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Why I’m Cryptophobic

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81–90 of 455 posts

Re: Why I’m Cryptophobic

#81
This is really long and I gave it my best shot, but from the onset it's intellectually dishonest.

Anarcho =/= "centralized authority is corrupt and evil"

He has redefined anarchism (no authority) to suit his needs and attached the negative connotation in his defining characteristics.

The paradigm, which he has missed, is that the blockchain IS the "state". The authority of the system is derived from its working mechanism and therefore does not require outside governance.

Citing oppososition from leftist progressives as surprising....? The group that demands the most compliance to ideaology and greatest support for expanding federal government? This isn't difficult mental exercise or requiring some contortion to find plausible. Their opinion is the obvious conclusion.

I find here further evidence that VC is a bunch of wealthy hacks hiring their smart friends to wax knowledgeable to the rest of us, lower cretins.

Re: Why I’m Cryptophobic

#82

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, but having it is a hedge for the contingency of finding yourself in a situation where you can only do a transaction in gold, and then it can be life-saving (bribing your way out of a European country in 1944, etc.)

The reason people believe gold will retain meaningful value in a situation where nothing else does is thousands of years of history where it did work out like that. It's debatable (to say the least) whether Bitcoin with its mere twelve years of history and inherent dependency on easily disrupted digital networks could have the same properties.

Re: Why I’m Cryptophobic

#83

Earlier quoted context omitted.

So scarcity pays no role in value? Is the Mona Lisa not valuable? If money is printed it doesn't lose value? Why would Bitcoin collapse if it was used at "any" scale? Low max transactions per second? It is used by some people (even if not many) to pay for real things as well as wages! Are you saying an "economic" transaction has to be a commodity or taxes? I think any specific currency is valuable because people beli…

>So scarcity pays no role in value? Is the Mona Lisa not valuable? You're mixing up things. I can draw a one-off picture, that doesn't make the drawing valuable (sadly. If you want to buy my paintings, hmu). The value needs to be attributed by a shared denominator, which for the example of Mona Lisa is cultural prestige. Crypto has zero inherent cultural prestige, it's only value lies in social attribution. Wallets o…

NFTs = attempted cultural prestige for crypto?

Re: Why I’m Cryptophobic

#84
That article is a whole lot of words where it never really becomes very clear what the big "fear" is about, until we finally arrive at this:

"A feudal system in which the masses are duped into farming the lands of their crypto overlords."

Sounds quite a lot like our current system, but I digress. This fearful scenario requires the so-called hyperbitcoinization scenario where all of the world's wealth will be absorbed by Bitcoin (or other crypto). A market cap of 100T or more.

Which will never happen. It's easily suppressed by regulation. Most of the current elite won't allow it, and the people themselves, whom are already in the mood for protests, surely aren't going to sit by and end up dirt poor because they missed crypto.

As for crypto being libertarian, not really. Most are in it because it's a "number go up" technology, in good times that is. There's a small minority of loud mouths whom see it as a religion, but the vast majority are pragmatists, or plain gamblers.

Even if you consider the die-hard position, the so-called "anarcho libertarian", the author makes it out to be as if they are the devil themselves. All they say is that money should have controlled inflation and that there's freedom of transaction. I guess that's an extreme right wing position now? How very scary. It's pretty much how the 80s cash-based society was, except for the inflation part.

The biggest gap in these kind of "crypto scary" articles is that they fail to sympathize with the root cause. There's claims like "well, our current system may not be perfect, but at least it's democratic and accountable".

That sounds nice, but it doesn't mean anything. Young people experience one financial hardship after the other and grow up living in a monetary and economic system that is plain broken.

Where exactly can you "vote" on the 2008 crash, aggressive monetary expansion, zero interest rates on savings, 10% inflation? None of these things are democratic, they are hollow words.

Does crypto solve these problems? Probably not, but the above backdrop explains the appeal. In a system that doesn't work at all, why not throw the little you have in crypto? There's the potential to win big, and if instead you lose it all...it wasn't that much to begin with anyway.

If we'd have a sound monetary and economical system, that ensures a middle class existence and reasonable wealth for all, one that doesn't boom and bust all the time, one that preserves purchase power and savings, one that enables upwards mobility and the building up of assets, if we'd have all of that and in a stable sense...yes, then crypto has no use case or appeal. But we don't have any of that.

Own the failing of the current system. The status quo is completely broken.

Re: Why I’m Cryptophobic

#85

Earlier quoted context omitted.

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.

> economies can crash. Gold can not…

A glance at the gold prices and economies of the 19th century show that in fact the gold price certainly can crash due to gold strikes.

In addition, the stock of the planet’s gold is negligible compared to the global economy (the hard to quantify set of transactions that people do with each other) so by definition can only operate at the margins. If the world crashes so far that gold is a meaningful proportion, will there be much to transact at all?

Re: Why I’m Cryptophobic

#86
post #50
post #31

Earlier quoted context omitted.

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.

Genuinely curious here: has anyone actually proposed making family helping with childcare illegal (or perhaps taxed?) Even if it’s just an economist weirdo I’d be curious to see what the argument is there

The exceptions in the rules here for example are almost certainly directly constructed by Congress or anger from Congress and not particularly consistent with how the IRS expands laws by expanding existing theories if left alone:

https://www.irs.gov/businesses/small-businesses-self-employe...

Re: Why I’m Cryptophobic

#87
> The world has never seen an economic phenomenon like crypto. There is no historical analogous technology trend or investment craze that comes close to capturing the sustained and frenzied momentum of crypto that has engulfed so many and that will continue to do.

Never say never. Greed and speculation have a long and robust history. This crypto speculation and greed reminds of of the price of tulips. [1] During that craze a single tulip bulb could purchase a mansion.

[1] https://www.investopedia.com/terms/d/dutch_tulip_bulb_market...

Re: Why I’m Cryptophobic

#88
As to whether or not Crypto becomes a legitimate form of currency is neither here nor there, but in its current history it has (seemingly - I am not an economic historian) mirrored the Dutch tulip trade of the 1600's in many ways:

https://www.investopedia.com/terms/d/dutch_tulip_bulb_market...

How Crypto comes out on the other end remains to be seen, but there can probably be some technologies that can be salvaged in legal and shipping contracts, for sure. As far as digital currency and items goes, in games and life, that remains to be seen... proof of work currency will probably die, if I had to guess though.

Re: Why I’m Cryptophobic

#89
post #31

Earlier quoted context omitted.

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.

I don't get your point or you don't get mine. The individual individual's incentives are to have benefits without them being measurable income so Tax being about dollars makes dollars less desirable without many more actions from the state to force dollar measurable transactions.

Re: Why I’m Cryptophobic

#90
post #78

> too high maintenance to be a store of value like gold Really? because the price/value flutuates too much? How is storing 1B dollars in gold lower maintenance than storing 1B dollars in BTC or other high-liquidity crypto?

Maybe the author thinks it is easier to steal or harder to secure bitcoin than gold. I think it is sort of nuanced and could go either way, but I would agree that bitcoin is easier to store: especially with a trusted multisig setup.

Bitcoin owners have a lot of cheap security options based on their spending habits risk model.

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