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Most of the advantages cryptocurrency fall into one two categories. 1. Speed improvements over the legacy infrastructure e.g. instant transfers without a middl

Most of the advantages cryptocurrency fall into one two categories. 1. Speed improvements over the legacy infrastructure e.g. instant transfers without a middleman. Itself, mostly a problem just in the USA. 2. Bypassing various international and national regulations. Central bank digital currency retains #1 while rejecting #2 which is important for a nation's sovereignty.

rfd4sgmk8u 5y ago
Don't forget (the primary reason Bitcoin was invented) 3. The lack of ability for central banks to inflate the monetary supply. "The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." --SN 3. is important for ensuring you don't have the time value of your savings destroyed by inflation.
- ClumsyPilot 5y ago
  "The lack of ability for central banks to inflate the monetary supply." I am not clear how this helps. If bitcoin/ether becomes the dominant currency, 2008 crisis is still possible, but the recovery is not. So it seems like it would make things worse, not better? Countries used to go to war over gold and silver, it does not seem to be economically beneficial to have a deflationary currency.
  - effie 5y ago
    Being deflationary isn't the problem there. Stealing gold/silver happens because they are small physical objects with objective value that can be stolen from people guarding it with enough people with guns. Stealing crypto-assets is much different and given competent security policy, seems much harder to do. These assets are not guarded in vaults by people, but in computers by strong access controls and encryption algorithms.
    - ClumsyPilot 5y ago
      You would not give up your (hypothetical) bitcoin wallet password even if mafia put a gun to your head? https://xkcd.com/538/ https://xkcd.com/538/
      - effie 5y ago
        I would, but that is a different problem, not specific to deflationary currency. It can happen whether I have dollars, gold, diamonds, crypto-assets. But with crypto-assets, being non-physical, it is possible to easily hide them and also hide who owns them, and then mafia has a very hard time figuring out who to hit with the wrench to get them. Deflationary currency would be bad for the current inflationary system and the small group of extremely rich people, but could be good for most people, who don't want to be in debt their whole life.
- bduerst 5y ago
  The tradeoff is lack of controls and ridiculous price volatility. The fed may not be perfect with the USD, but at least it's stable and supports global economies.
  - effie 5y ago
    > it's stable In what sense? We are observing massive devaluation, no?
    - bduerst 5y ago
      >massive devaluation No, we're not. USD is stable in the sense that it's not volatile like bitcoin and supports global economies.
      - effie 5y ago
        So, it's stabler than bitcoin or stocks. But can you see the hike in May 2021? [1] [1] https://ycharts.com/indicators/us_inflation_rate https://ycharts.com/indicators/us_inflation_rate
jimmydorry 5y ago
I think you forgot the most important advantage: zero trust by design. Short of a 51% attack, you do not need to trust any other entity while still being able to transact freely. Even transactions for physical goods are possible with a neutral third party facilitating escrow (zero-trust unless there is a dispute).

rfd4sgmk8u 5y ago

Don't forget (the primary reason Bitcoin was invented) 3. The lack of ability for central banks to inflate the monetary supply. "The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." --SN 3. is important for ensuring you don't have the time value of your savings destroyed by inflation.

ClumsyPilot 5y ago
"The lack of ability for central banks to inflate the monetary supply." I am not clear how this helps. If bitcoin/ether becomes the dominant currency, 2008 crisis is still possible, but the recovery is not. So it seems like it would make things worse, not better? Countries used to go to war over gold and silver, it does not seem to be economically beneficial to have a deflationary currency.
- effie 5y ago
  Being deflationary isn't the problem there. Stealing gold/silver happens because they are small physical objects with objective value that can be stolen from people guarding it with enough people with guns. Stealing crypto-assets is much different and given competent security policy, seems much harder to do. These assets are not guarded in vaults by people, but in computers by strong access controls and encryption algorithms.
  - ClumsyPilot 5y ago
    You would not give up your (hypothetical) bitcoin wallet password even if mafia put a gun to your head? https://xkcd.com/538/ https://xkcd.com/538/
    - effie 5y ago
      I would, but that is a different problem, not specific to deflationary currency. It can happen whether I have dollars, gold, diamonds, crypto-assets. But with crypto-assets, being non-physical, it is possible to easily hide them and also hide who owns them, and then mafia has a very hard time figuring out who to hit with the wrench to get them. Deflationary currency would be bad for the current inflationary system and the small group of extremely rich people, but could be good for most people, who don't want to be in debt their whole life.
bduerst 5y ago
The tradeoff is lack of controls and ridiculous price volatility. The fed may not be perfect with the USD, but at least it's stable and supports global economies.
- effie 5y ago
  > it's stable In what sense? We are observing massive devaluation, no?
  - bduerst 5y ago
    >massive devaluation No, we're not. USD is stable in the sense that it's not volatile like bitcoin and supports global economies.
    - effie 5y ago
      So, it's stabler than bitcoin or stocks. But can you see the hike in May 2021? [1] [1] https://ycharts.com/indicators/us_inflation_rate https://ycharts.com/indicators/us_inflation_rate

jimmydorry 5y ago

I think you forgot the most important advantage: zero trust by design. Short of a 51% attack, you do not need to trust any other entity while still being able to transact freely. Even transactions for physical goods are possible with a neutral third party facilitating escrow (zero-trust unless there is a dispute).