this post was submitted on 09 Feb 2024
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Crypto isn't a currency, it's a commodity for trading. One that doesn't physically exist. No inherent use and no inherent value.
The vast majority of "real" currencies are fiat currencies and don't have inherent value or use either.
US dollar hasn't been backed by gold since 1971, for example.
The only reason money has any perceived value at all, is because it's collectively agreed to have some value. Just like crypto currencies.
But this is actually why crypto isn’t a real currency: we haven’t collectively agreed to value it, or at least not in any way that makes it useful as a medium for exchange. Ironically it can’t possibly become a proper currency while speculators are making its price so volatile. The very act of investing in it is making it worthless.
Anything can be a currency, if you use it as a currency. A currency is not defined by its ability to be exchanged for gas or used to pay taxes.
If children in some school start to exchange pogs for junk food or video game cartridges, the pogs become a currency. By definition. The fact that the use is clearly limited and the value is a subject to rapid change or speculation is irrelevant.
There isn't a single currency in the world the value of which is set in stone. There isn't a single currency in the world which is universally accepted. Just because there exist currencies linked to some of the strongest economies in the world, which are relatively stable and incredibly hard to affect the value of via speculation, doesn't mean they're immune to speculation, nor does it mean that any smaller currencies, be it currencies or small countries, crypto or pogs, are "not real".
I mean sure. Anything someone is using like currency can be called currency. But we’re talking practical terms here. Things we “collectively agree to value.” My WoW gold might be useful for buying potions, but it’s not generally accepted anywhere outside that narrow context. The fewer people who are willing to accept the currency, the less useful, and arguably less “real” it becomes, in so far as currency is defined by its value to others. I could print “me bucks” that I value at $1B USD, but that doesn’t mean much if nobody will give me a sandwich for it.
If you're in the US, it's not very practical to try to pay for things using Turkish liras either, for example. But it's not any less "real" because of it. There is still a market for that currency, even if you might need to look around for a bit to actually use it or exchange it for a different one. Same for WoW gold or crypto.
Given Turkey's current monetary policies I wouldn't want to use Turkish liras even if I lived in Turkey.
But there's so few uses of actually buying things with crypto. People don't use it as a medium of exchange outside of illicit goods and money laundering. We're more than a decade into this and using crypto to buy a pizza is still a novelty.
A major proof of this is that FTX collapsed and took a chunk of the crypto market out with it. The market at large shrugged this off. If it were actually linked in to the broader economy, then it would have had similar ripple effects to a major US bank failing.
I, personally, use crypto to do art commissions (I'm an artist) and to pay my VPS's rent. Neither is an illicit good or related to money laundering.
And, honesty, it's pretty great, compared to alternatives.
Last time I've used PayPal, it decided to withhold the funds for a month, for whatever reason. Plus, the transaction fee was about a dollar.
Transferring the same amount of money via Monero is guaranteed take only about a minute or two to process, since a transaction in that system would never get withhold, plus the processing fee would be about a hundred times smaller.
In the EU they're getting a digital euro which allows them to avoid bowing down to Paypal, Payoneer, and all the services interlinked with them (e.g. Patreon) - the ancillary services can even offer digital euro payouts instead, too. So as long as what you're doing is legal, you can break the Paypal/Payoneer terms of service as much as you want and avoid their privately enforced authoritarianism that goes beyond the scope of the law for whatever reason. So those problems are being solved as we speak, depending on where you live.
The "Criticism and risks of the digital euro" section on Wikipedia outlines my concerns about such a system pretty well.
Unless they are going to implement a cryptocurrency with centralized minting (essentially giving themselves both as much and as little control over the digital currency as they have over physically printed money), it doesn't seem that much different from what we have already. Just because it's going to be a new system, doesn't really mean it not going to have issues with false-positives suspending regular transactions or fees that are higher than they need to be.
This is amazing. I was curious if you held an original thought this entire chain as I was reading it and your response ended up being “read this Wikipedia section for my thoughts”. I will concede that you are an astute parrot.
"What are your thoughts about setting your hair on fire?"
"This Wikipedia article about burns covers it pretty well"
"Aha! So you're a parrot!"
There's a finite number of possible conclusions one can come to if they use this little thing called "logic". If multiple people apply it to the same problem, they're likely to come up with similar, if not identical, answers. If your conclusions about some given thing aren't shared by anybody else, it's more likely than not because they're illogical nonsense. It's even worse if your conclusions are outright nonexistent. That's not good. Means you stoopid.
Something like a centralized financial system has some very obvious, glaring issues that should be instantly apparent to anyone. And I'm, obviously, not the first person to think about it. So, why should I write something, if people who thought about it before me already outlined all the logical concerns about this system? And, likely, in a more detailed and in-depth manner than I'd care to write in a comment on a random website.
One failed bank NOT causing an international disaster is a good thing imho.
Tbf, most money nowadays doesn't physically exist nowadays. Only a tiny fraction of the "money" that is out there has a physical instantiation. Most of it is just numbers in bank servers
You literally just defined the attributes of a currency. ~~The only difference is that crypto isn't backed by a government.~~
Edited. See below. Apparently some crypto is government backed. There is no functional difference between traditional currency and (at least some) crypto.
There is no reason for CBDC to use blockchain.
I stand corrected. There is literally no functional difference between "currency" and (at least some) crypto.
How much energy is required for use of each?
A CBDC can be blockchain based, but almost none actually will be. China's isn't. Japan's CBDC is not. In the US, the Federal Reserve is still in early stages but I'm confident it won't use blockchain either.
The big difference is that crypto is "decentralized". Traditional currency is, to some extent, controlled by a central bank. The CB seeks to ensure price stability.
Digital cash schemes are much older than bitcoin/crypto. It's not "crypto" just because it's digital money.
Sure, it's like if you printed ink on paper and pretended it was equivalent in cost to material goods.
Or if you pretended that material goods had an inherent value.
Indeed. All "value" is ultimately something that is collectively decided upon by society. A chunk of rock could be worthless or worth billions depending on how much people want it.
Pretense is not required for inherently valuable material goods.
Two sheets of cloth sewed together into pants provide protection, warmth, legal obedience.
Pants can be what keeps you from freezing to death and going to jail.
Ink stamped onto a piece of paper(or usually plastic)? A bunch of people with shared values have to agree that it means something, even though it inherently does not.
Carrying your stamped paper or plastic doesn't mean you won't freeze to death, starve to death, or anything else.
It's only value is by societal consensus, which while valuable, is not inherent, as with certain material goods.
Can be, but pants do not have inherent value in the context of a tropical climate where freezing is not an issue and nudity is allowed. They have contextual value.
Food does not have inherent value, it scales with availability and demand. An excess of apples that will spoil before they can be processed into something that can be consumed do not have inherent value.
This is important because while money's value is far more volatile, the argument that material goods have inherent value as a comparison is flawed.
Pants have value in any climate.
Exposure is a problem in any climate.
Dehydration, sunburns, bug bites, there are plenty of reasons you want clothing.
Clothing has inherent value whatever climate you're in.
Food does have inherent value.
Food is necessary to keep the human body, and the body of many other species, alive.
The excess of food for a given population may have less value, but you can trade that excess, or harvest or store it; the food itself still has inherent value to humans and other organisms that eat food.
You're looking for particular circumstances that mitigate or otherwise affect the inherent value of certain goods, though your scenarios depend on those goods having inherent value in the first place.
The fact that certain material goods have inherent value is not flawed, but you can keep trying.
Pants can have value, they do not have inherent value.
I am pointing out that there are exceptions to the assumption that there is inherent value to show that material goods do not have inherent value. That is the opposite of 'depending on them having inherent value'.
You’re looking for particular circumstances that mitigate or otherwise detrimentally affect the inherent value of certain goods, though your scenarios depend on those goods having inherent value in the first place.
Clothing has inherent value for people.
Containers have inherent value.
Shoes, any number of material goods have inherent value.
Currencies do not.
I don't think you understand what inherent means.
If something does not always have value in every circumstance, the value is not inherent.
In the context that we're using the phrase and have even explicitly stated, "...to people", these material goods...and food(that's use your craziest argument so far) have inherent value.
Do you think I'm talking about inherent value to dogs and cats?
I'm going to assume you are trolling and kick myself for falling for it.
No, that's my point? Currencies do not have an inherent value to people, only societal, while material goods have inherent value to people while you're pretending they don't while you struggle against a definition.
Struggle!
This is still dependent on societal consensus. Well, the going-to-jail part, anyway. The protection from cold issue is dependent on the climate and time of year of where you happen to be located. There are many parts of the world where you could comfortably go naked.
Clothes have inherent value by protecting you from exposure.
Spoons have inherent value in conveying food.
Containers have inherent value in holding and protecting resources.
Many material goods have inherent value, currency simply does not.
Sounds like without pants, I'll be freezing to death — then going to jail for that!
Probably not. Not many countries prosecute the dead.
But let me know.
There is no such thing as inherent value.
Not all crypto are the same.
Nano has been designed as digital money.
It has no mining, 0 fees (none for transactions, none for opening accounts), finalizes transactions sub-second (typically), has no built-in throughput limits and works across (political) borders.
I'd say these attributes offer some use and value.
Does my grocery store or gas station accept it?
Just because it's useless to you doesn't mean it's useless in general.
Does your grocery store or gas station accept Qatari riyals?
If that were my local currency, then I'm sure they would
At which point your local grocery store or gas station wouldn't be accepting whatever currency is your current local currency. The point would remain the same - a currency doesn't have to be universally accepted everywhere on the entire planet for it to still be a useful currency.