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I'd like to see someone like this really try to explain the global non-crypto currency system as it exists today in similar detail. This after all was one of t

I'd like to see someone like this really try to explain the global non-crypto currency system as it exists today in similar detail. This after all was one of the touted reasons for crypto - it would allow people around the world to hold wealth in a stable currency that wouldn't be subject to market crashes and currency devaluations. There are so many interesting questions that remain undiscussed - such as, to what extent does petrodollar recycling matter any more in terms of the value of the $USD relative to the euro and other currencies, such as Chinese and Japanese? If investing in crypto is a scam, why isn't investing in these other currencies also a scam? It would be nice to see some real in-depth compare and contrast writeups accessible to people who aren't professional currency traders etc.

aww_dang 5y ago
Don't hold your breath waiting for The New Yorker to publish it. Expect something more along the lines of, "Central Banking: Why all detractors are conspiracy theorists, by Paul Krugman"
michael1999 5y ago
You can’t store wealth stably in inanimate things. Wealth is always social in nature. Currencies are claims on the future production of people who want them. Their future desires and capacities defines the value.
- effingwewt 5y ago
  Gold. Other precious/rare metals. Property. You are speaking of collectibles, not wealth/currency.
  - shanusmagnus 5y ago
    Gold's value is other people's belief in it being worth something, so they will trade other things for it. Same with other rare metals. Property has something close to intrinsic value in that it provides shelter, but the value of property is only realizable if the social context allows it to be realized -- your claim to a house is only as good as the government's willingness to recognize that claim, and to protect it for you when it is challenged by others. Point is, the devastating attacks people think they're lobbing at bitcoin when they say that it's not 'backed' by anything are neither devastating, nor unique to bitcoin: unless you're talking about a commodity that people are consuming directly, nothing is backed by anything other than socially held belief. That's all money is, when you unwind it all the way. The important question is what is the relevant society, and what beliefs do they hold?
    - effingwewt 4y ago
      You are talking about a break down of society. In which values would indeed change drastically. Women of child bearing age, seeds, potable water, would instantly become precious. I'm talking about normal ass society. These may fluctuate, but there is a reason that since the beginning of human civilization we have currencies. Crypro is too volatile as a way to store wealth, that's why to this day the rich are hoarding gems and gold and property. I think all of it is ridiculous personally, even the dollar is no longer backed by gold. Point being you cant compare volatile, scammy, etc crypto to pretty much any normal value store. IMO.
  - Ekaros 5y ago
    Property isn't always good investment. How well Detroit and other communities where manufacturing went away are doing?
  - michael1999 5y ago
    The natural rate of return “saving” in metals is negative. Rust, security, and other storage costs are real, and inanimate things provide no return to carry them. And property is only valuable in the context of social uses. Else why is land so cheap in Detroit?
- SilasX 5y ago
  Inanimate things like mutual fund shares?
  - michael1999 5y ago
    Mutual fund units are a claim on future production. They connect to the the animate. A gold coin can never pay you a dividend.
    - SilasX 4y ago
      Great — then you agree that your original standard, animacy, was not quite what you meant as the distinguishing factor. I hope you’re more precise about that in the future.
NineStarPoint 5y ago
* > If investing in crypto is a scam, why isn't investing in these other currencies also a scam? * I know very few people who recommend investing in currencies to begin with. You invest in either hard assets (intrinsic value that currencies get pegged against), productive assets (companies value that can increase as they become more productive) or government bonds (interest rate means you get more fiat currency back than you put in.) The advice for how much fiat currency to hold at any given time is to have an emergency fund and then put all other assets into something that can at the very least keep pace with inflation. The purpose of currency is to be a medium of exchange, not an appreciating asset.
- deleted 4y ago
  [deleted]
Banana699 5y ago
The entirety of modern money seems to me like a scam. Questionable abstractions left and right, legal fictions left and right like there's no tomorrow. I started reading The Ascent of Money: A Financial History of the World by Niall Ferguson so that I can understand more, the first chapter explains Fractional Reserve Banking and... Holy Shit, that's a scam, no 2 ways about it. It's terrifying what Modern Money is and how it works. It scares and enrages me. It enrages me how the 'Store of Value', the things we exchange for our precious finite labor, is now whatever legal fan fiction that an influential someone at wall street or an equivalent finds a funny idea and convinces enough of his or her ilk to accept.
- simmerup 5y ago
  When you use modern money you get the knowledge that the biggest militaries in the world are invested in maintaining its value. You don't get that with many other stores of value
gostsamo 5y ago
Value exists only in the eyes of the buyer. Trying to lock value in whateverthing outside of the context of its use is exercise in creating false idols. And in that line of thought, central currencies have value just because the government says that they have value. As far as the common agreement is that governments are worth it, then central currencies will be the default stuff. This is the non-technological chain of trust that crypto bros are trying to fight. If they were not scammers, they would've noticed that this is the wrong place to attack it. Find something that can do government's job better than the government itself and its mechanism of value exchange will dominate the world. In the meantime, do not invest in scams.
orwin 5y ago
The forex environment is barely less corrupt and scammy than the cryptocurrency environment. It does have legit use (arbitrage mostly) that are 'useful' for the global economy and production chain, but most of the guys pushing it to regulars people are crooks. And "investing" in a currency is a scam. It's like investing in an company with not only no profit, but also no sales.
sanderjd 5y ago
> If investing in crypto is a scam, why isn't investing in these other currencies also a scam? Isn't the answer to this that other currencies are backed by the might (both economic and military) of nations? I don't think mainstream blockchains like bitcoin and ethereum are scams, but this is an important distinction between sovereign currencies and cryptocurrencies.
low_tech_love 5y ago
Just because you don’t understand how the traditional market works it doesn’t mean it’s a scam. Sure, there are scams, and sometimes they are big and problematic, but there is also a global network of honest people working, producing, creating, and selling real, useful things, and all that is connected by the global market. It is not perfect, but human beings aren’t, so it will always be flawed, but the good things far outweigh the bad ones. Investing in crypto is not a scam by nature, in theory; it is a scam in practice. It is just how people use it, because there simply is no other use. The only reason someone buys crypto is to wait for it to grow, for whatever reason, so they can get rich easy. There is no other reason (right now) to expect crypto coins to grow in value other than speculation and hope. And scammers feed on that hope, that’s just how it is. They are not that different, by nature, from the traditional market, but right the bad parts are exacerbated and there are no good ones to counterweight. Once cryptocurrencies are connected with enough real products, services, etc they will have a better reason to exist, and to become a better investment. After all a currency is just a way to trade things, it is not a value in itself.
z303 5y ago
> I'd like to see someone like this really try to explain the global non-crypto currency system as it exists today in similar detail. There was a video and thread on 'How (inter)national money transfers works' a couple of months ago https://news.ycombinator.com/item?id=30540125 https://news.ycombinator.com/item?id=30540125

aww_dang 5y ago

Don't hold your breath waiting for The New Yorker to publish it. Expect something more along the lines of, "Central Banking: Why all detractors are conspiracy theorists, by Paul Krugman"

michael1999 5y ago

You can’t store wealth stably in inanimate things. Wealth is always social in nature. Currencies are claims on the future production of people who want them. Their future desires and capacities defines the value.

effingwewt 5y ago
Gold. Other precious/rare metals. Property. You are speaking of collectibles, not wealth/currency.
- shanusmagnus 5y ago
  Gold's value is other people's belief in it being worth something, so they will trade other things for it. Same with other rare metals. Property has something close to intrinsic value in that it provides shelter, but the value of property is only realizable if the social context allows it to be realized -- your claim to a house is only as good as the government's willingness to recognize that claim, and to protect it for you when it is challenged by others. Point is, the devastating attacks people think they're lobbing at bitcoin when they say that it's not 'backed' by anything are neither devastating, nor unique to bitcoin: unless you're talking about a commodity that people are consuming directly, nothing is backed by anything other than socially held belief. That's all money is, when you unwind it all the way. The important question is what is the relevant society, and what beliefs do they hold?
  - effingwewt 4y ago
    You are talking about a break down of society. In which values would indeed change drastically. Women of child bearing age, seeds, potable water, would instantly become precious. I'm talking about normal ass society. These may fluctuate, but there is a reason that since the beginning of human civilization we have currencies. Crypro is too volatile as a way to store wealth, that's why to this day the rich are hoarding gems and gold and property. I think all of it is ridiculous personally, even the dollar is no longer backed by gold. Point being you cant compare volatile, scammy, etc crypto to pretty much any normal value store. IMO.
- Ekaros 5y ago
  Property isn't always good investment. How well Detroit and other communities where manufacturing went away are doing?
- michael1999 5y ago
  The natural rate of return “saving” in metals is negative. Rust, security, and other storage costs are real, and inanimate things provide no return to carry them. And property is only valuable in the context of social uses. Else why is land so cheap in Detroit?
SilasX 5y ago
Inanimate things like mutual fund shares?
- michael1999 5y ago
  Mutual fund units are a claim on future production. They connect to the the animate. A gold coin can never pay you a dividend.
  - SilasX 4y ago
    Great — then you agree that your original standard, animacy, was not quite what you meant as the distinguishing factor. I hope you’re more precise about that in the future.

NineStarPoint 5y ago

* > If investing in crypto is a scam, why isn't investing in these other currencies also a scam? * I know very few people who recommend investing in currencies to begin with. You invest in either hard assets (intrinsic value that currencies get pegged against), productive assets (companies value that can increase as they become more productive) or government bonds (interest rate means you get more fiat currency back than you put in.) The advice for how much fiat currency to hold at any given time is to have an emergency fund and then put all other assets into something that can at the very least keep pace with inflation. The purpose of currency is to be a medium of exchange, not an appreciating asset.

deleted 4y ago
[deleted]

Banana699 5y ago

The entirety of modern money seems to me like a scam. Questionable abstractions left and right, legal fictions left and right like there's no tomorrow. I started reading The Ascent of Money: A Financial History of the World by Niall Ferguson so that I can understand more, the first chapter explains Fractional Reserve Banking and... Holy Shit, that's a scam, no 2 ways about it. It's terrifying what Modern Money is and how it works. It scares and enrages me. It enrages me how the 'Store of Value', the things we exchange for our precious finite labor, is now whatever legal fan fiction that an influential someone at wall street or an equivalent finds a funny idea and convinces enough of his or her ilk to accept.

simmerup 5y ago
When you use modern money you get the knowledge that the biggest militaries in the world are invested in maintaining its value. You don't get that with many other stores of value

gostsamo 5y ago

Value exists only in the eyes of the buyer. Trying to lock value in whateverthing outside of the context of its use is exercise in creating false idols. And in that line of thought, central currencies have value just because the government says that they have value. As far as the common agreement is that governments are worth it, then central currencies will be the default stuff. This is the non-technological chain of trust that crypto bros are trying to fight. If they were not scammers, they would've noticed that this is the wrong place to attack it. Find something that can do government's job better than the government itself and its mechanism of value exchange will dominate the world. In the meantime, do not invest in scams.

orwin 5y ago

The forex environment is barely less corrupt and scammy than the cryptocurrency environment. It does have legit use (arbitrage mostly) that are 'useful' for the global economy and production chain, but most of the guys pushing it to regulars people are crooks. And "investing" in a currency is a scam. It's like investing in an company with not only no profit, but also no sales.

sanderjd 5y ago

> If investing in crypto is a scam, why isn't investing in these other currencies also a scam? Isn't the answer to this that other currencies are backed by the might (both economic and military) of nations? I don't think mainstream blockchains like bitcoin and ethereum are scams, but this is an important distinction between sovereign currencies and cryptocurrencies.

low_tech_love 5y ago

Just because you don’t understand how the traditional market works it doesn’t mean it’s a scam. Sure, there are scams, and sometimes they are big and problematic, but there is also a global network of honest people working, producing, creating, and selling real, useful things, and all that is connected by the global market. It is not perfect, but human beings aren’t, so it will always be flawed, but the good things far outweigh the bad ones. Investing in crypto is not a scam by nature, in theory; it is a scam in practice. It is just how people use it, because there simply is no other use. The only reason someone buys crypto is to wait for it to grow, for whatever reason, so they can get rich easy. There is no other reason (right now) to expect crypto coins to grow in value other than speculation and hope. And scammers feed on that hope, that’s just how it is. They are not that different, by nature, from the traditional market, but right the bad parts are exacerbated and there are no good ones to counterweight. Once cryptocurrencies are connected with enough real products, services, etc they will have a better reason to exist, and to become a better investment. After all a currency is just a way to trade things, it is not a value in itself.

z303 5y ago

> I'd like to see someone like this really try to explain the global non-crypto currency system as it exists today in similar detail. There was a video and thread on 'How (inter)national money transfers works' a couple of months ago https://news.ycombinator.com/item?id=30540125 https://news.ycombinator.com/item?id=30540125