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What you're describing is totally different in scale though. When the British pound got displaced as the currency for international trade it didn't suddenly los

What you're describing is totally different in scale though. When the British pound got displaced as the currency for international trade it didn't suddenly lose 99.9999% of its value in a weekend. And whilst the Dollar isn't guaranteed to be the most popular currency for international trade, it's still going to be the currency a bunch of guys with guns insist Americans pay taxes in. There are real reasons people must hold real currencies. There are no reasons that anyone needs to hold crypto. I'm not saying crypto has no value, but I'm saying it's not comparable to a modern currency. You might be right that it's similar to some historical examples of weak upstart currencies most of which failed, but even those were backed by a lot more than just... what? In this case we're literally comparing to currencies that are often backed by nothing.

practice9 4y ago
> it's still going to be the currency a bunch of guys with guns insist Americans pay taxes in Well, yeah, most currencies are defacto backed by military force. That fact creates bad incentives. Crypto doesn't have this luxury, it can be only be backed by the trust in code. If the currency is trusted - because it's open-source, open for all to use, is well designed - it's value is going to go up. See Bitcoin and Ethereum as best examples of this. This make a decision whether to use a particular coin similar to choosing Python vs JVM and their ecosystems. To be fair, I don't think stablecoins work well in that context. The information on how they are backed is not completely public, the companies issuing stablecoins are not that well audited...They are blobs of closed-source "stuff" that look like 1$
- Traster 4y ago
  Sure, and UST is another example of this, it built a multi-billion dollar market cap by obfuscating the fact you were buying a perpetual motion machine. The incentive created by "trust the code" is "lie about the code". Which is why you'll hear several thousand reasons why BTC is valuable but none are as compelling as "Those bunch of guys over there will shoot you if you try and undermine it", and most of them aren't even as compelling as "Number goes up". The theory is that the market can efficiently decide whether the code actually does work. But the practice is that you can make billions tricking people about what the code does. And often it's people who have never even glanced at the code telling you what it does. I would wager good money that there was no one invested in UST that understood the code.

practice9 4y ago

> it's still going to be the currency a bunch of guys with guns insist Americans pay taxes in Well, yeah, most currencies are defacto backed by military force. That fact creates bad incentives. Crypto doesn't have this luxury, it can be only be backed by the trust in code. If the currency is trusted - because it's open-source, open for all to use, is well designed - it's value is going to go up. See Bitcoin and Ethereum as best examples of this. This make a decision whether to use a particular coin similar to choosing Python vs JVM and their ecosystems. To be fair, I don't think stablecoins work well in that context. The information on how they are backed is not completely public, the companies issuing stablecoins are not that well audited...They are blobs of closed-source "stuff" that look like 1$

Traster 4y ago
Sure, and UST is another example of this, it built a multi-billion dollar market cap by obfuscating the fact you were buying a perpetual motion machine. The incentive created by "trust the code" is "lie about the code". Which is why you'll hear several thousand reasons why BTC is valuable but none are as compelling as "Those bunch of guys over there will shoot you if you try and undermine it", and most of them aren't even as compelling as "Number goes up". The theory is that the market can efficiently decide whether the code actually does work. But the practice is that you can make billions tricking people about what the code does. And often it's people who have never even glanced at the code telling you what it does. I would wager good money that there was no one invested in UST that understood the code.