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Crypto cannot create wealth, only move it around. If too many people become crypto-rich and try to spend it on real-world assets, the assets will just inflate i
by etaioinshrdlu 4y ago
Crypto cannot create wealth, only move it around. If too many people become crypto-rich and try to spend it on real-world assets, the assets will just inflate in price.
What can happen is that crypto could replace other forms of money. Governments will likely fight this tooth and nail however, because crypto is currently an anti-government technology.
- RestlessMind 4y agoBitcoin was created from scratch and is worth >500B today. And by worth, I mean you can literally sell your bitcoin on one of the crypto exchanges and get real dollars back. If that is not wealth creation, I don't know what your definition of wealth creation is. When we look at all the crypto coins, the combines value creation is >1.2 Trillion USD as per https://coinmarketcap.com/ https://coinmarketcap.com/.
- __del__ 4y agowealth isn't the same as "i can get money for this"
- RestlessMind 4y agoWealth is the stuff that people value. Money is one of the measures we use to measure that value, particularly when talking about "wealth creation". So if public stock market valuation is considered a good measure for wealth creation, why not crypto market cap?
- 10x-dev 4y agoCrypto lets governments track every citizen's purchase ever made, forever. KYC ensures that a wallet is tied to a person. I am surprised governments haven't yet jumped on this fully (without proof of work, just a government run digital currency and a blockchain).
- fallat 4y agoOh ho, they are. You have no idea how hard they are jumping in.
- Godel_unicode 4y agoThe government you would most expect to love that idea has done exactly that: https://en.m.wikipedia.org/wiki/Digital_renminbi https://en.m.wikipedia.org/wiki/Digital_renminbi
- dpweb 4y agoMoney is a creation of government, and frankly, the dollar ain’t so bad. If my bank goes under I’m protected by the FDIC. If Coinbase goes under they have the right to use my money to pay their creditors.
- throw123123123 4y agoUntil gov takes away your money and then what
- throw123123123 4y agoMoney is a private creation, government just made it illegal to run private money.
- notch656a 4y agoKeeping crypto on an exchange is like keeping gold at the gold dealer. Just why.
- arcticbull 4y agoNobody keeps bricks of gold at home. Just why would they. Way too much risk.
- boznz 4y agono risk if nobody knows they are there, ditto if you are a crypto billionaire and dont tell anyone
- jackvalentine 4y agoYour house burns down. Your house floods. You put your hardware wallet on the kitchen bench after adding/withdrawing crypto and the dog grabs it and chews it up.
- BuyMyBitcoins 4y ago
- datadata 4y ago> Governments will likely fight this tooth and nail however, because crypto is currently an anti-government technology. Democratic governments represent the will of the people, and I don't think a technology can be pro-government or anti-government, it ultimately depends on what the people what. I think you are correct though for autocratic governments. Would you for example say that guns are clearly anti-government or pro-government?
- guerrilla 4y ago> Democratic governments represent the will How are people still this naive and indoctrinated. Me, earlier: > You vote what you're told to vote by the media that the state and capital dominate entirely (Think about it: how would enough people even hear about an alternative idea or candidate that they don't deem in their interest?) If you're American you get to choose between two millionaires (or sometimes billionaires) with virtually identical economic politics chosen in advanced for you who can safely ignore you once they get elected. "Democracy."
- datadata 4y agoThis is not naivety, it is just stating what the ideal is.
- kqr 4y agoTruly democratic governments would represent the will of the people. Representative democracy, on the other hand, often ends up being an elective aristocracy -- just like you say. Once we elect a small set of people to make decisions for us, a political class tends to emerge (those with resources and time to spend their days wooing people) and it is their will who is represented by government. The people simply select the least worst of those options.
- piva00 4y agoAmerican-centrism is also bound to be a naive and indoctrinate way to be cynical... American democracy is a shitshow, not every democracy.
- randomhodler84 4y agoNo, I disagree. That’s like saying an isp can’t create information, only move it around. Metadata is value, such as on-chain data being an expression of trade volumes etc, and this itself is a second order value, beyond the utility of trustless censorship resistant payments, that in itself is worth percents of the total value transacted. Yes, it is a protocol, but TCP/IP made many fortunes also. Even though it just moves bits around the globe.
- deleted 4y ago[deleted]
- GartzenDeHaes 4y agoThe drop in ransomware might have something to do with it, since there's less money going into crypto from victims right now. https://www.zdnet.com/article/ransomware-has-gone-down-because-sanctions-against-russia-are-making-life-harder-for-attackers/ https://www.zdnet.com/article/ransomware-has-gone-down-becau...
- unclebucknasty 4y ago>Crypto cannot create wealth, only move it around. If too many people become crypto-rich... Not really understanding this. If crypto is just moving wealth around, then how can "too many" people become crypto-rich?
- deleted 4y ago[deleted]
- nradov 4y agoThe “too many" part is obviously subjective, but cryptocurrencies are all just zero-sum trading vehicles similar to Ponzi schemes. Unlike real businesses which expect natural resources or build things, there is no new wealth being created in cryptocurrency. Mathematically, only a minority of participants can ever get rich. The majority of participants are suckers who will be left holding worthless coins when bubbles pop. Of course that could take many years, so in the meantime traders who are lucky enough to time the markets correctly can make huge profits.
- unclebucknasty 4y agoIn your previous comment, you wrote: >If too many people become crypto-rich and try to spend it on real-world assets, the assets will just inflate in price. My point was that your logic is flawed. If crypto just moves wealth around vs creating it, as you also assert, then it won't materially change the number of wealthy people. Hence, it wouldn't be a mechanism for causing the inflation you predict.
- thfuran 4y ago>Crypto cannot create wealth, only move it around What's the difference? My employer doesn't create money, they just move it from clients to me. We're both still getting money out of it.
- nradov 4y agoEmployers other than banks don't create money, but they do create new value which never existed before. Most companies that extract natural resources or build things that people want increase the net wealth in our society. That wealth is denominated in currency, but in principle the wealth would still exist even if we eliminated money or switched to some other medium of exchange.
- thfuran 4y agoBut moving money around has value as well. That's why middlemen like visa are able to charge transaction fees.