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Why would you trust a novel currency over the collective interests that stand behind the USD or Euro? Currencies backed by powerful democratic governments, huge

Why would you trust a novel currency over the collective interests that stand behind the USD or Euro? Currencies backed by powerful democratic governments, huge corporations, advanced military industrial complex, research, educational, and financial institutions, and basically all the people that live in those countries aside from a miniscule fraction that prefer cryptocurrency, a currency that must be converted into USD/Euro if you want to do things like buy milk or put gas in your car. Do you reasonably think that if those currencies collapse, you will be just fine with a stockpile of bitcoin? If bitcoin collapses though, the USD will not even notice a ripple. I'm not saying that bitcoin or other cryptocurrencies are not currently a lucrative investment, but I am far from convinced that crypto offers more stability and is a safer bet that dollars or euros

SuoDuanDao 9y ago
I think bitcoin is best understood as a countercyclical bet. Like gold, it is highly volatile but trouble in mainstream markets will always lead to an increase in its value. So one would trust a novel currency over the collective interests that stand behind the USD or Euro if one expects a prolonged downturn in those economies or a divergence of the interests behind them.
koonsolo 9y ago
I consider Bitcoin more of a "collective interest" than money produced by governments. History is full hyperinflation horror stories. Do you trust professional encyclopedia writers more than a bunch of anonymous volunteers collectively writing articles? But Wikipedia is a fact no? It works. Distributed things seem to work, in practice. I agree that Bitcoin still has to prove itself. But if such a thing as Wikipedia can work, why not Bitcoin? But I get your point. Although the world is bigger than US and Europe alone. What about current unstable states? One thing will never happen to Bitoin: hyperinflation.
- notahacker 9y ago
  You can get the equivalent crash in currency value from people choosing to exit their BTC en masse without emitting new coins. Ultimately hyperinflation is a massive imbalance of supply and demand, and whilst the supply side is much more fixed with BTC than a floating, fractional reserve currency, the demand side is much less fixed because there really aren't that many future obligations to pay things in BTC. And I was under the (possibly incorrect?) impression that with the support of enough of the hashing power, core Bitcoin could hypothetically be forked in a way which massively increased the rate at which new BTC were emitted. (Something which would be highly unlikely as miners have strong incentives not to do this under normal circumstances, but the same applies to governments having no incentives to rapidly debase their currency under normal circumstances)
- subroutine 9y ago
  I do like the idea of distributed efforts, and I think Bitcoin has some really positive aspects. Still regarding Bitcoin as the stable alternative to USD is a major stretch, and I think that is partially due to it being decentralized. For one, with no state backing, what does a country risk in simply banning Bitcoin? China has already proven they are paying attention to crypto exchange, and their willingness to institute bans. Do you not fret the US could do the same at any moment? What options are there if the US put a ban on bitcoin exchange? Do you think it would still retain its value?
someonewhocar3s 9y ago
Look at the Rabobank skyscraper in the center of Utrecht, The Netherlands. Bitcoin was made by people that fit in just one room, office and all. It's ecosystem probably spans a floor or a few. And all those people involved, the vast size of the machine, these are weaknesses. Vulnerabilities. Do I want to fail with democracies? With government-subsidized military industry? With multinationals? Why would I want a financial institution, when I can directly create a financial product (as a DAO)? Why would I hold my money in a bank where the government can take it to bail out huge companies? CryptoCurrencies far exceed the financial sector's ability to produce and offer, reliably, financial products. And it feels like being liberated from a system so big and unwieldy nobody seems to understand or control it. If you want a sanity check: see how many bankers were >responsible< for the financial crisis. Hmm? Nobody went to jail for fraud, deception, recklessness or damage? who's in charge then? And how come the people took the fall? You're free to hand your value to the man. Or to keep your own administration. And now with bitcoin technology, it's easy for everyone to do collective yet independent accounting. (regardless - stable currency is not a solved issue, even in cryptoworld. You might assume it's solved IRL but it's not at all, it's better than 100 years ago, but seems to be a real struggle.)

SuoDuanDao 9y ago

I think bitcoin is best understood as a countercyclical bet. Like gold, it is highly volatile but trouble in mainstream markets will always lead to an increase in its value. So one would trust a novel currency over the collective interests that stand behind the USD or Euro if one expects a prolonged downturn in those economies or a divergence of the interests behind them.

koonsolo 9y ago

I consider Bitcoin more of a "collective interest" than money produced by governments. History is full hyperinflation horror stories. Do you trust professional encyclopedia writers more than a bunch of anonymous volunteers collectively writing articles? But Wikipedia is a fact no? It works. Distributed things seem to work, in practice. I agree that Bitcoin still has to prove itself. But if such a thing as Wikipedia can work, why not Bitcoin? But I get your point. Although the world is bigger than US and Europe alone. What about current unstable states? One thing will never happen to Bitoin: hyperinflation.

notahacker 9y ago
You can get the equivalent crash in currency value from people choosing to exit their BTC en masse without emitting new coins. Ultimately hyperinflation is a massive imbalance of supply and demand, and whilst the supply side is much more fixed with BTC than a floating, fractional reserve currency, the demand side is much less fixed because there really aren't that many future obligations to pay things in BTC. And I was under the (possibly incorrect?) impression that with the support of enough of the hashing power, core Bitcoin could hypothetically be forked in a way which massively increased the rate at which new BTC were emitted. (Something which would be highly unlikely as miners have strong incentives not to do this under normal circumstances, but the same applies to governments having no incentives to rapidly debase their currency under normal circumstances)
subroutine 9y ago
I do like the idea of distributed efforts, and I think Bitcoin has some really positive aspects. Still regarding Bitcoin as the stable alternative to USD is a major stretch, and I think that is partially due to it being decentralized. For one, with no state backing, what does a country risk in simply banning Bitcoin? China has already proven they are paying attention to crypto exchange, and their willingness to institute bans. Do you not fret the US could do the same at any moment? What options are there if the US put a ban on bitcoin exchange? Do you think it would still retain its value?

someonewhocar3s 9y ago

Look at the Rabobank skyscraper in the center of Utrecht, The Netherlands. Bitcoin was made by people that fit in just one room, office and all. It's ecosystem probably spans a floor or a few. And all those people involved, the vast size of the machine, these are weaknesses. Vulnerabilities. Do I want to fail with democracies? With government-subsidized military industry? With multinationals? Why would I want a financial institution, when I can directly create a financial product (as a DAO)? Why would I hold my money in a bank where the government can take it to bail out huge companies? CryptoCurrencies far exceed the financial sector's ability to produce and offer, reliably, financial products. And it feels like being liberated from a system so big and unwieldy nobody seems to understand or control it. If you want a sanity check: see how many bankers were >responsible< for the financial crisis. Hmm? Nobody went to jail for fraud, deception, recklessness or damage? who's in charge then? And how come the people took the fall? You're free to hand your value to the man. Or to keep your own administration. And now with bitcoin technology, it's easy for everyone to do collective yet independent accounting. (regardless - stable currency is not a solved issue, even in cryptoworld. You might assume it's solved IRL but it's not at all, it's better than 100 years ago, but seems to be a real struggle.)