Needs to be stickied... Many people on this site seem to think crypto is controlled by the government. It's not, but they are trying to make it that way right now.
I don't know anyone who thinks crypto is "controlled by the government." The crypto market (i.e. all the cryptocurrencies) is controlled by the PTB (AKA the cabal). They can destroy the crypto market on a whim, because they literally own all the money in the world and because the crypto market is based on faith, and they also own all the faith in the world. They currently use the crypto market as a pump and dump for their stock market shenanigans. The entire crypto market is their plaything. This whole pretend "government control" thing is nothing but controlled opposition.
That doesn't mean crypto is useless, it means crypto as a currencythat has no asset backing it is worthless. Crypto has a lot of important uses and I think it will be the technology that creates our future economy. But it's role won't be as a stand alone currency. It will help create a non-fucked up marketplace of real assets.
Youre somewhat misunderstanding that crypto "has nothing backing it." What backs it is an encryption model that is exponentially complicated.
I suggest it is not me that is misunderstanding it. What value does that "exponentially complicated encryption model" have? Is the work you can do with it equal to its rarity on a supply/demand curve?
For example, if you can spilt a crypto basically infinitely and use an infinitesimal piece of one to say, send an encrypted message, is that work that you can do with it worth the value of an entire one since you can use any size piece of it you want for that purpose?
Blockchain is fundamentally a networking protocol the misconception that it needs real assets to provide value is based on an incomplete perspective of it.
I never said anything about blockchain not having value. I am talking about its value being directly related to its productive capacity AND rarity. This is how value is assigned to all assets, and how it has been assigned since time began. It's the only piece of a normal economics degree that's worth a damn; the supply/demand curve sets the value. Currently cryptocurrencies have productive capacity but its not valued based on its productive capacity. It's valued based on its rarity and faith.
Obviously, this is almost unquantifiable
I agree, just as the value of a cryptocurreny is unquantifiable, which is why it has no value (or at least not enough to be worth a currency). A "piece of the internet" is worthless, even though the internet can be used to do work, because it is infinitely splittable to do that work.
It is the technological engine for an entire epoch of industrial and socio-economic revolution.
I agree with this completely.
Currency is only one use-case for the network.
It can't be used as a currency for the reasons I have stated. Its value is not tied to its productive capacity. It only has to exist to be used. The quantity is irrelevant.
Currency is a medium of exchange used to conduct commerce.
Currency is most commonly issued by government or some trusted non-government source. Currency could actually be a commodity that is so commonly known and valued that it is accepted as the medium for commerce.
Governments generally declare a monopoly on the issuing of currency in their borders. This is reasonable. In a day of using physical gold, silver, whatever ... a risk was run of someone making coins that were not the purity/% content and the issuer of such devalued coin would be giving themselves purchasing value they did not have by defrauding others. This would frequently result in harsh consequences up to the death penalty.
When a government devalues its own currency, or people have no confidence in the long term viability of the government, they will find something else to use as currency. Governments try to stop this, usually for tax purposes.
The fact that government issued currencies (and the governments issuing them) are viewed as not reliable and not stable does not make crypto reliable and stable. It just means that people are looking for something that might be stable. Growth in crypto is not a function of crypto being reliable, it is the fact that the government has become so unreliable that people would think that crypto would be a viable option. Tired of living with the abuser, the spouse hopes to find better luck with the con who up to this point has not provided evidence they are lying.
Most of the planet has as much reason to trust the issuers of crypto-currency as they do to trust the federal reserve. I have as much means of redress of grievances from being ripped off by the fed as I would from being ripped off by a crypto-currency issuer/originator. The drive is a loss of confidence in government.
The cyrpto-currency issuer:
1. can increase the amount of currency any time they want. You can't stop that and neither can I.
2. can lie about the total amount of currency in existence any time they want. You can't know the truth, you are putting implicit confidence in them.
3. backs the currency with nothing. The fact that the US government issues fiat currency does not make crypto valuable, it just means that it is a digital fiat with no government backing it.
4. can get their crypto-currency labelled a commodity or security by a government and treated as such. There is nothing the crypto-currency issuer or you can do about that but get taxed.
Many people who were 'early' adopters of crypto are quick to promote it because from there standpoint it is a potential measure of wealth that has increased for them (in potential terms) since they put government currency into the crypto.
The potential is only made into reality when the crypto is converted into tangible goods and property.
I know people who talk about how much their crypto has increased in value for them (in potential terms). Good for them. Its like someone telling me that they bought Apple at $10 a share. I have no incentive to get involved because I don't have any reasonable basis for making money there if I were entering now. The argument that 'crypto will just go higher so you should get in now' has echoes of ponzi schemes and multi-level marketing.
I accept crypto-currency is intended by some to be a good faith solution to lack of confidence in governments. However, where you find an honest inventor with a good idea, you quickly find a bunch of hucksters who see a way to take real wealth from others. For them, crypto is a way to take something of worth (real world government accepted currency units, securities, physical possessions) from suckers in exchange for the promise of crypto-currencies future.
Government issued currency backed by tangible resources (gold, silver, whatever) which the currency can actually be exchanged for is a winner.
Crypto based upon the above government issued currency is a winner.
Physical currency of commonly accepted value, though not issued by a government is a winner.
Crypto based upon someone's supposedly secure blockchain technology alone, with nothing to back it, and not yet exposed to a future generation of technologies ability to compromise existing security systems is a fantasy island of value. Crypto issued by some party that can devalue that currency any time without any means of redress by those who 'own' the currency is a scam.
Crypto issued by a party that goes out of existence is a scam.
Needs to be stickied... Many people on this site seem to think crypto is controlled by the government. It's not, but they are trying to make it that way right now.
I don't know anyone who thinks crypto is "controlled by the government." The crypto market (i.e. all the cryptocurrencies) is controlled by the PTB (AKA the cabal). They can destroy the crypto market on a whim, because they literally own all the money in the world and because the crypto market is based on faith, and they also own all the faith in the world. They currently use the crypto market as a pump and dump for their stock market shenanigans. The entire crypto market is their plaything. This whole pretend "government control" thing is nothing but controlled opposition.
That doesn't mean crypto is useless, it means crypto as a currency that has no asset backing it is worthless. Crypto has a lot of important uses and I think it will be the technology that creates our future economy. But it's role won't be as a stand alone currency. It will help create a non-fucked up marketplace of real assets.
I suggest it is not me that is misunderstanding it. What value does that "exponentially complicated encryption model" have? Is the work you can do with it equal to its rarity on a supply/demand curve?
For example, if you can spilt a crypto basically infinitely and use an infinitesimal piece of one to say, send an encrypted message, is that work that you can do with it worth the value of an entire one since you can use any size piece of it you want for that purpose?
I never said anything about blockchain not having value. I am talking about its value being directly related to its productive capacity AND rarity. This is how value is assigned to all assets, and how it has been assigned since time began. It's the only piece of a normal economics degree that's worth a damn; the supply/demand curve sets the value. Currently cryptocurrencies have productive capacity but its not valued based on its productive capacity. It's valued based on its rarity and faith.
I agree, just as the value of a cryptocurreny is unquantifiable, which is why it has no value (or at least not enough to be worth a currency). A "piece of the internet" is worthless, even though the internet can be used to do work, because it is infinitely splittable to do that work.
I agree with this completely.
It can't be used as a currency for the reasons I have stated. Its value is not tied to its productive capacity. It only has to exist to be used. The quantity is irrelevant.
Currency is a medium of exchange used to conduct commerce.
Currency is most commonly issued by government or some trusted non-government source. Currency could actually be a commodity that is so commonly known and valued that it is accepted as the medium for commerce.
Governments generally declare a monopoly on the issuing of currency in their borders. This is reasonable. In a day of using physical gold, silver, whatever ... a risk was run of someone making coins that were not the purity/% content and the issuer of such devalued coin would be giving themselves purchasing value they did not have by defrauding others. This would frequently result in harsh consequences up to the death penalty.
When a government devalues its own currency, or people have no confidence in the long term viability of the government, they will find something else to use as currency. Governments try to stop this, usually for tax purposes.
The fact that government issued currencies (and the governments issuing them) are viewed as not reliable and not stable does not make crypto reliable and stable. It just means that people are looking for something that might be stable. Growth in crypto is not a function of crypto being reliable, it is the fact that the government has become so unreliable that people would think that crypto would be a viable option. Tired of living with the abuser, the spouse hopes to find better luck with the con who up to this point has not provided evidence they are lying.
Most of the planet has as much reason to trust the issuers of crypto-currency as they do to trust the federal reserve. I have as much means of redress of grievances from being ripped off by the fed as I would from being ripped off by a crypto-currency issuer/originator. The drive is a loss of confidence in government.
The cyrpto-currency issuer: 1. can increase the amount of currency any time they want. You can't stop that and neither can I. 2. can lie about the total amount of currency in existence any time they want. You can't know the truth, you are putting implicit confidence in them. 3. backs the currency with nothing. The fact that the US government issues fiat currency does not make crypto valuable, it just means that it is a digital fiat with no government backing it. 4. can get their crypto-currency labelled a commodity or security by a government and treated as such. There is nothing the crypto-currency issuer or you can do about that but get taxed.
Many people who were 'early' adopters of crypto are quick to promote it because from there standpoint it is a potential measure of wealth that has increased for them (in potential terms) since they put government currency into the crypto.
The potential is only made into reality when the crypto is converted into tangible goods and property.
I know people who talk about how much their crypto has increased in value for them (in potential terms). Good for them. Its like someone telling me that they bought Apple at $10 a share. I have no incentive to get involved because I don't have any reasonable basis for making money there if I were entering now. The argument that 'crypto will just go higher so you should get in now' has echoes of ponzi schemes and multi-level marketing.
I accept crypto-currency is intended by some to be a good faith solution to lack of confidence in governments. However, where you find an honest inventor with a good idea, you quickly find a bunch of hucksters who see a way to take real wealth from others. For them, crypto is a way to take something of worth (real world government accepted currency units, securities, physical possessions) from suckers in exchange for the promise of crypto-currencies future.
Government issued currency backed by tangible resources (gold, silver, whatever) which the currency can actually be exchanged for is a winner. Crypto based upon the above government issued currency is a winner. Physical currency of commonly accepted value, though not issued by a government is a winner.
Crypto based upon someone's supposedly secure blockchain technology alone, with nothing to back it, and not yet exposed to a future generation of technologies ability to compromise existing security systems is a fantasy island of value. Crypto issued by some party that can devalue that currency any time without any means of redress by those who 'own' the currency is a scam. Crypto issued by a party that goes out of existence is a scam.