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$100 bills also have very little inherent value or worth. They are only useful because people are willing to trade them for goods and services, there is a regu

$100 bills also have very little inherent value or worth. They are only useful because people are willing to trade them for goods and services, there is a regulated source of them, and it is clearly defined how to transact with them. Cryptocurrencies have the latter 2 features sewn-up but there aren't a lot of hard-goods out there that are predominantly priced in crytocurrencies. . . until that happens their valuations will remain volatile.

deleted 9y ago
[deleted]
overcast 9y ago
The graph of the Dollar also doesn't look like this https://cdn-images-1.medium.com/max/1400/1*esoUPhcZiG3pEk1czC7ksw.png https://cdn-images-1.medium.com/max/1400/1*esoUPhcZiG3pEk1cz...
- klodolph 9y ago
  And it's a damn good thing, too. High volatility and deflation would be an unmitigated disaster. The US, UK, and Japan are all currently fighting deflation with QE policies, which seem to be working fairly well.
  - Frogolocalypse 9y ago
    If by working you mean rapidly transferring wealth into fewer sets of hands, yes.
    - klodolph 9y ago
      Are you saying that avoiding deflation and volatility is what consolidates wealth? How? Or are you saying that quantitative easing consolidates wealth? How? Or are you just inserting an unrelated complaint into the discussion?
      - Frogolocalypse 9y ago
        I think I'm being clear enough. There has been an objectively massive shift in wealth between low and middle income earners to wealthy asset accumulators over the past 30 years, and that has accelerated over the past 10. This solution you're lauding has been engineered by exactly those asset accumulators as a response to problems caused by exactly those asset accumulators. It's like you're cheering on an arsonist because after the fire he lit that has burned down your house, he hands you a bucket of urine to help put the fire out.
        klodolph 9y ago
        So, I don't understand what you were trying to say, and when I ask for clarification, you just double down instead of actually answering my questions? Come on, I just want to understand what your viewpoint is, but if you don't want me to understand your viewpoint, I guess that's your prerogative.
        Frogolocalypse 9y ago
        Your questions : 1. Strawman. It is the concept of value itself that has been perverted through this process. 2. Because organisations (i.e. banks and the owners of their service channels) closer to the feed of treasuries suffer the least of the effects of monetary expansion. 3. I thought we were talking about inflation and bitcoin as a store of value?
        klodolph 9y ago
        When the question is, "Are you saying X?", "Strawman" is a nonsensical answer. I wasn't asking rhetorical questions, I was asking questions because I didn't understand what argument you were making and I wanted clarification. That's pretty much the opposite of a strawman argument right there. Furthermore, I don't know how to make heads nor tails of the statement that the "concept of value itself" has been "perverted". Such a vague and sentimental notion could mean many different things. The criticism that our economic system aggregates wealth in the hands of a few is valid, but at least the dollar isn't suffering from deflation and extreme volatility, which is what makes it viable as a unit of account (unlike bitcoin). I wasn't considering bitcoins or dollars as stores of value, just as units for measuring value and devices for transmitting it. Maybe at some point bitcoin will overcome these problems, but for now, I'm rather glad a graph of the dollar's value looks nothing like the graph shown in the original comment.
    - overcast 9y ago
      You mean like Bitcoin, where a relatively small number of people hold the majority of all mined Bitcoin in the world? https://bitconnect.co/bitcoin-news/254/bitcoin-millionaires-how-many-people-hold-all-the-worlds-bitcoins/ https://bitconnect.co/bitcoin-news/254/bitcoin-millionaires-... https://bitcoinprivacy.net/richlist https://bitcoinprivacy.net/richlist
      - deleted 9y ago
        [deleted]
      - Frogolocalypse 9y ago
        What does that have to do with quantitative easing and deflation?
michalu 9y ago
Yes, but when my bank fails, the government backing that paper will pay up the deposit up to €50k... if the government is strong well there you go... Ask MtGox users what happened with their "currency"... and it's not even a big case in terms of amount of money gone. The thing is, yesterday I sent USD from US bank to UK and received it in less than 30 seconds paying less than 1% in total on fees (including FX), using Transferwise. Coinbase wants to charge me 4% and will take its time... A month ago I made a typo when making a transfer. The money bounced back in 3 days. Try sending BTC to your ETH wallet and see what happens. The problem that cryptocurrencies solve can and is being solved because the technology is at that level now so it's possible. Yeah banks suck, we need new, better banks. Transfers suck, we need more like Transferwise. Blockchain is a different story though...
- DennisP 9y ago
  Ask the central bank of Bangladesh what happened with theirs. http://thehackernews.com/2016/03/bank-hacking-malware.html http://thehackernews.com/2016/03/bank-hacking-malware.html
  - zanny 9y ago
    The point isn't that having the central bank backing makes fiat infallible, it is that people will trust a private bank with the backing of a government controlling an economy on the scale of the US more than something without any guarantees at all. Of course, with bitcoin, ether, and fiat, you don't need a bank. You can always keep your money yourself. Except with bitcoin and ether the ability to secure your own money is much more attainable for average people. On the flip side, a lot of people conflate trust in web exchanges or bitcoin banks with the stability of the currency itself. Isolated, you have a reason to trust bitcoin way more than any state actor - its math, codified, and nobody can erase it now. On the other hand, state actors have force of violence if anyone breaks the money. If someone breaks bitcoin with an exploit in the blockchain, you are screwed without recourse. At this point, with the amount of participation it has, the bitcoin protocol should be considered robust - but that also is what translates into its valuation. It is only worth so much because it is proven through its long years of use.
AlexCoventry 9y ago
The difference between a $100 bill and 0.04 BTC is that the IRS accepts the $100 bill as payment for taxes. Taxation is what creates the fundamental demand for national currency.

deleted 9y ago

[deleted]

overcast 9y ago

The graph of the Dollar also doesn't look like this https://cdn-images-1.medium.com/max/1400/1*esoUPhcZiG3pEk1czC7ksw.png https://cdn-images-1.medium.com/max/1400/1*esoUPhcZiG3pEk1cz...

klodolph 9y ago
And it's a damn good thing, too. High volatility and deflation would be an unmitigated disaster. The US, UK, and Japan are all currently fighting deflation with QE policies, which seem to be working fairly well.
- Frogolocalypse 9y ago
  If by working you mean rapidly transferring wealth into fewer sets of hands, yes.
  - klodolph 9y ago
    Are you saying that avoiding deflation and volatility is what consolidates wealth? How? Or are you saying that quantitative easing consolidates wealth? How? Or are you just inserting an unrelated complaint into the discussion?
    - Frogolocalypse 9y ago
      I think I'm being clear enough. There has been an objectively massive shift in wealth between low and middle income earners to wealthy asset accumulators over the past 30 years, and that has accelerated over the past 10. This solution you're lauding has been engineered by exactly those asset accumulators as a response to problems caused by exactly those asset accumulators. It's like you're cheering on an arsonist because after the fire he lit that has burned down your house, he hands you a bucket of urine to help put the fire out.
      - klodolph 9y ago
        So, I don't understand what you were trying to say, and when I ask for clarification, you just double down instead of actually answering my questions? Come on, I just want to understand what your viewpoint is, but if you don't want me to understand your viewpoint, I guess that's your prerogative.
        Frogolocalypse 9y ago
        Your questions : 1. Strawman. It is the concept of value itself that has been perverted through this process. 2. Because organisations (i.e. banks and the owners of their service channels) closer to the feed of treasuries suffer the least of the effects of monetary expansion. 3. I thought we were talking about inflation and bitcoin as a store of value?
        klodolph 9y ago
        When the question is, "Are you saying X?", "Strawman" is a nonsensical answer. I wasn't asking rhetorical questions, I was asking questions because I didn't understand what argument you were making and I wanted clarification. That's pretty much the opposite of a strawman argument right there. Furthermore, I don't know how to make heads nor tails of the statement that the "concept of value itself" has been "perverted". Such a vague and sentimental notion could mean many different things. The criticism that our economic system aggregates wealth in the hands of a few is valid, but at least the dollar isn't suffering from deflation and extreme volatility, which is what makes it viable as a unit of account (unlike bitcoin). I wasn't considering bitcoins or dollars as stores of value, just as units for measuring value and devices for transmitting it. Maybe at some point bitcoin will overcome these problems, but for now, I'm rather glad a graph of the dollar's value looks nothing like the graph shown in the original comment.
  - overcast 9y ago
    You mean like Bitcoin, where a relatively small number of people hold the majority of all mined Bitcoin in the world? https://bitconnect.co/bitcoin-news/254/bitcoin-millionaires-how-many-people-hold-all-the-worlds-bitcoins/ https://bitconnect.co/bitcoin-news/254/bitcoin-millionaires-... https://bitcoinprivacy.net/richlist https://bitcoinprivacy.net/richlist
    - deleted 9y ago
      [deleted]
    - Frogolocalypse 9y ago
      What does that have to do with quantitative easing and deflation?

michalu 9y ago

Yes, but when my bank fails, the government backing that paper will pay up the deposit up to €50k... if the government is strong well there you go... Ask MtGox users what happened with their "currency"... and it's not even a big case in terms of amount of money gone. The thing is, yesterday I sent USD from US bank to UK and received it in less than 30 seconds paying less than 1% in total on fees (including FX), using Transferwise. Coinbase wants to charge me 4% and will take its time... A month ago I made a typo when making a transfer. The money bounced back in 3 days. Try sending BTC to your ETH wallet and see what happens. The problem that cryptocurrencies solve can and is being solved because the technology is at that level now so it's possible. Yeah banks suck, we need new, better banks. Transfers suck, we need more like Transferwise. Blockchain is a different story though...

DennisP 9y ago
Ask the central bank of Bangladesh what happened with theirs. http://thehackernews.com/2016/03/bank-hacking-malware.html http://thehackernews.com/2016/03/bank-hacking-malware.html
- zanny 9y ago
  The point isn't that having the central bank backing makes fiat infallible, it is that people will trust a private bank with the backing of a government controlling an economy on the scale of the US more than something without any guarantees at all. Of course, with bitcoin, ether, and fiat, you don't need a bank. You can always keep your money yourself. Except with bitcoin and ether the ability to secure your own money is much more attainable for average people. On the flip side, a lot of people conflate trust in web exchanges or bitcoin banks with the stability of the currency itself. Isolated, you have a reason to trust bitcoin way more than any state actor - its math, codified, and nobody can erase it now. On the other hand, state actors have force of violence if anyone breaks the money. If someone breaks bitcoin with an exploit in the blockchain, you are screwed without recourse. At this point, with the amount of participation it has, the bitcoin protocol should be considered robust - but that also is what translates into its valuation. It is only worth so much because it is proven through its long years of use.

AlexCoventry 9y ago

The difference between a $100 bill and 0.04 BTC is that the IRS accepts the $100 bill as payment for taxes. Taxation is what creates the fundamental demand for national currency.