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Cryptocurrency in its purest is money not issued or controlled by a government. Instead the supply inflation is controlled by transparent rules that are plain t

Cryptocurrency in its purest is money not issued or controlled by a government. Instead the supply inflation is controlled by transparent rules that are plain to see. “Protocol-based finance” vs. the existing government-based finance. Now there are all manner of divergences from the above paragraph. Coins that are totally controlled and issued by a small group or company. Black box rules rather than transparent. There are also huge trade offs with not having a central entity - lose your private key and lose your money for example. Does this make the entire industry a Ponzi? No. There are legitimate uses for crypto, and even if I listed a whole bunch here the HN skeptics would disagree, but certainly buying drugs online is a real use case, which crypto excels at. You may say that’s morally wrong but it is still a use case, for better or worse.

JumpCrisscross 4y ago
> Does this make the entire industry a Ponzi? No, the things you mentioned don’t. The argument the article made, that almost all the dollars and euros and yen crypto spits out come from investment, does. That some people are buying drugs and financing terrorism or Pyongyang dilutes the Ponzi case. Those are examples of utility. But I’m not sure that’s the defence crypto was looking for.
- monero-xmr 4y ago
  Stablecoins such as USDC and Tether (although despised by many) are used for non-criminal cross border transfers and savings accounts. Here is a recent episode of EconTalk that explains the use case in Argentina https://podcasts.apple.com/us/podcast/econtalk/id135066958?i=1000582879756 https://podcasts.apple.com/us/podcast/econtalk/id135066958?i...
  - JumpCrisscross 4y ago
    > USDC and Tether (although despised by many) are used for non-criminal cross border transfers and savings accounts One of these is almost certainly a fraud. The other provides utility, but largely in sidestepping money-laundering and banking rules.
Trasmatta 4y ago
Crypto doesn't even excel at buying drugs online. The fact that it's a permanent ledger of transactions means the purchase could be trivially linked to you by law enforcement, unless you jumped through all the necessary hoops to also anonymize it. Which most people don't.
- monero-xmr 4y ago
  Have you looked into monero? https://getmonero.org/ https://getmonero.org/
  - bb88 4y ago
    So are you saying monero can solve the planetary crisis of users not being able to buy illicit drugs online?
    - monero-xmr 4y ago
      Monero is digital cash. Cash is also used to buy drugs, but we do not ban it. I feel that financial privacy is a human right just like any other form of privacy. If you disagree then please post your last month’s bank statement in response to this comment.
      - carewell 4y ago
        I think parent commenter's argument is that it's hard to get excited about crypto just based on the fact that it allows some people buy drugs online. While millions of investors lose a ton of money to crypto scams.
        monero-xmr 4y ago
        The problem is HN is an exhausting circular firing squad when it comes to crypto. I could extol the benefits of private currency on philosophical and moral grounds but this won’t convince a lot of people. So I try to put it in more concrete terms and then it’s either criticized or brushed off. If you believe as I do that government control of money is a mistake for many different reasons, then crypto is a revolutionary technology. If you say “Bitcoin has all the problems” then I refer you to monero.
jeremyjh 4y ago
It isn't money. Money can be easily exchanged for goods and services. It is a digital "asset" whose only meaningful application is speculative trading...of itself. If something only has value because you think you can sell it to the next sucker for more, it is a ponzi scheme.
- bbbbb5 4y ago
  Cryptocurrency can easily be exchanged for a whole lot of goods and services.
- monero-xmr 4y ago
  If your definition of money = using something for goods and services, the crypto has certainly exceeded that definition.
  - jeremyjh 4y ago
    Yes that's why they accept it at Amazon and Alibaba right?
    - monero-xmr 4y ago
      Here is a list of services that accept crypto directly https://kycnot.me/ https://kycnot.me/
      - jeremyjh 4y ago
        Thank you for proving my point.
        ifeeltriedboss 4y ago
        I can buy 4 VPNs with my crypto yay.
        deleted 4y ago
        [deleted]
atoav 4y ago
Your username makes you wanna add a disclaimer here? Your judgment might be coloured by your own involvement in crypto. If anything a bigger part of the chaos in the cryptocurrency-space comes from people who want to believe.
deleted 4y ago
[deleted]
dandanua 4y ago
> buying drugs online is a real use case It's a use case that doesn't solve the problem with trust. Parties have to trust each other or use escrow. So, it solves only the "government control" problem. But I agree, crypto is not just a Ponzi scheme. It's an enormous investment into the world of criminals - individuals and organizations.
carewell 4y ago
Splitting hairs could be a reasonable expectation but at this point right after the FTX debacle it's not warranted. Any sufficiently complex system can have minor benefits while overall be considered extremely harmful. Cancer can make you lose weight. Nazi Germany built great highways.
cm277 4y ago
I used to agree with you; but I think this line of thinking takes a (core) feature of money (trust in its value) and reduces the whole thing down to just it. Fiat money has another core feature in its definition: that you can pay taxes to a government using that currency. Similarly, equity in a company comes with dividends: a core cashflow that you can predict based on P&L. Trust in their current (and most importantly future) value, is a (big) aspect of it, but not the only one: there's actually a predictable "base" value that you can use to calculate a floor to that value. The future value is just the ceiling to that prediction. Crypto is only trust. Without that social trust, there's no minimum value. That doesn't mean there is no value, just that the floor can go away, that the entire thing is much more volatile. So basically, gambling. This is not a value judgement btw, gambling and volatile assets can be fun and profitable; they are just not currencies.
- monero-xmr 4y ago
  The counterpoint to the “fiat mindset” (not to criticize you, but how I categorize it) is gold. There is no reason why gold is valued so highly other than historical and traditional reasons - its industrial utility is far lower than its monetized value. IMO Bitcoin is superior to gold in nearly every single aspect. The only thing it doesn’t have is 5000 years of human belief in its worth. If you understand logically why gold in 2022 has a monetary premium above its industrial value, then you can logically reason about Bitcoin and its value. If you accept that Bitcoin has long term utility and value, then it isn’t a stretch to start analyzing other coins on similar valuation heuristics.
  - cm277 4y ago
    That's a good counter; but gold does have a minimum value separate from trust in its future value: it can be used for jewelry / metallurgical applications, etc. and it won't rust / oxidize. And gold is a lousy currency: risky, expensive to store, tied to natural resources, etc.; I guess just like BC :-)
    - monero-xmr 4y ago
      It has a minimal value but it’s far less than its monetary premium. If you are investing in gold (as many mainstream wealth managers and central banks do) then you aren’t assessing “what is the minimum my investment can fall to based on fundamental industrial utility?” The investment thesis for gold completely ignores any potential for demonetization or else the investment is suicidal.

JumpCrisscross 4y ago

> Does this make the entire industry a Ponzi? No, the things you mentioned don’t. The argument the article made, that almost all the dollars and euros and yen crypto spits out come from investment, does. That some people are buying drugs and financing terrorism or Pyongyang dilutes the Ponzi case. Those are examples of utility. But I’m not sure that’s the defence crypto was looking for.

monero-xmr 4y ago
Stablecoins such as USDC and Tether (although despised by many) are used for non-criminal cross border transfers and savings accounts. Here is a recent episode of EconTalk that explains the use case in Argentina https://podcasts.apple.com/us/podcast/econtalk/id135066958?i=1000582879756 https://podcasts.apple.com/us/podcast/econtalk/id135066958?i...
- JumpCrisscross 4y ago
  > USDC and Tether (although despised by many) are used for non-criminal cross border transfers and savings accounts One of these is almost certainly a fraud. The other provides utility, but largely in sidestepping money-laundering and banking rules.

Trasmatta 4y ago

Crypto doesn't even excel at buying drugs online. The fact that it's a permanent ledger of transactions means the purchase could be trivially linked to you by law enforcement, unless you jumped through all the necessary hoops to also anonymize it. Which most people don't.

monero-xmr 4y ago
Have you looked into monero? https://getmonero.org/ https://getmonero.org/
- bb88 4y ago
  So are you saying monero can solve the planetary crisis of users not being able to buy illicit drugs online?
  - monero-xmr 4y ago
    Monero is digital cash. Cash is also used to buy drugs, but we do not ban it. I feel that financial privacy is a human right just like any other form of privacy. If you disagree then please post your last month’s bank statement in response to this comment.
    - carewell 4y ago
      I think parent commenter's argument is that it's hard to get excited about crypto just based on the fact that it allows some people buy drugs online. While millions of investors lose a ton of money to crypto scams.
      - monero-xmr 4y ago
        The problem is HN is an exhausting circular firing squad when it comes to crypto. I could extol the benefits of private currency on philosophical and moral grounds but this won’t convince a lot of people. So I try to put it in more concrete terms and then it’s either criticized or brushed off. If you believe as I do that government control of money is a mistake for many different reasons, then crypto is a revolutionary technology. If you say “Bitcoin has all the problems” then I refer you to monero.

jeremyjh 4y ago

It isn't money. Money can be easily exchanged for goods and services. It is a digital "asset" whose only meaningful application is speculative trading...of itself. If something only has value because you think you can sell it to the next sucker for more, it is a ponzi scheme.

bbbbb5 4y ago
Cryptocurrency can easily be exchanged for a whole lot of goods and services.
monero-xmr 4y ago
If your definition of money = using something for goods and services, the crypto has certainly exceeded that definition.
- jeremyjh 4y ago
  Yes that's why they accept it at Amazon and Alibaba right?
  - monero-xmr 4y ago
    Here is a list of services that accept crypto directly https://kycnot.me/ https://kycnot.me/
    - jeremyjh 4y ago
      Thank you for proving my point.
      - ifeeltriedboss 4y ago
        I can buy 4 VPNs with my crypto yay.
        deleted 4y ago
        [deleted]

atoav 4y ago

Your username makes you wanna add a disclaimer here? Your judgment might be coloured by your own involvement in crypto. If anything a bigger part of the chaos in the cryptocurrency-space comes from people who want to believe.

deleted 4y ago

[deleted]

dandanua 4y ago

> buying drugs online is a real use case It's a use case that doesn't solve the problem with trust. Parties have to trust each other or use escrow. So, it solves only the "government control" problem. But I agree, crypto is not just a Ponzi scheme. It's an enormous investment into the world of criminals - individuals and organizations.

carewell 4y ago

Splitting hairs could be a reasonable expectation but at this point right after the FTX debacle it's not warranted. Any sufficiently complex system can have minor benefits while overall be considered extremely harmful. Cancer can make you lose weight. Nazi Germany built great highways.

cm277 4y ago

I used to agree with you; but I think this line of thinking takes a (core) feature of money (trust in its value) and reduces the whole thing down to just it. Fiat money has another core feature in its definition: that you can pay taxes to a government using that currency. Similarly, equity in a company comes with dividends: a core cashflow that you can predict based on P&L. Trust in their current (and most importantly future) value, is a (big) aspect of it, but not the only one: there's actually a predictable "base" value that you can use to calculate a floor to that value. The future value is just the ceiling to that prediction. Crypto is only trust. Without that social trust, there's no minimum value. That doesn't mean there is no value, just that the floor can go away, that the entire thing is much more volatile. So basically, gambling. This is not a value judgement btw, gambling and volatile assets can be fun and profitable; they are just not currencies.

monero-xmr 4y ago
The counterpoint to the “fiat mindset” (not to criticize you, but how I categorize it) is gold. There is no reason why gold is valued so highly other than historical and traditional reasons - its industrial utility is far lower than its monetized value. IMO Bitcoin is superior to gold in nearly every single aspect. The only thing it doesn’t have is 5000 years of human belief in its worth. If you understand logically why gold in 2022 has a monetary premium above its industrial value, then you can logically reason about Bitcoin and its value. If you accept that Bitcoin has long term utility and value, then it isn’t a stretch to start analyzing other coins on similar valuation heuristics.
- cm277 4y ago
  That's a good counter; but gold does have a minimum value separate from trust in its future value: it can be used for jewelry / metallurgical applications, etc. and it won't rust / oxidize. And gold is a lousy currency: risky, expensive to store, tied to natural resources, etc.; I guess just like BC :-)
  - monero-xmr 4y ago
    It has a minimal value but it’s far less than its monetary premium. If you are investing in gold (as many mainstream wealth managers and central banks do) then you aren’t assessing “what is the minimum my investment can fall to based on fundamental industrial utility?” The investment thesis for gold completely ignores any potential for demonetization or else the investment is suicidal.