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The original use case for cryptocurrency (eg digital sound money, not world computers and the like) is as a long-term (and hopefully independent and uncorrrelat
by SkyMarshal 8y ago
The original use case for cryptocurrency (eg digital sound money, not world computers and the like) is as a long-term (and hopefully independent and uncorrrelated enough) hedge against mis-management and failure of national currency regimes. That remains a legit use case but will take years or decades to materialize. Given that the tech is still in the early stages of its maturity curve and needs more time to robustify, that’s a good thing.
But national currencies are getting increasingly shaky, even the USD where it appears Congress has no political will to control the US national debt and deficit, and where the GOP blows bigger deficit holes with tax cuts and the Dems are talking about MMT. Not to mention the risks to the Euro and Yuan, along with the many smaller countries with distressed currencies.
It’s interesting to me that cryptocurrrency skeptics and critics seem to regularly ignore this as a use case, when in fact it is the most important one (maybe even the only one). It seems many people can’t bring themselves to believe that modern national currencies can fail and don’t need an independent hedge, even though the 1800s and 1900s were full of exactly that.
- woah 8y agoThat wasn't the original use case for crypto. In the bitcoin white paper he mostly talks about micropayments, which bitcoin has ironically failed at.
- SkyMarshal 8y agoHe covered his bases and talked about everything, but micropayments don’t need expensive decentralization to implement. Incorruptible digital money does.
- Qasaur 8y agoThis is wrong. Satoshi Nakamoto was incredibly well-read in the Austrian school and mentions central bank controlled credit bubbles in his whitepaper as well as in many of his online posts on forums. The genesis block is even dedicated to this goal: https://en.bitcoin.it/wiki/Genesis_block https://en.bitcoin.it/wiki/Genesis_block "The coinbase parameter (seen above in hex) contains, along with the normal data, the following text: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"
- tim333 8y agoI don't see any mention of credit bubbles in https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf
- tim333 8y ago>hedge against mis-management and failure of national currency regimes At the moment cryptocurrencies seem a good be worse than fiat. Imagine your salary or mortgage was a set number of bitcoins. There were probably a number of initial uses imagined but if you look as Szabo's twitter pretty much the first link is The Crypto Anarchist Manifesto about circumventing government and libertarian freedom which I think was a big part of the inspiration. (https://mobile.twitter.com/NickSzabo4/status/1074018110829555713 https://mobile.twitter.com/NickSzabo4/status/107401811082955... )
- SkyMarshal 8y agoThey’re a hedge in that they have different failure modes than govt fiat, which means they’re a potential safe haven in the event of govt currency collapse/hyperinflation/etc. Which is part of what the cryptoanarchists wanted. Yes they’re volatile, but they’re new, immature tech, with shallow market depth. None of those things will last forever.
- tim333 8y agoGuess if they become accepted enough. At the moment businesses transacting with iffy countries often do the deal in USD so I guess it could be the new USD maybe.