Also, how do you trust anonymous employees not to steal?
Pretty extreme example, but just look at the cryptocurrency space which is filled with stories of theft by anonymous founders or employees, e.g. "Sifu" of DeFi protocol Wonderland was actually Michael Patryn of Quadriga infamy[0] (who in turn was actually Omar Dhanani who had previously served 18 months for identity theft[1]), the "UmbralUpsilon" contributor to Indexed Finance used inside information to "steal" $11.9M in tokens[2], etc. etc.
Now if it were charities doing good work with no money involved (either received from donors or paid to employees), then I can just about imagine a case for anonymous philanthropy or whatever, but money and anonymous individuals do not safely mix. Even if they don't initially set out to steal, they might be tempted if they find they can get away with it - opportunity makes a thief.
Not only nefarious entities, but the "social/twitter world" has shown us that people tend to be careless and at their worst behavior when anonymous.
If one could program ones code to brick the phones/computers of those they consider political enemies, and could get away with it anonymously and start a new job under a "new identity", who wouldn't be tempted?
The problem is that any "legitimate" use case is negated many times over by all the illegitimate ones. It would be like saying let's legitimise terrorism because sometimes the terrorists might (just might) be freedom fighters, when in actual fact terrorism on the whole does way more harm than it does good. In the opening example, sure some money may have got through to Ukraine via cryptocurrency (although some was stolen by scammers pretending to be Ukraininans, and more much money was transferred more securely and efficiently through traditional means), but any good that did was completely undone many times over by Russia's use of cryptocurrency. Put politely, cryptocurrency is a net negative for our society and environment (by a considerable margin).
You are making blanket statements without backing it up with evidence. Even if you do back it up with evidence, it will be anecdotal, since Russia has been actively working on crypto infrastructure and reserves, while Ukraine hasn't. Also, you are comparing individual Ukranians with the Russian state.
Also; Bitcoin isn't net negative for society and environment. Another blanket statement given without any form of evidence. Please note that the environment FUD has been refuted many, many times over.
> Please note that the environment FUD has been refuted many, many times over.
And here you are making a blanket statement without backing it up with evidence.
Bitcoin spends more than $1M/hr through proof-of-work, https://www.crypto51.app/ , essentially out-spending any doublespenders. This is wasteful.
If the inflationary reward were reduced or eliminated, the transaction fees were more in line with the externalities. But mining budget would also drop, which means less security (which means more waiting for large transfers to gain additional confirmations).
As such, a "Bitcoin Green" fork with reduced mining rewards would be very welcome by me at least.
PoW security is a vector, and doesn't flip from secure to insecure at some specific point. A gradual reduction in mining hash rate doesn't render the chain noticeably less secure.
Feel free to fork Bitcoin and use it as an alternative. Please note that this has been done in the past, and will probably be done in the future. There is a reason why the economic majority remain with Bitcoin, even though PoW isn't energy neutral.
> PoW security is a vector, and doesn't flip from secure to insecure at some specific point.
The network does flip from secure to insecure whenever the cost of mounting a 51% attack dips below the amount an attacker could expect to gain. Markov and Schoar [0] made a convincing case last year that as minted rewards from mining drop, the active mining pool will naturally shrink and become more and more vulnerable. PoW does not prevent misbehavior; it establishes an incentive system to encourage participants to behave properly, and that incentive is subject to realignment by market forces.
It's not a network-wide flip. Certain victims suffer only, and they are very few - the ones not waiting for enough confirmations after receiving a large amount. For example, right now with a cost of mining of $1M/h, after receiving $2M, you should wait for 2 hours (12 confirmations), before accepting it as settled.
I am going to criticize your blanket statements without backing it up with evidence by making other blanket statements also not backed up with any evidence.
This article completely ignores the "embodied carbon" emissions and e-waste generated by the mining ecosystem [0]. Electricity usage is not the whole story.
Without Bitcoin, Ransomware would essentially not exist. With Bitcoin, 37% of global organizations said they were the victim of some form of ransomware attack in 2021.
Beyond that, there are plenty of inflation hedges that don't require massive damage to the environment. Look into Series I Savings Bonds from TreasuryDirect.gov. Currently yielding 9.6%. There's gold, silver, productive assets like stocks and rental properties.
I think Cryptocurrency is one of the worst hedges against inflation anyone could come up with.
A lower bound of the benefits provided by the network (the transaction fees paid) is 50% higher than the ransomware. I am surprised it is that low, and am sad that the scammers are so successful.
But at what point does banning something become warranted? Roads, planes, cities, and spoons are also used by criminals. And "it is better that ten guilty persons escape than that one innocent suffer."
I'd rather argue that paying ransoms should be illegal, since it amounts to directly financing criminal activity.
> gold, silver, productive assets like stocks and rental properties
It isn't just ransomware. It's money laundering, terrorist financing, drug trafficking, human trafficking and so much more.
Think about it for a second - of those $900 million in transaction fees, how many of them were transactions involving legal vs illegal activities? Anyone involved in legal activities would have a much easier time and lower fees using ACH, wire transfers and other methods.
Well, that is upsetting me. I am profoundly disappointed, but I think you have a serious point.
I will look for some more data on illegal activity. I hope the data is not accurate, but I would only be lying to myself if I refused to believe reality.
I accept that the lower bound of the value of the network does not surpass the illegal activity. But most of the volume should still be presumed innocent.
Are there any resources to read about Russia's use of cryptocurrency during wartime? It seems purely hypothetical at this stage. I thought, like China, they would ultimately ban it to prevent civilians from easily exiting the Russian economy. (another legitimate use of cryptocurrency that is often overlooked)
> I thought, like China, [Russia] would ultimately ban it to prevent civilians from easily exiting the Russian economy. (another legitimate use of cryptocurrency that is often overlooked)
You're kind of proving GP's point here. Evading capital controls is a criminal activity, and, though this is an example of a crime that we would all agree is morally righteous, you're still arguing that cryptocurrency is good because it makes crime easier.
Good catch, but assuming evading capital controls is crime, then this becomes a debate of victimless crime. Under normal circumstances, it's not victimless, because it can hurt the economy and everyone in it. Who is the victim of a Russian civilian evading their establishment? I don't see the criminals running the establishment as a victim; they already did the most damage to their economy, and they're still the perpetrators of other crimes with many victims. Cryptocurrency makes everything pertaining to money easier, unfortunately crime too depending on what is considered crime, and I think it's still a net benefit. No matter what happens, we can't rely on implicit control of money as an easy way to punish crime anymore, no amount of debating or essays or letters will close that box.
> Cryptocurrency makes everything pertaining to money easier, unfortunately crime too
This is where you lose me. Cryptocurrency makes most transactions considerably more difficult, and so far, the one segment of the economy that has consistently been willing to accept those tradeoffs is the criminal world. No one is going to argue that the law is always right or that criminals are always wrong -- after all, Oskar Schindler and Aristides de Sousa Mendes were criminals -- but what you are arguing here is that it's important to retain a tool to subvert the law for when the law becomes unjust.
I'm not saying you're wrong! I just happen to believe the harm of bad crime enabled by crypto outweighs the positive effects of crypto-enabled crime, but that's a personal opinion and one that might change if the world does. People in the US make a similar argument about guns (that retaining the ability to overthrow a tyrannical government is worth the extra gun crime we have to ensure); I disagree with them, too, but I would not be so sure if I lived in eastern Ukraine today or Berlin in 1941.
I see it as a kind of gold, or perhaps in a less cliche way of putting it, a sovereign unit of account. I call it easier because it can be handled entirely digitally with no great expenses to transfer it around the world unlike gold, therefore easily being used on the smartphones of people who need it. It is true that the tech currently has many shortcomings in accessibility now, but I see none that can't be overcome with further development. For an example, see Celo's development of a decentralized phone-number-to-EVM-address linking system. Actually, a lot of the projects surrounding Celo are what inspire me to publicly defend cryptocurrency, but I don't bring it up much because I'd be accused of shilling them.
Anyway, I think that cryptocurrency enables lots more non-criminal and should-be-non-criminal activity that can far outnumber the harmful-criminal activity. Perhaps it's already that way, or perhaps it will be so in the future. "In the future" is admittedly another pro-crypto cliche, but we're seeing results headed in that trajectory like the ones mentioned in the financialinclusion letter.
Depends on what you consider legitimate or not. Many proponents of crypto hold the view that taxation is theft by definition, and any tax evasion, therefore, not only legitimate, but also a moral obligation.
Are you seriously comparing cryptocurrency with terrorism? One is a inherently neutral tool, functionally almost identical to cash, the other is a inherently harmful violent action.
I mean there are plenty of countries where the idea of free trade being inherently harmful is accepted as common knowledge, but the US isn't one. Your view is one of extremism.
Maybe we need to modernize Godwin's law with "terrorism".
They are clearly not and it’s daft to suggest they are. They are using an extreme example that should be easy to agree on to establish a principle or point that then once understood should be used to analyse the actual, less obvious, thing they are criticising.
Whether or not their point is a good one is a separate issue.
My point is that this is an apples and oranges comparison. An appropriate comparison would be between banning terrorism and banning sending cryptocurrency to enemy governments. Thankfully both are already banned so there's no need to debate on this.
> Are you seriously comparing cryptocurrency with terrorism?
Well, terrorism is a way of framing things; it's how the momentary victor labels the momentary loser. Cf. WW2; "terrorists" during the war became heroes when the war ended, and victory switched sides.
Cryptocurrency on the other hand, provides zero benefits, while contributing immensely to C02 emissions and global warming, which could end life on earth as we know it.
So the comparison might not turn to crypto's advantage.
Transaction irreversability is the whole point of the "peer to peer electronic cash system": "Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments... cutting off the possibility for small casual transactions ... What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. Transactions that are computationally impractical to reverse would protect sellers from fraud" from the opening lines of the Bitcoin white paper.
So Bitcoin was designed for micropayments, and irreversability is a feature to reduce the friction. That is fine because it was intended for "small casual transactions" which very few people are going to invest the time and effort into disputing. It even looked like it might be successful as a micropayment system at first, given small Bitcoin transactions were initially processed without any transaction fees.
The problem is that it has clearly failed as a "peer to peer electronic cash system". It is now used primarily for large transactions, which you absolutely do need consumer protections for if you are a legitimate user (indeed the fact that there aren't consumer protections has made the space so popular with fraudsters, scammers etc.). And as others have commented, the newer cryptocurrencies which attempt to offer such protections end up being worse in every conceivable way from the traditional solutions. Leading back to the original article - is there any legitimate point to cryptocurrencies nowadays?
> It's now used primarily as a vehicle for speculation
Gambling. It’s gambling. A significant fraction of the American economy continues to gear towards gambling. Whether it be short-term dopamine hits from ad-fuelled social media or trading crypto, it’s a similar pattern of decay across a common although growing demographic stripe.
You probably should look at different numbers than just the dollar price.
Number of nodes is rising,
number of wallets is rising, number of hash-power is rising.
Also, please look into the "Lightning Network". It's the second layer on top of Bitcoin and that's where the whole ecosystem scales (in terms of numbers of transactions per second). Cheap, scalable and fast transactions.
Nodes rise because businesses that want to build on the chains require them unless they want to a pay far too much for a wrapper API. The number of wallets is literally unbounded, and it’s impossible to know precisely how many entities are attached to those wallets. I am one person. My tens of wallets are only for one person. I make a new wallet every time I try new wallet apps. I make new wallets to try new things. “Number of wallets” and “number of nodes” is a bad metric.
I would be highly interested in finding a serious shop/commerce/ecommerc operation where Lighting Network is actually used.
I check LN every 6 months or so and situation is not looking so great.
As it was with Bitcoin itself in early 2010s the shops advertising crypto acceptance are doing it mostly for publicity/ideological reasons or actually have stopped existing.
* http://www.room77.de/ - SMTP-packets to port 25 (info[at]room77.de) may very likely get a response just as much as electrons sent to our telephoney landline-device (+49.30.31102260). Single static page.
Lightning network pulls transactions off-chain, thus relying on trusting someone (either the person you transact with or some third party acting as escrow for the funds). By adding in trust, you can mitigate the primary bottleneck caused by proof-of-work consensus methods. But if you have people you can trust to transact with, there's no point in interfacing with Bitcoin at all, just make a micro-payment network without the bitcoin connectivity, like Venmo. This is why we don't see adoption of Lightning Network, it just moves us off of Bitcoin, which lets us get most of the "benefits" for none of the costs.
That's not how lightning works. While it's true that the transactions are off-chain there is no trust element involved.
A channel between 2 entities is backed by real bitcoin and a scheme to manage the ledger based on bitcoin primitives (multisignature).
Lightning is just a series of channels + routing, so in effect it's a path of channels between you and the party you are transacting with + ledgers of those channels updating with the value that is being moved. At any point in time you can close any channel and materialize however bitcoin you have on your side.
> allowing any two willing parties to transact directly
And what happens if one of the parties is not willing? If someone's e-wallet gets broken into and funds are transferred? How does any current system handle that situation?
A lot of folks consider irreversibility a feature, when there's a strong case to be made that it is a bug.
The system does not handle it. If that is a problem for you, then cryptocurrencies are not for you. In a way it's like cash. If your wallet is stolen, there is no easy way to get your money back.
What this means to me is that cryptocurrencies are not for anybody. We don't have to create digital systems with the limitations of cash. We haven't had to do that for decades. Now there's a push to go back to the time before that, for (in general) no discernible reason besides people gambling on the price.
> In reality, a crypto wallet is better compared to a bank account, though. Most people don't carry their life savings (or comparable amounts) in cash.
I would think it was the exact opposite.
A 'regular' bank account has reversibility, and so if there are some shenanigans you can (potentially) get your money back. With a cryptocurrency 'bank account' (wallet), if anything bad happens you're SOL.
> Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments... cutting off the possibility for small casual transactions ...
Very small transactions happen on the internet all the time. Services like venmo allow for very small casual transactions all the time. And there is no cost for the transaction.
Sure venmo is trusted third party and the transaction is reversible, but it's still significantly easier and cheaper than bitcoin. Or any other other coin for that matter.
The crypto ethos is antithetical to that of non-commercial content creators - putting a crypto wallet address on a website is like putting a big banner saying "I'm helping legitimise an environment destroying pyramid scheme to enrich myself, and I'm probably into lots of other shady stuff too", which might be fine for venture capitalists and their like, but not non-commercial content creators. Putting a donation link to something like ko-fi.com on the other hand is a better look for that sort of site.
> The crypto ethos is antithetical to that of non-commercial content creators - putting a crypto wallet address on a website is like [...]
Yeah, so no true non-commercial content creator would use evil crypto. By the snark, I can tell you are as invested in hating crypto as some of us are invested in building it. What is your motivation?
If these scams and frauds are being fueled and legitimised by the venture capitalists, and the venture capitalists are US regulated, shouldn't the regulators be going after the venture capitalists? Even a few seconds of amateur due diligence (e.g. the time it takes to read "20% guaranteed annual return with zero risk") would have set off alarm bells, so they must have known they were aiding and abetting criminal activity.
The author repeatedly refers to Bitcoin as a "public good", "dependent" on a "volunteer-layer", like the crypto bros such as the article author are putting all their time and effort into running a public service for the greater benefit of society out of the goodness of their hearts with no expectation of profit. That is clearly the exact opposite of reality - they are trying to extract maximum personal profit in the shortest time irrespective of the damage they are doing to our society and environment.
A large fraction of the field of economics is about taking that tremendous force coming from the desire for personal gain (= greed if you will) and turning it into a public good (= the enormous abundance the markets have delivered) while avoiding some of the most egregious harms (= "externalization of costs, privatization of profits" = exploitation, pollution, overfishing, etc, etc).
What I believe OP is talking about is how the blockchain made it possible to incentivize people to mine, thereby delivering the service of the public good of the blockchain.
Sure, all of those individual points are of perhaps debatable value, but he acknowledges that while maybe mining or staking aren't quite it yet, the fundamental blockchain tech still enables decentralized coordination and the creation of a public good through private incentive.
The P2P network consists of volunteers who are not paid for running nodes, and whose contribution is basically guaranteeing open access to all of the data flows (confirmed and unconfirmed blocks and transactions) needed for other participants to join the network and participate on equal terms.
One of the major problems in the crypto space is that people attribute to "decentralization" the properties of openness that are actually there because of the volunteer (non-profit) provision of the open network from which miners/stakers are extracting their profits.
You misunderstand the meaning of volunteer in this context. It does not mean that the reason to run a full node is for "the greater benefit of society from the goodness of their hearts" (though the cost of running a Bitcoin full node is minuscule enough that many may do so according to those reasons), no - it means that full nodes are run unpaid for the good of the Bitcoin network; its actually crucial to the argument of the piece which your emotions distracted you from addressing.
But first your basic conception of Bitcoin will be addressed, since its all you opined on (why even respond if you aren't addressing the article?)
If Bitcoin only served miners it would not be around. Miners are paid indirectly by the rising price in Bitcoin, so those purchasing it are the ones who are setting that value - they are fully consenting to the simple and genius system for its economic and technological properties which they cannot get anywhere else. The Bitcoin system is very simple; if it was purely extractive as you claim people would not use it as a store of value and transaction layer. Considering large portions of users hold their coins through large price action, and have done so for the entire duration of its lifetime, they consider it useful beyond speculation. Who are you to tell them they are wrong in so few words? And if an invention is deemed valuable, why shouldn't it use energy?
And we haven't even gotten to the article yet, because you misunderstood the economic context for your preconception of a vocal subset of a community that the author is in disagreement with.
Do the maintainers of SMTP do so as a public good, eg: provide us with decentralized email systems?
Encryption protocols? ECMAscript?
Internet protocols are maintained as a public good. The Bitcoin developers are certainly not trying to extract profits, they are trying to deliver the world an open source monetary system.
What they are trying to deliver and what they are actually delivering are two wildly different things. They've built a platform that destroys the environment faster than the entire banking sector, enables scams and ponzi schemes at unprecedented scale and anonymity, meanwhile delivering a whopping transaction throughput of around 20/s - enough to support a few moderately busy supermarkets in a single small city.
With all due respect none of those things are true. I understand that you passionately believe them, but they are not true. You should try to understand how this works and why people would be interested.
So Tether has become something like an international reserve cryptocurrency, which gives them an "exorbitant privilege"[0], meaning they can do pretty much whatever they want safe in the knowledge that everyone else will do everything they can to prevent them from failing because everyone else would have too much to lose if they did fail. That has kept it going for a long time, and might (or might not) keep it going for a lot longer, but ultimately a replacement reserve cryptocurrency will come.
By most measures, it appears that Tether is slowly going to die out and replaced by USDC. Among retail users, Tether has increasingly lost sway and is largely used only on exchanges (which is still massive, but not the only game in town anymore).
Roughly half of USDT is circulating on Tron, which is a dead chain. This TRC20 Tether is almost exclusively used for inter-exchange transfers (since fee is capped at $1/transaction)
On Ethereum, USDC is now bigger than Tether. Over a month, Tether on-chain supply has dropped nearly 12% [0]
The "exorbitant privilege" usually belongs to a government with a vast military, and/or substantial colonial possessions -- something that allows force to be used in an emergency. There is a reason why the US dollar, but not the Swiss franc, is an international reserve currency.
The UK Pound is still considered an international reserve currency by virtue of being incorporated into IMF special drawing rights, even though the UK no longer really has a vast military or substantial colonial possessions.
Beyond the nukes another comment mentioned, the UK is also a permanent UN Security Council member, a founding NATO member and a productive member of the Five Eyes and AUKUS [1]. And it still has the world's fifth most powerful navy [2].
> substantial colonial possessions
No, but they have overseas military installations in Gibraltar and on Cyprus, the Falkland Islands and Diego Garcia. Smaller installations at Ascension Island, in Singapore and Brunei "provide important staging posts and logistical support facilities for British and allied forces passing nearby" [3]. In terms of practical force projection radius, they're in a very small club of nations.
They still have the ability to put nuclear warheads anywhere on the globe, by virtue of their ballistic missile submarines and the nuclear warheads those ballistic missiles carry. The Trident D5 missiles have a range of more than 7,500 miles, and the submarines move.
That, in and of itself, is worth a lot -- potentially even more than having a large military.
I completely agree, I was just responding to the parent commenter's assertion that the UK didn't have the offensive power to have "exorbitant privilege"
I saw a trident missile launch once in 2017. Didn’t know it at the time. Everyone should know about those missiles—they are the reason we don’t have “real” war.
They are so unbelievably powerful it blows my mind.
Expenditures don't mean much. Look at purchasing power parity, and actual capabilities. The UK military lost the ability to conduct large-scale independent operations without US support decades ago. Capabilities are minimal in many crucial areas including logistics, aerial refueling, strategic bombing, amphibious lift, ballistic missile defense, and space dominance. Even their nuclear deterrent is completely dependent on the US military-industrial complex.
In my view, how you earn your money affects how you value it.
Many with cryptocurrency haven't had to do any hard honest work to obtain it, e.g. the early joiners who have just had to wait as their "wealth" accrues from later joiners, or even newer joiners who have made their "wealth" from scams or rugpulls or wash trading to artificially inflate the value of their NFTs or whatever. These people tend not to value their "wealth" in the same way as the "greater fools" who have had to work hard at honest jobs to earn their fiat prior to converting it to cryptocurrency, and so don't have such a problem with the constant risk of losing everything via loss or theft or market crash or whatever.
Putting a significant amount of money into something that the vast majority of "intelligent" people say is a scam (as you do), is reward for taking risk. No different than an investor looking at small cap stocks to pick winners and throwing a lot of money in. It seems you are criticizing the concept of investing.
Something is only a sound investment if you know all sides are bound by rule of law. If you were to put money into a shell game at the local unlicenced market, then that would not be classed as a sound investment (even if you did know how to "beat the system" there's a good chance an accomplice would mug you for your winnings after you walked away). Or if you received a cold call from someone claiming to be a stockbroker with "insider knowledge" encouraging you to buy shares that they "know" are about become very valuable, that would not be classed as a sound investment.
With cryptocurrency it is the same. The combination of zero consumer protection and anonymity is the perfect breeding ground for fraud. If you were being charitable, you could call converting fiat money into cryptocurrency a gamble, but certainly not a sound investment. The only people who will try to convince you otherwise are those set to gain from the fraud.
I don't think it's "rule of law" here, but information parity.
How you become sure you have as much information about the subject as the person you're dealing with (i.e., whether that's because it is required by law and you expect to have some recourse if it's violated, or because you are confident that you've had access to the relevant information for some other reason) isn't really important.
They’re both inherently high risk, but the value derives from different things. With small caps, it’s the idea that one or more may grow to produce outsize returns in the future, whereas the other is hoping someone will come along later with more money to take you out of your position.
(The small caps for the most part aren’t attracting money based on popularity or memes, so are closer to high-risk investing than gambling on speculative assets).
I don't think that's what they're claiming at all. The "no different than" is doing the work here but I don't think it's warranted.
An investor in that situation has to (presumably, and I'm ignorant so maybe not) do work in doing research, having enough domain and industry knowledge to evaluate what a "winner" looks like in a given industry, understand how valuations are formed and what can make them wrong, etc etc.
Some of that is done by crypto people sure, but the difference between a big success and losing your money there seems a lot more luck-based than in normal investing.
People have been making the argument that investing is gambling for decades at this point, and I don't think that's completely wrong but it is very hard to draw the line. I am comfortable putting crypto trading on the gambling side of that line, and most forms of professional investing probably on the non-gambling side.
They are possibly a lot closer than I think they are, but I don't think that speaks well for either activity!
Literally the only way you can profit with real estate is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.
Literally the only way you can profit with stocks is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.
> Literally the only way you can profit with real estate is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.
Except, of course, if you live in it, rent it out or use it as businesses asset. Good luck doing that with crypto.
> Literally the only way you can profit with stocks is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.
Except, of course, that you as a shareholder can influence the direction of the company and earn dividends. Good luck doing that with crypto.
What does that have to do with the original point?
- Real estate has real-world use cases
- Stocks have real-world use cases
- Bitcoin has real-world use cases
It's meaningless to describe any of these as pyramid schemes because "to profit you must be able to sell at a higher price to someone else". That's true of buying or selling anything.
You can live in real estate and get dividends from stocks. Cryptocurrencies are more similar to commodities: gold, wheat, coal. (You can consume wheat and coal, yes, but that consumes them and then you don't have them anymore; that's not profit.)
You see no value in having a currency that can't be inflated on a whim by your government? As in, the printing of money that reduces the purchasing power of the money sitting in your bank account. Really?
There is some value in having assets immune to inflationary money printing; indeed there are countless examples of such assets available for purchase such as stocks and real estate. My question remains: why is risk of permanently losing your money worth the alleged benefits of crypto? I am willing to accept 2% fees from Amex built into my purchases because such purchases are insured against fraud and deceptive business practice. Crypto provides none of that but it does provide a substantial non-zero risk of permanently losing access to your money because you forgot your password or lost your coke storage.
Stocks and real estate also pose a risk of permanently losing your money; for example, the company might go bankrupt, the real estate might be expropriated via adverse possession, or the government might freeze trade in the market until after you die, as has happened in a large number of cases since the Russian invasion of Ukraine. Even without government freezes, Ukrainian refugees whose savings were invested in Ukrainian real estate cannot spend them now (they are illiquid) and may lose them.
I recommend not storing your password with your coke.
There are people using Bitcoin as a currency, via lightning, right now. More join all the time. The network expands.
It is a currency, is used as a currency, as sats. It is also a long term store of value as Bitcoin. You can ignore reality as much as your like, but the world has moved on from your 2017 era complaints.
that’s not how it works. You establish a channel with a network peer, spend some to add incoming liquidity to your channel, and reach the rest of the network. Send and receive payments. Yes the limitation is the liquidity and balance in your channels, but as far as routing goes we are all only a few hops away for each other.
It is wildly practical today, and there are several good custodial solutions if you do not wish to run a node yourself. Please give it a try!
A currency that requires you to run and a node and does not allow you to perform a transaction unless you have staked more currency than you are currently spending is not viable.
Commodity traders couldn't care less, and the vast majority of the use of gold is purely commerce, unrelated to its inherent value for plating electrical contacts or coating mirrors.
Commodities are eventually consumed or used. Traders don't buy wheat futures for the joy of collecting wheat futures, they buy them because eventually some business wants to buy and use the actual wheat.
The "and use" phrase is what differentiates commodities from cryptocurrency.
Sure corporations use futures to ensure stable prices but there are also traders that specifically just trade futures without any hope for receiving the underlying commodity.
> Trading is only zero sum at an instant in time and space. Moving or holding commodities can change the sum of the trade.
Trading between financial participants is, cetiris paribus, always zero sum. Irrespective of the timeline.
Buyer's gains are the seller's opportunity cost; buyer's losses were avoided by the seller. (Paribus violation is when parties have different funding costs.)
Moving commodities around isn't trading per se; it's logistics. Again, value adding.
> Only if you consider the trade in the quantity of the goods traded, and not in a prevailing unit of accounting
Nope, this is microeconomics. If you and I have the same funding costs and we trade a commodity derivative, any gain you have is a gain I gave up. Any loss you have is one I avoided.
This is true irrespective of the unit of account of point in time at which one measures it; it's an identity. The only
You are carefully defining the word “trading” to meet a narrow academic category which excludes many cases normal people consider integral to “trading”.
Someone who buys wheat, holds it and sells it the next day is definitely not “trading”, he merely engages in a series of discrete trades? Daft.
> Putting a significant amount of money into something that the vast majority of "intelligent" people say is a scam (as you do), is reward for taking risk.
I don't think this is any more a fact than my statement. I'm merely trying to point out that you seem to be saying it's ok to invest in what people perceive as a scam (my example was pyramid schemes) because it's an investment.
Good analogy - portscanning and email spoofing was considered a relatively benign issue decades ago, but would be quite serious now and does lead to jail time, and I'm sure the same will be true with cryptocurrencies (unless you're in a failed state where the rule of law is a bug not a feature).
Pretty extreme example, but just look at the cryptocurrency space which is filled with stories of theft by anonymous founders or employees, e.g. "Sifu" of DeFi protocol Wonderland was actually Michael Patryn of Quadriga infamy[0] (who in turn was actually Omar Dhanani who had previously served 18 months for identity theft[1]), the "UmbralUpsilon" contributor to Indexed Finance used inside information to "steal" $11.9M in tokens[2], etc. etc.
Now if it were charities doing good work with no money involved (either received from donors or paid to employees), then I can just about imagine a case for anonymous philanthropy or whatever, but money and anonymous individuals do not safely mix. Even if they don't initially set out to steal, they might be tempted if they find they can get away with it - opportunity makes a thief.
[0] https://news.ycombinator.com/item?id=30120762
[1] https://news.ycombinator.com/item?id=30346251
[2] https://news.ycombinator.com/item?id=31478795