Trump says that we're going to embrace crypto
(twitter.com)
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I have colored myself skeptical on crypto for many reasons, but not one of them warrants government controls on crypto. Whether its gonna be the future or just a dud in the end, its gotta be free and if Trump is on board with it, it will win over. hearts of many dream eyed people!
I see it as another avenue towards Fedcoin / CBDC. I want anonymity. I do not want the federal government being able to control how when where or what I spend my currency. I also want something tangible that is backed. I know everyone says that US Currency is going to end or devalue to a point that it's worthless, it still has the backing of the Federal Government.
I am completely ignorant on bitcoin or other crypto other than knowing the incredible losses when people do not hold the crypto themselves. That being said, I do not see what tangible backing it has to protect it's value. I understand it's limited and there is only so many can be produced. I also know I need to study it more, but from my limited smooth brain, if several key governments limited it's use or like ponzi schemes, if everyone pulled their value out let's say due to a global crisis, what intrinsic value is backing it ?
What "intrinsic value" backs an Excel spreadsheet? In ancient rural villages, what "intrinsic value" backed the ledger that the village headman kept saying who owed what? That is what crypto is. Nothing more than an incorruptible, digital ledger. It solves the Byzantine General's problem of trust.
The problem is thinking of any money as something of intrinsic value. It isn't. All money, fiat cash included, is merely an accounting mechanism that has value solely because people decide to give it value.
If you want intrinsic value, only direct barter can offer that. Even gold is just a rock. Nobody values a rock...they value what that rock represents, and it works as an accounting mechanism because of its intrinsic properties.
You are still talking/thinking about money like it is "something". Money is nothing but an abstract accounting system that tells you how much of the planet's aggregate resources you are allowed to have. Ultimately, people assign value to the specific barterable items based on their desirability at a specific moment in time (i.e. the price, which can and does fluctuate), and the accounting chits are appropriately marked. That can be by passing a paper note, updating a ledger, or flipping bits in a computer.
There is never, ever, EVER intrinsic value to money. It is always and everywhere ONLY an accounting system. A ledger. Just like Bitcoin.
Don't confuse money with barterability. They are not the same things.
...well said
Gold has intrinsic value because it does not corrode. Gold plating adds intrinsic value (and quality) to anything it is put onto. Therefore, gold always has a demand, and intrinsic value.
Crypto is just a technology. It can be used in millions of ways in addition to Bitcoins. CDBC is just a digital currency technology without necessarily having the crypto component to it.
"Crypto" aspect refers to the use of encryption in such a way that the ledger can be stored publicly without worrying about unauthorized access or tampering.
Think of it as a coast to coast highway - like route 66. You take the same highway whether you want to get off at California or Arizona or Texas. Where you end up will depend on exactly what exit you take.
The real crypto currency that is backed by some real assets, that protects privacy of people while at the same time provides transparency of government spending, with no central control is yet to be unveiled. High probability that its already in development.
This is my primary gripe, the existing cryptos that in my limited knowledge, is backed by zilch. If you're old enough, 15 years ago or so, people were flipping - collecting beany babies, cheap shit that can be produced over and over, with a tangible value of making some kid smile at best. I knew of two people who dumped 10's of thousands into buying and holding this shit for part of their retirement. I am sure you can see how it ended. The difference I see between bitcoin and this, is at least they got a stuff animal out of the deal.
Now back to something backed, I am with you on the anonymity at a high level. With something backed, I would feel a bit better, like the proposed fedcoin etc, but in the right hands and controls. I still see risk because I am old enough to remember when people never thought the standards of encryption would cracked. I get most of your points and I have more understanding to do on my side. I like the control aspect of transparency, that provides a whole lot clarity and honesty but still see too many risks, which admittedly, a lot is probably due to my lack of knowledge. I still prefer paper, but as you say, having a ledger prevents or provides a window to see the printer go burrrrrrrr.
Thanks for taking the time to provide some insight.
Let me say you are thinking about crypto far better than most people I know. You are asking all the right questions.
Also a crypto that does not have an intrinsic value is probably not gonna cut it. Only intrinsic value digitally, is computation and storage power. So a crypto that is implicitly backed by computational power - a distributed computational network, for instance - is probably one way to do this. The governments can purchase cryptos on this network to run their infrastructure, using their assets as backing - making it a true asset backed crypto with intrinsic value.
You are spot on Encryption. The only solution, honestly, is a off-world technology that we will never be able to crack. Probably something very esoteric.