Cryptocurrency
- Thread starter Playboi Carti
- Start date
Good morning melt, I’ll take my crack at it. Here is my issue with the current monetary system aka fiat money.
Money today is technically not backed by anything physical. Sure one can say it is backed by governments, but that’s a system based in faith. We are lucky to live in the US where the dollar has been the global currency for many years. However, even the dollar has been greatly devalued due to the amount of money printed. Graph below gives you a good indication of dollars in circulation and you can see that it has gone parabolic. This money is also not even distributed. If you receive this freshly printed money first, you don’t suffer any of the inflation impacts. However, if you are the last person to see it, then guess what the market has already adjusted for it and prices have been adjusted. Additionally, incomes are just not keeping up with it.
Now let’s take this to another level. Imagine you were not fortunate enough to be born in the US. After all most people can’t really control that. If instead you were born in Argentina, in the last 10 years alone your money became 25x less valuable.
In my opinion, the current system is unfair and hurts those at the bottom the most. A currency like bitcoin cannot be manipulated like money is today. There will always only exist 21m bitcoin units.
Hope this helps.
1. Currency only has value because people agree that it does. People used to trade seashells. Dollars only have value to the degree people agree to trust our government. Pretty much every government in history with control of the currency resorts to debasement (like the US has been doing for years). Bitcoin is this era's "sound money". Sound money among many things is free from outside manipulation. Maybe that isn't valuable to you. But it is for an ever increasing number of people.
2. Are you really going to argue that when fiat purchasing power all over the world is at these levels? Bitcoin may be volatile, but if you hold it over time your purchasing power will be preserved. This thesis is true until proven otherwise.
3. Financial services is 7% of GDP. How much energy do you suppose is used for that infrastructure? Bitcoin mining function acts as a guardian for the network millions of people use to store value. It is hard coded to defend against a 51% attack. Is it wasted energy if it protects people and their value?
4. It's indefensible because your premise that if something doesn't produce anything then it can't be valuable is obviously false. Many things have value that don't produce something. Bitcoin provides sound money to the world with a finite supply free from government and corporate control. That is valuable to some people.
5. How long did it take for the receiving party to get your funds? My guess is a few days. Basically by carrier pigeon.
I will just disagree vehemently with this. The reason why Apple has value is it produces goods and services that people want to buy. That's fundamentally different than crypto in many, many many cases.
Probably, but honestly I don't think this is very indicative of anything. If you look at the .com bust of 2000, there were a fairly high % of trash companies that just put .com in their name and took seed money from dummies then went to zero. Same thing is going to happen in Crypto now and IMO it's a natural cycle. I think Bitcoin will be around forever for example.
I just think the time to buy Bitcoin was in 2013 if you wanted to actually get wealthy, just like the time to buy Apple was in 2001 if you wanted to get wealthy. You can still buy both and they are probably good overall investments but I'm not going to go crazy on them like the crypto evangelists.
I never compared crypto to a stock. Bitcoin is money. By definition, money is valuable by general consent of a group of people. Just like any other money it has value because some people agree that it does.
The problem is it acts like both. Also, it can be manipulated, which isn't different from money but makes it less good at its supposed intended task.
Most people buying bitcoin don't use it as money. They are buying it as an investment. People talk about it like it's an investment. You can say it's money but that's not the primary use of it for most owners.
I believe you are not recognizing the difference between fiat money and sound money. Gold and bitcoin are examples of sound money. They can be a means of exchange among certain groups that agree to do so, but also function as an investment.
Bitcoin L2 has the capacity to be far cheaper and faster then the VISA network. So, it COULD function as a day to day money if needed or desired. But it doesn't need to in order to be valuable.
Sound money is an investment to me. It's a store of value, that's the whole point.
Do you really believe that the price of Bitcoin can't be or hasn't been manipulated? Being based on decentralized software doesn't prevent manipulation.
Sure, me too. Although with L2 that is changing around the world. It's cheaper for business to use Lightning over Visa. The US is way behind other countries and their legislation and tax treatment of crypto. Personally, if the US were more friendly I would be paid in BTC and use it exclusively.
It seems like every time a 6+ figure sum of money was moved around in crypto, it was somebody getting robbed or scammed. Exactly the kind of thing you WANT protection for. And as you said, for smaller/more practical amounts, the friction is higher than our current system - delays, transaction costs, etc.
The price of bitcoin could be manipulated just like ANY tradable asset especially with derivatives.
But you can't manipulate the software. So, the supply, hashing algorithm, etc cannot be manipulated. If you change your USA perspective of having dollar as the unit of account to considering bitcoin as unit of account then you will see that it in fact cannot be manipulated.
On the other hand, the dollar is under constant manipulation.
That is not correct. Lightning allows for spot settlement and is faster and cheaper than visa/mastercard.
Hell a tweet from Elon Musk can make the market nutty.
The fact that it's not easy to move 100k around in real money is a feature not a bug. It's supposed to be hard to prevent all kinds of illegal activity.
To your first point, Bitcoin also isn't backed by anything physical, so bitcoin and fiat money are no different. I agree that wages have not kept up with inflation, and that money has definitely flowed unevenly to the wealthy, but that seems to be divorced from what bitcoin is doing.
Like you said, bitcoin is fixed at 21m units. This makes bitcoin very susceptible to deflation, meaning the value of a bitcoin tomorrow is more than it is today. If bitcoin was to become a currency of the future, meaning more and more adoption and more use, then demand would constantly increase, while supply was constantly flat, causing the price to constantly rise. That's great if you're someone who bought BTC a couple years ago and didn't use it. It's terrible if you need to buy bitcoin in the future.
Economies generally hate deflation because it makes people not want to spend money. Why should I spend my BTC today if it will be worth more tomorrow? Inflation encourages spending since the value of your dollar today is worth less than tomorrow. Deflation can cause stagnant economies as every sits on their money. It's why the Federal Reserve likes to keep inflation at 2%, it is a slight nudge to keep the economy moving.
BTC is not solving anything for people at the bottom because if they can't afford a BTC today, then it becomes even harder for them to afford it tomorrow because the price should keep going up. Except now when everyone decides to dump their BTC and the value drops 50% over 6 months. Which is another reason why BTC sucks as a currency, it's incredibly volatile.
