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Why I’m Cryptophobic

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Re: Why I’m Cryptophobic

#141

Post by yellowapple »

Aunche wrote: post #103
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…

Gold is used for jewelry more than it used as a store of value. Even as a store of value, Gold has an advantage of cryptocurrency in that you can actually store it. Cryptocurrency presupposes the existence of the internet. If all the world reserve currencies collapse, there is a good chance that the internet would go down with it, and your cryptocurrency would be worthless.

> Cryptocurrency presupposes the existence of the internet.

Not really. You just need some way for nodes to communicate. That could happen over the Internet, or it could happen over mail, or it could happen over a team of ravens carrying transaction data on little scrolls (hell, given corvid intelligence, they might even be able to execute smart contracts in transit).

Re: Why I’m Cryptophobic

#142

Post by lottin »

diogenes1 wrote: post #75
lottin wrote: post #65

Earlier quoted context omitted.

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

which is fine, since you can back another cpi/whatever automated chainlink index adjusted asset with it. Sure the efficiency will not be as good as fiat but it's robust

I thought we were talking about price stability.

Re: Why I’m Cryptophobic

#143

Post by daniel-cussen »

cowtools wrote: post #42
nightski wrote: post #15

Earlier quoted context omitted.

But most Gold is not used for circuits. Not only that, gold can be mined on demand and has an ever increasing supply (gold does not really disappear).

Sure, but a not-insignificant amount of gold is still used for industrial applications. Even if gold wasn't used as money or in jewlery, I imagine it would still be quite expensive: at least half of it's current price. The same could be said of other precious metals. But I don't think you can say the same about bitcoin. Bitcoin's fundamental utility is low, even compared to other cryptocurrencies. Gold has useful uni…

It would definitely be worth half its price as a reserve currency for purely industrial reasons, if not a bit more. Like if it became impossible to balance payments with it, well like if it became irradiated long-term like in Goldfinger, but there was still some clean gold left and it was just for industry. People would totally invent new uses for it at half the price. They just don't even consider it because it's expensive.

Re: Why I’m Cryptophobic

#144

Post by datadata »

hans1729 wrote: post #47
hackernudes wrote: post #23

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…

> For crypto to have value, someone else needs to pay Dollar/Euro/whatever at an exchange. That's the value of crypto - the exchange rate.

This is true for every economic good, including paintings. Whether the value is "inherent" or not is irrelevant, you need a transaction or the value is just theory. Culture could also forget about the significance of the Mona Lisa, it has happened before, see for example https://en.wikipedia.org/wiki/Archimedes_Palimpsest, a mathematical text that our culture considers having very high value, but was overwritten into a prayer book by a culture that considered the work less valuable than the material it was written on.

Re: Why I’m Cryptophobic

#145

Post by datadata »

hans1729 wrote: post #124
hackernudes wrote: post #117

Earlier quoted context omitted.

OK, maybe the Mona Lisa was not a good example. But if somehow Da Vinci had produced a billion copies of the Mona Lisa it would not be nearly as valuable! My other point in that paragraph was that if a country prints more units of currency the value goes down, so scarcity is important to value.

Scarcity isn't 100% important for value - leverage is. Leverage can be tied to scarcity, but doesn't have to, it all depends on the goods which are being exchanged. Artworks exist just once, coupled with the attributed prestige the value increases. Guns exist a bunch, their price doesn't scale relative to their scarcity. Food is not priced relative to the amount on the market, but to the demand of the consumer. If th…

Modern art reproducers can make copies of the Mona Lisa that experts can't easily distinguish from the original. This kind of replica fraud happens often in the art world. I find it interesting to try to justify the value of the original when it is almost zero cost to have an exact replica of the original. The scarcity is not real, or at least the scarcity of being able to enjoy the intrinsic value of looking at the painting is not real. When you remove that part, the value lies only in being able to verify the authenticity of the work, rather than in its quality as art.

Re: Why I’m Cryptophobic

#146

Post by yellowapple »

mikeyouse wrote: post #52
ntoskrnl wrote: post #25

Earlier quoted context omitted.

Who says BTC isn't used for payments? Many porn sites ONLY allow you to pay with crypto, including PornHub[1], and they're keeping the lights on somehow. It's being used by the Ukrainian military to pay their suppliers while the banking system is offline[2]. It's being used for remittances. I had to pay my rent with it once. Also VPNs, etc. There's far more global economic activity conducted in BTC than in gold. It a…

That's not true for PHub -- Just went to confirm and the first option is bank transfer, the second is crypto. What percentage of people who pay for PHub do you think even own crypto? My guess would be <1%.

There's no way in any number of Hells that I'd trust PornHub with my banking info.

Re: Why I’m Cryptophobic

#147

Post by yellowapple »

bluetomcat wrote: post #63
yakak wrote: 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.

> This idea is at odds with the concept of the modern nation state.

Good.

Re: Why I’m Cryptophobic

#148

Post by DrBazza »

hans1729 wrote: post #132
DrBazza wrote: post #119

Earlier quoted context omitted.

> For BTC (or any coin) to have any value, it needs actual economic transactions to be conducted in it. If there aren't any, its value is smoke-and-mirrors; its not real. Not quite - if someone, anyone, wants something that someone else has, they're prepared to buy it. That's the price. You might say tulips are valueless, but that wasn't the case when people wanted them - https://en.wikipedia.org/wiki/Tulip_mania I'm…

>people want to buy it, and people also want to sell it. That means there's a market and therefore a value to it for those people. People don't want to sell it, they have to , in order to pay the electricity bills for the mining (in their countries normal currency, for that matter). There is no inherent value - you can only sell if the exchanges find someone who is willing to buy. The value to the seller is the Dolla…

Not at all - I can buy a bitcoin now, and then sell it, having not mined it.

I choose not to. But other people do.

> Money has value because of the value of the economic transactions in which its conducted.

As the OP said, little pieces of paper have essentially no intrinsic value. But use it for transactions, and it has suddenly has a value forced on it. We've all seen zombie apocalypse films with cash blowing around in the street and the survivors ignoring it for good reason, no one _values_ it.

Bitcoin is the same, it's a bit of paper in the sense that it's just some numbers on disc somewhere with no _intrinsic_ value, yet as soon as it's a medium of exchange, _which it is_, it has value. There are transactions made in bitcoin.

Re: Why I’m Cryptophobic

#149

Post by mitchdoogle »

hans1729 wrote: post #118
apocalypstyx wrote: post #91

Earlier quoted context omitted.

>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…

>Gold is like an old god: its faith has a lot of coinage. However, its rule is not necessarily omnipresent. Very nice point, you're not wrong. That being said: >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. Because it has properties that qualify it as a method of exchange (portability, provable chemic…

It's post apocalypse - you trade whatever you find. The most important commodities will be food, water, medicine. Gold would be practically worthless - it's not going to help anyone survive.

Re: Why I’m Cryptophobic

#150

Post by automatic6131 »

welshwelsh wrote: post #54
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…

Imagine a future where the vast majority of work is automated. Most of this is computationally expensive work, such as training large neural networks, and the average program takes a substantial amount of resources to run, comparable to paying a human worker. In this scenario, labor power has been replaced by GPU power, which can be measured in terms of electricity. Everything from ordering a meal at a restaurant to…

My sibling-in-christ, you are talking about an imaginary future. You cannot start to base the economy of today on your science fiction. Even if we were moving the direction of your sci-fi (and we're not, because you are even describing a PHYSICALLY IMPOSSIBLE SCENARIO), it would be so far in the future as to be stupid to start today. You might as well start building landing pads for asteroid mined metals.

Physically impossible: yes - you've suggested using a currency made by the infinitely wasteful PoW system to finance the power used to compute something useful. You might as well try to fly by pulling on the arms of your chair.

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