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> The developing world would hugely benefit from a scalable technology that can efficiently service digital transactions. The piece demonstrates this with how q

> The developing world would hugely benefit from a scalable technology that can efficiently service digital transactions. The piece demonstrates this with how quickly WeChat Pay and Alipay penetrated China. I hear this a lot in cryptocurrency threads, and I vehemently disagree. There's no doubt that using "some other currency" (currency or cryptocurrency) is better than using a corrupt, authoritarian regime's currency. But there's also no doubt that being able to execute monetary policy is a huge advantage for any country. Read anything about currency manipulation or currency markets. Not being able to control the supply of currency your goods (or others' goods, i.e. petrodollars) are valued in is a huge disadvantage. It feels like there's a huge political push to try and get the "developing world" (with all the hand-waving that's been applied to this term) onto cryptocurrencies, but that permanently puts them at a disadvantage compared to countries that can manipulate their own currency. I think selling this is short-term-ism at its worst. And honestly? It's also vaguely colonial. I would love to hear from people in these countries what they think about cryptocurrencies, if anything. Cryptocurrency advocates saying, "we know what's best for you" is super troubling to me.

JumpCrisscross 7y ago
> there's a huge political push to try and get the "developing world" (with all the hand-waving that's been applied to this term) onto cryptocurrencies, Is there? There's a lot of discussion around it. But I've never seen a legitimate push.
Shaddox 7y ago
I fully agree with you. I'd also like to add something that I consider the elephant in the room. Haven't tech companies already proven themselves that they're willing to bend to governments' will in order to do business? No authoritarian government will welcome Libra with open arms. If the currency won't bend to their will, then they will simply ban it and then it becomes (at best) a black market good. There's also another issue: how do you value it so that it becomes useful to everyone? If I'm in Venezuela getting paid in bolivars then my money already has no power to begin with. It will also be hard to manage for a lot of people. I doubt some average Joe in a poor country will want to complicate himself by buying something at 0.0000000231 Libra. It will require a lot of cognitive power to not get scammed.
- BlueTemplar 7y ago
  He'll just use 23.1 nanolibra? And why do you assume that there will be so few Libra around?
duguxu 7y ago
People living in these country here. Thank you for pointing out these concerns. Besides currency manipulation, another issue with cryptocurrency is about responsibility and accountability. For traditional central bank, before a greedy bad policy made, local governors must carefully think about the aftermath like unrest and they might be held for account and get punished. In the worst scenario, people keep the choice to overthrow old bureaucracy to change the policy by force. But this is not the case for cryptocurrency. There might be no one punished for terribly wrong decision, just because the public have no idea who the decision maker is, or he/she is in another country and escapes the rule of law. Just like 1997 financial crisis for southeast asian people.
- svd4anything 7y ago
  > But this is not the case for cryptocurrency. There might be no one punished for terribly wrong decision, just because the public have no idea who the decision maker is, or he/she is in another country and escapes the rule of law. Just like 1997 financial crisis for southeast asian people. What kind of “decision” are you imagining? I thought part of the point of cryptocurrencies is to remove power to even have these “decisions”. So I’m not sure what the scenario you imagine is. What if Gold was used as currency easily, is there a problem that would occur?
  - duguxu 7y ago
    I don’t know if i’m correct on this. but i think members of the libra have the power to manipulate exchange rate more or less, although they might choose not to use it. Also, upgrading cryptocurrency with improper algorithm or parameters could influence the market, targeting certain countries for instance. There are decisions in cryptocurrency. and they are “democratically” made in the computing power sense, which means, as a less computationally powerful country, it might lose policy independence in the global voting. For gold, there would be much less space for policies, both good and bad, and hence less benefits and problems at the same time. I think that’s one of the reasons why it’s not widely adopted anymore.
aserafini 7y ago
Regarding a country’s ability to manipulate their own currency or execute monetary policy which is mostly in the direction of printing more: the end game of crypto seems to take this option off the table for all governments in the long term. Why? Because assuming all other things being equal (convenience as medium of exchange etc.), an individual is always going to prefer holding currency that isn’t subject to inflation. An individual is never going to generously allow their government to erode X% of their liquid cash voluntarily. This future doesn’t require any crypto ‘dictating’ its money supply policy, it just requires at least one fixed supply crypto to exist in your country that is as convenient as existing cash / online payment to make governmental monetary policy useless. The problem for governments is: the genie is out of the bottle regarding fixed supply. Note that I’m not saying it’s good or bad that countries cannot effectively control money supply anymore but it seems inevitable they can’t in the long term.
- RobertoG 7y ago
  >>"Why? Well assuming all things being equal (convenience as medium of exchange etc.), an individual is always going to prefer holding currency that isn’t subject to inflation." And why should they spend a so wonderful asset? And what is the point of a currency that is always appreciating and nobody want to spend? >>"The problem for governments is: the genie is out of the bottle regarding fixed supply." Central banks don't target the quantity of money, they target the interest rate. The quantity of money is a function of the economic activity, as it should. The idea that people is going to change to private currencies is a joke. The only thing a government have to do, in order to create demand for its currency, is accept only its currency as payment for taxes.
  - aserafini 7y ago
    > what is the point of a currency that is always appreciating and nobody want to spend Fixed supply doesn't mean it will always appreciate. It just seems like it today because the first fixed supply currency that can be transferred over the internet was only invented 10 years ago. It (or an equivalent, or a mix of equivalents) has to rise from 0 USD to X USD over time where X is "the value of global, fixed supply currency". When X is reached, it reverts to being the worst investment you can possibly make, useful only for buying higher yield assets or exchanging for food, shelter and stuff. > The only thing a government have to do, in order to create demand for its currency, is accept only its currency as payment for taxes. Just because I pay taxes in USD/EUR doesn't mean I can't store my cash in a fixed supply currency, and anyone who does this avoids inflation. And if everyone does this, government no longer controls the money supply.
hvhsb 7y ago
>Not being able to control the supply of currency your goods (or others' goods, i.e. petrodollars) are valued in is a huge disadvantage. Ask the poor countries of the EU, which have been ripped off by the rich countries for decades now.
abecedarius 7y ago
Re: "we know what's best for you". We're talking about private companies offering people a free choice of an alternative to state monopoly money. Yes, Facebook has reach, but they're not the ones jailing people, etc. Even though I can't stand Facebook I think you have this backwards. (To the extent they succeed through dirty tricks, I'd be wrong about this.) > there's also no doubt that being able to execute monetary policy is a huge advantage for any country. I'm not confident about pretty much anything macroeconomic, but I do doubt the confidence of most talk about it. The U.S. was on the gold standard through the Industrial Revolution, for example.
Macross8299 7y ago
>Cryptocurrency advocates saying, "we know what's best for you" is super troubling to me. How is this fundamentally different from an unelected monetary economist working at the IMF or Federal Reserve deciding they know what's best for millions of people in a country? Given that you're presenting a country that can manipulate their own currency as the superior choice.
- ausbah 7y ago
  Because the monetary economists work to improve the economy of their whole country, while "cryptocurrency advocates" are more likely to be vouching for a system that stands to personally benefit them?
  - Macross8299 7y ago
    >Because the monetary economists work to improve the economy of their whole country I'm really not so sure that can be stated as some universal truth when it comes to things like the IMF.
freddie_mercury 7y ago
I live in a developing country. I don't see any benefit whatsoever for using a cryptocurrency for digital transactions. I can transfer money instantly to someone else's bank account, they just need to give me their name & account number. I've used that to buy lots of things from places that don't accept credit cards. For people who don't trust banks (my inlaws don't keep any money in a bank because they don't trust it, so they are unbanked) -- I don't see anything about Libra or Cryptocurrencies that is going to make them trust it. "There's some super-complicated math that proves you own this money and no one can take it from you" just isn't the kind of thing that is going to convince my inlaws to trust it. Libra hasn't released any pricing on their processing fees so it is all vaporware & unfounded guessing right now.

JumpCrisscross 7y ago

> there's a huge political push to try and get the "developing world" (with all the hand-waving that's been applied to this term) onto cryptocurrencies, Is there? There's a lot of discussion around it. But I've never seen a legitimate push.

Shaddox 7y ago

I fully agree with you. I'd also like to add something that I consider the elephant in the room. Haven't tech companies already proven themselves that they're willing to bend to governments' will in order to do business? No authoritarian government will welcome Libra with open arms. If the currency won't bend to their will, then they will simply ban it and then it becomes (at best) a black market good. There's also another issue: how do you value it so that it becomes useful to everyone? If I'm in Venezuela getting paid in bolivars then my money already has no power to begin with. It will also be hard to manage for a lot of people. I doubt some average Joe in a poor country will want to complicate himself by buying something at 0.0000000231 Libra. It will require a lot of cognitive power to not get scammed.

BlueTemplar 7y ago
He'll just use 23.1 nanolibra? And why do you assume that there will be so few Libra around?

duguxu 7y ago

People living in these country here. Thank you for pointing out these concerns. Besides currency manipulation, another issue with cryptocurrency is about responsibility and accountability. For traditional central bank, before a greedy bad policy made, local governors must carefully think about the aftermath like unrest and they might be held for account and get punished. In the worst scenario, people keep the choice to overthrow old bureaucracy to change the policy by force. But this is not the case for cryptocurrency. There might be no one punished for terribly wrong decision, just because the public have no idea who the decision maker is, or he/she is in another country and escapes the rule of law. Just like 1997 financial crisis for southeast asian people.

svd4anything 7y ago
> But this is not the case for cryptocurrency. There might be no one punished for terribly wrong decision, just because the public have no idea who the decision maker is, or he/she is in another country and escapes the rule of law. Just like 1997 financial crisis for southeast asian people. What kind of “decision” are you imagining? I thought part of the point of cryptocurrencies is to remove power to even have these “decisions”. So I’m not sure what the scenario you imagine is. What if Gold was used as currency easily, is there a problem that would occur?
- duguxu 7y ago
  I don’t know if i’m correct on this. but i think members of the libra have the power to manipulate exchange rate more or less, although they might choose not to use it. Also, upgrading cryptocurrency with improper algorithm or parameters could influence the market, targeting certain countries for instance. There are decisions in cryptocurrency. and they are “democratically” made in the computing power sense, which means, as a less computationally powerful country, it might lose policy independence in the global voting. For gold, there would be much less space for policies, both good and bad, and hence less benefits and problems at the same time. I think that’s one of the reasons why it’s not widely adopted anymore.

aserafini 7y ago

Regarding a country’s ability to manipulate their own currency or execute monetary policy which is mostly in the direction of printing more: the end game of crypto seems to take this option off the table for all governments in the long term. Why? Because assuming all other things being equal (convenience as medium of exchange etc.), an individual is always going to prefer holding currency that isn’t subject to inflation. An individual is never going to generously allow their government to erode X% of their liquid cash voluntarily. This future doesn’t require any crypto ‘dictating’ its money supply policy, it just requires at least one fixed supply crypto to exist in your country that is as convenient as existing cash / online payment to make governmental monetary policy useless. The problem for governments is: the genie is out of the bottle regarding fixed supply. Note that I’m not saying it’s good or bad that countries cannot effectively control money supply anymore but it seems inevitable they can’t in the long term.

RobertoG 7y ago
>>"Why? Well assuming all things being equal (convenience as medium of exchange etc.), an individual is always going to prefer holding currency that isn’t subject to inflation." And why should they spend a so wonderful asset? And what is the point of a currency that is always appreciating and nobody want to spend? >>"The problem for governments is: the genie is out of the bottle regarding fixed supply." Central banks don't target the quantity of money, they target the interest rate. The quantity of money is a function of the economic activity, as it should. The idea that people is going to change to private currencies is a joke. The only thing a government have to do, in order to create demand for its currency, is accept only its currency as payment for taxes.
- aserafini 7y ago
  > what is the point of a currency that is always appreciating and nobody want to spend Fixed supply doesn't mean it will always appreciate. It just seems like it today because the first fixed supply currency that can be transferred over the internet was only invented 10 years ago. It (or an equivalent, or a mix of equivalents) has to rise from 0 USD to X USD over time where X is "the value of global, fixed supply currency". When X is reached, it reverts to being the worst investment you can possibly make, useful only for buying higher yield assets or exchanging for food, shelter and stuff. > The only thing a government have to do, in order to create demand for its currency, is accept only its currency as payment for taxes. Just because I pay taxes in USD/EUR doesn't mean I can't store my cash in a fixed supply currency, and anyone who does this avoids inflation. And if everyone does this, government no longer controls the money supply.

hvhsb 7y ago

>Not being able to control the supply of currency your goods (or others' goods, i.e. petrodollars) are valued in is a huge disadvantage. Ask the poor countries of the EU, which have been ripped off by the rich countries for decades now.

abecedarius 7y ago

Re: "we know what's best for you". We're talking about private companies offering people a free choice of an alternative to state monopoly money. Yes, Facebook has reach, but they're not the ones jailing people, etc. Even though I can't stand Facebook I think you have this backwards. (To the extent they succeed through dirty tricks, I'd be wrong about this.) > there's also no doubt that being able to execute monetary policy is a huge advantage for any country. I'm not confident about pretty much anything macroeconomic, but I do doubt the confidence of most talk about it. The U.S. was on the gold standard through the Industrial Revolution, for example.

Macross8299 7y ago

>Cryptocurrency advocates saying, "we know what's best for you" is super troubling to me. How is this fundamentally different from an unelected monetary economist working at the IMF or Federal Reserve deciding they know what's best for millions of people in a country? Given that you're presenting a country that can manipulate their own currency as the superior choice.

ausbah 7y ago
Because the monetary economists work to improve the economy of their whole country, while "cryptocurrency advocates" are more likely to be vouching for a system that stands to personally benefit them?
- Macross8299 7y ago
  >Because the monetary economists work to improve the economy of their whole country I'm really not so sure that can be stated as some universal truth when it comes to things like the IMF.

freddie_mercury 7y ago

I live in a developing country. I don't see any benefit whatsoever for using a cryptocurrency for digital transactions. I can transfer money instantly to someone else's bank account, they just need to give me their name & account number. I've used that to buy lots of things from places that don't accept credit cards. For people who don't trust banks (my inlaws don't keep any money in a bank because they don't trust it, so they are unbanked) -- I don't see anything about Libra or Cryptocurrencies that is going to make them trust it. "There's some super-complicated math that proves you own this money and no one can take it from you" just isn't the kind of thing that is going to convince my inlaws to trust it. Libra hasn't released any pricing on their processing fees so it is all vaporware & unfounded guessing right now.