| The issue isn't that it solves the wrong problem. The issue is that crypto boosters (including a few already here) claim it solves a whole host of other problems without thinking things through, kind of like some communists. Then if you argue enough they'll point out that things can be fixed ... but bitcoin is now indistinguishable from any other currency, other than its payment system that will no longer be widely used. Like, you can make it easy to use if there are banks. And those banks will be subject to regulations. Boom, now you have banks and regulations. You can get a loan from those banks. Now there's fractional reserve banking, with something like a virtual gold standard. If it ever gets big enough, the fed can write bitcoin denominated bonds, and it's now prerty much a fiat currency, not even virtual gold. Yes you still have a shadow sector where you can use bitcoin to buy drugs or dodge the taxman. But all the other supposed benefits have gone. |
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| ▲ | wisty 2 days ago | parent [-] | | Pretty much. People say it's meant to replace laws and regulations, but if it's successful then it won't. The US has a large bitcoin strategic reserve. Banks offer bitcoin accounts (in some countries). You can get a loan backed by your bitcoin. We're not yet at the point where you can get a credit card and 60 year home loan denominated in bitcoin, with the fed writing bonds or even issuing fiat to stabilise rates, but if it was more popular then is there any technical reason we couldn't get there? | | |
| ▲ | verzali 2 days ago | parent [-] | | What purpose does a bitcoin strategic reserve serve? | | |
| ▲ | wisty 2 days ago | parent [-] | | Trump did it, so frankly it's probably just a brain fart. However, the US having a strategic reserve of a currency makes it a lot like other currencies. The next logical step is that banks can use it (already in the works - also Trump). If you can get a bank account it bitcoin, the next logical step is towards a fractional reserve system (loans, banks effectively "printing money"). The strategic reserve can cover a run on banks - think interbank lending, bailouts. Then the fed can offer bonds and IOUs (fiat). All the things q lot of bitcoin advocates say bitcoin should stop, but you can't stop the government writing an IOU and demanding everyone treat it as currency. |
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| Your argument here appears to be "crypto is no better than fiat, because you can build the same systems on top of them." What you put on top is not the core value proposition of cryptocurrencies? It's what's underneath that's different, that was always the point. Fiat currency is built on a foundation of gov't control, whether it's the physical currency or the money in your bank account. Cryptocurrencies, fundamentally, are under no such control. If you're stupid enough to go get a 5mil loan in bitcoin from a bank who is only holding 1.7mil, and the delivery of said bitcoin is a slip of paper saying "iou btc lol" that's not the currency failing you, it's you acting stupidly. |
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| ▲ | danaris 2 days ago | parent | next [-] | | No; the argument is much closer to "if you don't make cryptocurrency basically the same as fiat, by building the same systems on top of it, it's useless to the vast majority of people." | | |
| ▲ | dns_snek 2 days ago | parent [-] | | That is just an observation, not an argument against building, improving, and using crypto. Cryptocurrency doesn't need to do everything for everyone at all times to be a useful thing to have in the world. It only needs to be helpful to a subset of people, in a subset of situations, some of the time. I'm happy paying by card for ~100% of my daily transactions, but I want cryptocurrency to exist should the need arise. The rise of authoritarian governments and policies across the world should've made that obvious by now. What's legal and perfectly moral today can become a crime tomorrow. | | |
| ▲ | FabHK 2 days ago | parent | next [-] | | You don't solve the issue of authoritarian governments with crypto, though. I haven't seen China collapsing exactly since 2009. Instead, you give criminals a tool for crime. And gamblers a new casino. | |
| ▲ | danaris 2 days ago | parent | prev [-] | | But cryptocurrency enables more abuse, more victimization, today. And the problems with authoritarian governments a) cannot actually be solved by introducing cryptocurrency; that only enables some people to work around them; and b) cannot even be worked around with cryptocurrency for the majority of people: only those who are already relatively wealthy have access to the systems that enable that. |
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| ▲ | user34283 2 days ago | parent | prev [-] | | The financial system being under government control is the only proposition consistent with reality. We, the people, make the rules. Replacing our democratic processes with finance controlled by the one with the most computing power, control of the software, or having horded the most of the tokens, is in no way desirable or realistic. Even if the proposition wasn't borderline idiotic in the first place, there is no clear explanation how such a system should reward early adopters and allow them to cash out at a profit many times exceeding inflation. It's all a scam. | | |
| ▲ | Dilettante_ 2 days ago | parent | next [-] | | I'm gonna first of all disagree with the notion that our entire democracy rests on control of the financial system, secondly point out that you seem to make some wild leaps about how decentralized currencies work, and thirdly ask how the hell you're getting the idea that early adopters would need to be "cashed out at a profit many times exceeding inflation"(Participation in the new system is the point of adopting it, how is this unclear). Finally: We, the people, make the rules.
If you truly believe that, you are (and I realize this is not the level of discourse I should strive for on HN) beyond redemption. | | |
| ▲ | user34283 2 days ago | parent [-] | | I said the financial system must be controlled by our democratic system, not that democracy rests on control of the financial system. No idea where I'm supposedly making "wild leaps" here. You on the other hand... And guess where "the hell" I am getting the idea that early adopters would need to be cashed out at a profit many times exceeding inflation: reality. As cashing out at a large profit is exactly what has been happening for over a decade. It is the sole reason for virtually all participants joining the scheme in the first place. |
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| ▲ | dns_snek 2 days ago | parent | prev | next [-] | | > We, the people, make the rules. Since when? We merely vote for politicians who promise to enact laws and regulations that are beneficial for us but they almost universally fail to do that, succumbing to self-interests and corruption. If a government implements authoritarian measures that curb our freedom in an unpopular manner, "we the people" can't do anything about it. In a few years we may or may not vote them out, and the people who replace them may (or may not) do what we, the people, want. | | |
| ▲ | user34283 2 days ago | parent [-] | | That's a bleak view on the state of democracy. Whatever your feelings on the topic may be, we will not be giving up government control of the financial system in favor of a blockchain and profits for crypto-bros. | | |
| ▲ | dns_snek 2 days ago | parent [-] | | Bleak but realistic, unfortunately. There needs to be a viable alternative as long as our elected representatives have the power to abuse the financial system as a means of authoritarian control, like freezing the bank accounts of protestors. A truly democratic leadership with stringent limitations on how they can meddle with financial transactions would be preferable, but that's just a dream at this point. | | |
| ▲ | user34283 2 days ago | parent [-] | | A viable alternative to the financial system is also just a dream. If we take from the government the ability to freeze bank accounts of protestors, we can't just also remove the ability to freeze the accounts of criminals, enemies, or even terrorists. It seems like a clear non-starter, yet many proponents of crypto seem to think it would be an obvious improvement. | | |
| ▲ | Dilettante_ 2 days ago | parent [-] | | >If we take from the government the ability to freeze bank accounts of protestors, we can't just also remove the ability to freeze the accounts of criminals That's really the crux of the issue here: Having to choose one over the other, would you rather some criminals go free, or some innocents be imprisoned? I suspect anyone's position to this depends heavily on which sides they've been on more on their lives: Victimized by criminals or unjustly punished. | | |
| ▲ | user34283 2 days ago | parent [-] | | That might be the crux philosophically. But realistically we're not seriously going to entertain stripping all controls from the financial system because we don't trust the government to do a reasonable job. Perhaps you'll agree that this is a very unlikely thing to happen. Now my issue here is that many proponents of crypto, among other fallacies, use this exact scenario as a justification for why eg. Bitcoin will go to $1M, and why they should deserve to cash out at a 10x return in the future. It's not going to happen, and even if it was, there's still no reason for early adopters to profit in what has so far been a zero sum wealth redistribution scheme with negligible value generated. | | |
| ▲ | Dilettante_ 2 days ago | parent [-] | | We are actually completely in agreement that crypto-hustlers and such are entirely full of hooey and nobody deserves any payout whatsoever. I'm only arguing from a point of "government bad" idealism. >realistically we're not seriously going to entertain stripping all controls from the financial system because we don't trust the government to do a reasonable job I kind of am. What I'm seeing happen is the opposite: The government stripping more and more agency from the individual because it does not trust its citizens do do a reasonable job(of anything). Every sector freed from the Leviathan, every tiny bit of life that can proceed without being subject to gov't interference is a huge win for me. Again, this is essentially a position born from my seeing what happens when "safety over liberty" goes too far. >negligible value generated Depends on what you value. I happen to like drugs and gambling. On the other hand, giving someone who falls for a hustle the ability to get their money back is something that I personally do not value at all. |
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| ▲ | FabHK 2 days ago | parent | prev [-] | | You might have formulated things a bit unclearly, but I fundamentally agree that money, like everything else, should be under democratic control of the people. Not controlled by some crypto bros that are happy to interfere with the protocol if it suits them (The DAO hack, two 20+ block rollbacks of Bitcoin), but not if massive crime happens on it. | | |
| ▲ | user34283 2 days ago | parent [-] | | I guess so, although crypto proponents will anyway tell you that you don't understand how crypto works as soon as you say anything negative about their scheme. I believe what I said is a fairly accurate summary of Proof of work / Proof of stake mechanisms and Core developer's influence on the protocol. |
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