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Why I’m Cryptophobic

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Re: Why I’m Cryptophobic

#41

Post by rvense »

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.

As far as I can tell, money is so entirely based on trust that it might as well consist of it, trust in in some fuzzy combination of other people's continued rationality and things staying roughly the same. I accept 100 euro bills for my labour because I believe I'll continue to be able to trade them for food and shelter.

Re: Why I’m Cryptophobic

#42

Post by cowtools »

nightski wrote: post #15
zach_garwood wrote: post #12

Earlier quoted context omitted.

Gold has utility. You can't make circuits out of Bitcoins.

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 unique properties over other metals. Bitcoin does not even have useful unique properties over other cryptocurrencies.

Re: Why I’m Cryptophobic

#43

Post by smt88 »

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.

Gold has thousands of years of history as a currency (or backing a currency).

It's also intrinsically valuable for jewelry and industrial purposes. It's irreplaceable in electronics, for example.

Cryptocurrency that can't be sold to someone else has absolutely no value. In fact, it has negative value because of transaction fees, something that plain cash doesn't have. I can send someone $100k with a $0 transaction fee.

Re: Why I’m Cryptophobic

#44

Post by wolframhempel »

hackernudes wrote: post #23
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 beli…

Scarcity can support existing value - e.g. in creating a Gold Standard or some other means to artificially limit money supply - but it is not an intrinsic value. There are countless things that are both scarce and valueless.

I believe your last two sentences hit the nail on the head (albeit being oxymoronic). Things have value because people are willing to pay for them. That's it. If companies can be traded below book value, Tesla can be worth more than the next five automakers combined and NFTs can cost six digits there seems to be no intrinsic value.

Re: Why I’m Cryptophobic

#45

Post by benreesman »

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 the ass of the derivatives market.

It’s. Just. Not. That big of a deal.

There’s been a lot of scams, some serious people here and there are doing real work in the space (don’t argue with me: take it up with Liskov and Waddler).

But if we put the wisdom of crowds on a forum like this to work on the dog wagging the tail with the flea on it, it would be a potentially useful discussion.

Le sigh.

Re: Why I’m Cryptophobic

#46

Post by benmanns »

bluetomcat wrote: post #8
peyton wrote: post #5

Earlier quoted context omitted.

I really don’t buy the old taxes-make-the-money-work chestnut. Far too many counterexamples.

Paying taxes in a given currency means that the government forces the use of that currency nation-wide. Without a central tax authority requiring that currency, groups of people could start exchanging, say, peanuts for the mutual exchange of goods and services. Since you can't pay your taxes in peanuts, you would want to hold national currency instead of peanuts.

For example with USD, this also requires not just transacting in USD once a year, but hedging in the national currency, as many crypto earners and traders are learning. If you get paid 1 BTC when BTC is worth $50k, you really should sell and hold 15-50% of it immediately to cover your tax obligation. If the price drops to $20k, you can sell and book a $30k loss, but you may only be able to deduct $3k of it against your $50k in income, leaving you in a bad spot come April 15.

Re: Why I’m Cryptophobic

#47

Post by hans1729 »

hackernudes wrote: post #23
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 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 on hard drives are meaningless unless we decide that they aren't. The mona lisa isn't worth what it is if we decide otherwise, but it does have inherent value. Crypto does not. 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.

Re: Why I’m Cryptophobic

#50

Post by elil17 »

yakak wrote: post #31
bluetomcat wrote: post #8

Earlier quoted context omitted.

Paying taxes in a given currency means that the government forces the use of that currency nation-wide. Without a central tax authority requiring that currency, groups of people could start exchanging, say, peanuts for the mutual exchange of goods and services. Since you can't pay your taxes in peanuts, you would want to hold national currency instead of peanuts.

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

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