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The problems we're seeing with cryptocurrencies are utterly unsurprising if you know what money really is and how it actually works. I think people who are exc

The problems we're seeing with cryptocurrencies are utterly unsurprising if you know what money really is and how it actually works. I think people who are excited about cryptocurrencies assume that money is merely a tool to facilitate transactions between parties of people. The fundamental model of this is two people bartering goods, lol, in some sort of imagined "forest primeval" before money was invented. That money is just a substitute for that behavior. It's hopelessly naive.

fdchn2018 9y ago
Finally created an account to reply to this. There is a great thread on Reddit called - Where has all the world's money gone, explain it like I'm 5. It starts from a convenient barter system. As I was reflecting on the various ICOs I realised that the technology and the blockchain makes the old barter system very efficient. So I do believe that in fact it is a substitute for that behaviour. In fact Im convinced that bitcoin or something like it will become the new gold. If you also think about why we needed to elect representatives, it was so that they would represent the needs of the people. Once I can vote/discuss a topic on the blockchain, I dont need representatives anymore. The blockchain and crypto currencies are going to change the way democracies operate. We're not going to need our elected leaders. This is why you see them spreading so much FUD. Cause they know they're going to be irrelevant in the system and access to all that money is going to go. Tomorrow if I want to build a bridge - going to setup a smart contract - with escrow payments - validated by the people. You hit your milestone and the money gets released. And why not it be digital money. This new wave is being built ground up and govts cannot stop it - even if they want.
- IntronExon 9y ago
  That’s a long way to go to just proselytize without addressing any of the previous concerns. You seem to be reading from the same script all of the “new accounts” use to boost cryptocurrency as well. Finally you claim governments can’t stop something which creates a cryptographically secure “paper” trail. No.
  - fdchn2018 9y ago
    Everyone in crypto world knows that Tether is borderline fraud. Everyone's waiting for this correction. It's important for the coin and the people who invested in tether may get shafted. It's an important learning lesson. There are a lot of coins that may just not go anywhere. Don't read the whitepapers and make the right conclusions - and you're burned. Not defending tether at all. The top commenter is absolutely right about tether. Hope it dies fast.
    - deleted 9y ago
      [deleted]
- naravara 9y ago
  >Where has all the world's money gone, explain it like I'm 5. It starts from a convenient barter system. As I was reflecting on the various ICOs I realised that the technology and the blockchain makes the old barter system very efficient. There was no "old barter system" the way modern people think of it. The idea that pre-commercial economies operated on a "barter system" in the sense that people are directly exchanging goods of similar value is just a simplifying metaphor early economists made to explain how commercial transactions work. Pre-commercial economies operate more like gift economies. It's not so much about trading objects based on their valuation, it's about doing favors for people with the expectation that they will do favors back for you. It takes strong bonds of social trust and cohesion for this to work. Everyone has to have a sense of obligation to pitch in for the community. The bartering only comes in as a form of collateral when dealing with outsiders (people you don't trust as much). This is why the earliest form of exchanges in this way were tied to marriages (e.g. dowries, bride prices) or interactions with other political groups (e.g. treaties, armistice). Barter doesn't actually work, it's basically just a format for giving collateral to make sure people don't welch on deals. Normal currency already solves that problem way better than trust chains based exchange does because the value is obvious and exchanged up front without having to go through any clearing-house to be validated.
  - dsr_ 9y ago
    One of the leading theories about the invention of written numbers and arithmetic is to handle accounting for debts that would last longer than a few weeks or involve many people -- that is, as a supplement to memory for the purpose of credit/debt. So at the dawn of agriculture, people weren't using barter -- they were using credit unions.
    - naravara 9y ago
      And it's easy to speculate how someone would come up with something like that to help adjudicate disputes after having enough he said/she said arguments. Literally chisel some hash-marks into a rock so people don't "forget" and problem solved.
  - qubex 9y ago
wcoenen 9y ago
> if you know what money really is and how it actually works OK, I'll bite. What is money really and how does it actually work?
- zackmorris 9y ago
  I would say that money is a measure of inefficiency. Say for example you hire a mechanic to fix your car. You pay the mechanic's shop for parts and labor. The cost of parts represents inefficiencies in how they're manufactured, the markups of middlemen, the high cost of raw materials from nonrecycled sources, etc etc. Labor represents your lack of knowledge about how to fix your own car, plus the time involved to fix things on your car like water pumps that (due to uninspired design) fail much earlier than they should. In an ideal world where you drive a solar-powered car with a dozen moving parts built by robots from recycled materials, costs would fall to a fraction of what they are now. With the same automation applied across all industries, prices would fall to the point where the opportunity cost for humans to be in debt/servitude to rent-seeking financial institutions would exceed the benefit of using money in the first place. This is basically what happened on Star Trek and is likely to happen in coming decades with Tesla, Amazon etc as humans can no longer compete with machine labor. Things will cost less but incomes will be so low that we won't be able to afford them anyway. Personally I would argue that that started happening sometime after the late 1960s and has gotten to the point where the status quo can only be propped up by every-growing absurdities on a global scale. An oldie but goodie: http://marshallbrain.com/manna1.htm http://marshallbrain.com/manna1.htm
  - maratd 9y ago
    Really? That’s depressing. Money can be anything you want it to be, so how about this. Money = thank you points You give it to people you’re thankful to, who either did something nice for you or gave you something you wanted.
    - zackmorris 9y ago
      Ya I like that better too. I'd like to see us move beyond a world of artificial scarcity to one where everyone's basic needs are met and people can focus on self-actualization. If people want a mansion, great, they can work for it. But if people want to be left alone so they can explore the meaning of life, then they should be free to do so and whatever money is used at that point should go to things that are special. Kind of a Burning Man philosophy maybe?

fdchn2018 9y ago

Finally created an account to reply to this. There is a great thread on Reddit called - Where has all the world's money gone, explain it like I'm 5. It starts from a convenient barter system. As I was reflecting on the various ICOs I realised that the technology and the blockchain makes the old barter system very efficient. So I do believe that in fact it is a substitute for that behaviour. In fact Im convinced that bitcoin or something like it will become the new gold. If you also think about why we needed to elect representatives, it was so that they would represent the needs of the people. Once I can vote/discuss a topic on the blockchain, I dont need representatives anymore. The blockchain and crypto currencies are going to change the way democracies operate. We're not going to need our elected leaders. This is why you see them spreading so much FUD. Cause they know they're going to be irrelevant in the system and access to all that money is going to go. Tomorrow if I want to build a bridge - going to setup a smart contract - with escrow payments - validated by the people. You hit your milestone and the money gets released. And why not it be digital money. This new wave is being built ground up and govts cannot stop it - even if they want.

IntronExon 9y ago
That’s a long way to go to just proselytize without addressing any of the previous concerns. You seem to be reading from the same script all of the “new accounts” use to boost cryptocurrency as well. Finally you claim governments can’t stop something which creates a cryptographically secure “paper” trail. No.
- fdchn2018 9y ago
  Everyone in crypto world knows that Tether is borderline fraud. Everyone's waiting for this correction. It's important for the coin and the people who invested in tether may get shafted. It's an important learning lesson. There are a lot of coins that may just not go anywhere. Don't read the whitepapers and make the right conclusions - and you're burned. Not defending tether at all. The top commenter is absolutely right about tether. Hope it dies fast.
  - deleted 9y ago
    [deleted]
naravara 9y ago
>Where has all the world's money gone, explain it like I'm 5. It starts from a convenient barter system. As I was reflecting on the various ICOs I realised that the technology and the blockchain makes the old barter system very efficient. There was no "old barter system" the way modern people think of it. The idea that pre-commercial economies operated on a "barter system" in the sense that people are directly exchanging goods of similar value is just a simplifying metaphor early economists made to explain how commercial transactions work. Pre-commercial economies operate more like gift economies. It's not so much about trading objects based on their valuation, it's about doing favors for people with the expectation that they will do favors back for you. It takes strong bonds of social trust and cohesion for this to work. Everyone has to have a sense of obligation to pitch in for the community. The bartering only comes in as a form of collateral when dealing with outsiders (people you don't trust as much). This is why the earliest form of exchanges in this way were tied to marriages (e.g. dowries, bride prices) or interactions with other political groups (e.g. treaties, armistice). Barter doesn't actually work, it's basically just a format for giving collateral to make sure people don't welch on deals. Normal currency already solves that problem way better than trust chains based exchange does because the value is obvious and exchanged up front without having to go through any clearing-house to be validated.
- dsr_ 9y ago
  One of the leading theories about the invention of written numbers and arithmetic is to handle accounting for debts that would last longer than a few weeks or involve many people -- that is, as a supplement to memory for the purpose of credit/debt. So at the dawn of agriculture, people weren't using barter -- they were using credit unions.
  - naravara 9y ago
    And it's easy to speculate how someone would come up with something like that to help adjudicate disputes after having enough he said/she said arguments. Literally chisel some hash-marks into a rock so people don't "forget" and problem solved.
- qubex 9y ago

wcoenen 9y ago

> if you know what money really is and how it actually works OK, I'll bite. What is money really and how does it actually work?

zackmorris 9y ago
I would say that money is a measure of inefficiency. Say for example you hire a mechanic to fix your car. You pay the mechanic's shop for parts and labor. The cost of parts represents inefficiencies in how they're manufactured, the markups of middlemen, the high cost of raw materials from nonrecycled sources, etc etc. Labor represents your lack of knowledge about how to fix your own car, plus the time involved to fix things on your car like water pumps that (due to uninspired design) fail much earlier than they should. In an ideal world where you drive a solar-powered car with a dozen moving parts built by robots from recycled materials, costs would fall to a fraction of what they are now. With the same automation applied across all industries, prices would fall to the point where the opportunity cost for humans to be in debt/servitude to rent-seeking financial institutions would exceed the benefit of using money in the first place. This is basically what happened on Star Trek and is likely to happen in coming decades with Tesla, Amazon etc as humans can no longer compete with machine labor. Things will cost less but incomes will be so low that we won't be able to afford them anyway. Personally I would argue that that started happening sometime after the late 1960s and has gotten to the point where the status quo can only be propped up by every-growing absurdities on a global scale. An oldie but goodie: http://marshallbrain.com/manna1.htm http://marshallbrain.com/manna1.htm
- maratd 9y ago
  Really? That’s depressing. Money can be anything you want it to be, so how about this. Money = thank you points You give it to people you’re thankful to, who either did something nice for you or gave you something you wanted.
  - zackmorris 9y ago
    Ya I like that better too. I'd like to see us move beyond a world of artificial scarcity to one where everyone's basic needs are met and people can focus on self-actualization. If people want a mansion, great, they can work for it. But if people want to be left alone so they can explore the meaning of life, then they should be free to do so and whatever money is used at that point should go to things that are special. Kind of a Burning Man philosophy maybe?