"I've seen people get rich off crypto" and I've seen hundreds of gambling addicts lose their house and put their family on the street when the bet didn't go right. Even when you're talking about serious coins, ignoring the rug pulls. That money comes from somewhere. Who's holding the bag?
Crypto people tend to have an infinite dose of "f** you got mine" even if they didn't get theirs.
Yep, for every person who gains a dollar someone had to lose a dollar. No value was created. In this way crypto is actually a less than zero sum game since some money is always lost to the machine through sending to abandoned wallets, lost private keys, etc. So on average everyone loses.
if the seller is happy at the price they are selling at and the buyer is happy at the price they are buying at, where does the "someone had to lose a dollar" come from?
if the seller sold to the buyer, then it went up, the only "dollars lost" would be hypothetical opportunity cost had the seller decided to hold instead.
It's only zero sum when the total value of the space is fixed. That's obviously not the case here, since the total value of the space continues to expand.
The counter argument is that such cases contribute to scarcity, which reduces supply and therefore those who sell can demand more.
I don’t know though how sound this argument really is as I don’t see what value bitcoin has outside its monetary worth.
Can you really use this stuff? Not really. At best is a difficult to scale — if at all — database for transactions.
Though similar things could be said about paper money as well — that it is nothing but the agreed upon value — but at least that can exchange hands far more easily in a much more scalable and flexible manner.
There are many venues to gamble your money. You could also go for meme/penny stocks.
I personally have only Bitcoin and some small amount of ETH. I don't consider myself a gambler and think that these smaller cryptocurrencies are very far away from Bitcoin, which is very stable and safe these days as the toolset is quite developed.
It's unfortunate that the loudest advocates of crypto in the US and Europe are screeching libertarians and grifters/scammers. They drown out the everyday users in far off places like Argentina and Nigeria that nobody (in the US and Europe) seem to care about.
That's because it's harder to see the forest for the trees when you're out in the woods. Just like the author of this blog post, users in Argentina and Nigeria aren't going to stop and think about the far-reaching problems with crypto if that crypto is helping them with their day-to-day lives.
The author describes precisely my reason for being interested in Bitcoin.
Things which other people seem to readily accept, such as ATM's having limits, the nature of card payments being inherently asymmetric, the middlemen, "know your customer", etc.
All of that stuff just seems insane to me. It's as if someone were standing at my door, telling me that I can't take more than seven items out of my house per day, asking me why I'm moving furniture around, etc.
If you're happy with that stuff, great, stick with it. I'm not.
It is not and never was about "getting rich". That's the side effect of the utility of the system.
How does crypto solve any of that if its future is just more regulation pressing it into the molds of already established systems? I can’t pay my moving guy in crypto, I have to convert it to cash and all that “protection” is easily surmountable.
The problem that Bitcoin aimed to solve was that cash cannot be transferred online. The headline of the whitepaper - "a peer to peer electronic cash system".
You can transfer cash in person by handing someone coins or notes. It might be illegal in some jurisdictions to do that for high amounts or certain items, but it is at least physically possible i.e. permissionless.
Bitcoin is that, but online.
The regulations you are describing affect what are essentially financial institutions operating on top of the system.
The act of sending Bitcoin is permissionless by design.
That's it, that's all it is. Nothing more, nothing less.
Different countries have different regulations and differing levels of permeation within society. Nobody in the US will take crypto as payment (other than a few niche retailers), but it's a pretty popular payment option in places like Argentina, Estonia, El Salvador, Vietnam, India, Singapore, and Nigeria. So popular in Nigeria, in fact, that it's displacing the local currency and the government is (unsuccessfully) trying to ban p2p transactions.
Money isn’t like your house. It’s like the roads and other infrastructure that connects your house to other places.
You can’t drive at 100mph on the wrong side of the road. You can’t mess with the plumbing and electricity in ways that would affect the grid, even if you do it on your own property.
There are of course places in the world that are so empty or so undeveloped that you can make your own rules off-grid. But most people don’t want that because it’s a lot of work and means you’re largely disconnected from others. Bitcoin as a currency has the same problem.
I can transact with people who choose to use it and convert to fiat currency when needed. I have been doing this for over ten years now.
It works. What's the problem?
Are you saying that me merely using Bitcoin endangers others and is akin to driving into oncoming traffic?
edit: Sure, driving into oncoming traffic is bad. So let's criminalize and punish that, rather than banning vehicles because I could drive on the pavement and cause havoc.
This is a very welcome counterpoint to a lot of the cryptocurrency hate that tends to be promoted. I think this is more along the lines of a "strong man" argument for cryptocurrency.
The article contains no real information, in fact can't even support its own title because apparently stablecoins are more attractive to those living in high inflation environments than Bitcoin.
The reader is left with no more information about "The Meaning of Bitcoin" than they entered with. No attempt is made to inform the reader about how cryptocurrency solves inflation or any of the other proposed issues with centrally-controlled currencies, besides reminding the reader that "stablecoins" exist. Well "stable" is in the name so it must be true, right? End article.
> In December 2001, Argentine President Fernando de la Rua imposed an ATM withdrawal limit of $250 per week.
> I sometimes read from people in developed countries, offended by bitcoin’s carbon emissions or by the huge amount of scams in the crypto space. ... To really get crypto, you have to have been fucked by some third party with power over your money. Be it a government, a bank, a business, or an ex-employer, it will come.
You’re making it sound like there’s a uniform blob of unreflected hate, when it’s really specific criticisms for many different aspects.
I feel like a steelman argument for Bitcoin specifically is somewhat easier to make than one for NFTs or quasi-investment share tokens, in that it’s at least not a transparent Ponzi scheme by its issuers (one might argue it is one by its current holders, though).
The problems of Bitcoin are largely different to those of stablecoins, NFTs etc.
There's a large cohort of people who want to hate on anything related to cryptocurrency, whether it's a specific currency like Bitcoin, NFTs, web3 or related technology. You may be right that cryptocurrency proper is easier to defend against but the default position I see by most people is to criticize carbon emissions, energy usage, attack the legitimacy or the utility. One of the first comments here to this article was a comment specifically asking why Bitcoin was needed at all (in the US).
I agree that problems of Bitcoin are different from other neighboring technologies, people lump them into one and tend to use the same arguments (energy usage, scams, ponzi schemes, illegitimate, crime only use case, etc.).
This article at least starts to make the argument of why something like Bitcoin is needed and how it solves real world problems.
Hmm.. the government effectively owns the network, the land, and the police force. The idea that the government cannot stop a monetary transaction is woefully naive; the only reason they haven't in the case of BTC is that it isnt money. If it came anywhere close to rivalling a state-backed currency, you'd be undermining the monetary and financial ability of a democratically elected government to exercise its economic policies. You'd be thrown in prison.
Aside from the obvious ease with which a government can undermine the network, it's participants, and so on -- there is also the lack of incentive for anyone not ideologically committed to interpreting a blockchain as currency, to do so.
A database, of any type, is just a set of numbers. The meaning of those numbers is a social and institutional practice. Contracts enforcing that meaning is a legal and political one.
This article displays the same extraordinary naivety of tech libertarians that I'd assumed had now past. Money is a social institution. Social institutions will not be replaced by anyone's preferred system of rules.
This is a common flaw in all utopian thinking, that necessarily and forever, all people will have more incentive to listen to them and follow their rules, than to ignore them or kill them. There is no evidence for the former, and daily mountains of evidence of the latter.
The final incentive to accept the dollar is the threat to your life, and all people you'd conspire with, to undermine it. This is the only known solution to forming stable contracts and society-wide reliable institutions.
You're thinking too far ahead: governments define the currency that can be used to extinguish debts, particularly to the state (taxes).
You can't pay your taxes in Bitcoin: you can only use Bitcoin to buy enough local currency to pay your taxes from someone else who has some. Which they get from the state.
While the endpoint of this is jail and the monopoly on violence of government, it's also just regular economic reality: you can't buy something if you don't have anything the seller will accept. And the government doesn't accept Bitcoin.
Well I'm thinking as far ahead as the article author. You're right that there are many issues long before all this, but they would hand-wave those away.
What you can't handwave way is: in your utopia, why does everyone have more of an incentive to buy-into your system than to ignore it or destroy it?
This is the fundamental question of all national social institutions. A distributed database is so far away from answering the problem that it comes across, at best, as childlike.
No utopian projects can answer this question, and utopians in my experience, hate it: the communitists as much as the libertairian objectivists. They are all committed to a theory of sin in which we live in a fallen world because people do not behave the right way, and if we just programmed to them to behave that way, all our problems would be solved. Neither care to note how radically different their opponents programs are.
Ironically, of course, the utopian is the problem that they are trying to solve: a person with a Mission to divest from The Existing Social Order, and found a new one. The very existence of people with this mindset demonstrates that some people will prefer to destroy an order than to participate in it -- if they could. They are each trying to forment The Final Civil War.
Thankfully many, but not all, countries today have got out of this doom-loop.
There is a multitude of governments involved in Bitcoin with different incentives and strategies. If you claim "The government can do X to Bitcoin" you should explain which government(s) and how exactly that would work.
When was the FED a "democratically elected government", by the way?
Any nation's legislature, if threatened with loss of control of the nation's money, would immediately make it illegal to use any tender not sanctioned by that state. A vast amount of the state's historical policing was aimed largely at preventing alternative currencies from forming (consider, e.g., Isaac Newton's role at the Royal Mint).
They will put you in jail; withdraw your business licence and suspend your limited liability; deny your bankruptcy claims; tax you into oblivion; and so on. The state has every incentive to destroy a private currency, or a private army, or a private police force.
The only reasons states have take some interest in bitcoin and the like is that they aren't currencies. If there was any viable way of making ordinary daily economic transactions in BTC, it wouldnt exist. Inside the crypto system, "coins" are mere tokens with basically no ability to be traded for any goods or services. To buy anything you need to exist the system into an actual currency. So long as that latter step is required, BTC/etc. isnt a political project in the sense of this article.
"Money" isn't much more than a veil over the good-and-services of a society, an approximate quantitative measure of their marginal value. Governments require control over the money supply to manage this activity (eg., in pandemics) so they can, eg., prevent a widespread economic depression by temporarily exploiting inefficiencies the gap between the notional-and-actual value of money, giving people lots of it. Woe betide anyone who sells cars in BTC when there's a war on; you'll be in prision as a traitor.
> Another bought a laptop by taking out a stablecoin loan on a DeFi platform when no bank would lend to him.
Could someone explain this to me — I thought that loans on cryptocurrency platforms had to be collateralized by cryptocurrency? How could someone buy a house with a crypto loan if they didn’t already have enough to buy one in the first place?
Ok i do not want to get into the whole argument of usefulness of bitcoin, but I have to repeat something that I have been repeating for many years on this site, on other sites and in real life, and it still does not catch on. Bitcoin is not anonymous! True, the government may need to do some work to find your wallet number, but once they do they will know all transactions you have ever done with that wallet in all of time. In fact bitcoin allows for surveillance possibilities that governments could only dream of before. It also provides surveillance opportunities for people that are not the lawful government and do not have the power to issue warrants.
Anytime you engage in any transaction using bitcoin, the other party must necessarily know your wallet number. Then the other party can easily check every single transaction made with that wallet for the history of bitcoin, and can do additional checks in the future. Of course you can get a new wallet, but moving the money from the old wallet to the new wallet will also appear for everyone to see.
Thus any government agent, creditor or ordinary stalker can figure out a way to sell you something or buy something from you using bitcoin, and voila they have your entire financial history.
The writer of the original article is being dangerously misleading when he implies bitcoin is anonymous. There are people languishing in jails right now because they thought bitcoin was anonymous.
“ Literally no human, corporation, or government could have stopped what I had just done.”
“ A world where no government or politician can change the rules one random day. A world where financial innovation moves at the pace of programmers, not legislators.”
Argentina may have serious monetary problems, but does the USD? Do we really need financial innovation to move at the "pace of programmers?" Is "bitcoin" really money when you can't use it to buy anything without converting it to money first?
No. If you're happy with USD, then use USD. If you are Argentinian (or Venezuelan, or Iraqi, or Zimbabwean) and your currency is getting devalued to nothing and the government is restricting access to your funds and preventing you from holding USD, then Bitcoin or Stablecoins are a pretty good option.
The attitude I see a lot (mostly by Americans and Western Europeans) is that "Crypto is not useful to me, therefor it is not useful to anyone" - forgetting that it's a global network open to everyone and anyone. And that other countries exist that are difficult places to live at times.
Exactly this. People in these countries really don't know the problems from the rest of the world.
When an international fintech player get into market (TransferWise, PayPal, etc) they always optimize the experience for users from the US and western EU first. I doubt many people know you can't send money to Ukraine via Paypal unless you mark the transaction as "for Friends or Family", which means you lose all the customer protection. Paypal is worse than crypto in almost every aspect in this case.
> Argentina may have serious monetary problems, but does the USD?
It is a possibility. The US's debt payments are a similar order of magnitude to their military spending and there is not really a scenario where the principle will get paid back in real terms. And the US's net international investment position is eyewatering. It isn't obvious that the money was well spent in the negative interest rate years, although maybe there has been a lot of capital formation in the US that flew under my radar it is early days yet of positive interest rates.
We're also probing at a big war and there are real questions over what the US will do to USD holdings in the event that risk materialises. We all see what is happening to Russia's assets.
It isn't particularly obvious that the USD is a safer currency in the abstract than the Argentine Peso. Certainly as a foreigner it looks a bit risky. It might also become unreliable for internal use, the debt situation or a political blow up are both ways it could go bad. The situation is something of a spectacle.
Not only is it nearly impossible to use anywhere... but a huge component of BTC's mythology is making fun of someone who ACTUALLY spent it as money (Bitcoin Pizza)
It is amusing that the author was burned by a corrupt third party holding their wallet. I appreciate the growth to understanding the point is for you to be your own bank.
The killer app will be the day Putin offers oil for BTC. When nations conduct business on crypto, then sanctions mean next to nothing and will cost real blood and treasure to enforce.
Readit News
Crypto people tend to have an infinite dose of "f** you got mine" even if they didn't get theirs.
if the seller is happy at the price they are selling at and the buyer is happy at the price they are buying at, where does the "someone had to lose a dollar" come from?
if the seller sold to the buyer, then it went up, the only "dollars lost" would be hypothetical opportunity cost had the seller decided to hold instead.
am i missing something?
I don’t know though how sound this argument really is as I don’t see what value bitcoin has outside its monetary worth.
Can you really use this stuff? Not really. At best is a difficult to scale — if at all — database for transactions.
Though similar things could be said about paper money as well — that it is nothing but the agreed upon value — but at least that can exchange hands far more easily in a much more scalable and flexible manner.
I personally have only Bitcoin and some small amount of ETH. I don't consider myself a gambler and think that these smaller cryptocurrencies are very far away from Bitcoin, which is very stable and safe these days as the toolset is quite developed.
Inconsistent rewards foster addictive patterns like nothing else.
That comes from the hope of recovering their loss one day and dumping the bags on somebody else.
Things which other people seem to readily accept, such as ATM's having limits, the nature of card payments being inherently asymmetric, the middlemen, "know your customer", etc.
All of that stuff just seems insane to me. It's as if someone were standing at my door, telling me that I can't take more than seven items out of my house per day, asking me why I'm moving furniture around, etc.
If you're happy with that stuff, great, stick with it. I'm not.
It is not and never was about "getting rich". That's the side effect of the utility of the system.
You can transfer cash in person by handing someone coins or notes. It might be illegal in some jurisdictions to do that for high amounts or certain items, but it is at least physically possible i.e. permissionless.
Bitcoin is that, but online.
The regulations you are describing affect what are essentially financial institutions operating on top of the system.
The act of sending Bitcoin is permissionless by design.
That's it, that's all it is. Nothing more, nothing less.
Deleted Comment
You can’t drive at 100mph on the wrong side of the road. You can’t mess with the plumbing and electricity in ways that would affect the grid, even if you do it on your own property.
There are of course places in the world that are so empty or so undeveloped that you can make your own rules off-grid. But most people don’t want that because it’s a lot of work and means you’re largely disconnected from others. Bitcoin as a currency has the same problem.
It works. What's the problem?
Are you saying that me merely using Bitcoin endangers others and is akin to driving into oncoming traffic?
edit: Sure, driving into oncoming traffic is bad. So let's criminalize and punish that, rather than banning vehicles because I could drive on the pavement and cause havoc.
The article contains no real information, in fact can't even support its own title because apparently stablecoins are more attractive to those living in high inflation environments than Bitcoin.
The reader is left with no more information about "The Meaning of Bitcoin" than they entered with. No attempt is made to inform the reader about how cryptocurrency solves inflation or any of the other proposed issues with centrally-controlled currencies, besides reminding the reader that "stablecoins" exist. Well "stable" is in the name so it must be true, right? End article.
> In December 2001, Argentine President Fernando de la Rua imposed an ATM withdrawal limit of $250 per week.
> I sometimes read from people in developed countries, offended by bitcoin’s carbon emissions or by the huge amount of scams in the crypto space. ... To really get crypto, you have to have been fucked by some third party with power over your money. Be it a government, a bank, a business, or an ex-employer, it will come.
I feel like a steelman argument for Bitcoin specifically is somewhat easier to make than one for NFTs or quasi-investment share tokens, in that it’s at least not a transparent Ponzi scheme by its issuers (one might argue it is one by its current holders, though).
The problems of Bitcoin are largely different to those of stablecoins, NFTs etc.
I agree that problems of Bitcoin are different from other neighboring technologies, people lump them into one and tend to use the same arguments (energy usage, scams, ponzi schemes, illegitimate, crime only use case, etc.).
This article at least starts to make the argument of why something like Bitcoin is needed and how it solves real world problems.
Aside from the obvious ease with which a government can undermine the network, it's participants, and so on -- there is also the lack of incentive for anyone not ideologically committed to interpreting a blockchain as currency, to do so.
A database, of any type, is just a set of numbers. The meaning of those numbers is a social and institutional practice. Contracts enforcing that meaning is a legal and political one.
This article displays the same extraordinary naivety of tech libertarians that I'd assumed had now past. Money is a social institution. Social institutions will not be replaced by anyone's preferred system of rules.
This is a common flaw in all utopian thinking, that necessarily and forever, all people will have more incentive to listen to them and follow their rules, than to ignore them or kill them. There is no evidence for the former, and daily mountains of evidence of the latter.
The final incentive to accept the dollar is the threat to your life, and all people you'd conspire with, to undermine it. This is the only known solution to forming stable contracts and society-wide reliable institutions.
You can't pay your taxes in Bitcoin: you can only use Bitcoin to buy enough local currency to pay your taxes from someone else who has some. Which they get from the state.
While the endpoint of this is jail and the monopoly on violence of government, it's also just regular economic reality: you can't buy something if you don't have anything the seller will accept. And the government doesn't accept Bitcoin.
What you can't handwave way is: in your utopia, why does everyone have more of an incentive to buy-into your system than to ignore it or destroy it?
This is the fundamental question of all national social institutions. A distributed database is so far away from answering the problem that it comes across, at best, as childlike.
No utopian projects can answer this question, and utopians in my experience, hate it: the communitists as much as the libertairian objectivists. They are all committed to a theory of sin in which we live in a fallen world because people do not behave the right way, and if we just programmed to them to behave that way, all our problems would be solved. Neither care to note how radically different their opponents programs are.
Ironically, of course, the utopian is the problem that they are trying to solve: a person with a Mission to divest from The Existing Social Order, and found a new one. The very existence of people with this mindset demonstrates that some people will prefer to destroy an order than to participate in it -- if they could. They are each trying to forment The Final Civil War.
Thankfully many, but not all, countries today have got out of this doom-loop.
1. "Bitcoin is inevitable" and governments will be forced to buy it as "digital gold" to prevent a collapse of the world financial system.
2. Governments are already sneakily stockpiling BTC as insurance against a collapse of the world financial system.
They will put you in jail; withdraw your business licence and suspend your limited liability; deny your bankruptcy claims; tax you into oblivion; and so on. The state has every incentive to destroy a private currency, or a private army, or a private police force.
The only reasons states have take some interest in bitcoin and the like is that they aren't currencies. If there was any viable way of making ordinary daily economic transactions in BTC, it wouldnt exist. Inside the crypto system, "coins" are mere tokens with basically no ability to be traded for any goods or services. To buy anything you need to exist the system into an actual currency. So long as that latter step is required, BTC/etc. isnt a political project in the sense of this article.
"Money" isn't much more than a veil over the good-and-services of a society, an approximate quantitative measure of their marginal value. Governments require control over the money supply to manage this activity (eg., in pandemics) so they can, eg., prevent a widespread economic depression by temporarily exploiting inefficiencies the gap between the notional-and-actual value of money, giving people lots of it. Woe betide anyone who sells cars in BTC when there's a war on; you'll be in prision as a traitor.
Could someone explain this to me — I thought that loans on cryptocurrency platforms had to be collateralized by cryptocurrency? How could someone buy a house with a crypto loan if they didn’t already have enough to buy one in the first place?
Anytime you engage in any transaction using bitcoin, the other party must necessarily know your wallet number. Then the other party can easily check every single transaction made with that wallet for the history of bitcoin, and can do additional checks in the future. Of course you can get a new wallet, but moving the money from the old wallet to the new wallet will also appear for everyone to see.
Thus any government agent, creditor or ordinary stalker can figure out a way to sell you something or buy something from you using bitcoin, and voila they have your entire financial history.
The writer of the original article is being dangerously misleading when he implies bitcoin is anonymous. There are people languishing in jails right now because they thought bitcoin was anonymous.
“ A world where no government or politician can change the rules one random day. A world where financial innovation moves at the pace of programmers, not legislators.”
The attitude I see a lot (mostly by Americans and Western Europeans) is that "Crypto is not useful to me, therefor it is not useful to anyone" - forgetting that it's a global network open to everyone and anyone. And that other countries exist that are difficult places to live at times.
Exactly this. People in these countries really don't know the problems from the rest of the world.
When an international fintech player get into market (TransferWise, PayPal, etc) they always optimize the experience for users from the US and western EU first. I doubt many people know you can't send money to Ukraine via Paypal unless you mark the transaction as "for Friends or Family", which means you lose all the customer protection. Paypal is worse than crypto in almost every aspect in this case.
If your government is going as far to prevent you to own USD, they aren't going to view cryptocurrencies any more favorably anyways.
It is a possibility. The US's debt payments are a similar order of magnitude to their military spending and there is not really a scenario where the principle will get paid back in real terms. And the US's net international investment position is eyewatering. It isn't obvious that the money was well spent in the negative interest rate years, although maybe there has been a lot of capital formation in the US that flew under my radar it is early days yet of positive interest rates.
We're also probing at a big war and there are real questions over what the US will do to USD holdings in the event that risk materialises. We all see what is happening to Russia's assets.
It isn't particularly obvious that the USD is a safer currency in the abstract than the Argentine Peso. Certainly as a foreigner it looks a bit risky. It might also become unreliable for internal use, the debt situation or a political blow up are both ways it could go bad. The situation is something of a spectacle.
The killer app will be the day Putin offers oil for BTC. When nations conduct business on crypto, then sanctions mean next to nothing and will cost real blood and treasure to enforce.