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The tech is interesting and the ideals of a currency not aligned with a government or big bank are nice but cryptocurrencies have no real value. Essentially, t
by matt_s 9y ago
The tech is interesting and the ideals of a currency not aligned with a government or big bank are nice but cryptocurrencies have no real value.
Essentially, they are a verifiable ledger of anonymous people exchanging bytes. They may have paid for those bytes with a real currency, much like someone paid for tulips some time ago, or they may have won them for verifying something on the ledger.
Some people in the tulip craze actually had tulips though, right? If a cryptocurrency falls to $0 USD exchange then all that is left is a digital ledger.
"At the peak of tulip mania, in February 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftsworker" [1]
I wonder if time of year plays into the psychology of this.
[1] https://en.wikipedia.org/wiki/Tulip_mania https://en.wikipedia.org/wiki/Tulip_mania
- jstanley 9y ago> The tech is interesting and the ideals of a currency not aligned with a government or big bank are nice but cryptocurrencies have no real value. If it's interesting, and the ideals are nice, how does it have no value?
- luke3butler 9y agoThis might be beating a dead horse, but what's the difference between Bitcoin and gold then? If gold loses its value, then it's just a heavy rock. They both take time, money, and resources to mine but neither of them have any intrinsic value.
- oscilloscope 9y agoGold's been around for a lot longer— it's mythologically significant. But as far as recent technology goes, Bitcoin's been around for a while. It's older then the iPad.
- matt_s 9y agoThat's sort of my point. If Bitcoin and gold lose all financial value, at least with gold you have a heavy rock and to most humans, visually appealing. You can do something with that - build a house with enough of it, make jewelry out of it, forge weapons (would they be any good?) You can't do anything with Bitcoin if is exchanging at $0 USD.
- luke3butler 9y agoA decentralized, distributed ledger has value as well. Ethereum is a better example, but on the flip-side so is steel.
- cglace 9y agoGold has a myriad of uses outside of it being a heavy rock. If it's price were to drop substantially it's use in industry would increase substantially and we know what happens to price when demand increases.
- soneil 9y agoI don’t think industry is the floor you think it is. They’ll happily pay as little as they can for it. I think the more honest measure is simply how many people have faith in it. Bitcoin and gold may be logically equivalent for this function, but a lot more people have a lot more faith in gold.
- cglace 9y agoAnyone will happily pay as little as possible for anything. I don't see your point.
- wslh 9y ago> The tech is interesting and the ideals of a currency not aligned with a government or big bank are nice but cryptocurrencies have no real value. If the network participants obtain an utility there is value. One example that I commented several times here in HN: I live in Buenos Aires, Argentina, and when foreign customers paid us via a wire transfer the inefficient big banks (that exist almost everywhere) calculate an exchange rate that is not very fair. Doing the same transfer by Bitcoin and converting it (100% legally) to our local currency gives us a better rate which means more profits for our company. Other examples exist but at the core what is happening is that there are financial innovations that the regulatory framework is killing and can be leveraged with these technologies. Sure, there are a lot of scammers right there but this is another topic.
- RestlessMind 9y agoTo prevent scammers from scamming and imbibe confidence about a currency (or any store of value) in the general populations, you need regulations, security practices and insurance. All those cost money and transaction fees is one source to pay that cost.
- wslh 9y agoThe central dilemma is how far the regulations go to prevent innovation. Just look at the accredited investor thing in US, it is unbelievable while you can go to Las Vegas and lose everything.
- xya3453 9y agoThe enormous value that the technology provides is anonymous, distributed consensus. It enables digital asset ownership. It enables self-organising permissionless networks. It enables humans to organise and transact without any central authority for the first time. That's the real value.
- cesarb 9y ago> It enables humans to organise and transact without any central authority for the first time. Didn't that already happen before we even had central authorities?