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Crypto: The Good, the Bad and the Ugly

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Re: Crypto: The Good, the Bad and the Ugly

#141

Post by rland »

dskloet wrote: post #119
rland wrote: post #83

I've gotten this feeling, ever since about 2008 or so, that the map that is asset prices is slowly, inexorably becoming uncoupled from the territory of the physical world. This economy-scale decoupling is the dual of each and every one of our very own psychological uncoupling from our own physical worlds, which has occurred because of the computerization of work, socialization, and life itself (the shimmering neurali…

Being able to transfer value across the internet without the permission of a middle man, is valuable in the real world.

No, you can’t. If you follow the axioms of the cryptocurrency evangelists to their logical ends, transferring cryptocurrency to another wallet is something that happens entirely in virtual space.

Of course, this virtual space is coupled with physical space, by hugely centralized entities called exchanges. To get your money across the border, you need to deal with them. In that case the physical value you can buy with your cryptocurrency comes about from the exchange, not the currency.

Value is a physical thing, not a virtual thing. That’s because we live in the physical, not the virtual world. But we’ll readily delude ourselves into believing that’s not the case.

Re: Crypto: The Good, the Bad and the Ugly

#142

Post by jasongi »

dskloet wrote: post #123
jasongi wrote: post #115

I don't understand how any take on crypto can not mention that it is now the de-facto currency of online black markets, from pornhub to silk road 9.0 or whatever version we're up to. This is crypto's utility and the only thing I've seen crypto being used for seriously that isn't speculation. Cryptocurrency is disrupting the black markets the same way amazon/ebay/online shopping disrupted the retail markets. Crypto is…

> the only thing I've seen crypto being used for seriously that isn't speculation When paying for domain names or VPS (or anything online, but those are the cases where it's easy), I prefer paying with crypto because I don't want to give my credit card information to some stranger so they can misuse or lose it. This is not illegal and a legitimate use case.

Crypto offers zero protection from fraud, as transactions are non reversible however if you pay by credit card goods are not delivered or if your card is used fraudulently, the credit card issuer can and will reverse the transactions. Also due to PCI standards almost all online transactions are done via a third party, PCI compliant payment processor.

I don't see the value crypto is adding here. If you did have misplaced worries about being a victim to CC fraud, seems like it would be easier to use a prepaid credit card, debit card that you only transfer funds to when making purchases or a service like paypal.

Re: Crypto: The Good, the Bad and the Ugly

#143

Post by jack_pp »

rland wrote: post #83

I've gotten this feeling, ever since about 2008 or so, that the map that is asset prices is slowly, inexorably becoming uncoupled from the territory of the physical world. This economy-scale decoupling is the dual of each and every one of our very own psychological uncoupling from our own physical worlds, which has occurred because of the computerization of work, socialization, and life itself (the shimmering neurali…

Bitcoin is tied to the physical world the same way every other currency is tied to the physical world. Right now you can transfer abstract value you have acquired without a 1-2% fee through bitcoin, which is much easier than doing it via a bank. For example a poker player needing to get 1 million dollars to Monaco to play a tournament would have to pay 1% (10,000$) and wait god knows how long if he went through the banks, with bitcoin that process is much smoother.

Re: Crypto: The Good, the Bad and the Ugly

#144

Post by ethbr0 »

dskloet wrote: post #119
rland wrote: post #83

I've gotten this feeling, ever since about 2008 or so, that the map that is asset prices is slowly, inexorably becoming uncoupled from the territory of the physical world. This economy-scale decoupling is the dual of each and every one of our very own psychological uncoupling from our own physical worlds, which has occurred because of the computerization of work, socialization, and life itself (the shimmering neurali…

Being able to transfer value across the internet without the permission of a middle man, is valuable in the real world.

Only to the extent it allows me to do things. Realistically, that currently means fiat->crypto->fiat, which requires a semi-stable conversion rate (on the order of time to complete the roundtrip), but the transitory nature of the crypto holding seems a nebulous link to floor value.

Re: Crypto: The Good, the Bad and the Ugly

#145

Post by int_19h »

dagmx wrote: post #138
int_19h wrote: post #127

Earlier quoted context omitted.

Hawala clearly solves a problem - the very fact of its existence is proof of that. Crypto solves the same problem.

Hawala also existed in a time with poor communication abilities between the financial nodes.

Hawala still exists.

Re: Crypto: The Good, the Bad and the Ugly

#146

Post by streamofdigits »

thomasikzelf wrote: post #131

Crypto needs to solve a problem. I think cryptocurrencies should focus on making a cheap currency that people can actually use. requirements: - low transaction costs - low volatility - many places where you can pay with it - secure - privacy - no tax problems - fast transactions - handle fraud - scalable If a crypto currency can solve above points by cutting out the middle man and making transactions virtually free i…

looks like cash has solved (most) of this some time ago:

- V. costs nothing to exchange a bill

- V. link to a real economy so little volatility (except when the real economy implodes)

- V. accepted everywhere within a currency zone

- V. mostly secure (ofcourse theft is as old as humanity)

- V. private (only your counterparty knows about it)

- V. fully integrated into financial accounts / tax systems

- X. fast (local) transactions but remote remittances outside a currency zone a serious problem (expensive, slow)

- V. counterfeit tech very sophisticated

- V. you can print as much as you want

The major flaw of cash is actually linked more to the international system of currencies (which underlies many more socioeconomic problems)

Re: Crypto: The Good, the Bad and the Ugly

#147

Post by WA »

rasengan wrote: post #11

This article comes off very biased. There are a number of major problems blockchain solves - most importantly, ownership and control of things. Saying “crypto is for people who love money” is silly. Cryptocurrency is for people who wish to control their assets. Spending time writing a hit piece on these technologies is silly and I wonder what the actual motive is.

> most importantly, ownership and control of things.

I feel ownership and control of my house and my stuff. To some extend at least. Can the government theoretically seize my assets? Yes. Can the goverment seize my Bitcoins? Well, depends on whether or not I want to leave my social circle.

The sense of ownership of Bitcoin is based on your willingness to leave everything behind. And your ability to cross borders into countries that won't send you back.

I think, ultimately, crypto only works if your outlook on the world is very pessimistic and you have zero trust in existing structures of society.

Re: Crypto: The Good, the Bad and the Ugly

#148

Post by grey-area »

rland wrote: post #83

I've gotten this feeling, ever since about 2008 or so, that the map that is asset prices is slowly, inexorably becoming uncoupled from the territory of the physical world. This economy-scale decoupling is the dual of each and every one of our very own psychological uncoupling from our own physical worlds, which has occurred because of the computerization of work, socialization, and life itself (the shimmering neurali…

I'd have a slightly different take, recent changes in asset prices and the speculative frenzy are due to changes in monetary and fiscal policy since 2008. I'd include the popularity of cryptocurrencies as speculative assets in that (they don't seem to have any other use-value).

Asset prices have seen massive inflation in the last decade due to ZIRP, asset purchases by central banks on an unprecedented scale. The risk free rate has been zero for far too long, and this has directly led to people moving into more risk in order to try to get a return, any return at all. So asset prices, particularly risky speculative asset prices, are no longer judged on their fundamentals like cash flow, but are tightly tied to monetary policy instead. This is starting to feed through to prices of food and other commodities as price inflation as well. So now central banks (and the Fed in particular) have an invidious choice - crash the stock market and save the real economy, or crash the real economy via inflation and save the stock market.

The Fed just suggested they would take away the punch bowl from assets a little earlier than planned, so the party is over and people are scrambling for the exits - that will continue this year. This impacts tech stocks which are not making money and not likely to make money, and speculative assets like bitcoin which money has piled into due to Fed policies.

We've seen this story before, we know how it ends.

Re: Crypto: The Good, the Bad and the Ugly

#149

Post by ethbr0 »

int_19h wrote: post #124
ethbr0 wrote: post #100

Earlier quoted context omitted.

The irony is that much of the criticism against the missing physical link / utility of crypto was surely levelled against the idea of money in its earliest days. "Coins? Why would I want those instead of food? I can't eat coins." To which the killer adoption feature was governments saying "Well, you have to pay taxes in coins, so you need some" to bootstrap & put a floor in under the system's value. Crypto doesn't ap…

Money predates governments, though, and there are many examples of successful money that did not require a government to prop it up. Consider e.g. https://en.wikipedia.org/wiki/Shell_money or https://en.wikipedia.org/wiki/Rai_stones . Note that in the latter case, the physical money doesn't even change hands - it's all in a ledger, but the ledger is in people's heads. In fact, you could say it's a proof-of-work syste…

Point! But I'd guess the velocity of information and rate adjustments in shell-based economies were slower.

E.g. If someone said "The value of the cowrie has crashed!", then how long did it take for everyone to find out & the cowrie economy to reprice itself?

I'd hazard we deal with much more sophisticated, capable, fast, and aggressively predatory market participants now.

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