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For me the most important part of this article is the comparison of how Bitcoin operates in the US vs other less powerful economies. Specifically how cryptocurr

For me the most important part of this article is the comparison of how Bitcoin operates in the US vs other less powerful economies. Specifically how cryptocurrencies are primarily priced in dollars, the US has enough international power and control over the existing financial system to leverage control over crypto-exchanges, and how moving economic activity out of the Rupee into crypto-currencies significantly risks damaging the the rupee. This is something that is probably often missed by people in this conversation but it's very common in economies with weak currencies to see other strong currencies used in their place (plenty of places in Turkey accept dollars and euros for example) and this has a real impact on government policy.

eric_cc 5y ago
The hope is that in the future crypto breaks free of the connection to fiat. Rather than comparing crypto against $USD it will be compared against $BTC. This is why it’s essential for $BTC to maintain and expand upon its role as a source of value. It’s the best path we have to break the bondage to $USD and other government-controlled fiat currencies.
- nemacol 5y ago
  Forgive my ignorance but that sounds like comparing future crypto to the USD but with an extra step.
  - eric_cc 5y ago
    Sadly I think the only people that would do the extra step will be older people who grew up with USD and still desire it. Do you mentally compare USD to other random obscure currencies? Of course not. And in a future when USD has been replaced, nobody will care to mentally determine USD prices. Another way to consider it: when you go to the grocery store, you don’t think about how many sats something costs. Because USD is still king.
- xxs 5y ago
  >The hope is that in the future crypto breaks free of the connection to fiat wow, I don't know what kind of hope this is, and I avoid commenting on any crypto currency[0]. Since the comment appears to be genuine, I've felt compelled. [0]: calling it them "crypto" is an insult to the rest of the cryptography, though
  - __MatrixMan__ 5y ago
    I think that having more than one type of money to represent different types of value is a reasonable thing to want. We're operating under this illusion that all value is the same because we use USD as a unit of account, but it causes a lot problems. To give just one example, look at US policy in Latin America in the 80s: We would give weapons to terrorists, and the bargain was that once they had overthrown their governments, the new ones would respect our money. Then, having made ourselves into aristocrats, we'd come in and make off with their natural resources (e.g. Chilean copper). Better would be that if you want to influence people in a community that you aren't a member of, you have to contribute types of value that actually align with the values of those people. Of course having only two types, as GP suggests: fiat-value and crypto-value--that's a pretty impoverished type system. I'd rather have carbon-footprint-value and space-exploration-value and infrastrucure-maintenance-value... so that the allocation of types of value in my wallet are sort of an expression of my political will. This way, poison-the-well-and-sell-bottled-water-value can be rejected by pretty much everybody (as it should), while other sectors remain untarnished.
    - eric_cc 5y ago
      Great point. How would you represent/express space exploration value?
      - __MatrixMan__ 5y ago
        Well it would have a unit, call it parsecs or whatever, and individuals would configure their wallets to hold it at some percentage. If I'm a space nerd maybe I keep 50% of my wealth in parsecs, or if I think space exploration is a misallocation of resources maybe I keep 0% of it in parsecs.
- dale_glass 5y ago
  This hope died years ago, when the early bitcoin enthusiasts were replaced by the modern "number go up" ones. This won't ever happen because pretty much nobody who matters wants this. BTC today is firmly a "store of value", where "value" is measured in USD, and the only point of it is to buy it low, and sell high, for USD. You won't find many today who think buying pizza in BTC is a good idea. BTC is also completely unsuitable for using as a currency given the block size limit.
  - cuteboy19 5y ago
    Then: we will create a peer to peer digital cash system. No intermediaries or trust required. Now: we use the Crypto.Com Visa™ credit card with a Bitcoin sticker on it.
  - eric_cc 5y ago
    > the only point of it is to buy it low, and sell high, for USD Until the point that nobody wants to be the USD bag holder. Plenty of boomers still don’t think of saving USD as a terrible idea because they were trained their whole life to have faith in it. They are being robbed in plain sight, sadly. But younger generations won’t put up with it.
    - dale_glass 5y ago
      BTC is completely unsuitable to be used as a currency, since it's deflationary. Would you buy a car if waiting meant you could have it at half price? Of course not, that'd be stupid. So you'll sit on your hoard, while the economy implodes.
      - eric_cc 5y ago
        How sad would it be if Americans consumed less? Mindless consumption is the whole point of living!
      - harambae 5y ago
        >Would you buy a car if waiting meant you could have it at half price? Apparently yes, a bunch of people are buying cars now at temporarily inflated prices when prices are expected to tank https://autos.yahoo.com/analysts-warn-possible-used-car-151000491.html https://autos.yahoo.com/analysts-warn-possible-used-car-1510...
- Yizahi 5y ago
  The bigger will be "consumer" possibilities and adoption of bitcoin token the bigger will be a payout for 51% attacker, same with relative price of each token and same with amount of financial instruments available. Bitcoin tokens are like a self destruct system which ticks faster to the explosion the more energy and adoption it has.
- AvAn12 5y ago
  How? If I want a unit of any cryptocurrency, I have to hand over an equal value of USD to obtain it. My employer can't pay me in crypto because they only have USD flowing in to their business in exchange for their products and services. What you describe would require basically the entire economy to somehow abandon its fiat currency and switch to crypto - - - I think if this scenario is supposed to be taken remotely seriously, you have to explain how that scenario is supposed to develop - something more than hope that in the future...
  - eric_cc 5y ago
    > What you describe would require basically the entire economy to somehow abandon its fiat currency and switch to crypto - - - I think if this scenario is supposed to be taken remotely seriously, you have to explain how that scenario is supposed to develop Gradually, then Suddenly Unfortunately I believe we get there via chaos, winners, and losers. I don’t believe the transition will be equitable and clean because I don’t see any way that would be possible. And yet, it’ll be worth it in order to have sound money.
  - koonsolo 5y ago
    > My Maybe you should try to look further than yourself. Miners are getting paid in crypto, crypto exchanges are getting paid in crypto. It just has to start somewhere. Investors with crypto staking are getting paid in crypto, or hodlers see their assets increase in value. Diamonds are getting bought with crypto: https://www.cnbc.com/2022/02/10/billion-year-old-black-diamond-bought-with-cryptocurrency-for-4point3m.html https://www.cnbc.com/2022/02/10/billion-year-old-black-diamo... Houses in Dubai are getting bought with crypto. I would say crypto is already kickstarted, let's just see how far it can take us.
    - crispyambulance 5y ago
      > I would say crypto is already kickstarted, let's just see how far it can take us. It will take us only up to the point where we can no longer convert crypto into actual currency (you know, "money"). After that whoever has crypto will be left "holding the bag", and all the boiler-room operators will have long-ago cashed out. I wish we could just have digital currency that is traceable, secure, and stable without all the insane hyper-libertarian social-Darwinist scammer stuff.
csee 5y ago
I don't understand this. If they buy BTCINR, they will hold and own BTC, BTCINR will go up, and USDBTC will go down (ever so slightly, or not at all) due to statistical arbitrage traders. No direct USD transaction took place. In what way are they supporting the USD? I get the separate point that BTC itself may displace INR, but not the USD point.
- JumpCrisscross 5y ago
  > No direct USD transaction took place One, flight to safety. When markets crash, risk assets sell off in favour of dollars. (Yes, crypto still behaves like a risk asset.) If the rupee is selling off in favour of Bitcoin and that prompts a crisis, the rupee will enter a death spiral. Two, more potently, the world’s financial rails run on dollars. Hell, most of crypto runs on dollars. For a capital controlled economy like India’s, Bitcoin is an off ramp for converting INR into USD.
  - smaryjerry 5y ago
    Currently the perception is USD is safer than INR, but that can change at any time. There is no reason not to use stable coins denominated in INR if INR becomes more trusted. Imagine if the US printed 40 percent of their currency of all time in a single year leading to subsequent years of the highest USD inflation in 40 years.. which just happens to be exactly the time we are living in.
- manojlds 5y ago
  Lot of folks do convert to stable coins like USDT and then use it for further trading. Not sure if it's a relevant point or not.
kkjjkgjjgg 5y ago
How does the US have power over crypto exchanges? And don't most countries have exchanges that offer local currency?

eric_cc 5y ago

The hope is that in the future crypto breaks free of the connection to fiat. Rather than comparing crypto against $USD it will be compared against $BTC. This is why it’s essential for $BTC to maintain and expand upon its role as a source of value. It’s the best path we have to break the bondage to $USD and other government-controlled fiat currencies.

nemacol 5y ago
Forgive my ignorance but that sounds like comparing future crypto to the USD but with an extra step.
- eric_cc 5y ago
  Sadly I think the only people that would do the extra step will be older people who grew up with USD and still desire it. Do you mentally compare USD to other random obscure currencies? Of course not. And in a future when USD has been replaced, nobody will care to mentally determine USD prices. Another way to consider it: when you go to the grocery store, you don’t think about how many sats something costs. Because USD is still king.
xxs 5y ago
>The hope is that in the future crypto breaks free of the connection to fiat wow, I don't know what kind of hope this is, and I avoid commenting on any crypto currency[0]. Since the comment appears to be genuine, I've felt compelled. [0]: calling it them "crypto" is an insult to the rest of the cryptography, though
- __MatrixMan__ 5y ago
  I think that having more than one type of money to represent different types of value is a reasonable thing to want. We're operating under this illusion that all value is the same because we use USD as a unit of account, but it causes a lot problems. To give just one example, look at US policy in Latin America in the 80s: We would give weapons to terrorists, and the bargain was that once they had overthrown their governments, the new ones would respect our money. Then, having made ourselves into aristocrats, we'd come in and make off with their natural resources (e.g. Chilean copper). Better would be that if you want to influence people in a community that you aren't a member of, you have to contribute types of value that actually align with the values of those people. Of course having only two types, as GP suggests: fiat-value and crypto-value--that's a pretty impoverished type system. I'd rather have carbon-footprint-value and space-exploration-value and infrastrucure-maintenance-value... so that the allocation of types of value in my wallet are sort of an expression of my political will. This way, poison-the-well-and-sell-bottled-water-value can be rejected by pretty much everybody (as it should), while other sectors remain untarnished.
  - eric_cc 5y ago
    Great point. How would you represent/express space exploration value?
    - __MatrixMan__ 5y ago
      Well it would have a unit, call it parsecs or whatever, and individuals would configure their wallets to hold it at some percentage. If I'm a space nerd maybe I keep 50% of my wealth in parsecs, or if I think space exploration is a misallocation of resources maybe I keep 0% of it in parsecs.
dale_glass 5y ago
This hope died years ago, when the early bitcoin enthusiasts were replaced by the modern "number go up" ones. This won't ever happen because pretty much nobody who matters wants this. BTC today is firmly a "store of value", where "value" is measured in USD, and the only point of it is to buy it low, and sell high, for USD. You won't find many today who think buying pizza in BTC is a good idea. BTC is also completely unsuitable for using as a currency given the block size limit.
- cuteboy19 5y ago
  Then: we will create a peer to peer digital cash system. No intermediaries or trust required. Now: we use the Crypto.Com Visa™ credit card with a Bitcoin sticker on it.
- eric_cc 5y ago
  > the only point of it is to buy it low, and sell high, for USD Until the point that nobody wants to be the USD bag holder. Plenty of boomers still don’t think of saving USD as a terrible idea because they were trained their whole life to have faith in it. They are being robbed in plain sight, sadly. But younger generations won’t put up with it.
  - dale_glass 5y ago
    BTC is completely unsuitable to be used as a currency, since it's deflationary. Would you buy a car if waiting meant you could have it at half price? Of course not, that'd be stupid. So you'll sit on your hoard, while the economy implodes.
    - eric_cc 5y ago
      How sad would it be if Americans consumed less? Mindless consumption is the whole point of living!
    - harambae 5y ago
      >Would you buy a car if waiting meant you could have it at half price? Apparently yes, a bunch of people are buying cars now at temporarily inflated prices when prices are expected to tank https://autos.yahoo.com/analysts-warn-possible-used-car-151000491.html https://autos.yahoo.com/analysts-warn-possible-used-car-1510...
Yizahi 5y ago
The bigger will be "consumer" possibilities and adoption of bitcoin token the bigger will be a payout for 51% attacker, same with relative price of each token and same with amount of financial instruments available. Bitcoin tokens are like a self destruct system which ticks faster to the explosion the more energy and adoption it has.
AvAn12 5y ago
How? If I want a unit of any cryptocurrency, I have to hand over an equal value of USD to obtain it. My employer can't pay me in crypto because they only have USD flowing in to their business in exchange for their products and services. What you describe would require basically the entire economy to somehow abandon its fiat currency and switch to crypto - - - I think if this scenario is supposed to be taken remotely seriously, you have to explain how that scenario is supposed to develop - something more than hope that in the future...
- eric_cc 5y ago
  > What you describe would require basically the entire economy to somehow abandon its fiat currency and switch to crypto - - - I think if this scenario is supposed to be taken remotely seriously, you have to explain how that scenario is supposed to develop Gradually, then Suddenly Unfortunately I believe we get there via chaos, winners, and losers. I don’t believe the transition will be equitable and clean because I don’t see any way that would be possible. And yet, it’ll be worth it in order to have sound money.
- koonsolo 5y ago
  > My Maybe you should try to look further than yourself. Miners are getting paid in crypto, crypto exchanges are getting paid in crypto. It just has to start somewhere. Investors with crypto staking are getting paid in crypto, or hodlers see their assets increase in value. Diamonds are getting bought with crypto: https://www.cnbc.com/2022/02/10/billion-year-old-black-diamond-bought-with-cryptocurrency-for-4point3m.html https://www.cnbc.com/2022/02/10/billion-year-old-black-diamo... Houses in Dubai are getting bought with crypto. I would say crypto is already kickstarted, let's just see how far it can take us.
  - crispyambulance 5y ago
    > I would say crypto is already kickstarted, let's just see how far it can take us. It will take us only up to the point where we can no longer convert crypto into actual currency (you know, "money"). After that whoever has crypto will be left "holding the bag", and all the boiler-room operators will have long-ago cashed out. I wish we could just have digital currency that is traceable, secure, and stable without all the insane hyper-libertarian social-Darwinist scammer stuff.

csee 5y ago

I don't understand this. If they buy BTCINR, they will hold and own BTC, BTCINR will go up, and USDBTC will go down (ever so slightly, or not at all) due to statistical arbitrage traders. No direct USD transaction took place. In what way are they supporting the USD? I get the separate point that BTC itself may displace INR, but not the USD point.

JumpCrisscross 5y ago
> No direct USD transaction took place One, flight to safety. When markets crash, risk assets sell off in favour of dollars. (Yes, crypto still behaves like a risk asset.) If the rupee is selling off in favour of Bitcoin and that prompts a crisis, the rupee will enter a death spiral. Two, more potently, the world’s financial rails run on dollars. Hell, most of crypto runs on dollars. For a capital controlled economy like India’s, Bitcoin is an off ramp for converting INR into USD.
- smaryjerry 5y ago
  Currently the perception is USD is safer than INR, but that can change at any time. There is no reason not to use stable coins denominated in INR if INR becomes more trusted. Imagine if the US printed 40 percent of their currency of all time in a single year leading to subsequent years of the highest USD inflation in 40 years.. which just happens to be exactly the time we are living in.
manojlds 5y ago
Lot of folks do convert to stable coins like USDT and then use it for further trading. Not sure if it's a relevant point or not.

kkjjkgjjgg 5y ago

How does the US have power over crypto exchanges? And don't most countries have exchanges that offer local currency?