higher income would help you more.

>It used to be you saved to start a business. But today savings is literally penalized.

You are saying this, while savings are at an all time high. The money supply is growing significantly faster than inflation. If anything, we are pandering to savers way too much. What people don't seem to understand is that the rich save way way more than anyone else so increasing overall savings doesn't matter for the vast majority of people.

Also, let me tell you something. Let's say you visit your family and your parents make you food. Would it be reasonable to tell them that you want to make your own food? It makes no sense, your parents already made food. Just take it. Don't pile up more food that nobody wants.

It's the same with money. The rich have saved such an incredible amount of money, that there is literally no point in saving your own money.

Re: On anti-crypto toxicity

#634

Post by imtringued » Wed, Apr 20, 2022, 8:19 PM UTC

reedjosh wrote: post #518

JumpCrisscross wrote: post #513

Earlier quoted context omitted.

> inflation is 8.5%, and you're holding an ounce of gold, then that gold raises by 8.5% in kind Gold is volatile in real terms [1]. If inflation is 8.5%, your gold might be worth 10% more, 100% more or 90% less. [1] https://goldprice.org/inflation-adjusted-gold-price.html

That isn't the point. In fact you're basically illustrating my point. Without taking risk, you will lose the value of your money. If you had some perfect asset (not gold since the volatility distracts you) that increased in dollars exactly as much as inflation, then you would still lose value to taxation even though you only gained as much as inflation. In the real world, yes, no perfect asset like that exists, so it…

Would you be willing to pay a demurrage fee on cash equivalent to inflation if it meant no inflation in the unit of account? The difference is small but important. Such a currency wouldn't lie to you. The money illusion would be gone. You can plan decades ahead. You know what the negative interest rate is going to be. Loaning out the currency avoids the demurrage fee on cash. So a 0% loan would maintain your savings.

Why doesn't this happen? Two reasons, people have loss aversion so they prefer being lied to through the money illusion. They get to blame you when the truth is that they are at fault. If they preferred taking the loss they wouldn't have to find a scapegoat. The other reason is that inflation has an uneven impact on the economy. Some gain and some lose and many people want to be winners or at least for there to be the possibility of winning, even if it is a detriment to society overall.

Re: On anti-crypto toxicity

#635

Post by djur » Wed, Apr 20, 2022, 8:21 PM UTC

mr_spothawk wrote: post #537

djur wrote: post #525

Earlier quoted context omitted.

You can use it to pay taxes, which means you can live, work, and do business in a particular country.

Do i understand correctly, then, that your point is: "The fundamental value of fiat currency is its capacity to pay taxes to a regional entity?"

The fundamental value of fiat currency is that it is effectively a share of the productivity of a particular economy. The underlying driver of that value is that debts are denominated in and payable with the currency, and the underlying driver of that is that the government levies taxes.

Re: On anti-crypto toxicity

#636

Post by przeor » Wed, Apr 20, 2022, 8:24 PM UTC

loup-vaillant wrote: post #564

przeor wrote: post #528

Earlier quoted context omitted.

Social Security at least in Poland, also is a Ponzi-like scheme. The difference is that to crypto you arent forced to participate in in opposit to govt backed schemes.

Err… can you explain in more detail how social security works in Poland, and how it is pyramidal, or at least multi-level?

A friend with nickname "G3rn0ti" from Germany explained in the longer comment what I had on mind.

I am not sure how it works in USA, but in Poland it's similar scheme as in Germany.

Pure Ponzi-like scheme, but if you decline to participate in it, then you go to fail for avoiding it.

Anyway, there are many more people who can join the crypto trend than polish Social Security system. Growth trajectory is downward, and only printing more many can save it from collapsing.

Re: On anti-crypto toxicity

#637

Post by throwawaymanbot » Wed, Apr 20, 2022, 8:26 PM UTC

No post body was provided.

Re: On anti-crypto toxicity

#638

Post by imtringued » Wed, Apr 20, 2022, 8:28 PM UTC

Aicy wrote: post #437

scottLobster wrote: post #412

Earlier quoted context omitted.

Bitcoin will only be "sound money" when I can pay my taxes in it. Or at least pay for my oil change. Sure it's artificially limited in quantity. Great! Doesn't make it money. It's a commodity like any other.

This was fhe promise of the gold standard before the world wars. The gold standard would force governments to be financially disciplined, right? Wrong, as soon as governments needed to drop the gold standard they did it. Why wouldn't they do the same with the bitcoin standard?

Why does the government need to drop the gold standard? Why does it happen so many times? I am under the impression that it is the gold standard that is flawed. After all, it didn't fail for a lack of trying. It was adopted and abandoned so many times.

What surprises me is that people think that the problem is evil/incompetent governments mismanaging the currency. Wouldn't it be more productive to think of reasons why such mismanagement is inevitable instead of just sweeping it under the rug? Greece did austerity and it didn't work. If Greece hadn't done austerity, it could have gotten a few more years of 5% growth. Austerity ended up increasing indebtedness instead of reducing it by massively reducing the GDP of Greece.

It's only rational to "mismanage" your economy away from such a financial crisis. The real question should be, why is growth required every single year? Why can't we just stand still for a year and then pick up growth again?

In my opinion it is quite simple. Savings and debts must equal in the global economy. So if the government introduces a debt brake, the private sector must reduce the amount of savings it holds. If those savings are held as cash, the government can't do anything about it. It can't just recall the bank notes. So debt can't go down. If it does anyway, then the money that is currency circulating, moving around from person to person is saved as cash until the amount of money that is actively circulating shrinks so much that daily transactions can't be made. That is what recessions are. A sudden malfunction in the medium of exchange function of money.

Re: On anti-crypto toxicity

#639

Post by imtringued » Wed, Apr 20, 2022, 8:34 PM UTC

snapcaster wrote: post #365

tablespoon wrote: post #321

Earlier quoted context omitted.

> Problem is that this democracy/central bank is not stable in every country. So crypto provides real "internet money", with all benefits and drawbacks. Except that, from a practical perspective, if you live in a country without a stable "democracy/central bank," using fiat from a stable country (e.g. dollars or euros) is a better solution than cryptocurrency in pretty much all cases. AFAIK, cryptocurrency isn't in p…

Well on your last point it does. "Money should be inflationary" is a "weird ideological monetary policy idea" it's just one that you agree with?

Deflation implies that the medium of exchange function of money has malfunctioned. You can't use money both as a medium of exchange and a store of value at the same time. It just doesn't work.

Inflation ruins the store of value function of money, but a little inflation isn't a bad tradeoff if the medium of exchange function of money keeps working.

The reason for this bias is that our society defines itself through a high degree of the division of labor. If money stops flowing, the division of labor stops and without the division of labor we are going straight back to the stone age (hyperbole). This is why economic recessions and depressions are feared more than economic booms.

Re: On anti-crypto toxicity

#640

Post by rglullis » Wed, Apr 20, 2022, 8:53 PM UTC

dmitriid wrote: post #628

rglullis wrote: post #542

Earlier quoted context omitted.

Visicalc was not free software. Unix is from the 70's, but Linux 1.0 is from 1994. The point is not just in having an application, the point is in having an application created under the new paradigm.

> Visicalc was not free software... but Linux 1.0 is from 1994. Goalposts: shifted. The shift itself is also extremely funny because web3's entire premise is: "you pay for everything" > The point is not just in having an application, the point is in having an application created under the new paradigm. So, where are they? Where's web3's VisiCalc (1979), emacs (1976), vi (1976)? Douglas Engelbart's Mother of All Demos…

> Goalposts: shifted.

Not at all. It was you and OP who asked for some kind of "killer app" from web3 as a way to justify its existence. My response is to say that this is an absurd ask.

Not only is absurd, it already exists, you just prefer to ignore it. I may agree that Bitcoin as a currency is a failed experiment, there is no denying that the possibility of sending value across borders is the killer app already.

"Oh, but BTC is volatile!". Yes, but I could in 2011 send money from the US to Brazil instantly without going through any international bank (buy in US exchange with USD, sell it in Brazilian exchanges in BRL, wire from the exchange to my brazilian bank) with minimal exposure to BTC volatility and at a lower cost than the fees charged by the banks.

But I am sure you want to ignore that, or find a reason to say that "it doesn't count". I can not fight your own prejudices.