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I notice this when travelling the world and it's one of the main reasons I think the many of the arguments for cryptocurrency are flawed. I've used decades old

by altacc 3y ago

I notice this when travelling the world and it's one of the main reasons I think the many of the arguments for cryptocurrency are flawed. I've used decades old dollar bills in SE Asia that have been pretty much detached from the US economy for decades and have held value better than bitcoin ever has. The value of the dollar is linked not just to the US economy but also a global black economy and that has some unoffical influence on exchange rates & dollar value.

idiotsecant 3y ago
This will be true right up until the point it is not. The US dollar dominance is not a feature of the universe, it's a social agreement that, like any such agreement, will eventually come undone.
- VHRanger 3y ago
  Cryptocurrencies are inherently bad currencies because of price volatility (except stable coins). That also makes them good speculative assets fwiw
  - adgjlsfhk1 3y ago
    and stablecoins are always fraudulent
    - mikhailfranco 3y ago
      Usually. But only if they offer you an intetest rate dramatically above the short-term rate on the corresponding govt bill/bond - e.g USD 2yr.
    - idiotsecant 3y ago
      Interesting. You sound like you know a lot about the subject, to be so confident. Could you please explain how, for example, DAI is fraudulent?
  - f33d5173 3y ago
    The price volatility is an aspect of the fact that existing cryptocurrencies aren't very useful for paying for things, so that the only thing they're useful for is speculating. A cryptocurrency that lacked speculation and which was widely used for payment would be much more stable.
  - more_corn 3y ago
    Stanlecoins are even worse. When they unpeg as all must, everything falls apart.
- ToucanLoucan 3y ago
  Not to sound hyperbolic but I feel once the US Dollar crashes entirely to the degree that it no longer serves as a "default currency" of sorts, that society will have broken down far enough that even the gold will be relatively worthless and the predominant goods of choice will be cans of dog food and beans.
  - bluGill 3y ago
    For a year you will be correct. However after a year what is left will start to rebuild, and gold works better than beans (remember the cans are all eaten by now - we are talking beans someone actually grew). The problem with beans is they spoil (even carefully stored): eventually someone says "I have all the beans I need now, but I still want to sell my shoes". Using something like gold as an agreed medium of exchanges means the bean grower and shoe maker can make an exchange without trying to put together a complex trade involving a dozen people just to get enough of various goods to satisfy the show maker. Instead the shoemaker can get some gold and then buy everything as an individual transaction - and the people he buys from can in turn go to the bean grower if they want beans.
    - lesuorac 3y ago
      Or instead of gold they can just trade the empty cans and if you happen to have enough of a functioning society they can also just trade on debt (see Tallysticks [1]). Investing in gold as a hedge for the collapse of society is imo a really piss-poor idea. Either invest in stuff you can use (i.e. food) or stuff that will be demand (Ham radios, firearms). Gold is just not going to be the future medium of currency there isn't enough of it in practical sized values. [1]: https://en.wikipedia.org/wiki/History_of_money#Overview https://en.wikipedia.org/wiki/History_of_money#Overview
      - bluGill 3y ago
        Gold - because it is pretty - will always have some value. Ham radio is only useful if you can power it and find someone else with one who can also power it, my guess not enough people will have them to be useful. firearms are only useful if you have ammo - while you can make bullets and black power it is hard to say if it is worth it. I doubt there will be much firearm trade unless there is an ammo manufacturing (no longer society collapse - though a much more likely scenereo) - people who have ammo will keep the guns that go with it. I'm not disagreeing that there are plenty of things other than gold to hold onto. However gold is still a reasonable choice for post disaster trade for the same reasons society settled on it in the first place. (note that society also used copper and silver for trade)
- bluGill 3y ago
  Eventually, but that eventually shows no sign of stopping soon. There are two cases where it stops: the US decides to replace the dollar with something else, and there is a clear trade in program (the EU went to the Euro, and India did something similar); or things change slowly over time so you will have plenty of time where your dollar maybe isn't worth what it was yesterday but still is worth almost a dollar - odds are you don't hold dollars long enough or that loss of value to matter.
  - scottiebarnes 3y ago
    You're forgetting the case where the US dollar gets hyperinflated or highly inflated due to something like a debt crisis. Speaking of which...$33 trillion.
    - fuzzfactor 3y ago
      A hundred years ago a US silver dollar would buy you a decent steak dinner, and naturally a US $10 gold eagle coin would serve 10 people. Now that same kind of dinner can still be had for the same silver dollar, but the amount of gold in the small 1923 gold eagle[0] would be enough to serve 30 today, not merely the 10 diners of 100 years ago. And some of these are nice restaurants. Today if your dollar does not contain the full ounce of silver it was originally intended to, and all you have is a $1 bank note instead, it still buys a kid-sized ice cream cone at McDonald's. Now sometimes only during special promotions depending on market. [0] Regular ordinary legal tender, but were all confiscated by the government because they were gold in 1933, when the ownership of gold by Americans was outlawed until decades later (only after its backing of the dollar was discontinued).
      - teleforce 3y ago
        Thanks for the info, I didn't know back in the 19th century that the US also used bimetallic currency where 10 US silver dollar is equivalent to 1 gold coin. This has been (more or less) the standard since like forever, for at least several thousand of years including in major world's empires including the Greek, Persian, Roman (Rome and Byzantine), Islamic (Rashidun, Umayyad, Abbasid, Ottoman) and British Empire until 19th century where bimetallic currency namely silver coin (dirham) and gold coin (dinar) were pervasive. Fun facts, the word dirham in Islamic empire is derived from the word drachma with the same meaning in Greek, while dinar is derived from the Roman word denarius.
- eli_gottlieb 3y ago
  Well yeah, but of course it's kinda hard to just go ask the people who make monetary policy for the global black-market economy, since they wouldn't want to admit to any of it.
- mensetmanusman 3y ago
  The dollar system is bad, but it’s the least bad we can see. There isn’t even a close second. It will take generations at the rate every possible competitor is also self destructing.
- jareklupinski 3y ago
  > it's a social agreement that, like any such agreement, will eventually come undone unless we agree for it not to. it took faith in a social structure to put the system together, and as long as it's maintained, it will stay together. there's likely no invisible hand that builds and then ruins all of our achievements (unless we want to believe there is one (which makes it just us again in the end))
olalonde 3y ago
> I've used decades old dollar bills in SE Asia that have been pretty much detached from the US economy for decades and have held value better than bitcoin ever has. I'm not sure what makes you feel that way. Gold and Bitcoin are up against the dollar in the past decade, and by a significant margin. Bitcoin is up ~225x against the dollar. Gold is up ~50x against the dollar going back five decades. The US dollar is pretty terrible at holding value.
- ericmay 3y ago
  Yes… but it’s a great currency, unlike gold or Bitcoin. You could also find individual stocks or maybe even the S&P500 and compare those to the dollar as well (and to each other).
  - olalonde 3y ago
    Sure. If you want to buy a pad Thai in Thailand, US dollars are probably going to be more widely accepted. On the other hand, if you have savings in an inflating currency, you might want to convert them to a medium that holds value well in the long term, rather than US dollars. That does include S&P500 stocks but those are not bearer instruments and not easily accessible, especially in foreign countries.
    - ericmay 3y ago
      Well you can sell the stock and convert it into dollars and then use those. That's something I can do easily today if I wanted regardless of the country I'm in so long as I have the Internet and an ATM. Gold you can't travel with (weight and loss due to theft and also probably actually illegal) and is also not accessible, and Bitcoin you can't buy a coffee with. Other available crypto currencies just do worse jobs than Bitcoin or dollars at their respective functions. The key here is to understand that monetary instruments have pros/cons. Dollars have the con that they aren't a great store of value (and this is by design). Dollars have the pro that they are widely accepted, hold their value in the short term (i.e. not volatile), and are highly liquid. Bitcoin has the pro that it's a great store of value, but has cons like inability to transact. Stocks are liquid but volatile, etc.
aeyes 3y ago
That might be a thing in countries with less stable currencies. You won't see anyone with dollars in Europe or Japan.
eloisant 3y ago
The USD retains its value because it's used as a global currency, it's as simple as that. Not because US bills are used in SE Asia or other places but because big transactions (like oil) are done in USD.
gopherthon 3y ago
Bitcoin has greatly increased in price while the USD has dumped in value exclusively for decades. The dollar has lost 95%+ of it's original purchasing power when they took it off the gold standard. The dollar doesn't hold value at all, it's losing value due to inflation every single day. Just less rapidly than some other currencies that are manipulated to an even higher degree. Do you pay attention to food, housing, or insurance prices? They have increased _significantly_ in just the past 3 years.
andirk 3y ago
I agree that USD, regardless of its waining value, is fairly universal. If I was going to start a country, I would start with USD as the currency instead of risking insane volatility. However, as discussed in the Bitcoin whitepaper, one of its pinnacle features is it is (supposedly) not controlled by a single entity or government or private institution, or really any institution. So the advantage of USD being tethered to the USA government is both a feature and a flaw, and BTC not being tethered to anything is both a feature and a flaw.
kaliqt 3y ago
I don't understand, Bitcoin has gone up in value much more than any currency you must be referring to.

by altacc 3y ago

idiotsecant 3y ago

This will be true right up until the point it is not. The US dollar dominance is not a feature of the universe, it's a social agreement that, like any such agreement, will eventually come undone.

VHRanger 3y ago
Cryptocurrencies are inherently bad currencies because of price volatility (except stable coins). That also makes them good speculative assets fwiw
- adgjlsfhk1 3y ago
  and stablecoins are always fraudulent
  - mikhailfranco 3y ago
    Usually. But only if they offer you an intetest rate dramatically above the short-term rate on the corresponding govt bill/bond - e.g USD 2yr.
  - idiotsecant 3y ago
    Interesting. You sound like you know a lot about the subject, to be so confident. Could you please explain how, for example, DAI is fraudulent?
- f33d5173 3y ago
  The price volatility is an aspect of the fact that existing cryptocurrencies aren't very useful for paying for things, so that the only thing they're useful for is speculating. A cryptocurrency that lacked speculation and which was widely used for payment would be much more stable.
- more_corn 3y ago
  Stanlecoins are even worse. When they unpeg as all must, everything falls apart.
ToucanLoucan 3y ago
Not to sound hyperbolic but I feel once the US Dollar crashes entirely to the degree that it no longer serves as a "default currency" of sorts, that society will have broken down far enough that even the gold will be relatively worthless and the predominant goods of choice will be cans of dog food and beans.
- bluGill 3y ago
  For a year you will be correct. However after a year what is left will start to rebuild, and gold works better than beans (remember the cans are all eaten by now - we are talking beans someone actually grew). The problem with beans is they spoil (even carefully stored): eventually someone says "I have all the beans I need now, but I still want to sell my shoes". Using something like gold as an agreed medium of exchanges means the bean grower and shoe maker can make an exchange without trying to put together a complex trade involving a dozen people just to get enough of various goods to satisfy the show maker. Instead the shoemaker can get some gold and then buy everything as an individual transaction - and the people he buys from can in turn go to the bean grower if they want beans.
  - lesuorac 3y ago
    Or instead of gold they can just trade the empty cans and if you happen to have enough of a functioning society they can also just trade on debt (see Tallysticks [1]). Investing in gold as a hedge for the collapse of society is imo a really piss-poor idea. Either invest in stuff you can use (i.e. food) or stuff that will be demand (Ham radios, firearms). Gold is just not going to be the future medium of currency there isn't enough of it in practical sized values. [1]: https://en.wikipedia.org/wiki/History_of_money#Overview https://en.wikipedia.org/wiki/History_of_money#Overview
    - bluGill 3y ago
      Gold - because it is pretty - will always have some value. Ham radio is only useful if you can power it and find someone else with one who can also power it, my guess not enough people will have them to be useful. firearms are only useful if you have ammo - while you can make bullets and black power it is hard to say if it is worth it. I doubt there will be much firearm trade unless there is an ammo manufacturing (no longer society collapse - though a much more likely scenereo) - people who have ammo will keep the guns that go with it. I'm not disagreeing that there are plenty of things other than gold to hold onto. However gold is still a reasonable choice for post disaster trade for the same reasons society settled on it in the first place. (note that society also used copper and silver for trade)
bluGill 3y ago
Eventually, but that eventually shows no sign of stopping soon. There are two cases where it stops: the US decides to replace the dollar with something else, and there is a clear trade in program (the EU went to the Euro, and India did something similar); or things change slowly over time so you will have plenty of time where your dollar maybe isn't worth what it was yesterday but still is worth almost a dollar - odds are you don't hold dollars long enough or that loss of value to matter.
- scottiebarnes 3y ago
  You're forgetting the case where the US dollar gets hyperinflated or highly inflated due to something like a debt crisis. Speaking of which...$33 trillion.
  - fuzzfactor 3y ago
    A hundred years ago a US silver dollar would buy you a decent steak dinner, and naturally a US $10 gold eagle coin would serve 10 people. Now that same kind of dinner can still be had for the same silver dollar, but the amount of gold in the small 1923 gold eagle[0] would be enough to serve 30 today, not merely the 10 diners of 100 years ago. And some of these are nice restaurants. Today if your dollar does not contain the full ounce of silver it was originally intended to, and all you have is a $1 bank note instead, it still buys a kid-sized ice cream cone at McDonald's. Now sometimes only during special promotions depending on market. [0] Regular ordinary legal tender, but were all confiscated by the government because they were gold in 1933, when the ownership of gold by Americans was outlawed until decades later (only after its backing of the dollar was discontinued).
    - teleforce 3y ago
      Thanks for the info, I didn't know back in the 19th century that the US also used bimetallic currency where 10 US silver dollar is equivalent to 1 gold coin. This has been (more or less) the standard since like forever, for at least several thousand of years including in major world's empires including the Greek, Persian, Roman (Rome and Byzantine), Islamic (Rashidun, Umayyad, Abbasid, Ottoman) and British Empire until 19th century where bimetallic currency namely silver coin (dirham) and gold coin (dinar) were pervasive. Fun facts, the word dirham in Islamic empire is derived from the word drachma with the same meaning in Greek, while dinar is derived from the Roman word denarius.
eli_gottlieb 3y ago
Well yeah, but of course it's kinda hard to just go ask the people who make monetary policy for the global black-market economy, since they wouldn't want to admit to any of it.
mensetmanusman 3y ago
The dollar system is bad, but it’s the least bad we can see. There isn’t even a close second. It will take generations at the rate every possible competitor is also self destructing.
jareklupinski 3y ago
> it's a social agreement that, like any such agreement, will eventually come undone unless we agree for it not to. it took faith in a social structure to put the system together, and as long as it's maintained, it will stay together. there's likely no invisible hand that builds and then ruins all of our achievements (unless we want to believe there is one (which makes it just us again in the end))

olalonde 3y ago

> I've used decades old dollar bills in SE Asia that have been pretty much detached from the US economy for decades and have held value better than bitcoin ever has. I'm not sure what makes you feel that way. Gold and Bitcoin are up against the dollar in the past decade, and by a significant margin. Bitcoin is up ~225x against the dollar. Gold is up ~50x against the dollar going back five decades. The US dollar is pretty terrible at holding value.

ericmay 3y ago
Yes… but it’s a great currency, unlike gold or Bitcoin. You could also find individual stocks or maybe even the S&P500 and compare those to the dollar as well (and to each other).
- olalonde 3y ago
  Sure. If you want to buy a pad Thai in Thailand, US dollars are probably going to be more widely accepted. On the other hand, if you have savings in an inflating currency, you might want to convert them to a medium that holds value well in the long term, rather than US dollars. That does include S&P500 stocks but those are not bearer instruments and not easily accessible, especially in foreign countries.
  - ericmay 3y ago
    Well you can sell the stock and convert it into dollars and then use those. That's something I can do easily today if I wanted regardless of the country I'm in so long as I have the Internet and an ATM. Gold you can't travel with (weight and loss due to theft and also probably actually illegal) and is also not accessible, and Bitcoin you can't buy a coffee with. Other available crypto currencies just do worse jobs than Bitcoin or dollars at their respective functions. The key here is to understand that monetary instruments have pros/cons. Dollars have the con that they aren't a great store of value (and this is by design). Dollars have the pro that they are widely accepted, hold their value in the short term (i.e. not volatile), and are highly liquid. Bitcoin has the pro that it's a great store of value, but has cons like inability to transact. Stocks are liquid but volatile, etc.

aeyes 3y ago

That might be a thing in countries with less stable currencies. You won't see anyone with dollars in Europe or Japan.

eloisant 3y ago

The USD retains its value because it's used as a global currency, it's as simple as that. Not because US bills are used in SE Asia or other places but because big transactions (like oil) are done in USD.

gopherthon 3y ago

Bitcoin has greatly increased in price while the USD has dumped in value exclusively for decades. The dollar has lost 95%+ of it's original purchasing power when they took it off the gold standard. The dollar doesn't hold value at all, it's losing value due to inflation every single day. Just less rapidly than some other currencies that are manipulated to an even higher degree. Do you pay attention to food, housing, or insurance prices? They have increased _significantly_ in just the past 3 years.

andirk 3y ago

I agree that USD, regardless of its waining value, is fairly universal. If I was going to start a country, I would start with USD as the currency instead of risking insane volatility. However, as discussed in the Bitcoin whitepaper, one of its pinnacle features is it is (supposedly) not controlled by a single entity or government or private institution, or really any institution. So the advantage of USD being tethered to the USA government is both a feature and a flaw, and BTC not being tethered to anything is both a feature and a flaw.

kaliqt 3y ago

I don't understand, Bitcoin has gone up in value much more than any currency you must be referring to.