• Euphoma@lemmy.ml
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    1 year ago

    Cryptocurrency has its uses as unregulated currency, though that makes it easy to scam people with it.

    • upstream@beehaw.org
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      1 year ago

      The biggest problem is people trying to peddle it as currency.

      It isn’t currency, never will be. Much more alike to bonds.

      It’s an investment object with a speculative value, and no tangible value. The only value it has is what the next guy is willing to pay for it.

      While currency is deflationary by nature, crypto is entirely based on demand and supply, and sure, as long as people think it will be worth more tomorrow - sky’s the limit.

      Like any pyramid scheme it pays out to get in early, and get out before it collapses.

      Relying on crypto is high stakes gambling, and people being people is the only reason I can find for it not having collapsed totally already.

      • jarfil@beehaw.org
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        1 year ago

        Where to start…

        Like any pyramid scheme it pays out to get in early, and get out before it collapses.

        That’s not how pyramid schemes work, the ones at the top never collapse, only the ones at the bottom end up holding the bags. GIF NFTs are pyramid schemes.

        Ponzi schemes on the other hand, are the quintessential representation of fractional reserve: creditors get paid with new investors, until there is a bank run; you want to get out before that happens. USD is a Ponzi scheme, just like all currencies, including cryptos.

        It’s an investment object with a speculative value, and no tangible value. The only value it has is what the next guy is willing to pay for it.

        That’s a currency.

        Relying on crypto is high stakes gambling

        Let me introduce you to FOREX Futures and intraday HFT. There is also Crypto futures, but who’s counting.

      • Euphoma@lemmy.ml
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        1 year ago

        Thats true, but you can still use it as a currency if you want to buy illegal drugs, or donations to organizations that accept it (with monero so its untraceable) and buying mullvad vpn. It’s not stable, but its an accepted way of transferring money that can be as private as cash.

      • anachronist@midwest.social
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        1 year ago

        The thing about bonds is that presumably the entity that issues them makes computers or tractors or potato chips or insurance. Bitcoin is like the bad guys in Captain Planet: they build a factory that eats the rain forest and spits out pollution.

        • upstream@beehaw.org
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          1 year ago

          Yup. Never meant to say bonds didn’t represent tangible value, but definitely see how it could read that way.

          That said, I’m sure you can get bonds in companies doing crypto too.

      • Omega_Haxors@lemmy.ml
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        1 year ago

        The problem with using it as either a gamble or an investment is that the person/people holding control over the currency are doing so with the intent to make money. More often than not your money is gone the instant you pay in if they decide to make it hard/impossible to cash out. This is what Logan Paul’s scam crypto ended up doing. Say what you will about the US dollar, their main incentive is to stay in power which backs up the legitimacy of the currency. They’re not just going to rugpull the dollar because it would run counter to that goal.

        It’s fundamentally impossible for crypto to fulfil that role because everyone involved is just there to make a quick buck.

      • Gsus4@feddit.nl
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        1 year ago

        Probably a typo, but currency is *inflationary, cryptocurrency is *deflationary, that’s why it’s not for spending “now” (e.g. hodlbros)

        • jarfil@beehaw.org
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          1 year ago

          It can be either, Europe just came out of a decade with negative interest rates. That was deflationary. There is nothing inherently inflationary about currency.

          • Gsus4@feddit.nl
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            1 year ago

            Sure, any economy can experience deflation if you have more goods chasing the same amount of currency, but the point is that most economies usually print money, that causes inflation (moderately that mimics around 2% (approx. linear resource growth) and 4% (rent extraction). Interest rates influence market behaviour that causes inflation but do not determine inflation.

            • jarfil@beehaw.org
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              1 year ago

              I think we just live in an era when population doubles every 50 years, which means more demand, more production, and more currency needed to represent the value being transferred, which lead to more money being created.

              We got used to that, to a point where it’s become a kind of an act of faith. It’s not going to be like that forever, though:

              We’re way past “peak population” growth, and if nothing else were to change, eventually demand would go down, production would go down, and the amount of transferred value would also go down, with a rampant inflation and a need to drastically reduce the amount of money.

              But of course, it’s not the only change on the table. The AI revolution is right upon us, which will not reduce human demand, but will shift a bunch of production from humans to AIs, which is likely to increase the rate of value production several-fold, at the same time as increased interest rates are stifling the creation of money to combat the recent inflation.

              I’m afraid we might be coming into a perfect storm where a slightly slower growing demand, will be met with a much faster growing production from a much lower number of people, causing on one hand a sudden deflation, and at the same time an impoverishment of a large part of society unable to afford that value even at the deflated cost.

              • Gsus4@feddit.nl
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                1 year ago

                Ok, fine, I hadn’t considered that and it’s a factor. None of the demographically declining countries like Italy, Japan, Portugal is doing great in terms of growth…but they don’t have deflation either. You also have the productivity growth factor into account with automation (meaning each citizen produces more but also uses more resources)

      • ConsciousCode@beehaw.org
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        1 year ago

        It’s fiat, I won’t argue it was ever going to be a good currency with built-in deflation, but that’s what it was originally meant to be. It’s long since become too volatile to be anything but a speculative asset, though. It does seem curious to me what that says about the actual distinction between legitimate currencies, stock options, and pyramid scheme buy-ins.

        • jarfil@beehaw.org
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          1 year ago

          High volatility is not a problem for a currency:

          • work January, get paid $1000, pay $1000 in due bills
          • work February, get paid $25000, pay $25000 in due bills
          • work March, get paid $50, pay $50 in due bills

          Volatility is irrelevant to a currency, unless you want to treat it as an investment.

          • Sas [she/her]@beehaw.org
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            1 year ago
            • work January, get paid 1000, pay 600 in bills and lay 400 aside for potential emergencies
            • work February, medical emergency comes up but medical bills now cost 10000 so you can’t afford them with the 400 you set aside and you also can’t work because of the emergency so you take 20000 debth to repay the medical cost and other bills
            • work March to repay your debth, but you only get 50 while still having a debth of 20000
            • jarfil@beehaw.org
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              1 year ago

              Volatility is irrelevant to a currency, unless you want to treat it as an investment.

              can’t afford them with the 400 you set aside

              Meaning, you treated currency as an investment. What did I just say?

              • Sas [she/her]@beehaw.org
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                1 year ago

                What you just said was a thing that you can only do in an idealised world where you never get sick and all your bills are always payed in the month you get them. Nice of you to completely ignore the rest of the answer that kind of points to why in the real world you have to set aside money and why in the real world a volatile currency is useless

                • jarfil@beehaw.org
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                  1 year ago

                  I’m sick all the time, that’s why in my “idealized world”…

                  I just came from the pharmacy with a bag of meds, paid with… we have these plastic cards stamped with “Social Security” and our ID on them, worked just fine… right after going to get an echocardiogram… where I made the mistake of asking the receptionist where to go, he just told me to scan the barcode at this machine at the entrance, which directed me where to go and spit out a turn slip (turn 1, oh well, they didn’t seem to have many echocardiograms scheduled today)… and then had to take the bus, there is this other plastic ID card I have to touch to the scanner on entry, good thing it’s a city bus so disabled people get to ride for free.

                  By the way, also got my disability check today, which went straight to bills, and a bit onto a prepaid card in case I must pay something unexpected without having to ask a social worker for help. Setting some aside would be fun, I have some ways to invest it in case some month there’s too much left.

                  Guess I forgot to mention I live in the 1st world… but honestly, if I lived anywhere else, I’d trust currency even less.

                  (PS, the metamizole seems to be kicking in, so time to go take out the trash before I’m stuck back in bed)