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Cryptocurrency is probably doomed because the makers of cryptocurrencies have a fundamental conceptual disconnect with money: what it is, why it works and what

Cryptocurrency is probably doomed because the makers of cryptocurrencies have a fundamental conceptual disconnect with money: what it is, why it works and what it represents. Money only works when you have a powerful state actor enforcing the legality of the transaction. When you try to escape that, you get at best a parallel system that still goes back to the state for help in keeping functioning or a system prone to failure, fraud and speculation. To whit yet another one of these incidents.

autokad 9y ago
maybe, but this particular incident was more along the lines of phishing and little to do with the cryptocurrency itself
japhy__ryder 9y ago
Well Bitcoin has been doomed since 2011, so I guess if you just keep saying that, it will eventually be true. Until then, it looks like it'll be around for a while.
option 9y ago
bitcoin is probably doomed in US because it is taxed as asset and isn't considered a "money" by the IRS. Hence to actually legally use it as a money is a huge pain tax-wise (imagine having to calculate holding periods and capital gains each time you buy a coffee) But US isn't entire world.
- CyberDildonics 9y ago
  People keep saying this, but it just isn't true. All you have to do is match transactions with price. It can be done automatically.
  - option 9y ago
    A lot of things "can be done". And what is not true? Bitcoin IS considered an asset by the IRS
    - CyberDildonics 9y ago
      > bitcoin is probably doomed in US because a bold prediction, not backed up by what you are saying because: > to actually legally use it as a money is a huge pain tax-wise Is not true.
    - ringaroundthetx 9y ago
      > Bitcoin IS considered an asset by the IRS Yes, that is true and nobody was arguing that with you. Thats not controversial or interesting to anybody but you. It simply makes other considerations necessary to use it practically. And software already exists to alleviate how it is used, when used as payment network rails. In your attempt to imagine next week's death knell for bitcoin, in the US, you missed all the tax advantages the IRS has created for bitcoin by classifying it as property, such as the ability to like-kind exchange forever and never have a tax event (unless you buy something).
jankins 9y ago
I think you are making an assumption that seems common sense but might not actually hold: that cryptocurrency will fail if it is prone to fraud, speculation, theft, etc. I think it's interesting that cryptocurrency has achieved its current level of success despite those things being widely known and publicized. Users accept the risk to gain the benefits of the platform.
- Retra 9y ago
  It appears one of the benefits of the platform is the ability to easily commit fraud, speculations, theft, etc.
  - jankins 9y ago
    Yep :P that's definitely a benefit for a class of users, but it's not the benefit that all users are interested in, and all the other benefits are linked to those vulnerabilities. (in the current implementations anyway).
CyberDildonics 9y ago
> Money only works when you have a powerful state actor enforcing the legality of the transaction. Fiat currencies work this way. Gold and cryptocurrencies do not, but they still work all the same, though gold is not very convenient in the modern world. > failure, fraud and speculation. These ICO hacks are separate from the fact that cryptocurrencies do work and are working right now. Preventing fraud is not a feature of any currency. Speculation is something that happens with any investment, I'm not sure why you think that there is or should be efforts to prevent it.
- nickbauman 9y ago
  I never said anything should be prevented. But you just illustrated my point exactly. Gold (and cryptocurrencies) cannot support a market economy because of the problem of hoarding a limited resource and the lack of representation of debt. Even the ancients knew this: they would require taxes be paid in the _coin of the realm,_ not just gold. Requiring this made it possible for monarchs to facilitate a market economy. They paid their soldiers in the coin. The peasants traded with the soldiers in order to pay their taxes. Markets emerged from this.
  - CyberDildonics 9y ago
    > Gold (and cryptocurrencies) cannot support a market economy because of the problem of hoarding a limited resource and the lack of representation of debt. That's a bold claim to throw out there with nothing to back it up. Gold has been used as a currency for thousands of years. Crypto-currencies are out there working whether you like it or not. To say that they can't work is pretty silly when they are literally working right now. > they would require taxes be paid in the _coin of the realm First, you should source this since it sounds like you are talking about a specific country at a specific time in history. Those were usually made of gold and silver. Why do you think coins have cleated edges? It's so people can shave them off without someone knowing. Also countries used gold to transact between each other, no matter what they tried to press on their citizens. The longest any fiat currency has lasted is around 300 years, most don't last 50. Our current world wide currency system is only about 40 years old. The transition came after Charles DeGualle started to reclaim France's gold after the Vietnam war because he feared the US didn't have enough gold to redeem their dollars. Nixon was forced to take the US off the gold standard completely and our current system was born.
CPLX 9y ago
Perhaps. Another way of looking at it is that they have an intuitive and successful connection with the mechanics of gambling. Cryptocurrencies and ICO's as they stand today conceptually have a lot more in common with the old urban numbers rackets[0] than they do with the concept of currency. [0] https://en.wikipedia.org/wiki/Numbers_game https://en.wikipedia.org/wiki/Numbers_game
- justadeveloper2 9y ago
  I had an uncle who used to "carry money" for numbers rackets in NY which I think means he was involved in racketeering. I don't claim to understand how it worked, but I know the winning numbers were related to the winners of certain horse races. The state lottery pretty much put an end to it.
empath75 9y ago
I'm a cryptocurrency skeptic, but money works if people accept it as a medium of exchange. People are willing to trade goods and services for bitcoin, so it's money. Now, without a nation-state backing it, it's going to potentially have problems with stability, regulation, etc, but that doesn't mean it's not acting as money now.
kusmi 9y ago
I must confirm, this is sarcasm?

autokad 9y ago

maybe, but this particular incident was more along the lines of phishing and little to do with the cryptocurrency itself

japhy__ryder 9y ago

Well Bitcoin has been doomed since 2011, so I guess if you just keep saying that, it will eventually be true. Until then, it looks like it'll be around for a while.

option 9y ago

bitcoin is probably doomed in US because it is taxed as asset and isn't considered a "money" by the IRS. Hence to actually legally use it as a money is a huge pain tax-wise (imagine having to calculate holding periods and capital gains each time you buy a coffee) But US isn't entire world.

CyberDildonics 9y ago
People keep saying this, but it just isn't true. All you have to do is match transactions with price. It can be done automatically.
- option 9y ago
  A lot of things "can be done". And what is not true? Bitcoin IS considered an asset by the IRS
  - CyberDildonics 9y ago
    > bitcoin is probably doomed in US because a bold prediction, not backed up by what you are saying because: > to actually legally use it as a money is a huge pain tax-wise Is not true.
  - ringaroundthetx 9y ago
    > Bitcoin IS considered an asset by the IRS Yes, that is true and nobody was arguing that with you. Thats not controversial or interesting to anybody but you. It simply makes other considerations necessary to use it practically. And software already exists to alleviate how it is used, when used as payment network rails. In your attempt to imagine next week's death knell for bitcoin, in the US, you missed all the tax advantages the IRS has created for bitcoin by classifying it as property, such as the ability to like-kind exchange forever and never have a tax event (unless you buy something).

jankins 9y ago

I think you are making an assumption that seems common sense but might not actually hold: that cryptocurrency will fail if it is prone to fraud, speculation, theft, etc. I think it's interesting that cryptocurrency has achieved its current level of success despite those things being widely known and publicized. Users accept the risk to gain the benefits of the platform.

Retra 9y ago
It appears one of the benefits of the platform is the ability to easily commit fraud, speculations, theft, etc.
- jankins 9y ago
  Yep :P that's definitely a benefit for a class of users, but it's not the benefit that all users are interested in, and all the other benefits are linked to those vulnerabilities. (in the current implementations anyway).

CyberDildonics 9y ago

> Money only works when you have a powerful state actor enforcing the legality of the transaction. Fiat currencies work this way. Gold and cryptocurrencies do not, but they still work all the same, though gold is not very convenient in the modern world. > failure, fraud and speculation. These ICO hacks are separate from the fact that cryptocurrencies do work and are working right now. Preventing fraud is not a feature of any currency. Speculation is something that happens with any investment, I'm not sure why you think that there is or should be efforts to prevent it.

nickbauman 9y ago
I never said anything should be prevented. But you just illustrated my point exactly. Gold (and cryptocurrencies) cannot support a market economy because of the problem of hoarding a limited resource and the lack of representation of debt. Even the ancients knew this: they would require taxes be paid in the _coin of the realm,_ not just gold. Requiring this made it possible for monarchs to facilitate a market economy. They paid their soldiers in the coin. The peasants traded with the soldiers in order to pay their taxes. Markets emerged from this.
- CyberDildonics 9y ago
  > Gold (and cryptocurrencies) cannot support a market economy because of the problem of hoarding a limited resource and the lack of representation of debt. That's a bold claim to throw out there with nothing to back it up. Gold has been used as a currency for thousands of years. Crypto-currencies are out there working whether you like it or not. To say that they can't work is pretty silly when they are literally working right now. > they would require taxes be paid in the _coin of the realm First, you should source this since it sounds like you are talking about a specific country at a specific time in history. Those were usually made of gold and silver. Why do you think coins have cleated edges? It's so people can shave them off without someone knowing. Also countries used gold to transact between each other, no matter what they tried to press on their citizens. The longest any fiat currency has lasted is around 300 years, most don't last 50. Our current world wide currency system is only about 40 years old. The transition came after Charles DeGualle started to reclaim France's gold after the Vietnam war because he feared the US didn't have enough gold to redeem their dollars. Nixon was forced to take the US off the gold standard completely and our current system was born.

CPLX 9y ago

Perhaps. Another way of looking at it is that they have an intuitive and successful connection with the mechanics of gambling. Cryptocurrencies and ICO's as they stand today conceptually have a lot more in common with the old urban numbers rackets[0] than they do with the concept of currency. [0] https://en.wikipedia.org/wiki/Numbers_game https://en.wikipedia.org/wiki/Numbers_game

justadeveloper2 9y ago
I had an uncle who used to "carry money" for numbers rackets in NY which I think means he was involved in racketeering. I don't claim to understand how it worked, but I know the winning numbers were related to the winners of certain horse races. The state lottery pretty much put an end to it.

empath75 9y ago

I'm a cryptocurrency skeptic, but money works if people accept it as a medium of exchange. People are willing to trade goods and services for bitcoin, so it's money. Now, without a nation-state backing it, it's going to potentially have problems with stability, regulation, etc, but that doesn't mean it's not acting as money now.

kusmi 9y ago

I must confirm, this is sarcasm?