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Indeed using Bitcoin for payment does not seem a good fit. However, Bitcoin could be viewed as the world reserve currency that is impossible to debase. This can

Indeed using Bitcoin for payment does not seem a good fit. However, Bitcoin could be viewed as the world reserve currency that is impossible to debase. This can give stability to all other currencies that are based on it. I think that would be a good thing. It would reduce governments' ability to deficit spend, thus reduce the likelihood of financing armies that can be used for aggression... It would not eliminate wars entirely, but would make financing them very difficult. Unfortunately, scammers are everywhere. I think it is my responsibility to do the best I can to avoid falling for various schemes. I hold that Bitcoin is not the cause of the scams. I unfortunately missed the early days of Bitcoin because I was concerned about being robbed and secondarily I did not understand (or even known about) the intent Satoshi had when he invented the thing... Thank you for your feedback!

smoldesu 4y ago
> I hold that Bitcoin is not the cause of the scams. I wish I could agree, as someone who remains eternally hopeful for crypto. Unfortunately, it's almost certainly not the case. When half a billion dollars goes missing from the US banking system, we can follow the paper trail every time. Criminals never cash out at that scale, especially when they wire money digitally. There's always an account to find, a wire transfer to track, or another bank to contact. The centralization is their saving grace against these scams. When half a billion dollars goes missing from a DAO or someone's cold wallet, they're fucked. Those coins get tumbled and are almost certainly never seen again. The bad guys win every time, which makes it highly unattractive for any investment at scale. Which raises the ultimatum of Bitcoin, and cryptocurrency as a whole: to hold, or not to hold? That is the question. Custody is the bottom line here, and there's no easy answer. The public will always prefer to have someone else manage their account, which removes their agency and increases the capability of private parties debasing the asset. The higher the demand, the further the centralization progresses. Unfortunately, that demand is nearly unlimited and the benefits of managing your own wallet are slim compared to the work and upfront knowledge it requires. > It would reduce governments' ability to deficit spend, thus reduce the likelihood of financing armies that can be used for aggression... It would not eliminate wars entirely, but would make financing them very difficult. This is completely false. There is not a single first-world country that would base the value of their currency on crypto, and having cryptocurrency exist as an independent fiat makes it extraordinarily easy to fund combat. Terrorist organizations could accept donations via untraceable coins and cash out anonymously. Extremist sects could fund themselves privately without scrutiny. Even in your idyllic example, it would only embolden countries like Russia to pillage their neighbors since they don't need to worry about the consequences of financial sanctions, being cut off from the world's banking system, or even worrying about the value of their own currency. If anything, the world embracing crypto all at once would escalate the financing of combat to unconscionable heights.
- sillysaurusx 4y ago
  But.. this isn’t true on two counts: Cartels smuggle huge amounts of money all the time, and the bitcoin hack involving a YC founder ended with the coins recovered. They were unable to tumble the coins without losing them.
  - smoldesu 4y ago
    Cartels smuggle cash. Cash is fairly untraceable, so it makes sense. If anything, it reinforces the idea that removing accountability from money encourages bad behavior. > the bitcoin hack involving a YC founder ended with the coins recovered Sometimes you get a happy ending. There's plenty of stories about the Wild West that don't end with two dead cowboys. On the other hand though, our banking system can almost universally guarantee a happy ending. Axie Infinity hacks simply don't happen on there. When someone is dumb enough to try it, they're in custody by the end of the day and their money likely never even left the source account in the first place.
    - sillysaurusx 4y ago
      Cartels smuggle hundreds of millions of dollars through the actual banking system. It's scary how connected they are. I was very surprised.
      - smoldesu 4y ago
        Be that as it may, do we really want to enable everyone to have cartel-level money smuggling capabilities? Is that the sort of power we should strive to democratize?
        AnimalMuppet 4y ago
        Yes. Everybody, or nobody. Why should some have it and others not? Note well: In this post, I am not taking a position as to whether "everybody" is the correct answer, or whether "nobody" is. I just want everyone to be at the same level.
monkeydreams 4y ago
Debasement of currency happens for a few key reasons, most of which are far removed from modern financing in the West. And Bitcoin is, by design, both wasteful in terms of energy, and volatile, which excludes it from any reserve currency status. Remember, these are emergent from the design of the platform and incentives keep Bitcoin from changing. Deficit spending... sigh. I am sorry, but this idea that deficit spending is irresponsible is often tied to beliefs in gold-backed currencies, hyper inflation being inevitable due to 'money printing' and other misconceptions. Deficit spending is not bad. Any government who did not deficit spend is basically tying both hands behind their backs. It is an incredibly useful tool that can be used as both to kick-start an ailing economy, or cool an over hot economy through higher interest bond sales. Politicians who insist on no-deficit budgets are generally scammers or populists and, in my experience, will ignore this rule once in power. The main reason deficit spending is not an issue is that inflation eats away at debt over time. Countries, being effectively immortal, don't have to worry about retirement and so can continue to build wealth and finance debt for centuries to come. How those loans are spent is a whole different kettle of fish.

smoldesu 4y ago

> I hold that Bitcoin is not the cause of the scams. I wish I could agree, as someone who remains eternally hopeful for crypto. Unfortunately, it's almost certainly not the case. When half a billion dollars goes missing from the US banking system, we can follow the paper trail every time. Criminals never cash out at that scale, especially when they wire money digitally. There's always an account to find, a wire transfer to track, or another bank to contact. The centralization is their saving grace against these scams. When half a billion dollars goes missing from a DAO or someone's cold wallet, they're fucked. Those coins get tumbled and are almost certainly never seen again. The bad guys win every time, which makes it highly unattractive for any investment at scale. Which raises the ultimatum of Bitcoin, and cryptocurrency as a whole: to hold, or not to hold? That is the question. Custody is the bottom line here, and there's no easy answer. The public will always prefer to have someone else manage their account, which removes their agency and increases the capability of private parties debasing the asset. The higher the demand, the further the centralization progresses. Unfortunately, that demand is nearly unlimited and the benefits of managing your own wallet are slim compared to the work and upfront knowledge it requires. > It would reduce governments' ability to deficit spend, thus reduce the likelihood of financing armies that can be used for aggression... It would not eliminate wars entirely, but would make financing them very difficult. This is completely false. There is not a single first-world country that would base the value of their currency on crypto, and having cryptocurrency exist as an independent fiat makes it extraordinarily easy to fund combat. Terrorist organizations could accept donations via untraceable coins and cash out anonymously. Extremist sects could fund themselves privately without scrutiny. Even in your idyllic example, it would only embolden countries like Russia to pillage their neighbors since they don't need to worry about the consequences of financial sanctions, being cut off from the world's banking system, or even worrying about the value of their own currency. If anything, the world embracing crypto all at once would escalate the financing of combat to unconscionable heights.

sillysaurusx 4y ago
But.. this isn’t true on two counts: Cartels smuggle huge amounts of money all the time, and the bitcoin hack involving a YC founder ended with the coins recovered. They were unable to tumble the coins without losing them.
- smoldesu 4y ago
  Cartels smuggle cash. Cash is fairly untraceable, so it makes sense. If anything, it reinforces the idea that removing accountability from money encourages bad behavior. > the bitcoin hack involving a YC founder ended with the coins recovered Sometimes you get a happy ending. There's plenty of stories about the Wild West that don't end with two dead cowboys. On the other hand though, our banking system can almost universally guarantee a happy ending. Axie Infinity hacks simply don't happen on there. When someone is dumb enough to try it, they're in custody by the end of the day and their money likely never even left the source account in the first place.
  - sillysaurusx 4y ago
    Cartels smuggle hundreds of millions of dollars through the actual banking system. It's scary how connected they are. I was very surprised.
    - smoldesu 4y ago
      Be that as it may, do we really want to enable everyone to have cartel-level money smuggling capabilities? Is that the sort of power we should strive to democratize?
      - AnimalMuppet 4y ago
        Yes. Everybody, or nobody. Why should some have it and others not? Note well: In this post, I am not taking a position as to whether "everybody" is the correct answer, or whether "nobody" is. I just want everyone to be at the same level.

monkeydreams 4y ago

Debasement of currency happens for a few key reasons, most of which are far removed from modern financing in the West. And Bitcoin is, by design, both wasteful in terms of energy, and volatile, which excludes it from any reserve currency status. Remember, these are emergent from the design of the platform and incentives keep Bitcoin from changing. Deficit spending... sigh. I am sorry, but this idea that deficit spending is irresponsible is often tied to beliefs in gold-backed currencies, hyper inflation being inevitable due to 'money printing' and other misconceptions. Deficit spending is not bad. Any government who did not deficit spend is basically tying both hands behind their backs. It is an incredibly useful tool that can be used as both to kick-start an ailing economy, or cool an over hot economy through higher interest bond sales. Politicians who insist on no-deficit budgets are generally scammers or populists and, in my experience, will ignore this rule once in power. The main reason deficit spending is not an issue is that inflation eats away at debt over time. Countries, being effectively immortal, don't have to worry about retirement and so can continue to build wealth and finance debt for centuries to come. How those loans are spent is a whole different kettle of fish.