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> What you’re saying is that the car to gold ratio should be constant if your understanding is correct, right? No. I am aware that the value of gold fluctuates
by mopsi 7y ago
> What you’re saying is that the car to gold ratio should be constant if your understanding is correct, right?
No. I am aware that the value of gold fluctuates, but it is safer than many national currencies, stocks of failing companies or overvalued real-estate. The amount of gold in the world is known and stable and there's no way to massively "print" gold to crash its value. This stable supply is mimicked by algorithms built into cryptocurrencies. As long as there is demand for a something, and there is limited supply of it, it will be worth >0. Cryptocurrencies satisfy both requirements: they are limited in supply and have demand because of their usefulness (fast & cheap transactions).
> Re:your criticism of fiat money, I would accept that if I lived in Venezuela, Zimbabwe, or Turkey. But, I’m talking about specifically the USD and other established currencies such as GBP and EUR. There is literally no danger that the US, UK, or EU is going to experience hyperinflation short of near total governmental collapse.
No need for hypotheticals. The government of Cyprus confiscated 47.5% of all holdings above 100 000 EUR in 2013 during its banking crisis. https://eu.usatoday.com/story/money/business/2013/07/29/bank-of-cyprus-depositors-lose-savings/2595837/ https://eu.usatoday.com/story/money/business/2013/07/29/bank... Cyprus is full member of the EU and Eurozone, so these risks are not limited to corrupt and failing third-world countries.
> Oh, and if you think BTC can’t be confiscated, I have news for you:
Most cryptocurrencies cannot be confiscated by network nodes like traditional banking institutions can freeze or rewrite payments and accounts (see Cyprus above). Only the one who has private keys controls the assets. This is a major feature.
- pmiller2 7y agoCan you spot the effect of the Cyprus bailout on the value of the EUR in this chart? https://www.fx-exchange.com/currencyimages/2013/eur/the-year-of-2013-eur-usd-exchange-rates-history-graph.png https://www.fx-exchange.com/currencyimages/2013/eur/the-year... What happened immediately after that?
- mopsi 7y agoIf you sold a house for 300k the month before and then government confiscated a third of it, I doubt the value of EUR was of much consolation. Had the 300k been held in cryptocurrencies, the government would've been powerless to seize a part of it.
- pmiller2 7y agoI thought that was still responding to the stability of the Euro. You’re right that if I had 300k EUR in a single, uninsured bank account, the government could confiscate it. That still doesn’t address the fact that BTC can be confiscated, as I pointed out previously. You could have also taken the prudent measure of not having that much money in a single bank account.
- mopsi 7y ago> That still doesn’t address the fact that BTC can be confiscated, as I pointed out previously. No, it cannot. No government can issue an order to seize 47.5% of everything over 10 BTC (ca 100k EUR) from a list of accounts. Third parties cannot freeze cryptocurrency accounts or rewrite their balances. That's the major innovation of distributed ledgers (blockchain). This is a fundamental difference compared to traditional banking where account balances are just fields in a writable database. At best, they can seize private keys that control accounts, but to achieve that, they must confiscate personal devices (phones, tablets, computers) and examine each of them with forensic tools. This is not viable on a large scale, especially when considering that private keys are easy to hide with plausible deniability (using encryption, steganography, memorization, etc). News stories about "confiscated" cryptocurrency are nothing more than private keys found on seized computers. No-one can take control over any account by any other means.
- pmiller2 7y ago> No-one can take control over any account by any other means. I see. I suppose if the US government orders, say, Coinbase, to turn over control of someone’s account, they won’t do it? You have an example of that happening, right?
- mopsi 7y agoCoinbase has no control over any cryptocurrency accounts besides their own. Each cryptocurrency user generates a private key that becomes a wallet and is used to sign transactions. These signed transactions are then broadcast to the internet for balance keeping nodes to keep track of. They do it in a globally distributed manner (no central entity) and earn rewards for their work (like collecting a tiny fraction of the transaction as a fee). The private key is never disclosed to anyone.