Why I’m Cryptophobic • Hacker News Board

Re: Why I’m Cryptophobic

#61

Post by wuliwong » Thu, Jun 30, 2022, 2:45 PM UTC

peyton wrote: post #5

mjburgess wrote: post #4

There needs to be some basic economics here.. Money has value because of the value of the economic transactions in which its conducted. Government-backed currencies are forced to have value in the sense they force people to use it for their taxes. The US, additionally, forces the world to use it for oil trades. Value is in those economic transactions. A currency is just a "liquifying" of that value, to make it easier…

I really don’t buy the old taxes-make-the-money-work chestnut. Far too many counterexamples.

To me, the stronger government intervention is taxing the use of cryptocurrencies (or pretty much anything except dollars in the US) when buying something with it. There is a capital gains tax event that happens if you buy something with BTC, for example. So you have to pay extra to use non-dollars for transactions but also a regular person's taxes would become extremely complicated if they used non-dollars for all their transactions.

Re: Why I’m Cryptophobic

#62

Post by cowtools » Thu, Jun 30, 2022, 2:45 PM UTC

hans1729 wrote: post #56

capableweb wrote: post #26

Earlier quoted context omitted.

> This is not the case for crypto No? You don't think the following statement is as true as the one you made? "If you have Bitcoin, you will find someone who is willing to exchange it for something else with material value in any city on the planet" My experience would tell me otherwise, but maybe I'm a outlier.

Scenario: a country-wide blackout occurs. You're haggling with local farmers for food. Which has value to them, bits on a hard drive or solid gold?

I agree with your point, but consider the following:

1: Cryptocurrencies can still operate over distributed mesh networks or sneaker-nets in a semi-doomsday scenario.

2: With gold, it is difficult to verify its authenticity vs some impostor alloy without the necessary tech/knowledge.

Edit: the bottom line is that in a doomsday scenario, people have little use for bitcoins or shiny yellow rocks.

Re: Why I’m Cryptophobic

#63

Post by bluetomcat » Thu, Jun 30, 2022, 2:48 PM UTC

yakak wrote: post #31

bluetomcat wrote: post #8

Earlier quoted context omitted.

Paying taxes in a given currency means that the government forces the use of that currency nation-wide. Without a central tax authority requiring that currency, groups of people could start exchanging, say, peanuts for the mutual exchange of goods and services. Since you can't pay your taxes in peanuts, you would want to hold national currency instead of peanuts.

I would want to exchange peanuts and consequently owe no taxes. That is why the US has very complicated rules to discourage bartering and gives every sign it would complicate and eventually outlaw quid-pro-quo family/friend arrangements for things like child and elder care if large and powerful groups of people weren't still extended family oriented.

> I would want to exchange peanuts and consequently owe no taxes.

This idea is at odds with the concept of the modern nation state. You can't have running state institutions and an army that, in theory, should provide some level of security of the state borders. Having many groups of people, each exchanging peanuts, beans or stones would lead to a decreased level of trust and no concept of national unity.

Re: Why I’m Cryptophobic

#64

Post by pclmulqdq » Thu, Jun 30, 2022, 2:48 PM UTC

waynecochran wrote: post #38

mjburgess wrote: post #4

There needs to be some basic economics here.. Money has value because of the value of the economic transactions in which its conducted. Government-backed currencies are forced to have value in the sense they force people to use it for their taxes. The US, additionally, forces the world to use it for oil trades. Value is in those economic transactions. A currency is just a "liquifying" of that value, to make it easier…

I don't follow the last statement. If a cryptocurrency was used for decentralized buying and selling, folks were not using it for speculation, and thus it became a stable currency would it not flourish?

This is why Monero is doing really well right now as a currency, but it has become a bit of a dirty word among crypto bros. For many people in cryptocurrency, the price action is the point. People are tired of saving and seeing inflation eat their savings. They want to get rich, and they believe that no investment lets them do it. That's why the Gamestop fiasco became such a phenomenon, and I think that is why Bitcoin is so volatile and why it is what it is.

In my opinion, there will need to be a great clearing out for cryptocurrencies and blockchain technologies to mature, and things will need to get very boring. The "clearing out" means $0 BTC, DOGE, ETH, LTC, etc. The "boring" part means things staying stable. Otherwise, it doesn't look like there is enough room for other cryptocurrencies (like SOL as an NFT/smart contract platform) to succeed in the market, and scams will be the only viable business models because they are fast.

Re: Why I’m Cryptophobic

#65

Post by lottin » Thu, Jun 30, 2022, 2:49 PM UTC

waynecochran wrote: post #38

mjburgess wrote: post #4

There needs to be some basic economics here.. Money has value because of the value of the economic transactions in which its conducted. Government-backed currencies are forced to have value in the sense they force people to use it for their taxes. The US, additionally, forces the world to use it for oil trades. Value is in those economic transactions. A currency is just a "liquifying" of that value, to make it easier…

I don't follow the last statement. If a cryptocurrency was used for decentralized buying and selling, folks were not using it for speculation, and thus it became a stable currency would it not flourish?

The demand for a currency fluctuates according to various factors, therefore if the supply remains fixed its price will not be stable.

Re: Why I’m Cryptophobic

#66

Post by hans1729 » Thu, Jun 30, 2022, 2:50 PM UTC

dcolkitt wrote: post #58

mjburgess wrote: post #4

There needs to be some basic economics here.. Money has value because of the value of the economic transactions in which its conducted. Government-backed currencies are forced to have value in the sense they force people to use it for their taxes. The US, additionally, forces the world to use it for oil trades. Value is in those economic transactions. A currency is just a "liquifying" of that value, to make it easier…

The continued existence of gold as a store of value (and to a lesser extent silver) contradicts this model. Very few economic transactions are denominated in gold, either as a medium of exchange or a unit of account. There is a small amount of industrial demand, but this is far too tiny to justify gold's gigantic market capitalization. Valued on industrial demand alone gold would maybe worth $100/oz, yet today it tra…

>Very few economic transactions are denominated in gold, either as a medium of exchange or a unit of account.

That doesn't mean that gold isn't a viable medium of exchange - it obviously is, just go to a market of your choice and trade it for goods. In fact, it's the single most viable medium of exchange, globally, since currencies are tied to economies, and economies can crash. Gold can not, thus is it valuable.

Re: Why I’m Cryptophobic

#67

Post by carapace » Thu, Jun 30, 2022, 2:50 PM UTC

mjburgess wrote: post #4

There needs to be some basic economics here.. Money has value because of the value of the economic transactions in which its conducted. Government-backed currencies are forced to have value in the sense they force people to use it for their taxes. The US, additionally, forces the world to use it for oil trades. Value is in those economic transactions. A currency is just a "liquifying" of that value, to make it easier…

Giordano Bruno said that whatever has the most value and the least cost of storage becomes money.

Re: Why I’m Cryptophobic

#68

Post by ooaa » Thu, Jun 30, 2022, 2:52 PM UTC

This article raised some very interesting points through comparing the movement to religion and the fact that the peoples wealth is affected makes it that much more potent.

I'm still optimistic because I think that the current way the world runs is not going to work in the long run. Something radical has to change or we will destroy the planet. I don't know if Bitcoin will play a role in this and if it's going to be positive or negative but things need to change.

I have two specific points in the articles that didn't make sense.

1. Bitcoin whales can only affect the price of Bitcoin. They have no power over Bitcoin itself.

2. The article also makes the point that Bitcoin is weakening local currencies (fiat) which doesn't make sense since inflation is mostly driven by money printing and other economic factors.

Re: Why I’m Cryptophobic

#69

Post by cowtools » Thu, Jun 30, 2022, 2:52 PM UTC

nathias wrote: post #17

mjburgess wrote: post #4

There needs to be some basic economics here.. Money has value because of the value of the economic transactions in which its conducted. Government-backed currencies are forced to have value in the sense they force people to use it for their taxes. The US, additionally, forces the world to use it for oil trades. Value is in those economic transactions. A currency is just a "liquifying" of that value, to make it easier…

ah yes, the "basic economics" that you just make up as you go ...

Rebut the parent comment

Re: Why I’m Cryptophobic

#70

Post by whatisweb3 » Thu, Jun 30, 2022, 2:54 PM UTC

avivo wrote: post #18

There is also a rebuttal article by the same fund: https://www.bvp.com/atlas/the-antidote-to-cryptophobia/ That said, I think Adam (the original article) is closer to being right. He doesn't even get into the thing that originally made me incredibly excited about the potential of blockchain tech—the way it lets one create a new sort of custom and irrevocable 'physics' for information and incentives. But the same irre…

I loosely agree with you but am a little more optimistic. I see centralized lenders and services like Celsius and 3AC collapsing and running off with money, or blocking withdrawals - this would not occur had the loans been made on-chain through smart contracts, and DeFi platforms like Aave are holding up just fine during this downturn. This is an example of a shift of power away from incumbents and toward the people en masse, should they choose to actually understand and use the decentralized blockchain.

> If we get something wrong, it may be impossible to change, unlike normal human systems.

It's not far fetched that blockchains will change as humans adapt to new challenges. An example is already happening: Eth is transitioning from PoW to PoS and moving to a layer two centric ecosystem to meet block space demand.

There are real concerns with adding functionality on top of the blockchain without understanding its immutability - like the ridiculous suggestion of putting twitter or a period tracking app on-chain.