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Blockchains facilitate trustless transactions enabling truly decentralized currencies not under the control of any government. Many people find this quite valua

Blockchains facilitate trustless transactions enabling truly decentralized currencies not under the control of any government. Many people find this quite valuable, as evident by recent trends in authoritarian overreach, fiscal repression, and inflation. Privacy optimized cryptocurrencies like Monero also deal with the problem of their blockchain 'providing evidence in court.'

ThrowawayTestr 2y ago
How can a currency exist without a state to insure it's value?
- jimbob21 2y ago
  How can gold exist without a state to insure its value? Simple: demand.
  - RichardCA 2y ago
    The value of Gold is based on scarcity dictated by the laws of Physics, and on people believing it has value. The fascination with that yellow gleam goes as far back as recorded time. The fact that it's easy to work with (malleability, ductility, etc.) probably played a part as well. The value of Crypto products is based on scarcity dictated by the computationally intensive nature of certain algorithms, and on people believing those products have value.
    - hanniabu 2y ago
      > dictated by the computationally intensive nature of certain algorithms You mean math?
  - ThrowawayTestr 2y ago
    Gold isn't a currency. Gold coins can be, but then you either have to trust the mint or you carry around a scale. The key is being fungible and it's the state that promises that a dollar bill is equal to any other dollar bill.
- CraigJPerry 2y ago
  A state doesn’t insure the value of a currency. In order, the largest influences on currency value are: 1. Speculation / belief 2. Approx 10x less influential is trade, most currency transactions both by volume and by value are in speculation which is underpinned and driven by beliefs in a particular currency. Some estimates put trading as low as 2.5% of all forex. Trading does impact the price of a currency, but in miniscule proportions to speculation 3. We can fairly confidently say tax collection is a lower influence than trade because of so many examples (and extraordinarily rare counter examples) but I don’t know of any reasonable way to quantify how much less the effect is. The threat of incarceration and / or asset seizure drives demand for currency which influences its value. Places like Argentina are fascinating (said while acknowledging the extreme hardship being placed on people who have to use Argentinian currency!). In recent history all of the above have had visible influence on their currency along with pegging / dollarization which attempts to introduce a control on all the above factors with various degrees of success.
- deleted 2y ago
  [deleted]
paulryanrogers 2y ago
> Privacy optimized cryptocurrencies like Monero also deal with the problem of their blockchain 'providing evidence in court.' Apparently Monero has some weaknesses [0]. Time will tell how effective it is once the mask of parallel construction slips. [0] https://www.wired.com/story/monero-privacy/ https://www.wired.com/story/monero-privacy/

ThrowawayTestr 2y ago

How can a currency exist without a state to insure it's value?

jimbob21 2y ago
How can gold exist without a state to insure its value? Simple: demand.
- RichardCA 2y ago
  The value of Gold is based on scarcity dictated by the laws of Physics, and on people believing it has value. The fascination with that yellow gleam goes as far back as recorded time. The fact that it's easy to work with (malleability, ductility, etc.) probably played a part as well. The value of Crypto products is based on scarcity dictated by the computationally intensive nature of certain algorithms, and on people believing those products have value.
  - hanniabu 2y ago
    > dictated by the computationally intensive nature of certain algorithms You mean math?
- ThrowawayTestr 2y ago
  Gold isn't a currency. Gold coins can be, but then you either have to trust the mint or you carry around a scale. The key is being fungible and it's the state that promises that a dollar bill is equal to any other dollar bill.
CraigJPerry 2y ago
A state doesn’t insure the value of a currency. In order, the largest influences on currency value are: 1. Speculation / belief 2. Approx 10x less influential is trade, most currency transactions both by volume and by value are in speculation which is underpinned and driven by beliefs in a particular currency. Some estimates put trading as low as 2.5% of all forex. Trading does impact the price of a currency, but in miniscule proportions to speculation 3. We can fairly confidently say tax collection is a lower influence than trade because of so many examples (and extraordinarily rare counter examples) but I don’t know of any reasonable way to quantify how much less the effect is. The threat of incarceration and / or asset seizure drives demand for currency which influences its value. Places like Argentina are fascinating (said while acknowledging the extreme hardship being placed on people who have to use Argentinian currency!). In recent history all of the above have had visible influence on their currency along with pegging / dollarization which attempts to introduce a control on all the above factors with various degrees of success.
deleted 2y ago
[deleted]

paulryanrogers 2y ago

> Privacy optimized cryptocurrencies like Monero also deal with the problem of their blockchain 'providing evidence in court.' Apparently Monero has some weaknesses [0]. Time will tell how effective it is once the mask of parallel construction slips. [0] https://www.wired.com/story/monero-privacy/ https://www.wired.com/story/monero-privacy/