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The idea that crypto would be a boon for the lower classes seems to me to be extremely dubious. Probably my single biggest concern about crypto is how much powe

The idea that crypto would be a boon for the lower classes seems to me to be extremely dubious. Probably my single biggest concern about crypto is how much power it would shift away from governments and into the hands of the wealthy.

CrazyPyroLinux 5y ago
> "that crypto would be a boon for the lower classes seems to me to be extremely dubious" Why? The lower classes are the most vulnerable to inflation. And even the poorest have cell phones these days. See TXT-banking in Africa. Or this example with Bitcoin: https://www.forbes.com/sites/tatianakoffman/2020/07/14/this-el-salvador-village-adopts-bitcoin-as-money https://www.forbes.com/sites/tatianakoffman/2020/07/14/this-... > "it would shift [power] away from governments and into the hands of the wealthy" You repeat yourself. ;) There are certainly risks - 51% attacks, etc. I don't know if crypto is the whole answer or maybe part of it, but when you consider how much the current financial systems are controlled and rigged, it's hard for me to see crypto as not an improvement for the common people.
- imtringued 5y ago
  >The lower classes are the most vulnerable to inflation. The lower classes spend most of their income and accumulate very little savings and even if they do, those savings will not generate enough returns to replace their job, if the latter were possible they would not be lower classes by definition. Really there is only one benefit that Bitcoin brings and that is the ability to "strike" and force central banks to set interest rates properly e.g. the threat of competition keeps everyone honest. Also, Bitcoin is going down very quickly. Considering the recent rise in inflation I wouldn't want to hold onto Bitcoin if my goal was to get ahead of inflation. The volatility completely drowns out inflation. You may have to hold onto your Bitcoin for years and hope for a recovery.
merpnderp 5y ago
Is that why it is such a huge hit in Venezuela and other high inflation countries? Because poor people are playing into the hands of the powerful and not because it gives them a stable way to store wealth and trade with people in other countries? Sorry for my tone, but it rubs me raw when people casually discount the plight of the poor with do-gooder polices that make people's lives even harder, all while ignoring actual evidence.
- imtringued 5y ago
  Let me tell you about the mechanism. There is this theoretical construct called the world interest rate and it refers to the average real interest rate. Any country whose real interest rate is above the world interest rate will receive capital inflows and any country whose real interest rate is below the world interest rate will have capital outflows. So the goal is to get as close to the world interest rate as possible or even exceed it slightly. Therefore if the world interest rate is 2% and you have 8000% inflation per year, the interest rate must be 8002% (oversimplified) so that the real interest rate becomes 2%. Bitcoin is just another currency and since it is not generating any returns it should closely track the world interest rate like gold does because when you are buying gold or Bitcoin, you are betting that the world economy will continue to exist in the future. The ability to exchange Venezuelan money is just a way to obtain access to the world interest rate without interference of the government and usually that is a good thing, not because governments shouldn't be trusted with your money, no it's because bad governments can't access it but ultimately you are hoping that your government becomes good again or you move to a different country where the government is less corrupt, because it is a non goal to organize an economy with Bitcoin.

CrazyPyroLinux 5y ago

> "that crypto would be a boon for the lower classes seems to me to be extremely dubious" Why? The lower classes are the most vulnerable to inflation. And even the poorest have cell phones these days. See TXT-banking in Africa. Or this example with Bitcoin: https://www.forbes.com/sites/tatianakoffman/2020/07/14/this-el-salvador-village-adopts-bitcoin-as-money https://www.forbes.com/sites/tatianakoffman/2020/07/14/this-... > "it would shift [power] away from governments and into the hands of the wealthy" You repeat yourself. ;) There are certainly risks - 51% attacks, etc. I don't know if crypto is the whole answer or maybe part of it, but when you consider how much the current financial systems are controlled and rigged, it's hard for me to see crypto as not an improvement for the common people.

imtringued 5y ago
>The lower classes are the most vulnerable to inflation. The lower classes spend most of their income and accumulate very little savings and even if they do, those savings will not generate enough returns to replace their job, if the latter were possible they would not be lower classes by definition. Really there is only one benefit that Bitcoin brings and that is the ability to "strike" and force central banks to set interest rates properly e.g. the threat of competition keeps everyone honest. Also, Bitcoin is going down very quickly. Considering the recent rise in inflation I wouldn't want to hold onto Bitcoin if my goal was to get ahead of inflation. The volatility completely drowns out inflation. You may have to hold onto your Bitcoin for years and hope for a recovery.

merpnderp 5y ago

Is that why it is such a huge hit in Venezuela and other high inflation countries? Because poor people are playing into the hands of the powerful and not because it gives them a stable way to store wealth and trade with people in other countries? Sorry for my tone, but it rubs me raw when people casually discount the plight of the poor with do-gooder polices that make people's lives even harder, all while ignoring actual evidence.

imtringued 5y ago
Let me tell you about the mechanism. There is this theoretical construct called the world interest rate and it refers to the average real interest rate. Any country whose real interest rate is above the world interest rate will receive capital inflows and any country whose real interest rate is below the world interest rate will have capital outflows. So the goal is to get as close to the world interest rate as possible or even exceed it slightly. Therefore if the world interest rate is 2% and you have 8000% inflation per year, the interest rate must be 8002% (oversimplified) so that the real interest rate becomes 2%. Bitcoin is just another currency and since it is not generating any returns it should closely track the world interest rate like gold does because when you are buying gold or Bitcoin, you are betting that the world economy will continue to exist in the future. The ability to exchange Venezuelan money is just a way to obtain access to the world interest rate without interference of the government and usually that is a good thing, not because governments shouldn't be trusted with your money, no it's because bad governments can't access it but ultimately you are hoping that your government becomes good again or you move to a different country where the government is less corrupt, because it is a non goal to organize an economy with Bitcoin.