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Why I’m Cryptophobic

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Re: Why I’m Cryptophobic

#91

Post by apocalypstyx »

hans1729 wrote: post #66
dcolkitt wrote: post #58

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, thus is it valuable.

The thing about money is that it is a technology. But unlike other technologies, such as an electric toothbrush, for instance, it has an additional quirk: without belief, it doesn't work. Regardless of whether or not I believe in electricity, an electric tooth brush turns on and off; if the participants in an economy don't have faith in the economy, the economy falters. Money's value lies in this belief, whether it is the belief that I can buy groceries or pay taxes. It is a faith that is a function of utility: there is the interdependence of the gods' delivering and my belief that they will; should the gods not deliver sufficiently, my faith wavers; likewise, if enough of the faith of the masses wavers, the gods fail to deliver.

Gold is like an old god: its faith has a lot of coinage. However, its rule is not necessarily omnipresent.

Scenario: we are in a post-nuclear apocalypse. I have a small trading post and a can of beans; you have a solid gold coin. Challenge: convince me why I should take the coin.

Re: Why I’m Cryptophobic

#92

Post by UnpossibleJim »

IncRnd wrote: post #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…

Great minds and all that, we seemingly posted this same article at the same time =)

Re: Why I’m Cryptophobic

#93

Post by upupandup »

IncRnd wrote: post #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…

You don't even need to go back that far: e-gold, liberty reserve.

Fun fact, bitcoin client had a poker lobby in it, and it was announced mere weeks after Liberty Reserve court ruling jailing its founder for 20 to life for money laundering.

Individual or groups behind bitcoin were watching that Liberty Reserve trial very very closely and e-gold/liberty reserve was very popular amongst the online poker industry ;)

There's many more interesting facts you can discover but I won't spoil them.

Re: Why I’m Cryptophobic

#94

Post by sixQuarks »

627467 wrote: 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?

Yeah, I stopped taking the author seriously after this ridiculous statement.

Re: Why I’m Cryptophobic

#95

Post by api »

AlexandrB wrote: post #74
api wrote: post #14

This is kind of a straw man, but I don't think he's wrong. The problem is that he's kind of straw manning what "libertarian" means in this context and by doing so he's landing a much weaker blow against crypto than he could. Libertarian, if words are to mean things, is roughly the view that the initiation of force should be extremely strictly limited. This includes the idea of small government since government has a…

> Force is anything that attempts to contravene the independent will of another human being. That can be done by whacking someone on the head, pointing a gun at them, or gaslighting and lying to them to the point that their judgement is deeply impaired. I find this definition of force somewhat counter to most libertarian positions I've seen. When it comes to employer/employee relationships, what is the need to eat ot…

There is no easy canned answer. If there were easy answers to questions like this the world would be way simpler. Yet I can't even imagine how you can have a free society without some respect for the honesty. Without that at the very least people will start taking the law into their own hands, which leads to collapse and the tyranny of the nearest person with a big stick.

Re: Why I’m Cryptophobic

#96

Post by neocognitronx »

"The world has never seen an economic phenomenon like crypto." - I'm not an expert but the whole state of crypto just looks like buying stocks before stock exchanges and market regulations were in place.

This comment is fueled by the prejudice that people just tend to speak about history without knowing it that well to prove a point. I might be wrong.

Re: Why I’m Cryptophobic

#97

Post by ludston »

cowtools wrote: post #62
hans1729 wrote: post #56

Earlier quoted context omitted.

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.

You can verify gold with a vessel of water, an already verified piece of gold and a set of scales. It's taught in story form to primary age children with the famous quote "Eureka I found it!"

Re: Why I’m Cryptophobic

#98

Post by syzygyhack »

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…

> But the same irrevocability is now what makes me deeply concerned.

Strange hang-up to have. Irrevocability is not a trait that is fundamental to blockchain applications.

If the application is smart-contract based, irrevocability is a choice at the source code level. Just because one transaction in a block is irrevocable doesn't mean that another transaction in a future block can't undo whatever arbitrary state change was committed in the first. It depends entirely on what you make possible in the contract code.

Neither does the claim hold water for L1s that are the application (e.g. Bitcoin, Monero, etc.). If the entire Bitcoin core development team turned rogue, social consensus from the broader Bitcoin community would soon establish a new canonical chain. Hard forks can be and have been used. This is blockchain 101. Cryptographic and economic guarantees are not fundamental; the social layer is.

Re: Why I’m Cryptophobic

#99

Post by cowtools »

elil17 wrote: post #60
benreesman wrote: post #45

Both the rabid pro-crypto and rabid anti-crypto people seem to be missing that the prices move on the monetary policy of the United Stated Federal Reserve: more visibly the FOMC target guidance, the underwater part of the iceberg is the balance sheet. Global finance is a big deal, to put it mildly. Crypto is a flea on the ass of the foreign exchange market (which it superficially resembles), which is a bacterium on t…

Crypto has social effects (wasting energy production capacity, scams, wasting computer hardware and chip fab capacity) outside of its economic effects that do make it a big deal.

I've argued in another thread that we can expect those adverse effects to decrease as hype dies down and the coinbase reward for bitcoin and others decreases.

Re: Why I’m Cryptophobic

#100

Post by aabhay »

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…

Gold is the world's best physical commodity to use as a store of value -- it doesn't degrade or tarnish, is easily molded into coins or other symbols, melts easily, has a highly fixed supply (synthesizing it is prohibitively expensive), and (now) increasingly is not tied to an industrial output so can weather GDP fluctuations. So in a battle Royale of all commodities, gold wins. That said, all commodities are affected by price action by speculators, so the actual traded value of gold can be very unrealistic.

Gold is conceptually very similar to bitcoin, except gold can't be forked or copied. Which is why in the long term, I prefer gold.

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