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I hear that argument often, but don't crypto traders always cash out to fiat sooner or later and thus, end up in the same loop? It was naive to think cryptocurr

by yawaworht1978 5y ago

I hear that argument often, but don't crypto traders always cash out to fiat sooner or later and thus, end up in the same loop? It was naive to think cryptocurrencies will ever have wide spread adoption without getting regulated at least as much as fiat I think.

DennisP 5y ago
I'm fine with rational regulation that doesn't effectively outlaw the technology and keeps a level playing field, which is the opposite of what they're attempting right now.
Taek 5y ago
The long term goal for many in the crypto community is to get to a point where you don't need to cash out. More merchants accepting crypto, landlords accepting crypto, etc. We aren't there yet, but that remains the goal.
- snowwrestler 5y ago
  It’s never going to happen unless they can solve the deflation problem. Why would I use a unit of cryptocurrency to pay my rent today, if I think the real value of the cryptocurrency unit will buy even more rent next month? The Internet is full of stories from people who bought like a pizza with Bitcoin years ago and realize that same amount of Bitcoin would be worth like $10,000 today. Using cryptocurrency to transact every day items is directly contrary to the “HODL” culture around cryptocurrency that exists today. It works in society like an investment, not a currency. The ever-decreasing value of the dollar is a feature not a bug. It encourages people to transact their dollars for items of real value like pizza, and store their wealth in items of real value like real estate, stocks, etc.
  - christophilus 5y ago
    We’ve had pretty long periods of time when currency valuations remained flat or slightly deflationary. In reality, folks buy what they want when they want with the currency that is most convenient. I think you’re overthinking it.
  - yawaworht1978 5y ago
    However, that guy buying pizza and all the early darknet market purchases have been necessary adoption steps. Without these, adoption never happens.
  - ajkdhcb2 5y ago
    This is a completely invalid argument. You have no choice but to pay rent. If there is an asset that goes up in value, you will want to store your wealth in it. if you can directly pay with something that is also a good store of value, then for the individual that is simply the superior choice. >Using cryptocurrency to transact every day items is directly contrary to the “HODL” culture around cryptocurrency that exists today. It works in society like an investment, not a currency. That is due to other factors, not deflation. Not many people accept payment, people are forced to hold dollars, paid in dollars and there is friction when converting. Bad money gets spent first (Gresham's law). If you have dollars from your job anyway and your risk profile is to hold some % in crypto, then of course it doesnt make sense to spend your investment which would need to rebuy to rebalance your portfolio. The deflation problem that you imagine doesn't exist. There are other more worthwhile arguments against deflation but you didn't use them
    - imtringued 5y ago
      >This is a completely invalid argument. You have no choice but to pay rent. I don't know what you think you are saying but you've just proven the argument. If you only make the minimum necessary transactions then your economy will be of minimum size. >If there is an asset that goes up in value, you will want to store your wealth in it. It's just a balance sheet. If the value of the asset goes up it just means the allocation of resources is biased to BTC earned in the past. You also cannot store wealth in Bitcoin. You have to give up real wealth to own Bitcoin. >if you can directly pay with something that is also a good store of value, then for the individual that is simply the superior choice. Sure, the individual wants his share of wealth to grow at the expense of everyone else. After all, who the hell would be against free shit that you don't have to work for? >That is due to other factors, not deflation. >Not many people accept payment, people are forced to hold dollars paid in dollars and there is friction when converting. Literally nobody is forced to hold onto dollars. If anything central banks want people to stop holding dollars because of low inflation/the deflation problem. > Bad money gets spent first (Gresham's law). I don't know if you have noticed but bad money being spent first is snowwrestlers' argument. You've supported a supposedly completely invalid argument yourself... >The deflation problem that you imagine doesn't exist. There are other more worthwhile arguments against deflation but you didn't use them They boil down to the same thing. Deflation doesn't increase real wealth it only responds to real wealth increases by allocating the real wealth to people who held onto more currency. It is equivalent to an income tax that is then redistributed via a UBI that pays out proportional to how much BTC you own. If you know that you will get more wealth extorting other people you will refuse to spend your Bitcoin because it increases your ability to extort people in the future.
- imtringued 5y ago
  That will never happen. If I were a merchant that accepts Bitcoin I would want to acquire as much today as possible and my desire to adopt it would shrink as its value goes up. The best years for Bitcoin adoption are already over.

DennisP 5y ago

I'm fine with rational regulation that doesn't effectively outlaw the technology and keeps a level playing field, which is the opposite of what they're attempting right now.

Taek 5y ago

The long term goal for many in the crypto community is to get to a point where you don't need to cash out. More merchants accepting crypto, landlords accepting crypto, etc. We aren't there yet, but that remains the goal.

snowwrestler 5y ago
It’s never going to happen unless they can solve the deflation problem. Why would I use a unit of cryptocurrency to pay my rent today, if I think the real value of the cryptocurrency unit will buy even more rent next month? The Internet is full of stories from people who bought like a pizza with Bitcoin years ago and realize that same amount of Bitcoin would be worth like $10,000 today. Using cryptocurrency to transact every day items is directly contrary to the “HODL” culture around cryptocurrency that exists today. It works in society like an investment, not a currency. The ever-decreasing value of the dollar is a feature not a bug. It encourages people to transact their dollars for items of real value like pizza, and store their wealth in items of real value like real estate, stocks, etc.
- christophilus 5y ago
  We’ve had pretty long periods of time when currency valuations remained flat or slightly deflationary. In reality, folks buy what they want when they want with the currency that is most convenient. I think you’re overthinking it.
- yawaworht1978 5y ago
  However, that guy buying pizza and all the early darknet market purchases have been necessary adoption steps. Without these, adoption never happens.
- ajkdhcb2 5y ago
  This is a completely invalid argument. You have no choice but to pay rent. If there is an asset that goes up in value, you will want to store your wealth in it. if you can directly pay with something that is also a good store of value, then for the individual that is simply the superior choice. >Using cryptocurrency to transact every day items is directly contrary to the “HODL” culture around cryptocurrency that exists today. It works in society like an investment, not a currency. That is due to other factors, not deflation. Not many people accept payment, people are forced to hold dollars, paid in dollars and there is friction when converting. Bad money gets spent first (Gresham's law). If you have dollars from your job anyway and your risk profile is to hold some % in crypto, then of course it doesnt make sense to spend your investment which would need to rebuy to rebalance your portfolio. The deflation problem that you imagine doesn't exist. There are other more worthwhile arguments against deflation but you didn't use them
  - imtringued 5y ago
    >This is a completely invalid argument. You have no choice but to pay rent. I don't know what you think you are saying but you've just proven the argument. If you only make the minimum necessary transactions then your economy will be of minimum size. >If there is an asset that goes up in value, you will want to store your wealth in it. It's just a balance sheet. If the value of the asset goes up it just means the allocation of resources is biased to BTC earned in the past. You also cannot store wealth in Bitcoin. You have to give up real wealth to own Bitcoin. >if you can directly pay with something that is also a good store of value, then for the individual that is simply the superior choice. Sure, the individual wants his share of wealth to grow at the expense of everyone else. After all, who the hell would be against free shit that you don't have to work for? >That is due to other factors, not deflation. >Not many people accept payment, people are forced to hold dollars paid in dollars and there is friction when converting. Literally nobody is forced to hold onto dollars. If anything central banks want people to stop holding dollars because of low inflation/the deflation problem. > Bad money gets spent first (Gresham's law). I don't know if you have noticed but bad money being spent first is snowwrestlers' argument. You've supported a supposedly completely invalid argument yourself... >The deflation problem that you imagine doesn't exist. There are other more worthwhile arguments against deflation but you didn't use them They boil down to the same thing. Deflation doesn't increase real wealth it only responds to real wealth increases by allocating the real wealth to people who held onto more currency. It is equivalent to an income tax that is then redistributed via a UBI that pays out proportional to how much BTC you own. If you know that you will get more wealth extorting other people you will refuse to spend your Bitcoin because it increases your ability to extort people in the future.
imtringued 5y ago
That will never happen. If I were a merchant that accepts Bitcoin I would want to acquire as much today as possible and my desire to adopt it would shrink as its value goes up. The best years for Bitcoin adoption are already over.