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Or is this a "well crypto sucks for this NOW but JUST WAIT" argument?
For some people crypto sucks a lot, for other people crypto is pretty nice. I think most people are too lazy to even try to use it unless they really need to for example to buy drugs online etc. Some nerds do it just because they like the challenge of it.

I used to give out bitcoins to anyone who wanted them on another forum. They downloaded electrum, pasted their address and I sent them $1 just so they could see what kind of friction it was to enter the system. Often they were surprised "that's it?". I found that many posters would rather spend hours debating why it was hard to get started with bitcoin than the 5min it would have taken them to get 0.02btc and find out if it was hard or not. I find the same arguments from people today as I found from those people.

Getting more bitcoins was a bit more tricky, but there were services in many countries where you could get them for a decent fee pretty instant. People who just wanted to buy high quality drugs and get the mailman to deliver them, instead of meeting criminals irl, where often okay with this. Then there were ways to get bitcoins with less fees for people who were investing thousands of dollars into bitcoin, they would sign up with bitstamp, coinbase, kraken etc and do a SEPA transaction there, do the trade and then they had the bitcoins. Sure that might have taken them an hour of work, but it was not insurmountable. Then once that channel was open, people often started buying hardware on newegg, booking flights with bitcoin and paying in a few cafés that accepted bitcoin using a qr code. It was a bit silly, but that was the energy of the movement back then, people did it to support the movement not because it was better at that time.

This was in the early days of bitcoin 10 years ago. I left the bitcoin project once bitcoincore took over, my dream of bitcoin died there and instead I decided to support Ethereum.
 
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Imo crypto can and is being used in a way that we associate with how money is being used. Ie as a medium of exchange when two people want to exchange a goods or service for something that they can later exchange for another goods or service with a third party.

Crypto is being used as a medium of exchange by criminals (ransomware hackers, drug dealers, slave traders, etc.) because the advantage of relative anonymity compensates for the disadvantage of wildly-uncertain value. Its use in legitimate trade is minuscule, between boosters willing to accept the higher cost, and merchants willing to accept the hassle to get their business. In these cases, the merchants set the exchange rate high enough to compensate them for the inconvenience, and they convert the crypto back to real money the moment they receive it.

Other than that, it's a medium of speculation. And a lot of the trading in crypto is people "trading" with themselves to make it appear more used than it is, and people trading one crypto for another. The countries of the EU adopted a single currency because having 27 different currencies is chaotic. With almost twenty-three thousand different cryptocurrencies, crypto is even more chaotic.

I think overtime fiat will converge to become closer to todays crypto wrt some properties.

Fiat long ago adopted the only "property" of crypto that has any real use: The ability to transfer money digitally. I pay for my groceries by letting my phone communicate with the store's card reader, or with my card in the case of the occasional store that does not accept my phone. I deposit checks by showing them to my phone's camera. I pay my utility bills electronically. And when I want cash, the ATM takes the money out of my account electronically.

Fiat can do everything crypto can except hide electronic transactions. And fiat has the advantage of fraud protection. Crypto has no fraud protection, is wildly unstable, is wasteful of energy, is chaotic in the large number of different cryptos. If you use BTC and I use ETH and we want to transact business, we have to go through an exchange (effectively a crypto bank) which will take a percentage for the service. And that exchange is unregulated, so you risk losing your money every time you use it.
 
Question for crypto (including btc) boosters:

How would you be able to operate a business that needs to buy raw materials and set prices for finished products, when the value of money (crypto) can jump all over the place? You all complain about inflation with fiat money (which in a well-regulated economy is generally steady and predictable over the short term, so business owners know what to expect) but crypto typically rises or falls many percentage points, unpredictably, not in a year, but in a week or a day.

How does a business owner, who has to borrow money at interest to pay for materials, manage cash flow, when there's no way to know from one day to the next what the money will be worth? How does that business owner know what to charge for goods, when the income from sales can easily lose so much value from one day to the next that it's not sufficient to buy more materials?

How does a business owner convince investors to invest money in a business when the investors believe that they'll make more money just by HODLing their money than by investing it in a productive business?

How does any of this work with an unregulated currency whose value is dependent on nothing but the vagaries of the market for speculation on the currency?
 
Question for crypto (including btc) boosters:

How would you be able to operate a business that needs to buy raw materials and set prices for finished products, when the value of money (crypto) can jump all over the place? You all complain about inflation with fiat money (which in a well-regulated economy is generally steady and predictable over the short term, so business owners know what to expect) but crypto typically rises or falls many percentage points, unpredictably, not in a year, but in a week or a day.

How does a business owner, who has to borrow money at interest to pay for materials, manage cash flow, when there's no way to know from one day to the next what the money will be worth? How does that business owner know what to charge for goods, when the income from sales can easily lose so much value from one day to the next that it's not sufficient to buy more materials?

How does a business owner convince investors to invest money in a business when the investors believe that they'll make more money just by HODLing their money than by investing it in a productive business?

How does any of this work with an unregulated currency whose value is dependent on nothing but the vagaries of the market for speculation on the currency?
Like how many companies do it today even if they use fiat currencies. They set prices in some other more stable currrency such as euro/dollar/local currency. Bitcoin was designed to start at zero with the hope to at some point get to a higher value. It went 0->1/1337->$1->$1000->$30000. You don't do this INF and then another 4billion % appreciation in 15 years without the currency being volatile, that's not possible and people who argue that lower volatility would have been better need to think a bit longer... Over time the volatility has gone down, still very high levels, but the idea is that if Bitcoin goes from 0% of yesterday's economy to 1% of today's economy to 100% of the future's economy, at some point the volatility will be a lot lower.

If you can make more money by staking/interest rate/appreciation, then clearly it's not a great investment to do. I think one problem today is we have made some investment cheaper than they should be, which has lead to bubbles, large cycles and misallocation of resources. I think the Great Moderation was a mistake and the negatives we have seen after it ended were worse than what the benefits were while it lasted.
 
the idea is that if Bitcoin goes from 0% of yesterday's economy to 1% of today's economy to 100% of the future's economy, at some point the volatility will be a lot lower.


Ah, so it's this one-

Or is this a "well crypto sucks for this NOW but JUST WAIT" argument?





not entirely sure how this is relevant other than some of the crypto folks initially, wrongly, claimed this was a CBDC- which it is not?

I guess maybe relevant because it means the already-much-cheaper-than-crypto transaction costs of fiat will get up to 5x cheaper still, making crypto look even worse by comparison? But it already looked pretty bad before in comparison.
 
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Like how many companies do it today even if they use fiat currencies. They set prices in some other more stable currrency such as euro/dollar/local currency. Bitcoin was designed to start at zero with the hope to at some point get to a higher value. It went 0->1/1337->$1->$1000->$30000. You don't do this INF and then another 4billion % appreciation in 15 years without the currency being volatile, that's not possible and people who argue that lower volatility would have been better need to think a bit longer... Over time the volatility has gone down, still very high levels, but the idea is that if Bitcoin goes from 0% of yesterday's economy to 1% of today's economy to 100% of the future's economy, at some point the volatility will be a lot lower.

If you can make more money by staking/interest rate/appreciation, then clearly it's not a great investment to do. I think one problem today is we have made some investment cheaper than they should be, which has lead to bubbles, large cycles and misallocation of resources. I think the Great Moderation was a mistake and the negatives we have seen after it ended were worse than what the benefits were while it lasted.

Companies set their prices in foreign currencies when their own nation's currencies are poorly managed. They do this because they have to operate in their own national currency. NOBODY in a nation with a well-regulated national currency uses a poorly-regulated foreign currency for operations and then sets their prices in their own national currency. That's effectively what you're advocating.

And you've brought up one of the many fatal flaws of bitcoin: It was designed to be deflationary: To start out at zero and increase in value. Investment does not happen in a deflationary economy! That's why the Great Depression was so disastrous. Bitcoin CANNOT function as a currency. OTOH, it's a great get-rich scheme for the founders: Anybody who gets in at the start gets a bucketload of coins for free or nearly free, and if the scheme succeeds, their coins become immensely valuable. They don't use their coins. They just hold them until the price goes up. Currency must circulate. A token that is expected to continually rise in price does not circulate, because the owners are waiting for it to go up. The only trading is speculation as some people cash out their winnings and others buy in hoping it will go higher. And black market exchanges by people who want to avoid notice by the police.
 
And you've brought up one of the many fatal flaws of bitcoin: It was designed to be deflationary: To start out at zero and increase in value. Investment does not happen in a deflationary economy!
Clearly bitcoin has been extremely deflationary and clearly the amount of money invested into Bitcoin has been growing from zero to a lot during this time. The 19th century was deflationary, still investment did happen. I find people's fear of deflationary currecies a bit exaggerated. (using the word deflation in the modern definition, not the classical).

1689948374035.png


A token that is expected to continually rise in price does not circulate, because the owners are waiting for it to go up.
Bitcoin was expected to continually rise and it did circulate. Bitcoin's price has followed the transaction volume pretty well:
Screenshot 2023-07-21 at 22.13.39.png
 
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Bitcoin has not circulated to any significant extent. It's just been traded back and forth by speculators. A minuscule amount has been spent on goods from the vanishingly-small number of merchants that accept it (due to the bother of having to track its value for pricing of their goods, and then convert it immediately to real money) and some unknown, but probably significant, amount has been spent in the black market for drugs, slaves, to pay off ransomeware hackers, etc. The vast majority of bitcoin is in the wallets of HODLers, where it sits, not circulating, not buying anything, not serving any purpose.

Its only legitimate use is gambling on its own price in the hope of selling it for more than you paid. And indeed, the people who got in early have made obscene fortunes without doing any work.

All while sucking up an obscene amount of energy, much of that from coal-fired power plants in China.
 
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Bitcoin has not circulated to any significant extent. It's just been traded back and forth by speculators. A minuscule amount has been spent on goods from the vanishingly-small number of merchants that accept it (due to the bother of having to track its value for pricing of their goods, and then convert it immediately to real money) and some unknown, but probably significant, amount has been spent in the black market for drugs, slaves, to pay off ransomeware hackers, etc. The vast majority of bitcoin is in the wallets of HODLers, where it sits, not circulating, not buying anything, not serving any purpose.

Its only legitimate use is gambling on its own price in the hope of selling it for more than you paid. And indeed, the people who got in early have made obscene fortunes without doing any work.

All while sucking up an obscene amount of energy, much of that from coal-fired power plants in China.
Can you quantify these statements because I have no idea what they mean. How do I tell if something is minuscule, vanishingly small etc or not?

I am not well verse in Bitcoin anymore, but when I was back in those days Bitpay was the most used online payment service for websites. They released public numbers. I trust those number because they charged a decent fee so you don't want to do lots of fake transactions there, sending to yourself and back.
1689981265935.png


I would assume that volume has increased since then, but frankly I am not up to date. Do you have some better statistics making you so confident it is minuscule?

I have used Bitcoin for a few legit purposes myself and I assume other people have used it legitimate for other things.

I agree that Bitcoin is consuming a lot of energy. Should be noted that the modern banking system uses a lot of energy also. But I hope a PoS currency becomes dominant rather than a PoW.
 
That can't be correct, more than Paypal?
Is it? Paypal are doing billions per month rights?

1689985107728.png


200M at 1% fee is $2M/month in income. It's decent money for the company, but they will not get to top100 market cap on this. But the question is if this qualifies as minuscule or not. Also bitpay is just one, public american, company. There are many more.
 

BITCOIN IS UNINSURED: A MISCONCEPTION​


There is also a practical point to be made. FDIC government insurance is not insurance for the US dollar as a whole, it’s insurance for bank deposits. If you lose a hundred dollar bill, whether to a thief, scammer or simple carelessness, you’re out a hundred dollars; there is no insurance to protect you. If you lend money to someone and he defaults, there is no insurance to protect you. One might argue that as a consumer using US dollars electronically it’s all protected by the banking system and therefore ultimately by the FDIC, and you can do a chargeback to recover your money from accidental or malicious losses, but this is not true for everyone. If you are a merchant, for example, and you get a fraudulent chargeback from a customer there is no protection. Theoretically, you can go to court over the issue, but the costs of doing so are so high that practically it is simply not worth it. Thus, with regard to the online payments infrastructure our system does not even offer any insurance at all; instead, it simply shifts the risk from one party to the other, at the cost of delays and fees that are unacceptable in an internet-connected society. In a way, this artificial “merchant beware” system is even worse than the alternative of buyer beware: while consumers can comparison shop and refuse to deal with shady merchants, merchants cannot practically pick and choose their customers.
 

BITCOIN IS UNINSURED: A MISCONCEPTION​


There is also a practical point to be made. FDIC government insurance is not insurance for the US dollar as a whole, it’s insurance for bank deposits. If you lose a hundred dollar bill, whether to a thief, scammer or simple carelessness, you’re out a hundred dollars; there is no insurance to protect you. If you lend money to someone and he defaults, there is no insurance to protect you. One might argue that as a consumer using US dollars electronically it’s all protected by the banking system and therefore ultimately by the FDIC, and you can do a chargeback to recover your money from accidental or malicious losses, but this is not true for everyone.

It kind of is true for everyone though.

And even if it wasn't would still be vastly better than BTC where it's true for no one


If you are a merchant, for example, and you get a fraudulent chargeback from a customer there is no protection. Theoretically, you can go to court over the issue

This is outright false.

The merchant has a specified period to respond to the chargeback with evidence to the credit card company why the chargeback is invalid.

The card company then reviews the evidence and makes a decision. If, as a merchant, you don't like that decision, you then have ANOTHER recourse- the arbitrarion option with the relevant payment network (visa, mastercard, etc). Only if you dislike BOTH of THOSE results would you need to go to court over the issue as a THIRD resort. And even if you had to do THAT unless the amount is massive (in which case hiring a lawyer WOULD BE WORTH IT) you can file in small claims court for basically no cost at all besides a few bucks filing fee (which you can add to your damages). So you've got at least 3 completely independent levels of protection here.

Versus the ZERO resorts/protections you have for fraud involving BTC.



Once again you appear to be copy/pasting wrong info without bothering to have understood or fact checked it.
 
I mean, the VACCINES ARE BAD folks do have some "different" arguments in that some think it's 5G trackers, some think it's mind control, some think it's sterility, some thing it's making you autistic or trans....some have combinations of more than one of these. Those are "different" but they're all nonsensically wrong.... and it's all the same common problem between them in failing to have any understanding of the topic or science in general.

Same thing here among the CRYPTO IS MONEY AND FIAT IS BAD folks, but with ignorance of history and economics instead of biology and genetics (and wifi I guess!)

There are some people who seem to have the black and white belief that anything a government does is bad. There is not a government in the world that isn't guilty of doing something that isn't right, but centrally managing a currency is not necessarily one of them. In some instances governments may do things with their currency that aren't great, but just the fact that the government controls the nation's currency is not in itself a bad thing.

One of the problems the world had with currencies that were intrinsically tied to something tangible like gold was the money supply, and hence the capital supply was limited. When currencies were freed from this restriction it also freed up capital to flow into technological and scientific development and the last 80 years has been the fastest pace of technological development the world has ever seen.

Like most things there are dangers to fiat currencies too. Governments that produce new currency faster than the growth of the economy tend to see hyper inflation and a collapse of the economy.

I find it ironic that the party in the US who makes the most noise about how evils of the government and fiat currency is also the party that runs up the deficit the most when its in power. Hypocrisy at its finest.

The Constitution was written at a time when the speed of information was three miles per hour. When nearly everybody in the country lived on a farm. It was written by people who thought it was a good idea for people to own other people and have the right to summarily whip, brand, or kill the people they owned. Some of the framers of the Constitution had human beings burned with red-hot iron for the "crime" of picking cotton slower than their foremen thought they should be capable of.

So, no, I don't regard those barbaric, racist, vile pieces of human garbage as worthwhile authorities for how we should run our monetary system some two and a half centuries later.

And, FWIW, the Constitution has been amended since then.

Those people I mentioned above who think that paper money is worthless and the income tax is illegal, they get those ideas from reading the Constitution WITHOUT its amendments.

There is a group of people in the US who seem to consider the Constitution as some kind of holy document that was passed down from on high and can't be altered in any way or re-interpreted as times change. As you point out the world of the 21st century is vastly different from the world of the 18th when the document was originally written.

People who are against taxes like to point out how low taxes were in the 18th and 19th century. The world was also a much simpler place then. Transportation was partially by rail by the late 19th century, but all other transportation on land was done by animals over mostly dirt roads as a pace little more than a human walking pace.

The state of medicine was very primitive. There is line that the life expectancy was around 40 for Americans in 1900. That is true if you look at expected lifespan from birth, but if you made it past 5 you could expect to live into your 60s. The average lifespan was that short because so many children died in infancy. Very few families had all their children make it to adulthood which was why the birthrate was so high.

By the late 19th century most children were getting at least to 8th grade, but the education system was poor with only a very, very small percentage of the population getting a college education.

In the 18th century the weapons of war were inexpensive. What a soldier carried on the battlefield was little more than what a farmer had to control vermin and do some hunting. That's why the Minutemen of the American Revolution were so effective. Today the weapons of war are vastly more sophisticated than anything someone outside of the military can have or afford. The US allows demilitarized military rifles in private hands (with many having a problem with it, but it is allowed), but that's only the most basic weapon available to the military. Most of what the military uses is not allowed in civilian hands. And that kit is vastly more expensive than anything in the 18th century, even factoring in inflation.

The USS Constitution frigate cost $302,000 in 1797. According to this, that's $7.2 million in 2023 dollars
$302,000 in 1797 → 2023 | Inflation Calculator

Those 7 frigates were the peak of military technology in 1797. One F-35 costs $75 million.

Another thing that came along in the 20th century were social safety nets. Even in the US there is a substantial social safety net for elderly people. All developed countries have tax payer supported social safety nets for those less fortunate.

Those roads, health care, education, social safety nets, and military tech all cost money and therefore the population needs to be taxed more than it did when the world was a more primitive place.

The "government is evil" crowd don't realize all the benefits of government. Most got a government paid education (in full or in part), benefit from government maintained roads, are protected by a government paid military, and benefit from advanced in medicine paid for with government money or may get health care directly from the government. Some are drawing from government paid safety nets too.

Government run currencies are all part of this economy. Private currencies are not going to replace these things, and if we collectively try to, it will likely collapse the economy. There is no place for a privately run currency to replace the government supported currency. Private currencies, if they survive and aren't just a fad, will never replace government currencies and will always be small sub-economies off to the side of the main economy.
 
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BITCOIN IS UNINSURED: A MISCONCEPTION​


There is also a practical point to be made. FDIC government insurance is not insurance for the US dollar as a whole, it’s insurance for bank deposits. If you lose a hundred dollar bill, whether to a thief, scammer or simple carelessness, you’re out a hundred dollars; there is no insurance to protect you. If you lend money to someone and he defaults, there is no insurance to protect you. One might argue that as a consumer using US dollars electronically it’s all protected by the banking system and therefore ultimately by the FDIC, and you can do a chargeback to recover your money from accidental or malicious losses, but this is not true for everyone. If you are a merchant, for example, and you get a fraudulent chargeback from a customer there is no protection. Theoretically, you can go to court over the issue, but the costs of doing so are so high that practically it is simply not worth it. Thus, with regard to the online payments infrastructure our system does not even offer any insurance at all; instead, it simply shifts the risk from one party to the other, at the cost of delays and fees that are unacceptable in an internet-connected society. In a way, this artificial “merchant beware” system is even worse than the alternative of buyer beware: while consumers can comparison shop and refuse to deal with shady merchants, merchants cannot practically pick and choose their customers.

The government does not protect people against every kind of loss. That's not its job. The job of the government as regards currency is to regulate the supply of it to match the needs of the economy. It also sets the cost of borrowing money by setting the rate at which it borrows and lends money.

The government insures bank deposits (actually, it requires banks to purchase deposit insurance) because without that banks are more likely to suffer runs and go under unnecessarily. It does not insure the dollar bills you have in your pocket. Again, that's not its job. Banks (not the government) provide consumer protections to their card customers. The banks provide a service that allows buyers and sellers to exchange money for goods and services, and the banks provide protections against fraud, making electronic transactions safer than cash transactions.

BTC and other cryptos have no regulation. This is one of the things the pseudo-economists who love it love about it. This means that there will always be either too much of it, or too little of it, and it means that the value of it bears no relation to anything but the vagaries of speculators. These two facts mean that it cannot function as a useful currency. When you do buy something with crypto from one of the small number of businesses that accept it, the business will up-charge you for using crypto, and immediately convert that crypto to fiat. You are really just paying the merchant a fee to convert your crypto to fiat to make the purchase.

And there's no insurance or consumer protection whatsoever for users of BTC and other crypto. A crypto transaction costs more than an electronic fiat transaction, and the crypto transaction provides no fraud protection or any other benefit to the consumer, other than a degree of protection from legitimate law enforcement.