5 ms·

We have been saying it - but have been dismissed as being "anti-crypto"

stevekemp 4y ago
Yeah it's a tricky one. It seems obvious that "digital money" is going to be very useful in a lot of ways, and in the future is almost certain to appear. There was a very brief period when bitcoin might have been the start of such a thing. When companies were adding support for it, and people were spending 200+ bitcoin on pizza, actually doing useful things like transferring money internationally, etc. But these days? It's all speculation, gambling, and HODLing to the moon. Maybe in the future we'll have a cryptocurrency which is actually usable as a currency, spent, and being in circulation, not being mined and hoarded by people who expect 1000000% returns.
- FeepingCreature 4y ago
  A deflationary currency was never going to be viable as money.
  - ekianjo 4y ago
    there are still bitcoins being mined. where is it deflationary?
    - swalsh 4y ago
      To me the issue is the supply of tokens is not correlated to the actual underlying supply of goods and services in the economy. Tokens should be minted/burned according to the fundumentals of the underlying economy. Hard to do with a single digital currency as there is a whole economy. But viable with ERC-20's, which can be turned into micro-currencies. The great thing about ERC20 tokens, is you can swap them pretty effortlessly. And on a chain like Avalanche, it's cheap and scalable.
    - mensetmanusman 4y ago
      The rate of coin generation matters. Imagine a world of 100 people and 100 dollars. If the population doubles, and the 100 dollars remains fixed, the value of the dollar has increased. If more dollars are not printed to maintain some inflation, people will slow spending hoping for 300 people the next year. Now, in the case of BTC, it’s not global population that matters, but the population of interested users, which could go from 10,000 to 100,000,000 in months. If BTC can’t be mined fast enough to maintain a balance of coins/users as interest skyrockets, it is, by definition, deflationary.
      - drugstorecowboy 4y ago
        Why would people slow spending due to a fixed money supply? The money they have now could potentially buy more in the future, but at some point you have to actually buy the thing you need or want. Conversely in in an inflating currency scenario yes I might spend the money sooner than I would otherwise, but then in the future I won't be able to spend it again, why is it so much better that I buy today instead of tomorrow? I have heard the argument that deflation is just an unthinkable disaster for my entire life but I'm not convinced, rather it seems like a convenient excuse for countries to print their way out of budgetary problems.
        Sebb767 4y ago
        > The money they have now could potentially buy more in the future, but at some point you have to actually buy the thing you need or want. This might be true for food, but a lot of our economy is based on investments and things we don't strictly need. Why would I give money to a startup if I can simply leave it on my bank account and have a guaranteed return? > Conversely in in an inflating currency scenario yes I might spend the money sooner than I would otherwise, but then in the future I won't be able to spend it again, why is it so much better that I buy today instead of tomorrow? Because it keeps the money in circulation. You might spend the money, but that money then gets to a business. This business also doesn't want money lying around, so they might, for example, build something. Which gives the money to a building company. Which then gives the money back to the worker. That's a lot of movement and value creation. Also, you really want to spend or invest the money sooner, since you won't get as much for your money if you buy something tomorrow instead. With deflation, this whole reasoning is reversed - why would you spend any more money than necessary, if you can buy much more with it tomorrow? You wouldn't and this kills the economy.
  - cinntaile 4y ago
    There are many cryptocurrency experiments, not all are deflationary to be clear.
    - tromp 4y ago
      Even the ones with disinflationary supply suffer from a large wealth concentration as they distribute all or the majority of supply in just the first few years.
  - alangibson 4y ago
    This. Bitcoin is essentially the USD + US stock market in 1922. Hard money and unregulated securities markets already broke the world once. The crypto wizards somehow managed to forget a century of hard won lessons.
    - jkepler 4y ago
      It was hardly "hard money" in 1922, as the Fed was created in 1913, and the dollar started plummeting. If you want to see what a hard money world looks like, look at the 40 years or so prior to 1913, when most civilized nations were on a gold standard.
      - DebtDeflation 4y ago
        >look at the 40 years or so prior to 1913 Constant booms, busts, and panics. The period of the most financial instability in history occurred under the gold standard.
        throwawaymaths 4y ago
        We have constant booms and busts now, even though we have more liquidity, people who should know better, math to describe what's going on, 'tools' to try to prevent it...
        ekianjo 4y ago
        Lol then what do we have now?
        alangibson 4y ago
        Booms and busts that we can manage, and prevent from tanking the world economy, largely due to not having hard money.
      - throwawaymaths 4y ago
        You mean a half century of closing the wealth gap (while healing from the labor disruption of freeing the slaves), and somehow still managing to go from being a war torn country to world superpower?
  - deleted 4y ago
    [deleted]
- FabHK 4y ago
  > It seems obvious that "digital money" is going to be very useful in a lot of ways And indeed, digital fiat is used in production all the time and very useful.
- andy81 4y ago
  Monero still tries to fit in this niche. The only thing it's useful for is financial crime though - if your problem is just making a payment you can do it in dollars relatively easily and safely.
  - stevekemp 4y ago
    Payments here in the EU, even between countries, are pretty straightforward. Transferring money from the EU to UK, or EU to USA, Peru, or Canada get more complicated and expensive though. Those are the kind of transfers I had in mind. There are transferwise, and similar services, but even so it's not as cheap as it should/could be.
    - greyhair 4y ago
      The problem of transferring currencies is that you are always buying through currency traders, who are attempting to make a profit on knowing current exchange rates and predicting near and long term exchange rates. I was visiting Montreal from the US a couple decades ago, and I wanted to exchange some US dollars for Canadian, and in the financial center, I found five different exchanges with five different rates. I had to walk about six blocks total to hit them all, but the difference between the lowest and highest was significant.
      - jameshart 4y ago
        The problem that international fund transfers require currency brokerage is not solved by introducing another currency. Why do you need to convert currency when transferring to someone in another country in the first place? Because the banking infrastructure in that country is denominated in their currency. Because their bank account only permits them to hold balances in that currency. And because only funds in that currency are guaranteed by the banking laws in that country. If it weren’t for that, currency conversions could be ignored! If everyone in the world had bank accounts that could handle euros, say, you could transfer funds globally; people could make purchases by transferring euros, etc etc. In fact there’s not a lot stopping you from doing that. You can have an account denominated in whatever currency you like. Provided you don’t care about things like deposit protection. And that’s all Bitcoin and other crypto really add to the mix - a uniformly available currency for denominating non-deposit-protected balances.
- deleted 4y ago
  [deleted]

Yeah it's a tricky one. It seems obvious that "digital money" is going to be very useful in a lot of ways, and in the future is almost certain to appear. There was a very brief period when bitcoin might have been the start of such a thing. When companies were adding support for it, and people were spending 200+ bitcoin on pizza, actually doing useful things like transferring money internationally, etc. But these days? It's all speculation, gambling, and HODLing to the moon. Maybe in the future we'll have a cryptocurrency which is actually usable as a currency, spent, and being in circulation, not being mined and hoarded by people who expect 1000000% returns.

FeepingCreature 4y ago
A deflationary currency was never going to be viable as money.
- ekianjo 4y ago
  there are still bitcoins being mined. where is it deflationary?
  - swalsh 4y ago
    To me the issue is the supply of tokens is not correlated to the actual underlying supply of goods and services in the economy. Tokens should be minted/burned according to the fundumentals of the underlying economy. Hard to do with a single digital currency as there is a whole economy. But viable with ERC-20's, which can be turned into micro-currencies. The great thing about ERC20 tokens, is you can swap them pretty effortlessly. And on a chain like Avalanche, it's cheap and scalable.
  - mensetmanusman 4y ago
    The rate of coin generation matters. Imagine a world of 100 people and 100 dollars. If the population doubles, and the 100 dollars remains fixed, the value of the dollar has increased. If more dollars are not printed to maintain some inflation, people will slow spending hoping for 300 people the next year. Now, in the case of BTC, it’s not global population that matters, but the population of interested users, which could go from 10,000 to 100,000,000 in months. If BTC can’t be mined fast enough to maintain a balance of coins/users as interest skyrockets, it is, by definition, deflationary.
    - drugstorecowboy 4y ago
      Why would people slow spending due to a fixed money supply? The money they have now could potentially buy more in the future, but at some point you have to actually buy the thing you need or want. Conversely in in an inflating currency scenario yes I might spend the money sooner than I would otherwise, but then in the future I won't be able to spend it again, why is it so much better that I buy today instead of tomorrow? I have heard the argument that deflation is just an unthinkable disaster for my entire life but I'm not convinced, rather it seems like a convenient excuse for countries to print their way out of budgetary problems.
      - Sebb767 4y ago
        > The money they have now could potentially buy more in the future, but at some point you have to actually buy the thing you need or want. This might be true for food, but a lot of our economy is based on investments and things we don't strictly need. Why would I give money to a startup if I can simply leave it on my bank account and have a guaranteed return? > Conversely in in an inflating currency scenario yes I might spend the money sooner than I would otherwise, but then in the future I won't be able to spend it again, why is it so much better that I buy today instead of tomorrow? Because it keeps the money in circulation. You might spend the money, but that money then gets to a business. This business also doesn't want money lying around, so they might, for example, build something. Which gives the money to a building company. Which then gives the money back to the worker. That's a lot of movement and value creation. Also, you really want to spend or invest the money sooner, since you won't get as much for your money if you buy something tomorrow instead. With deflation, this whole reasoning is reversed - why would you spend any more money than necessary, if you can buy much more with it tomorrow? You wouldn't and this kills the economy.
- cinntaile 4y ago
  There are many cryptocurrency experiments, not all are deflationary to be clear.
  - tromp 4y ago
    Even the ones with disinflationary supply suffer from a large wealth concentration as they distribute all or the majority of supply in just the first few years.
- alangibson 4y ago
  This. Bitcoin is essentially the USD + US stock market in 1922. Hard money and unregulated securities markets already broke the world once. The crypto wizards somehow managed to forget a century of hard won lessons.
  - jkepler 4y ago
    It was hardly "hard money" in 1922, as the Fed was created in 1913, and the dollar started plummeting. If you want to see what a hard money world looks like, look at the 40 years or so prior to 1913, when most civilized nations were on a gold standard.
    - DebtDeflation 4y ago
      >look at the 40 years or so prior to 1913 Constant booms, busts, and panics. The period of the most financial instability in history occurred under the gold standard.
      - throwawaymaths 4y ago
        We have constant booms and busts now, even though we have more liquidity, people who should know better, math to describe what's going on, 'tools' to try to prevent it...
      - ekianjo 4y ago
        Lol then what do we have now?
        alangibson 4y ago
        Booms and busts that we can manage, and prevent from tanking the world economy, largely due to not having hard money.
    - throwawaymaths 4y ago
      You mean a half century of closing the wealth gap (while healing from the labor disruption of freeing the slaves), and somehow still managing to go from being a war torn country to world superpower?
- deleted 4y ago
  [deleted]
FabHK 4y ago
> It seems obvious that "digital money" is going to be very useful in a lot of ways And indeed, digital fiat is used in production all the time and very useful.
andy81 4y ago
Monero still tries to fit in this niche. The only thing it's useful for is financial crime though - if your problem is just making a payment you can do it in dollars relatively easily and safely.
- stevekemp 4y ago
  Payments here in the EU, even between countries, are pretty straightforward. Transferring money from the EU to UK, or EU to USA, Peru, or Canada get more complicated and expensive though. Those are the kind of transfers I had in mind. There are transferwise, and similar services, but even so it's not as cheap as it should/could be.
  - greyhair 4y ago
    The problem of transferring currencies is that you are always buying through currency traders, who are attempting to make a profit on knowing current exchange rates and predicting near and long term exchange rates. I was visiting Montreal from the US a couple decades ago, and I wanted to exchange some US dollars for Canadian, and in the financial center, I found five different exchanges with five different rates. I had to walk about six blocks total to hit them all, but the difference between the lowest and highest was significant.
    - jameshart 4y ago
      The problem that international fund transfers require currency brokerage is not solved by introducing another currency. Why do you need to convert currency when transferring to someone in another country in the first place? Because the banking infrastructure in that country is denominated in their currency. Because their bank account only permits them to hold balances in that currency. And because only funds in that currency are guaranteed by the banking laws in that country. If it weren’t for that, currency conversions could be ignored! If everyone in the world had bank accounts that could handle euros, say, you could transfer funds globally; people could make purchases by transferring euros, etc etc. In fact there’s not a lot stopping you from doing that. You can have an account denominated in whatever currency you like. Provided you don’t care about things like deposit protection. And that’s all Bitcoin and other crypto really add to the mix - a uniformly available currency for denominating non-deposit-protected balances.
deleted 4y ago
[deleted]