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No cryptocurrency currently passes the test as a currency in terms of acceptance, transaction speed and stability. So if it's classed rather as a store of valu

No cryptocurrency currently passes the test as a currency in terms of acceptance, transaction speed and stability. So if it's classed rather as a store of value (read investment) then I don't see the difference between it and other investment classes which you need to be a sophisticated investor to access. Noobs typically need protecting from themselves.

pacifist 5y ago
> Noobs typically need protecting from themselves. Whenever I hear this I start looking for my wallet.
SparkyMcUnicorn 5y ago
Other than acceptance, that's a rather bold blanket statement. Visa and Mastercard handle roughly 7000 transactions per second. Solana's chain (as an example) is among the highest performing and can handle north of 50k TPS. Edit: Please challenge my position and make me think. Votes are pointless, but being proven wrong is a learning experience.
- hiddencache 5y ago
  I see I'm also getting some downvotes, but I'll try to clarify just from my perspective. We looked into the option of accepting cryptocurrency as a payment method but came up against too many obstacles. Without being able to prove the provenance of client funds we would be at risk of breaching "proceeds of crime" / anti-money laundering regulations. And while the value of cryptocurrencies bounces all over the place and makes it impossible to budget, even stablecoins present problems. While they are pegged to something, the question is to what. Those pegged to precious metals such as gold or silver were a no-no, and even those pegged to the dollar present a problem. (As an aside it obviates one of the cited advantages of bitcoin - as a hedge against monetary policy-driven inflation). The question our board came up with was, if the currency is pegged to the dollar, why not just accept dollars? At least with established currencies we can buy currency hedging. With stablecoins, we'd be looking at specialist forex hedging, or messing about with futures. The board looked at the cost-benefit for about five minutes before they threw it out.
  - SparkyMcUnicorn 5y ago
    > The question our board came up with was, if the currency is pegged to the dollar, why not just accept dollars? Lower transaction fees, no chargebacks, and being able to serve international customers effortlessly. Agreed that accepting cryptocurrency doesn't have much appeal yet, and pitching it to a board would have mixed outcomes. I don't have any answers on provenance, and am not sure how this is being handled by the large amount of companies that currently accept it. While adoption is low, I think most companies are opting to settle transactions to cash. This is probably the safest choice for now. Now that I've argued for it, I also think accepting cryptocurrency doesn't fit everyone's business model yet and isn't always the best choice for some companies.
- 6AA4FD 5y ago
  Visa and Mastercard aren't currencies, they are payment systems. Furthermore, max TPS and day to day average utilized TPS are very different, that is a weird comparison. The confusion is that USD can change "hands" in so many different ways, it does not have a set transaction latency or bandwidth, if we did a best case analysis the latency would be me handing a tenner to the guy at the grocery store, with the bandwidth of 3.5B people handing a tenner to the other 3.5, that is a lot better than 50K TPS. Obviously not a serious suggestion, just trying to explain why the question of speed needs to be nuanced.
6AA4FD 5y ago
More importantly, our financial system needs protection from runs, and it seems like tether has not been doing a good job of handling that, they should at least be regulated like banks in terms of cash on hand requirements and the necessary auditability to verify that regularly.

pacifist 5y ago

> Noobs typically need protecting from themselves. Whenever I hear this I start looking for my wallet.

SparkyMcUnicorn 5y ago

Other than acceptance, that's a rather bold blanket statement. Visa and Mastercard handle roughly 7000 transactions per second. Solana's chain (as an example) is among the highest performing and can handle north of 50k TPS. Edit: Please challenge my position and make me think. Votes are pointless, but being proven wrong is a learning experience.

hiddencache 5y ago
I see I'm also getting some downvotes, but I'll try to clarify just from my perspective. We looked into the option of accepting cryptocurrency as a payment method but came up against too many obstacles. Without being able to prove the provenance of client funds we would be at risk of breaching "proceeds of crime" / anti-money laundering regulations. And while the value of cryptocurrencies bounces all over the place and makes it impossible to budget, even stablecoins present problems. While they are pegged to something, the question is to what. Those pegged to precious metals such as gold or silver were a no-no, and even those pegged to the dollar present a problem. (As an aside it obviates one of the cited advantages of bitcoin - as a hedge against monetary policy-driven inflation). The question our board came up with was, if the currency is pegged to the dollar, why not just accept dollars? At least with established currencies we can buy currency hedging. With stablecoins, we'd be looking at specialist forex hedging, or messing about with futures. The board looked at the cost-benefit for about five minutes before they threw it out.
- SparkyMcUnicorn 5y ago
  > The question our board came up with was, if the currency is pegged to the dollar, why not just accept dollars? Lower transaction fees, no chargebacks, and being able to serve international customers effortlessly. Agreed that accepting cryptocurrency doesn't have much appeal yet, and pitching it to a board would have mixed outcomes. I don't have any answers on provenance, and am not sure how this is being handled by the large amount of companies that currently accept it. While adoption is low, I think most companies are opting to settle transactions to cash. This is probably the safest choice for now. Now that I've argued for it, I also think accepting cryptocurrency doesn't fit everyone's business model yet and isn't always the best choice for some companies.
6AA4FD 5y ago
Visa and Mastercard aren't currencies, they are payment systems. Furthermore, max TPS and day to day average utilized TPS are very different, that is a weird comparison. The confusion is that USD can change "hands" in so many different ways, it does not have a set transaction latency or bandwidth, if we did a best case analysis the latency would be me handing a tenner to the guy at the grocery store, with the bandwidth of 3.5B people handing a tenner to the other 3.5, that is a lot better than 50K TPS. Obviously not a serious suggestion, just trying to explain why the question of speed needs to be nuanced.

6AA4FD 5y ago

More importantly, our financial system needs protection from runs, and it seems like tether has not been doing a good job of handling that, they should at least be regulated like banks in terms of cash on hand requirements and the necessary auditability to verify that regularly.