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None of these collapses have been due to fractional reserve banking, because fractional reserve banking requires being open about what you're doing. These coll

None of these collapses have been due to fractional reserve banking, because fractional reserve banking requires being open about what you're doing. These collapses have been about fraud. There are lots of other kinds of fraud; getting rid of this type would barely make an impact. While there's nothing intrinsic about cryptocurrency that would make it more prone to fraud than anything else, the culture around it seems highly susceptible to it.

fundad 4y ago
I crypto fans call it the "five-finger-fractional-reserve, have fun being poor" if you ask them.
cortesoft 4y ago
> While there's nothing intrinsic about cryptocurrency that would make it more prone to fraud than anything else There are absolutely intrinsic things that make cryptocurrency more prone to fraud. The inability to reverse transactions, quasi-anonymity, and lack of any central authority to resolve disputes. To limit fraud to the levels you see in traditional finance, you would need the regulations and oversight by centralized organizations that you have in the traditional space. The entire purpose of cryptocurrencies are to avoid those things, so while you technically could have them with a cryptocurrency, you would end up with no good reason to have a cryptocurrency at all.
- sweetbitter 4y ago
  > The entire purpose of cryptocurrencies are to avoid those things, so while you technically could have them with a cryptocurrency, you would end up with no good reason to have a cryptocurrency at all. I will substitute a word from your post that will help you understand this easier: "The entire purpose of cash is to avoid those things, so while you technically could have them with cash, you would end up with no good reason to have cash at all." Cryptocurrency is not antithetical to banks just like cash and gold are not. It is a digital version of cash, not credit.
  - strogonoff 4y ago
    Cryptocurrencies are nothing like cash for one important reason: they are not subject to physical constraints. You cannot easily scam millions of people around the world out of their hard-earned cash in a couple of days. You cannot easily move millions of dollars in cash without conspicuously hauling objects around and/or engaging many people to help with that. You can reverse a cash transaction immediately by grabbing the person and calling the police. You cannot maintain anonymity when dealing in cash without giving strong cues to bystanders and counterparties and risking being recorded on video. It is not the purpose of cash to avoid any of those “downsides”; but it clearly is a feature of cryptocurrencies. Cryptocurrencies are a qualitatively new thing humanity has never had to deal with ever, no matter how insistent are cryptocurrency aficionados’ in calling it merely “a digital version of cash”. This serves their wallets, by suspending deserved wariness and encouraging unsophisticated people to invest into a financial pyramid, but not truthful description of reality.
    - sweetbitter 4y ago
      > Cryptocurrencies are a qualitatively new thing humanity has never had to deal with ever, no matter how insistent are cryptocurrency aficionados’ in calling it merely “a digital version of cash”. This serves their wallets, by suspending deserved wariness and encouraging unsophisticated people to invest into a financial pyramid, but not truthful description of reality. Holding no cryptocurrency myself (I don't need to buy anything with it atm :D) I would hardly call myself an 'aficionado'. But you must understand that to compare does not mean to equate. All I was saying is that cryptographic currencies have some of the properties that cash has, but that they also have the ease of transport and storage afforded to us by credit. I don't see the issue with being able to transport cash across the 'net. Governments can still regulate businesses, banks, so if you go and buy a car and your government wants to know to tax it, the business selling you the car can just report this income. If a bank held your asset for you, they could just be subject to similar regulations as when they hold other assets for you. Once you stop treating it like credit or like some amorphous blob that cannot be regulated, this stuff gets pretty simple to understand.
      - 4y ago

fundad 4y ago

I crypto fans call it the "five-finger-fractional-reserve, have fun being poor" if you ask them.

cortesoft 4y ago

> While there's nothing intrinsic about cryptocurrency that would make it more prone to fraud than anything else There are absolutely intrinsic things that make cryptocurrency more prone to fraud. The inability to reverse transactions, quasi-anonymity, and lack of any central authority to resolve disputes. To limit fraud to the levels you see in traditional finance, you would need the regulations and oversight by centralized organizations that you have in the traditional space. The entire purpose of cryptocurrencies are to avoid those things, so while you technically could have them with a cryptocurrency, you would end up with no good reason to have a cryptocurrency at all.

sweetbitter 4y ago
> The entire purpose of cryptocurrencies are to avoid those things, so while you technically could have them with a cryptocurrency, you would end up with no good reason to have a cryptocurrency at all. I will substitute a word from your post that will help you understand this easier: "The entire purpose of cash is to avoid those things, so while you technically could have them with cash, you would end up with no good reason to have cash at all." Cryptocurrency is not antithetical to banks just like cash and gold are not. It is a digital version of cash, not credit.
- strogonoff 4y ago
  Cryptocurrencies are nothing like cash for one important reason: they are not subject to physical constraints. You cannot easily scam millions of people around the world out of their hard-earned cash in a couple of days. You cannot easily move millions of dollars in cash without conspicuously hauling objects around and/or engaging many people to help with that. You can reverse a cash transaction immediately by grabbing the person and calling the police. You cannot maintain anonymity when dealing in cash without giving strong cues to bystanders and counterparties and risking being recorded on video. It is not the purpose of cash to avoid any of those “downsides”; but it clearly is a feature of cryptocurrencies. Cryptocurrencies are a qualitatively new thing humanity has never had to deal with ever, no matter how insistent are cryptocurrency aficionados’ in calling it merely “a digital version of cash”. This serves their wallets, by suspending deserved wariness and encouraging unsophisticated people to invest into a financial pyramid, but not truthful description of reality.
  - sweetbitter 4y ago
    > Cryptocurrencies are a qualitatively new thing humanity has never had to deal with ever, no matter how insistent are cryptocurrency aficionados’ in calling it merely “a digital version of cash”. This serves their wallets, by suspending deserved wariness and encouraging unsophisticated people to invest into a financial pyramid, but not truthful description of reality. Holding no cryptocurrency myself (I don't need to buy anything with it atm :D) I would hardly call myself an 'aficionado'. But you must understand that to compare does not mean to equate. All I was saying is that cryptographic currencies have some of the properties that cash has, but that they also have the ease of transport and storage afforded to us by credit. I don't see the issue with being able to transport cash across the 'net. Governments can still regulate businesses, banks, so if you go and buy a car and your government wants to know to tax it, the business selling you the car can just report this income. If a bank held your asset for you, they could just be subject to similar regulations as when they hold other assets for you. Once you stop treating it like credit or like some amorphous blob that cannot be regulated, this stuff gets pretty simple to understand.
    - 4y ago