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I won't downplay the environmental consequences of PoW, but the actual reason so many governments are speeding the push against crypto might be related to a fut

by pid-1 5y ago

I won't downplay the environmental consequences of PoW, but the actual reason so many governments are speeding the push against crypto might be related to a future of high inflation and high gov debt. It would be the perfect storm for mainstream crypto adoption.

eli 5y ago
I sincerely think the main motivation is to protect people from losing too much when the bubble pops.
- roenxi 5y ago
  The bubble has been ongoing for a decade now. I suppose the challenge will be what is the line in the sand where it isn't a bubble? There isn't a lot of good evidence it is in a bubble. This thing also poses a real threat to SWIFT and anyone trying to put together a successor to SWIFT. The US has been weaponising international currency transfers for a while now, and China would be facing problems controlling capital flows if people could just send money internationally without much consequence. There are good, selfish, reasons for why governments would intervene.
mn678 5y ago
Nonsense. Why would any sane person move a large part of their assets into something as volatile as crypto? If you want to protect yourself against inflation, buy real estate or equities if your time horizon is long enough. Even fixed income once rates are a bit better. But for the average person please stay clear of crypto!
- pskiba 5y ago
  If your time horizon is long enough, volatility shouldn't matter. Historically speaking Bitcoin is getting less volatile with every market cycle. I would not be surprised if in the future its volatility is comparable to the S&P500. Why would any sane person invest in real estate? You have maintenance costs, property taxes, it's not liquid and you can go years with little growth. Not to mention if your area see's hard economic times (i.e. Detroit), the chance of a rebound is slim.
  - unethical_ban 5y ago
    I can live on land. I can't live on a string. You also ignore the premise being put forth, that Bitcoin as a currency still isn't ideal. You don't think "long term investment" with currency so much as short to medium term. Like, will bread and milk cost 10x as much next week? "Stop thinking investment and start thinking survival" might be a good way to put it.
    - pskiba 5y ago
      The original comment was about protecting yourself against inflation. Not sure how your comment is related.
      - unethical_ban 5y ago
        Ah. I got subthreads confused.
  - czl 5y ago
    Less volatile with every market cycle? Nassim Taleb disagrees: https://youtu.be/dLOeBSaq-Ps https://youtu.be/dLOeBSaq-Ps I bet the CoinGeek conference audience were stunned by his keynote talk because Taleb used to be a supporter.
- solarman5000 5y ago
  The average person cannot buy real estate. The average person knows the system is rigged against them
  - quantumBerry 5y ago
    Yes you can. Buy REIT ETFs. It's investing in real estate but with high liquidity and very low minimum investment.
- pid-1 5y ago
  I have no crypto as today due volatity as well. At the same time, hedging against inflation is hard. The things you suggested come with their own risks. I think a future in which crypto becomes stable due increased adoption is possible, and in that future it will be a good hedge.
- ulzeraj 5y ago
  > buy real estate or equities Does that logic applies in China? Are real state or equities a protection from volatility on a self proclaimed communist country? What about South America, Lebanon or Turkey? The incontestable precious and invaluable wisdom of the hacker news poster who potentially lives on US California or some rich western country on a comfortably fat salary. Every. single. time.
enkid 5y ago
For China specifically, the reason to hate crypto currency is because it's a system where they don't have control. It's the same reason they are cracking down on the tech sector and Hong Kong. The CCP does not like having competitors for power or even something they don't have control over.
- GDC7 5y ago
  > The CCP does not like having competitors for power or even something they don't have control over. The CCP is a bunch of unambitious individuals. Everything that causes troubles to the CCP means troubles for Xi and the possibility that his "president for life" title might be revoked, creating room for somebody else to ascend. From a game theory standpoint it is better to be at the helm of a slightly less relevant organization than being a subordinate of an organization plowing ahead at full steam unrivaled. This is even more true in politics and NGOs where the monetary compensation is very limited and it's all about the status.
  - MrPatan 5y ago
    If you fail on your bid for power in an NGO the chance of you being disappeared is very low.
  - ddorian43 5y ago
    Plenty of money in NGO. You just don't get it directly in your wage.
- barrenko 5y ago
  China is performing a sort of seppuku, will be interesting to watch.
gwbas1c 5y ago
> the actual reason so many governments are speeding the push against crypto might be related to a future of high inflation and high gov debt The reason why we have inflation and debt is to keep the value of our currencies stable. IE, if people want to use dollars, the US government can print more dollars to satisfy the demand. (And thus keep the value stable.) Cryptocurrency's volatile value is a result of its inability to "print money" when more people want to use it. Remember: Currency is not an investment. A good currency has a stable value over time; otherwise it's very difficult to conduct commerce.
- pid-1 5y ago
  > The reason why we have inflation and debt is to keep the value of our currencies stable. I'm not following. By definition, inflation is what happens when the price of a currency is not stable. > Remember: Currency is not an investment. A good currency has a stable value over time; otherwise it's very difficult to conduct commerce Agreed. But in countries with high inflation, such as mine, you will lose money if all your wealth is stored as fiat.
  - Retric 5y ago
    Stability operates on short and long time scales. 2% annual inflation means a currency is worth 99.994% as much tomorrow as it was today which in practice is generally fine. Even fairly high inflation levels of say 7% annually can still be quite stable on a daily or monthly basis which is all you really need. As most people spend most of their paycheck every month and savings aren’t limited to the currency in question. By comparison crypto coins tend to have much higher daily and monthly variations which isn’t a big deal for savings, but in practice it discourages their use for day to day expenses.
  - RobertoG 5y ago
    You should look more into the real causes of inflation in your country, because they are probably not what you think Even without knowing what country you are from, I would bet that inflation is because imports and exports imbalances and nothing to do with "printing too much money". And anyway, if the problem is storing value, why you don't buy gold or dollars, yens or something like that?
worrycue 5y ago
Current inflation is due to the government “creating money” for the COVID-19 stimulus, the fact that governments can even do that is what’s so good about fiat currency. Bailouts are another benefit. Governments can at will dull or even prevent financial contagion thus preventing another Great Depression. All this has a cost in the form of inflation until the money is reabsorbed of course but it’s better than economic collapse.
- GDC7 5y ago
  All fair. But there is no free lunch. The burden of the proof always lies with the person or the entity trying to sell something. The government failed to sell QE and bailouts to the population, the government further failed to sell inflation target at 2% to the population. Had government not failed in selling these concepts we'd not have bitcoin. Government as always can't sell. Otherwise it won't be government.
  - blacksqr 5y ago
    >The government failed to sell QE and bailouts to the population I recall a recent vote where someone was elected president by a significant majority running on just this platform.
    - GDC7 5y ago
      I don't think Biden campaigned for unlimited QE and unlimited bailouts In any event even if this was true an ambitious organization such as the government can't be satisfied with 52% confidence in its financial planning
      - blacksqr 5y ago
        We won't be getting unlimited QE or bailouts, so it's all good. As a democracy, there's no alternative to the government working with whatever majority it gets.
        5y ago
firecall 5y ago
Mainstream Crypto is the new year of Linux on the Desktop ;-)

by pid-1 5y ago

eli 5y ago

I sincerely think the main motivation is to protect people from losing too much when the bubble pops.

roenxi 5y ago
The bubble has been ongoing for a decade now. I suppose the challenge will be what is the line in the sand where it isn't a bubble? There isn't a lot of good evidence it is in a bubble. This thing also poses a real threat to SWIFT and anyone trying to put together a successor to SWIFT. The US has been weaponising international currency transfers for a while now, and China would be facing problems controlling capital flows if people could just send money internationally without much consequence. There are good, selfish, reasons for why governments would intervene.

mn678 5y ago

Nonsense. Why would any sane person move a large part of their assets into something as volatile as crypto? If you want to protect yourself against inflation, buy real estate or equities if your time horizon is long enough. Even fixed income once rates are a bit better. But for the average person please stay clear of crypto!

pskiba 5y ago
If your time horizon is long enough, volatility shouldn't matter. Historically speaking Bitcoin is getting less volatile with every market cycle. I would not be surprised if in the future its volatility is comparable to the S&P500. Why would any sane person invest in real estate? You have maintenance costs, property taxes, it's not liquid and you can go years with little growth. Not to mention if your area see's hard economic times (i.e. Detroit), the chance of a rebound is slim.
- unethical_ban 5y ago
  I can live on land. I can't live on a string. You also ignore the premise being put forth, that Bitcoin as a currency still isn't ideal. You don't think "long term investment" with currency so much as short to medium term. Like, will bread and milk cost 10x as much next week? "Stop thinking investment and start thinking survival" might be a good way to put it.
  - pskiba 5y ago
    The original comment was about protecting yourself against inflation. Not sure how your comment is related.
    - unethical_ban 5y ago
      Ah. I got subthreads confused.
- czl 5y ago
  Less volatile with every market cycle? Nassim Taleb disagrees: https://youtu.be/dLOeBSaq-Ps https://youtu.be/dLOeBSaq-Ps I bet the CoinGeek conference audience were stunned by his keynote talk because Taleb used to be a supporter.
solarman5000 5y ago
The average person cannot buy real estate. The average person knows the system is rigged against them
- quantumBerry 5y ago
  Yes you can. Buy REIT ETFs. It's investing in real estate but with high liquidity and very low minimum investment.
pid-1 5y ago
I have no crypto as today due volatity as well. At the same time, hedging against inflation is hard. The things you suggested come with their own risks. I think a future in which crypto becomes stable due increased adoption is possible, and in that future it will be a good hedge.
ulzeraj 5y ago
> buy real estate or equities Does that logic applies in China? Are real state or equities a protection from volatility on a self proclaimed communist country? What about South America, Lebanon or Turkey? The incontestable precious and invaluable wisdom of the hacker news poster who potentially lives on US California or some rich western country on a comfortably fat salary. Every. single. time.

enkid 5y ago

For China specifically, the reason to hate crypto currency is because it's a system where they don't have control. It's the same reason they are cracking down on the tech sector and Hong Kong. The CCP does not like having competitors for power or even something they don't have control over.

GDC7 5y ago
> The CCP does not like having competitors for power or even something they don't have control over. The CCP is a bunch of unambitious individuals. Everything that causes troubles to the CCP means troubles for Xi and the possibility that his "president for life" title might be revoked, creating room for somebody else to ascend. From a game theory standpoint it is better to be at the helm of a slightly less relevant organization than being a subordinate of an organization plowing ahead at full steam unrivaled. This is even more true in politics and NGOs where the monetary compensation is very limited and it's all about the status.
- MrPatan 5y ago
  If you fail on your bid for power in an NGO the chance of you being disappeared is very low.
- ddorian43 5y ago
  Plenty of money in NGO. You just don't get it directly in your wage.
barrenko 5y ago
China is performing a sort of seppuku, will be interesting to watch.

gwbas1c 5y ago

> the actual reason so many governments are speeding the push against crypto might be related to a future of high inflation and high gov debt The reason why we have inflation and debt is to keep the value of our currencies stable. IE, if people want to use dollars, the US government can print more dollars to satisfy the demand. (And thus keep the value stable.) Cryptocurrency's volatile value is a result of its inability to "print money" when more people want to use it. Remember: Currency is not an investment. A good currency has a stable value over time; otherwise it's very difficult to conduct commerce.

pid-1 5y ago
> The reason why we have inflation and debt is to keep the value of our currencies stable. I'm not following. By definition, inflation is what happens when the price of a currency is not stable. > Remember: Currency is not an investment. A good currency has a stable value over time; otherwise it's very difficult to conduct commerce Agreed. But in countries with high inflation, such as mine, you will lose money if all your wealth is stored as fiat.
- Retric 5y ago
  Stability operates on short and long time scales. 2% annual inflation means a currency is worth 99.994% as much tomorrow as it was today which in practice is generally fine. Even fairly high inflation levels of say 7% annually can still be quite stable on a daily or monthly basis which is all you really need. As most people spend most of their paycheck every month and savings aren’t limited to the currency in question. By comparison crypto coins tend to have much higher daily and monthly variations which isn’t a big deal for savings, but in practice it discourages their use for day to day expenses.
- RobertoG 5y ago
  You should look more into the real causes of inflation in your country, because they are probably not what you think Even without knowing what country you are from, I would bet that inflation is because imports and exports imbalances and nothing to do with "printing too much money". And anyway, if the problem is storing value, why you don't buy gold or dollars, yens or something like that?

worrycue 5y ago

Current inflation is due to the government “creating money” for the COVID-19 stimulus, the fact that governments can even do that is what’s so good about fiat currency. Bailouts are another benefit. Governments can at will dull or even prevent financial contagion thus preventing another Great Depression. All this has a cost in the form of inflation until the money is reabsorbed of course but it’s better than economic collapse.

GDC7 5y ago
All fair. But there is no free lunch. The burden of the proof always lies with the person or the entity trying to sell something. The government failed to sell QE and bailouts to the population, the government further failed to sell inflation target at 2% to the population. Had government not failed in selling these concepts we'd not have bitcoin. Government as always can't sell. Otherwise it won't be government.
- blacksqr 5y ago
  >The government failed to sell QE and bailouts to the population I recall a recent vote where someone was elected president by a significant majority running on just this platform.
  - GDC7 5y ago
    I don't think Biden campaigned for unlimited QE and unlimited bailouts In any event even if this was true an ambitious organization such as the government can't be satisfied with 52% confidence in its financial planning
    - blacksqr 5y ago
      We won't be getting unlimited QE or bailouts, so it's all good. As a democracy, there's no alternative to the government working with whatever majority it gets.
      - 5y ago

firecall 5y ago

Mainstream Crypto is the new year of Linux on the Desktop ;-)