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Loans would be one of the classic value creating activities, because they allow others to use otherwise idle capital to produce something new. Currency exchang
by LargeWu 6y ago
Loans would be one of the classic value creating activities, because they allow others to use otherwise idle capital to produce something new.
Currency exchange is fuzzier. If the exchange is happening to facilitate commerce, then sure, I would consider that value creation. If it's happening simply in order to support speculation in a different currency, then no, it's not value creating. And it's pretty clear from the data that the vast majority of crypto transactions are just glamorized forex trading - ie buying in order to hopefully sell later at a higher price. Add in the detrimental environmental externalities from crypto mining and you could even make the argument that crypto currency exchange actually creates negative value.
- shusson 6y ago> Loans would be one of the classic value creating activities, because they allow others to use otherwise idle capital to produce something new. Only if people use loans to produce something valuable. Most people I know take loans for houses, which afaik does not produce any direct value to society.
- imtringued 6y agoYou're right, the hope is that people build new houses, but that ship has sailed a long time ago.
- wallacoloo 6y agoAFAIK most of the loans in DeFi go to people who are leveraging their bets one way or another. So if speculation isn’t valuable, then perhaps many of these loans are also also not valuable under that criteria.
- andrepd 6y ago> Loans would be one of the classic value creating activities, because they allow others to use otherwise idle capital to produce something new. Only because capital is privatised. Perversely, only those institutions with enough capital can obtain the privilege of creating money from thin air.