That’s not how money works. Fiat currency is just IOU’s, literally, which are discharged when the promissory note returns to its originator (in the case of dollars, the US treasury). Check out Debt the First 5000 Years for an anthropological look at the origins of money.
Whereas I would prefer to live in a moneyless (i.e., debtless) post-scarcity anarchist society, which is how small tribes and communities were organized for tens of thousands of years before the rise of nations, fiat currencies are used to maintain the modern (unimaginably huge) marketplace, whose ostensible purpose is to allocate scarce resources.
Personal debt is risky. If I issue an IOU, I might die before I can fulfill that promise. Governments are more permanent, which removes the speculative aspect of currency (at least for most purposes, though Forex trading is a thing).
A central bank can balance inflation and employment numbers to ameliorate the natural volatility of the market (with good regulation lol).
Fiat currency can be synchronized with economic productivity, avoiding the deflationary pressure that is anathema to any currency.
Dollars represent faith in the power of the US government to extract taxes from its population.
Crypto represents nothing. It stands for nothing. “Coins” come and go, and if you’re the last one standing in the zero-sum game of musical chairs, you lose your savings. For that to happen with dollars, the US government would have to implode, which is unlikely.
Crypto is, quite possibly, the purest form of speculative trading (gambling) we have ever concocted. The only reason I don’t think it should be illegal is that I have no interest in saving people from their own cupidity and greed.
No one forces you to accept an IOU, but that’s how “money” is created.
If you want a beer and have nothing suitable to offer in exchange, you might give me an IOU, which I then hand off to someone else in exchange for goods and services, until one day someone asks you for goods and services in exchange for the same IOU that you had used to buy a beer months ago.
Yeah, a dollar and a crypto currency has no difference but reputation now. It isn’t backed by gold. They are both worthless gambles. The odds of variance is all your saying is different… Which is just reputation really
Again, this is incorrect. The reason dollars are not “backed by gold” (an arbitrary metric since gold is kind of useless — guns or bread or even puppies would make more sense) is that the US dollar is a currency, an IOU, not some sort of finite resource.
Dollars represent public trust in the power of the US government to extract taxes from its citizens. That’s tangible.
Bitcoin represents nothing; or if I’m being generous, I could say that bitcoin’s value represents people’s faith that the game of musical chairs won’t end tomorrow.
I have to use USD to pay my taxes, and if I don’t pay my taxes i go to jail. Cryptocurrencies aren’t used for anything other than financial speculation
None of this is specific to cryptocurrencies or even money, people do this with stocks (esp penny stocks), precious metals (look at all those “Buy Gold!!” videos), and collectibles (I still remember the beanie baby craze of the late 90s).
This is just gambling, betting that you’ll cash out before everyone else, but after the price has run up.
But that’s not “how all cryptocurrency works.” Yes, cryptocurrencies are valued based on supply and demand, but many aren’t actively speculated on and are used more as a currency. For example, Monero isn’t attractive for speculation because mining is unprofitable and exchanging with fiat is banned or difficult in many areas. It’s great as a currency though because transaction fees are low, transactions are fast, and it has a bunch of privacy features. Bitcoin is more attractive, but not as much for gambling because volumes are too high to get crazy spikes. So you end up with longer ye term speculation in Bitcoin like you’d see with individual large cap stocks. Bitcoin isn’t going to 10x overnight, but it’s also not going to drop 90% overnight either.
Like anything else, pick carefully, and ideally don’t gamble.
Isn’t this the basis of how all cryptocurrency work?
When you think about it … isn’t this also how all money works?
But some currencies are backed by countries with armies and such deterrents. Not so many countries currently backing crypto I guess.
That’s not how money works. Fiat currency is just IOU’s, literally, which are discharged when the promissory note returns to its originator (in the case of dollars, the US treasury). Check out Debt the First 5000 Years for an anthropological look at the origins of money.
Whereas I would prefer to live in a moneyless (i.e., debtless) post-scarcity anarchist society, which is how small tribes and communities were organized for tens of thousands of years before the rise of nations, fiat currencies are used to maintain the modern (unimaginably huge) marketplace, whose ostensible purpose is to allocate scarce resources.
Dollars represent faith in the power of the US government to extract taxes from its population. Crypto represents nothing. It stands for nothing. “Coins” come and go, and if you’re the last one standing in the zero-sum game of musical chairs, you lose your savings. For that to happen with dollars, the US government would have to implode, which is unlikely.
Crypto is, quite possibly, the purest form of speculative trading (gambling) we have ever concocted. The only reason I don’t think it should be illegal is that I have no interest in saving people from their own cupidity and greed.
All money is ious? If you walk up to me and try to hand me money and I don’t want it… it’s worth nothing.
No one forces you to accept an IOU, but that’s how “money” is created.
If you want a beer and have nothing suitable to offer in exchange, you might give me an IOU, which I then hand off to someone else in exchange for goods and services, until one day someone asks you for goods and services in exchange for the same IOU that you had used to buy a beer months ago.
These things actually happened^
Yeah, a dollar and a crypto currency has no difference but reputation now. It isn’t backed by gold. They are both worthless gambles. The odds of variance is all your saying is different… Which is just reputation really
Again, this is incorrect. The reason dollars are not “backed by gold” (an arbitrary metric since gold is kind of useless — guns or bread or even puppies would make more sense) is that the US dollar is a currency, an IOU, not some sort of finite resource.
Dollars represent public trust in the power of the US government to extract taxes from its citizens. That’s tangible.
Bitcoin represents nothing; or if I’m being generous, I could say that bitcoin’s value represents people’s faith that the game of musical chairs won’t end tomorrow.
It’s good you dropped the last part, because it disagreed with the first part.
Nah, it didn’t, but I had written it elsewhere. I didn’t think going on and on about how bitcoin represents nothing was helpful.
I have to use USD to pay my taxes, and if I don’t pay my taxes i go to jail. Cryptocurrencies aren’t used for anything other than financial speculation
Typical anti-blockchain crypto bashing.
Cryptocurrencies have plenty of uses besides speculation. For example, buying drugs and a plethora of scams.
ya got me right there
None of this is specific to cryptocurrencies or even money, people do this with stocks (esp penny stocks), precious metals (look at all those “Buy Gold!!” videos), and collectibles (I still remember the beanie baby craze of the late 90s).
This is just gambling, betting that you’ll cash out before everyone else, but after the price has run up.
But that’s not “how all cryptocurrency works.” Yes, cryptocurrencies are valued based on supply and demand, but many aren’t actively speculated on and are used more as a currency. For example, Monero isn’t attractive for speculation because mining is unprofitable and exchanging with fiat is banned or difficult in many areas. It’s great as a currency though because transaction fees are low, transactions are fast, and it has a bunch of privacy features. Bitcoin is more attractive, but not as much for gambling because volumes are too high to get crazy spikes. So you end up with longer ye term speculation in Bitcoin like you’d see with individual large cap stocks. Bitcoin isn’t going to 10x overnight, but it’s also not going to drop 90% overnight either.
Like anything else, pick carefully, and ideally don’t gamble.