Ban? Who said anything about ban?! I’ll take this as you agreeing with me. Crypto is used for criminal transactions.
In case there's any confusion, I'm also not advocating for the banning of fingers.
You are implying that cryptocurrencies only have use for criminals. That is patently false, and you know it. Of course some crypto transactions facilitate crime, but as studies have shown, this is the exception not the norm. The latest Chainalysis numbers estimate that transactions involving illicit addresses made up only 0.12 percent of the total cryptocurrency transaction volume in 2021 and 0.24 percent in 2022
See:
https://www.cato.org/blog/overstating-crypto-crime-wont-lead-sound-policy
Note: In case you don't trust Chainalysis, consider that their clientele includes the U.S. Government (DEA, FBI, CIA, etc.) as well as many other nations' investigative wings.
Again, you’re missing what’s being said. Remittances aren’t a primary use case, but if they were the dominant use of Bitcoin though the connection would be this:
Do some more research about cryptocurrencies and remittances. Venezuela, Lebanon, Afghanistan, and Nigeria, Kenya, and plenty of other countries have experienced surges of crypto growth at various points in the last few years. See:
https://www.brookings.edu/blog/afri...le-of-cryptocurrencies-in-sub-saharan-africa/ or
https://techcrunch.com/2021/10/09/crypto-remittances-are-a-lifeline-for-the-worlds-most-vulnerable/
In case you don't follow those links, here's a snippet: Chainalysis found that between July 2020 and June 2021, Africans received $105.6 billion worth of cryptocurrency payments—an increase of 1200 percent from the year before.
If someone is getting more money out, someone else is getting less. If the primary users are just using it as a means to transfer remittances across borders, those people are losing money to the profiteers.
This is also not true. Recall that Bitcoin has a settlement time of 10 minutes, other cryptocurrencies can be even less than that. That 10 minutes is your settlement risk - the period of time when value can fluctuate. The reality is within any given 10 minute time frame, cryptocurrencies don't move all that much - certainly far less than the very expensive fees incurred with competitors such as Western Union.
However, this assumes that the receiver even wants to convert their BTC back into local currency - they very well may not. In that case, they are willing to take on the speculation of future gain/loss. That is their choice to make. If you live in Venezuela or Nigeria, you likely prefer holding Bitcoin and converting as little as possible to your local currency for the goods you need in the immediate future.
No. Paying Bitcoin entitles you to write entries to the ledger. There is a transaction fee paid to the node operator to consume the ledger space.
You must hold/own bitcoin in order to transact in Bitcoin. You do not pay any fees to node operates to consume ledger space, you attach a fee to your desired transaction that is awarded to the MINER who includes your transaction in the next block they find. Nodes merely relay copies of the blockchain and are how miners report that they've found the next block in the blockchain.
If that's true, then the Bitcoin doesn't have value. The blockchain does. That's why you pay a transaction fee to put an entry in that ledger-- you are spending Bitcoin for that valuable service. The Bitcoin itself is now of less value because there is a cost to that ledger transaction.
Some people believe that blockchain has value and bitcoin does not. I, and many others, argue that the two cannot be separated. Bitcoin is the incentive for the Proof of Work. Without the reward, the blockchain inherently will not be decentralized, and once it is not decentralized, it can no longer be immutable. If a majority of hashing power fell within any given party, they would be able re-write transaction history.
It's clear you don't know what inflation is. Scroll back to my plots showing the money supply and prices.
Inflation doesn't "work differently" for Bitcoin. Do things get more expensive when priced in Bitcoin? Yes they do. I'll repeat my example:
In November 2021, a $60,000 car would have cost 1 BTC. In November 2022 the same car would have cost 4 BTC. That's an annual inflation rate of 300%
Did the programatic issuance of new coin prevent that massive price swing? No, it did not.
No, you are misunderstanding what I am saying. But to address your new point, programmatic inflation, particularly the "halving" moments where inflation drops by 50% (approx every 4 years) tends to drive BTC price upwards, but that is merely a historical observation. In your example, you cite the 300% inflation, but you fail to continue - if/when Bitcoin reaches $120,000/coin, the car would cost 0.5 BTC and the inflation would be negative - but that isn't true, and that is because your example actually doesn't address inflation at all.
Nope, just a currency. That's all it is. Maybe it could be called a meta-currency since it's mostly used as a way of converting back and forth among more useful currencies.
I like that you think of it as a currency. As I said, most governments and regulators treat Bitcoin as a commodity. Many shady cryptocurrencies are deemed unregistered securities.
Please tell me you see how much that one short statement sounds both cultish and like a Ponzi scheme all rolled into one...
You're just a few choice words from quoting PT Barnum's "There's a sucker born every minute".
Again you take my statements out of context - adoption for other currencies such as USD never stop either. If someone new comes into the world, guess what...they will end up using currency if they are lucky to get old enough. That is not cultish or bares any resemblance to a Ponzi scheme, it is just a matter of fact. Markets grow, and population growth is an important factor for that historically.
Because there's rarely any justification for doing so. I have some foreign currency I keep near my suitcase because I travel to the same countries pretty often, but beyond that there's no reason for me to convert to and from a currency I have no practical use for.
Where that's different is in countries with unstable economies or governments where people keep a lot of their savings either in Dollar denominated accounts or often in $100 bills.
Tell that to people in Zimbabwe or the plethora of populations where their national currency has collapsed. It is naive to assume that it can't happen to anyone. I appreciate you pointing out that exception because you are right, these tend to be unstable economies or governments. And again, this can happen anywhere.
People typically diversify to reduce risk (versus speculate which increases risk in the hope of greater returns). So you mentioned three actual currencies: USD, GBP and EUR. Is it a good thing to diversify from one of these incredibly stable currencies into something as volatile as Bitcoin or gold?
You and others who want to sing the praises of Bitcoin talk a lot of about hypothetical instability in fiat currencies but then propose alternatives with very real and massive instability.
Absolutely, Bitcoin and Gold have both been tremendous hedges over time. GBP and EUR have not been stable, look at a max-year chart of each. In fact, Bitcoin has outperformed the financial markets in 7 out of last 10 years.
Can you explain what you mean by "debt based"? Money creation is a complex process, but I'm curious which part you're focused on with that statement.
Likewise, explain what you mean by "tend to fail over time"-- at least in reference to major economies such as in the US and Europe. Interest rates over the last 20 years at least suggest that people have remarkably high confidence in the stability of the major currencies.
There are tons of literature that discuss this. The following is an excerpt from
https://www.thepublicdiscourse.com/2010/09/1580/
As the Latin word
fiat (“let it be done”) suggests, fiat money is a state-issued means of exchange which a government simply declares to be anything which, when presented as payment, extinguishes a debt owed to another. More specifically, as John Maynard Keynes stated in his
Treatise on Money (1930), fiat money is “created and issued by the State, but is not convertible by law into anything other than itself, and has no fixed value in terms of an objective standard.” In short, it has no intrinsic value in itself inasmuch as fiat money is not representative of a fixed and known amount of a commodity such as gold or silver. Instead fiat money is ultimately backed, as the U.S. Treasury
states, “by all the goods and services in the economy” as well as a confidence that the issuing government can ultimately pay its debts.
The high level of the U.S. federal government’s public deficit, for example, is at least partly premised on the unspoken supposition that the Fed (which is, after all, a government institution that operates within legal parameters set by Congress and whose members are nominated by the President) can simply print more money in paper or electronic form if creditors become worried that the U.S. government’s borrowings cannot be covered by anticipated taxation revenues, foreign borrowings, and its existing resources. This in turn encourages more people and governments to buy U.S. government debt in the form of bonds, which permits more deficit-spending, thereby encouraging a cycle of ever-spiraling public debt.
Thus, prior to the delinking of the American dollar from gold in 1971, the money supply between 1960 and 1970 grew by 47%, while the public debt grew by approximately 34%. In the decade after the dollar’s delinking from gold, however, a rapid acceleration occurred with the money supply growing by approximately 87% while the public debt increased by almost 139%. Between 1980 and 2005, the pace further accelerated at the respective ratios of 254% and 753%. The absence of some form of “golden brake” (even the pseudo-gold standard that existed between 1946 and 1971) is surely part of the reason for the accelerating increase in public debt.
I've heard people say this for decades, and the minute there's a burp in the global economy people pour into US bonds for stability. Even if the USD isn't "dominant" it'll behave like what, the Euro, Pound, Yen? What's the concern here?
See above.
Those coupons were the asset that Charles Ponzi made himself famous with. Sure they had some trivial value at the time, but the investment returns came from paying older investors with proceeds from new investors and building up hype.
Ah okay, got it. Due to the nature of blockchain, anyone at any time can verify all transactions made on the Bitcoin network, dissimilar to a Ponzi Scheme where "investments" are shrouded in secrecy. Ponzi Schemes need to obfuscate transactions from both investors and regulators in order for the scam to work, which is the exact opposite of how blockchain functions. In Ponzi Schemes, investors receive suspiciously consistent returns, which is just not plausible when it comes to trading Bitcoin. While Bitcoin and other cryptocurrencies are not Ponzi Schemes themselves, that doesn't mean that Ponzi Schemes cannot use Bitcoin to lure in potential investors.
Here's an article that goes into more detail:
https://www.yahoo.com/now/no-advisors-crypto-not-ponzi-134500048.html
