5 ms·

I have sat out the crypto craze. I was actually one of the first to introduce the idea to my friends after having stumbled upon Satoshi's paper. I even joined a

I have sat out the crypto craze. I was actually one of the first to introduce the idea to my friends after having stumbled upon Satoshi's paper. I even joined a mining pool early on, but never did I put my own money into it. I'm not an expert economist by any means, and am often intimidated when I go on crypto boards and the average user seems to be able to throw around advanced macroeconomics terms no problem. Nevertheless, my basic economic background in crypto told me that, since the currency is neither tied to ownership in something with value or some entity that actually produces something valuable or some token which governments will arrest you if you fail to pay, that it has no useful value. For years, I pointed this out to those around me, who thought I was some kind of Luddite. But, I think this is going to vindicate my basic argument. There is nothing valuable in crypto. It failed as a means of payment. It's failed to decentralize finance. And now, it's failed to be a store of value as well.

arcticbull 4y ago
> For years, I pointed this out to those around me, who thought I was some kind of Luddite. Fun fact, the Luddites weren't actually anti-technology - many of them were skilled machine operators. They were protesting for better working conditions, higher pay and apprenticeship programs. [1] [edit] Of note: the machines they were attacking were not new, and smashing industrial machines in protest was not a concept that began or ended with them. They were some of the more prolific victims of anti-organized-labor smear campaigns. [1] https://www.smithsonianmag.com/history/what-the-luddites-really-fought-against-264412/ https://www.smithsonianmag.com/history/what-the-luddites-rea...
pigtailgirl 4y ago
-- not really disagreeing with you - only nitpick would be it remains to be seen what happens when BTC is effectively pointless to mine (or is fully mined, but the first will come considerably sooner) - a store of value should obviously hold that value relatively stable - maybe it's being treated as three things simultaneously by three contingents so the use-case hasn't shook out properly? - not sure - just thinking out loud :=) --
blahblarblar 4y ago
My crypto is still worth more than I paid for it.
- arcticbull 4y ago
  It's worth nothing, it's priced higher than you paid. Price is what you pay, value is what you get.
  - blahblarblar 4y ago
    I don’t care what you say it’s worth, I care what people willing to buy it will pay.
    - arcticbull 4y ago
      Again price vs value. I've never argued someone wouldn't buy it from you - I'm arguing it's worthless to both parties. It's the manifestation of the bottle imp paradox. [1] [1] https://en.wikipedia.org/wiki/The_Bottle_Imp https://en.wikipedia.org/wiki/The_Bottle_Imp
      - blahblarblar 4y ago
        I get all that, it’s a fun philosophical widget to ponder over. But out here in the real world it has value to me because I can sell it for more than I paid. I’ve taken profits and converted it into real goods for myself. I am aware it could go to zero and I’ve hedged my risk appropriately.
        arcticbull 4y ago
        Genuinely, best of luck! It sounds like you've managed your risk appropriately, and of course, I want everyone to make a ton of money :)
    - dbsights 4y ago
      Looks like those buyers are reconsidering it's value too. HODL? Illogical unless you believe there is some underlying value. Otherwise there will be bagholders and all you've accomplished is to guarantee you'll be among them.
anticristi 4y ago
I thought the value of crypto is really clear: black markets. I totally agree with what you wrote, so I can't find a better explanation.
onphonenow 4y ago
I was into bitcoin for method of payment purposes very very early (I think it was 10 cents when I played with it). Never held it though or made money using it. Even before bitcoin some folks might remember digicash - I was into that, but it never went anywhere either. I'm a sci-fi reader. It seems to me that digital cash has utility. I've gone to Apple Pay wherever possible, my only wish was that apple pay would have taken out Visa and Mastercard with a direct offering with much lower fees. On merchant side there are still ripoffs - a lot of ACH processing fees are absurd (1% - no cap on amounts etc - so you end up at $100/transaction if you do a $10,000 transaction through certain platforms) and there is no way in person trx have enough fraud to justify the 2.x%. charged there. Chip and pin would solve the issue there anyways but for whatever reason has not been adopted in US.
- arcticbull 4y ago
  > Chip and pin would solve the issue there anyways but for whatever reason has not been adopted in US. Can speak to this. Historically the US has been reluctant to adopt CVM PIN because of the extra transaction time. A CVM Signature transaction (or even a CVM None) takes 1-2 seconds. Asking someone to enter their PIN takes an additional 10-20 seconds. A full order of magnitude longer. For places like McDonalds, this was a non-starter. It's even fairly painful in the countries where it has been adopted. The solution in both markets was to move to contactless EMV cards and especially to contactless-enabled mobile wallets. You get the best of both worlds with mobile wallets: low transaction times and low fraud risk. The interchange rate you're referencing (2.x%) isn't due to fraud risk really, it's used to fund the cost of reward programs. The EU just doesn't have nearly the same kinds of cash-back or frequent flyer program type cards - which just cannot be funded by the regulated 0.3% interchange cap.
  - onphonenow 4y ago
    What confuses me in all this is just that when I pay with a chip + signature, I have to insert my card AND LEAVE IT IN for something like 10-20 seconds until the beep beep beep of death. With my apple device, I touch the terminal, and its basically instant. In other words, the bandwidth sticking my card INTO the device (plus whatever time it takes to do some calcs on device) is something like 2,000 times slower over a wired connection then my iphone does over wireless. There is some failure in the current CVM implementation in the US because this makes no logical sense at all. About half the chip terminals have to put big stickers on about LEAVING card inserted until told to remove. We've gone backwards from mag stripe here which despite being supposedly inferior was definitely a lot faster.
boplicity 4y ago
I'm not so convinced it's failed. It's enabled the massive expansion of a relatively new industry: computer system hostage taking. This, combined with enabling illegal money-transfers, and other illicit activities, has been of extreme utility for many people. (And some of that money transferring, out of certain countries, is not amoral, IMO.) That being said, as an above-board currency/asset, it certainly has failed.
- Nextgrid 4y ago
  Cryptocurrencies have been used for this purpose long before the recent spikes in price. I agree it has value for the purposes you mentioned but I doubt the current price actually reflects said value.
olalonde 4y ago
Do you believe the US dollar would be worthless if the government eliminated taxes? Because going by your logic, it seems it should.
- anon291 4y ago
  If the US government stopped collecting taxes, that would heavily devalue the dollar. The dollar is the official currency of several other countries so it wouldn't go to zero, unless they too stopped collecting taxes. Of course, even if that happened, there would be some value, because by US law, the dollar is legal tender, which means offering a third party a US dollar should be sufficient to settle any debts. Of course, as the dollar is also no longer useful to any third party, more and more dollars would be demanded as the value slowly fell to zero. But yes, if the US stopped collecting taxes, the dollar would heavily devalue, and eventually reach zero In general, the value of fiat currency comes from how useful it is in satiating the demands of the government backing it. Usually, that is taxes, but there are a few other ways fiat is used that have to be taken into account (judgements, etc)

arcticbull 4y ago

> For years, I pointed this out to those around me, who thought I was some kind of Luddite. Fun fact, the Luddites weren't actually anti-technology - many of them were skilled machine operators. They were protesting for better working conditions, higher pay and apprenticeship programs. [1] [edit] Of note: the machines they were attacking were not new, and smashing industrial machines in protest was not a concept that began or ended with them. They were some of the more prolific victims of anti-organized-labor smear campaigns. [1] https://www.smithsonianmag.com/history/what-the-luddites-really-fought-against-264412/ https://www.smithsonianmag.com/history/what-the-luddites-rea...

pigtailgirl 4y ago

-- not really disagreeing with you - only nitpick would be it remains to be seen what happens when BTC is effectively pointless to mine (or is fully mined, but the first will come considerably sooner) - a store of value should obviously hold that value relatively stable - maybe it's being treated as three things simultaneously by three contingents so the use-case hasn't shook out properly? - not sure - just thinking out loud :=) --

blahblarblar 4y ago

My crypto is still worth more than I paid for it.

arcticbull 4y ago
It's worth nothing, it's priced higher than you paid. Price is what you pay, value is what you get.
- blahblarblar 4y ago
  I don’t care what you say it’s worth, I care what people willing to buy it will pay.
  - arcticbull 4y ago
    Again price vs value. I've never argued someone wouldn't buy it from you - I'm arguing it's worthless to both parties. It's the manifestation of the bottle imp paradox. [1] [1] https://en.wikipedia.org/wiki/The_Bottle_Imp https://en.wikipedia.org/wiki/The_Bottle_Imp
    - blahblarblar 4y ago
      I get all that, it’s a fun philosophical widget to ponder over. But out here in the real world it has value to me because I can sell it for more than I paid. I’ve taken profits and converted it into real goods for myself. I am aware it could go to zero and I’ve hedged my risk appropriately.
      - arcticbull 4y ago
        Genuinely, best of luck! It sounds like you've managed your risk appropriately, and of course, I want everyone to make a ton of money :)
  - dbsights 4y ago
    Looks like those buyers are reconsidering it's value too. HODL? Illogical unless you believe there is some underlying value. Otherwise there will be bagholders and all you've accomplished is to guarantee you'll be among them.

anticristi 4y ago

I thought the value of crypto is really clear: black markets. I totally agree with what you wrote, so I can't find a better explanation.

onphonenow 4y ago

I was into bitcoin for method of payment purposes very very early (I think it was 10 cents when I played with it). Never held it though or made money using it. Even before bitcoin some folks might remember digicash - I was into that, but it never went anywhere either. I'm a sci-fi reader. It seems to me that digital cash has utility. I've gone to Apple Pay wherever possible, my only wish was that apple pay would have taken out Visa and Mastercard with a direct offering with much lower fees. On merchant side there are still ripoffs - a lot of ACH processing fees are absurd (1% - no cap on amounts etc - so you end up at $100/transaction if you do a $10,000 transaction through certain platforms) and there is no way in person trx have enough fraud to justify the 2.x%. charged there. Chip and pin would solve the issue there anyways but for whatever reason has not been adopted in US.

arcticbull 4y ago
> Chip and pin would solve the issue there anyways but for whatever reason has not been adopted in US. Can speak to this. Historically the US has been reluctant to adopt CVM PIN because of the extra transaction time. A CVM Signature transaction (or even a CVM None) takes 1-2 seconds. Asking someone to enter their PIN takes an additional 10-20 seconds. A full order of magnitude longer. For places like McDonalds, this was a non-starter. It's even fairly painful in the countries where it has been adopted. The solution in both markets was to move to contactless EMV cards and especially to contactless-enabled mobile wallets. You get the best of both worlds with mobile wallets: low transaction times and low fraud risk. The interchange rate you're referencing (2.x%) isn't due to fraud risk really, it's used to fund the cost of reward programs. The EU just doesn't have nearly the same kinds of cash-back or frequent flyer program type cards - which just cannot be funded by the regulated 0.3% interchange cap.
- onphonenow 4y ago
  What confuses me in all this is just that when I pay with a chip + signature, I have to insert my card AND LEAVE IT IN for something like 10-20 seconds until the beep beep beep of death. With my apple device, I touch the terminal, and its basically instant. In other words, the bandwidth sticking my card INTO the device (plus whatever time it takes to do some calcs on device) is something like 2,000 times slower over a wired connection then my iphone does over wireless. There is some failure in the current CVM implementation in the US because this makes no logical sense at all. About half the chip terminals have to put big stickers on about LEAVING card inserted until told to remove. We've gone backwards from mag stripe here which despite being supposedly inferior was definitely a lot faster.

boplicity 4y ago

I'm not so convinced it's failed. It's enabled the massive expansion of a relatively new industry: computer system hostage taking. This, combined with enabling illegal money-transfers, and other illicit activities, has been of extreme utility for many people. (And some of that money transferring, out of certain countries, is not amoral, IMO.) That being said, as an above-board currency/asset, it certainly has failed.

Nextgrid 4y ago
Cryptocurrencies have been used for this purpose long before the recent spikes in price. I agree it has value for the purposes you mentioned but I doubt the current price actually reflects said value.

olalonde 4y ago

Do you believe the US dollar would be worthless if the government eliminated taxes? Because going by your logic, it seems it should.

anon291 4y ago
If the US government stopped collecting taxes, that would heavily devalue the dollar. The dollar is the official currency of several other countries so it wouldn't go to zero, unless they too stopped collecting taxes. Of course, even if that happened, there would be some value, because by US law, the dollar is legal tender, which means offering a third party a US dollar should be sufficient to settle any debts. Of course, as the dollar is also no longer useful to any third party, more and more dollars would be demanded as the value slowly fell to zero. But yes, if the US stopped collecting taxes, the dollar would heavily devalue, and eventually reach zero In general, the value of fiat currency comes from how useful it is in satiating the demands of the government backing it. Usually, that is taxes, but there are a few other ways fiat is used that have to be taken into account (judgements, etc)