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Why I’m Cryptophobic

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Re: Why I’m Cryptophobic

#21

Post by NhanH »

solotronics wrote: post #6
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…

Gold having value over a long period of time is a counter argument. Nobody is transacting in gold yet it is valuable.

For a long time (thousand of years), people in Asia transacted in gold for high value items.

My parents bought my childhood home with physical gold bars (around ~3.5kg gold, in bar of 37.5g each)

Re: Why I’m Cryptophobic

#22

Post by SkyMarshal »

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.

Edit: Oh, gotcha, failed/ing states with currencies that hyperinflated despite being the only accepted currency for taxes.

—

What are some of the counterexamples?

Re: Why I’m Cryptophobic

#23

Post by hackernudes »

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…

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 believe it is so. No single characteristic defines value.

Re: Why I’m Cryptophobic

#25

Post by ntoskrnl »

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…

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 all depends where you look. In some niches, BTC is used a lot. In some niches it isn't used by anyone (hi HN!) But it's a big world out there, and if you look outside your bubble it's not hard to find people using it.

Re: the last paragraph, BTC did indeed crumple under load for a long time around ~2016, and transaction fees were very high as a result. But lightning network has appeared since then and fees are back down to reasonable levels, well under $1. Those were serious growing pains, but we made it through just fine.

[1]: https://news.ycombinator.com/item?id=31914284

[2]: https://www.wsj.com/articles/how-crypto-is-helping-ukraine-r...

Re: Why I’m Cryptophobic

#26

Post by capableweb »

hans1729 wrote: post #13
solotronics wrote: post #6

Earlier quoted context omitted.

Gold having value over a long period of time is a counter argument. Nobody is transacting in gold yet it is valuable.

That's not right. One: gold is the og currency, it doesn't have to prove its value because it already did. Two: it is also being actively used for transactions, look no further than jewelry. If you have gold, you will find someone who is willing to exchange it for something else with material value in any city on the planet. This is not the case for crypto.

> 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.

Re: Why I’m Cryptophobic

#27

Post by R0b0t1 »

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…

A more compelling theory suggest that money has value because it is coercively used to extract value from a society via taxes. People desire it because the government's monopoly on force requires them to pay taxes in it.

Re: Why I’m Cryptophobic

#29

Post by michael1999 »

solotronics wrote: post #6
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…

Gold having value over a long period of time is a counter argument. Nobody is transacting in gold yet it is valuable.

That is incorrect. The Bank of International Settlement definitely uses gold for payment. In rare events, a country will do physical settlement via shipping, but it is usually done via paper claims.

https://www.bis.org/banking/balsheet/statofacc200831.pdf

Re: Why I’m Cryptophobic

#30

Post by mjburgess »

ntoskrnl wrote: post #25
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…

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…

You're right that BTC has a floor because there's some economy behind it. I'd say in the 100USD-1000USD/coin range.
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