[HN Gopher] The intellectual incoherence of cryptoassets
___________________________________________________________________
The intellectual incoherence of cryptoassets
Author : matthewsinclair
Score : 60 points
Date : 2021-11-07 17:42 UTC (5 hours ago)
(HTM) web link (www.stephendiehl.com)
(TXT) w3m dump (www.stephendiehl.com)
| cinntaile wrote:
| If anyone wants to read his other crypto pieces, here's all of
| them from this year. If you want even more, just check out his
| twitter.
|
| https://www.stephendiehl.com/blog/crypto-scams.html
|
| https://www.stephendiehl.com/blog/destroy-bitcoin.html
|
| https://www.stephendiehl.com/blog/non-innovation.html
| https://www.stephendiehl.com/blog/ransomware.html
|
| https://www.stephendiehl.com/blog/banbitcoin.html
|
| https://www.stephendiehl.com/blog/ponzi.html
|
| https://www.stephendiehl.com/blog/chernobyl.html
|
| https://www.stephendiehl.com/blog/gamestop.html
|
| https://mobile.twitter.com/smdiehl
| louwrentius wrote:
| He is on a mission and I support it fully. When the music
| stops, so many people will get seriously hurt financially.
| [deleted]
| [deleted]
| politician wrote:
| What people don't understand, even intellectuals like the author,
| is that money transmission is heavily regulated in the United
| States. This fact is why cryptocurrencies have such a seemingly
| difficult time finding grounding to the marketplace. It's not
| transaction times or energy usage. It's the BSA Travel Rule, it's
| KYC, AML, OFAC, and a regulatory minefield designed to maximize
| the government's ability to track and curtail financial flows.
| civilized wrote:
| If crypto's only advantage over the traditional finance sector
| is doing an end-run around regulations, it's no surprise that
| this advantage won't be sustainable.
| abeppu wrote:
| > This fact is why cryptocurrencies have such a seemingly
| difficult time finding grounding to the marketplace. It's not
| transaction times or energy usage.
|
| Don't you think it's overly simplistic to claim there's only
| one reason? Transaction times (or ETH gas costs or whatever)
| have made them infeasible to use in a bunch of cases.
|
| But isn't part of it also that every fiat currency has a baked
| in demand, in that if you don't pay your taxes in that currency
| you go to jail? As a US citizen, even if every business I
| frequent accepted BTC, I would still need USD. Using
| cryptocurrencies by contrast is entirely optional. And to the
| degree that you believe in the usefulness of cryptocurrencies,
| would you really spend it on a regular basis?
| lwansbrough wrote:
| Uhh, right? The FBI isn't going to suddenly give up on fraud
| investigations and the IRS isn't going to disappear if Bitcoin
| were to replace USD. You still have to follow the laws or you
| go to jail.
| scrubs wrote:
| Consider: what would the prevailing interest in crypto be --
| think of the US Gemini exchange for example -- if at the end of
| they day Gemini couldn't extract US dollars from it. I don't
| think Gemini would be a going concern. Therein is incoherence:
| all the tap dancing and hand waving by crypto adherents is undone
| without the ability to extract fiat currency. I think that says a
| lot.
| sparkie wrote:
| There's a lot of noise which can lead to people completely
| missing the signal.
|
| Speculation on "crypto" coins and fiat gainz is the noise. The
| KYC exchanges are the noise. Smart contracts are noise. NFTs
| are noise.
|
| Bitcoiners are not betting on getting fiat dollars out of their
| bitcoin. They are betting on completely replacing easy monies
| with money that cannot be intentionally debased. They will
| never sell their bitcoin for fiat currency, and you would have
| to prise their hardware wallets from the dead cold hands, only
| to find you don't have the correct passphrase to unlock it.
|
| It isn't solely about wealth. For many, it's almost a religious
| pursuit. The goal is not only to be better off financially
| yourself, but to make your fellow man better off by having
| money which is resistant to multiple forms of theft.
|
| Without an understanding of history and the motivation for
| saving, it probably just looks like a bunch of gambling.
|
| The noise doesn't matter. Bitcoiners will continue to save
| despite it. New users will move their savings to bitcoin to
| avoid inflation (aka daylight robbery). The feedback cycle
| cannot be stopped. You can only remain ignorant and miss the
| opportunity to acquire cheap sats.
| qeternity wrote:
| > It isn't solely about wealth. For many, it's almost a
| religious pursuit.
|
| Ok, hot take. Let's see where this goes.
|
| > The goal is not only to be better off financially yourself,
| but to make your fellow man better off by having money which
| is resistant to multiple forms of theft.
|
| Oh, ok, so it is all about wealth.
| louwrentius wrote:
| I am afraid that too many of the HN visitors have a stake in
| crypto and may downvote/ flag articles that may hurt their bottom
| line.
|
| In some sense it is funny that those are the same people that
| rave about perceived anti-censorship properties of crypto.
| ur-whale wrote:
| > may downvote/ flag articles that may hurt their bottom line.
|
| No such thing as bad publicity, or so they say.
| carlosdp wrote:
| There are plenty of articles every day talking about how crypto
| is a scam or w/e. Anyone that's worried about one more on the
| pile is being irrational.
|
| No amount blog articles is going to materially impact the long-
| term outlook of web3/crypto projects that aren't the actual
| scams/cash-grabs. =)
| sparkie wrote:
| > " If you sell your crypto and make a profit in dollars, it's
| only because someone else bought it at a higher price than you
| did."
|
| Note: Making a profit in dollars does not necessarily imply
| making an increase in purchasing power. If you profit ~5% in
| dollars, you've still lost ~10% in purchasing power due to
| inflation.
|
| Lesson: Don't save in dollars. Find something which can't be
| deliberately debased by policymakers.
| arisAlexis wrote:
| Imo this line of thinking is flawed:
|
| It's not X, it's not Y therefore it must be Q. It can also be a
| different asset class, a new one. Keeping an open mind is
| paramount in the super fast tech lane.
| 323 wrote:
| A lot of weak arguments, but the author manages to even
| contradict himself:
|
| > This is strictly inferior than assets like stocks which either
| pay dividends from their revenue, _buy back their own stock_ , or
| have mergers and acquisition events
|
| > grow the pool of greater fools to buy the token so that early
| token holders can be paid out by later token holders
|
| According to him, it's ok for a company to buy back it's own
| stock, thus giving it value, but not ok if a later token holder
| buys crypto from you, which is exactly the same thing.
|
| > Zinc is a commodity because it's a stable element at room
| temperature with 30 electrons and it's shell configuration makes
| it useful in tools and conducting electricity, as a commodity it
| does not depend on a narrative or shared collective delusion to
| give rise to this utility.
|
| Author should open a Zinc price chart, and zoom in on 2005-2009,
| when Zinc prices quadrupled, and then crashed back to earth,
| together with other commodities in that commodity bubble. Totally
| not a collective delusion and financial speculation back then.
|
| https://tradingeconomics.com/commodity/zinc
|
| Also, tulips and beanie babies, really? Are we still beating this
| dead horse?
| normalman wrote:
| I noticed an apparent contradiction, between these two
| statements.
|
| > There can be no separation of money and state, because the
| state is the only party that could issue money almost by
| definition. <
|
| Here, he attributes value, only if it is established via
| government backing of the asset, which is currency.
|
| > Securities are effectively a collective fiction, they're a
| financial product that exists within a legal framework about a
| contract that gives buyers and sellers legal rights to
| cashflows of a common enterprise. <
|
| Here, he attributes fictional value or no intrinsic value,
| because the government establishes the use of the asset class,
| supposedly only by backing the asset, which is securities.
|
| In both cases, he treats whether or not the asset has value, as
| depending on government backing. In one case, he gives value to
| the asset, only because of government backing. In the latter
| case the asset is treated as being deprived of having any real
| value, because it's ability to be used as an asset, exists only
| by being government backed.
|
| Both of these claims are made by handling them as being true
| "by definition". When claims are made "by definition", there is
| no proof needed, or given. At least within these true "by
| definition" statements themselves, there is no proof given.
|
| So this begs the questions, "what, if anything, is the real
| value of the assets, and why?". If you take away the assumed
| worth or worthlessness of government backed assets, then those
| questions still need to be answered.
|
| There is another word for when something is treated as being
| true "by definition". That word is "assumption". Until he
| provides better reasons for his rejection of crypto assets, as
| having any real and lasting value, I will have to reject his
| view, at least as it is explained in this article.
|
| Not that this alone would flip me to crypto. The questions
| assumed to be answered, in this article, still need to be
| answered.
| [deleted]
| Zoo3y wrote:
| >And finally there's the claim that crypto assets are like art.
| Essentially Satoshi's whitepaper is a piece of performance art
| split into 21 million pieces as a parody of hypercapitalism or to
| make a political statement about anarcho-capitalism.
|
| Isn't this a misunderstanding on the author's part? The claim
| that some crypto assets are treated as 'art' is not as a
| performance piece of Satoshi's work, but in form of NFTs on
| OpenSea (as an example) that utilize Ethereum as the exchange
| platform.
| abeppu wrote:
| I think more than "intellectual incoherence", as with everything,
| differing views about crypto come down to differing values.
|
| > The actual desirable property of a currency is one with a
| variable supply which a central bank can control to target a
| specific low inflation rate by measuring the purchasing power of
| the currency with respective to the domestic costs of goods.
|
| Desirable for who? I think this is desirable for a _state_ which
| seeks to have a growing and stable economy. That can differ
| meaningfully from what is desirable for a given large
| account/wallet holder.
|
| > The value of everyday things like wheat, metals,
| semiconductors, and even synthetic products like stocks, interest
| rate swaps and bonds are well understood. We have rational
| valuation models for these products and there's a market that
| purchases these products because of their intrinsic value or
| exposure they bring to collective human economic activity.
|
| I.e. he adopts the basic assumption that value is defined by how
| something can be used. That's often a useful definition, but as
| the 'art' section indicates, it's not comprehensive, and it
| doesn't acknowledge that the value of those uses ultimately
| bottoms out at human preferences (e.g. zinc is used in making
| electronics, but we assign a value to electronics because they
| facilitate lots of other things that we value).
|
| The people he's criticizing seem to define value as what someone
| will pay for something, which may be based on just rarity.
| Certainly gold, silver, and jewels were all highly valued before
| we had industrial processes that specifically used them.
|
| > Setting all these models aside, there are two far more coherent
| perspectives on the crypto assets that have far more explanatory
| power for the behavior we see. Crypto assets are the synthesis of
| a speculative mania and a financial scam built around an opaque
| technology, phoney populism, with a tolerance for intellectual
| incoherence at its core.
|
| "Mania", "scam", and "phoney populism" are at emotionally charged
| terms that weren't selected for their "explanatory power."
|
| One can have a view of crypto which is intellectually coherent,
| but still worth criticizing. Its claims are something like:
|
| - something is worth what people will pay for it; here's a thing
| that people will pay for.
|
| - as with other financial and investing decisions, individuals
| make choices around what serves them, not what serves society as
| a whole. Expecting otherwise is unrealistic.
|
| - the marketing for many products is not intended to give
| purchasers a full understanding of what they're buying and how it
| works. If that were a requirement, no complex technical
| innovation could be marketed and sold. How many people understand
| the working mechanisms of both a computer chip and a prescription
| drug?
|
| - as with many other industries, crypto mining expends energy to
| produce something of value, and benefits from a lack of effective
| taxes on the CO2 emitted. If we're gonna appropriately price
| carbon, just do it but don't preach at cherry-picked industries.
|
| The criticism should recognize that these characteristics aren't
| unique to crypto; they're totally of a piece with real estate
| speculation, complex and opaque financial instruments, and a
| world economy that built itself around extractive industries. If
| you want a society where people or organizations receive value
| commensurate with _doing_ something useful rather than just
| owning stuff, where forthrightness is present in financial
| products, and where economic activity isn't based on
| environmentally unsustainable practices ... you haven't been
| living in that society for a long time and you should rail
| against something bigger than crypto.
| SubiculumCode wrote:
| The author makes claims about hundreds of different assets
| without actual investigation, citation, or even reference to the
| particular use-cases, business models, or technologies of
| individual assets, and naturally, the author arrives at her
| (probably) preordained conclusion. If you want to actually
| investigate whether the crypto-space is viable, valuable, or
| useful, then do so, with evidence and specific examples, counter-
| examples. As it is, the author appears to exercise a sort-of
| pseudo analysis with intellectual pretensions that only a fool
| would base their investments upon.
| louwrentius wrote:
| Name one.
| SubiculumCode wrote:
| That is on the author who was making a thesis about their
| intellectual incoherence as an asset.
|
| But if you are asking me, I'd bring up several:
|
| 1. Vechain: https://www.vechain.org/ A blockchain focused on
| supply chain transparency and authentication. 2. Theta:
| https://www.thetatoken.org/ A blockchain from the co-founder
| of youtube that seeks to increase performance, lower costs,
| and decentralize video streaming of ultra-ultra high
| definition content. 3. Oracles like Chainlink:
| https://chain.link/ Use cases of crypto increase the more
| that real-world data can be linked to blockchain contracts.
| louwrentius wrote:
| You don't explain why I should trust this over a regular
| boring SQL database. Let alone exactly what the actual
| problem is that is addressed here.
|
| "Supply chain transparency", sounds fancy though.
|
| The problem is that the data must come from somewhere and
| blockchain can't guarantee that the data is valid, only
| that it hasn't been tampered with. We can assure that with
| less energy intensive solutions, no blockchain stuff
| needed.
|
| And we know how well smart contracts (code is law) are
| doing.
|
| Trust can never be replaced with technology. Trustless is
| bullshit.
| SubiculumCode wrote:
| You hadn't asked. But since you do now: Using Vechain as
| an example: Immutability is the difference and it's what
| matters the most when building parts for products because
| it provides an unchangeable audit trail verifying the
| quality/parts of a product. But don't get me wrong, there
| may be better centralized SQL solutions, but the market
| will decide, won't it.
| louwrentius wrote:
| The marked may be full of idiots, I don't care.
|
| It's the concept that is ridiculous, a solution in search
| of a problem.
| SubiculumCode wrote:
| Over 30 companies within the Fortune 500 have live
| solutions running on VeChain including Walmart, BMW,
| LVMH, Renault, Deloitte, and PwC. They are obviously
| interested enough to to examine costs and benefits of the
| system.
| ac29 wrote:
| > it provides an unchangeable audit trail verifying the
| quality/parts of a product
|
| How? How does the blockchain verify, for example, that
| the electronic parts used to build my widget aren't
| inferior quality counterfeits with lower lifespans?
| SubiculumCode wrote:
| Through a nfc chip tagging scheme.
|
| https://www.vechain.com/solution/retail
| https://destift.nl/official-vechain-nfc-chip-label/
| acdha wrote:
| In other words, it doesn't. The real work is being done
| by the trusted auditors who verify that the NFC tags are
| legitimate, have been attached to a legitimate product,
| and remained there all the way to the consumer. If you
| don't have that, you're still vulnerable to all of the
| common attacks businesses have been fighting for aeons;
| if you do, you don't need a blockchain.
| golemotron wrote:
| The hyper-rationalistic world view of this article is striking.
| Crypto, as an asset class, is easy to understand. It has the same
| basis as collectables or art: human mimetics, desire and
| scarcity. If you look for "intrinsic value" you miss a lot of
| human motivation.
| ur-whale wrote:
| > The hyper-rationalistic world view of this article
|
| The author is anything but rational about crypto.
|
| He actually is fanatically against it to the point where I'm
| thinking we can consider ourselves lucky he didn't chose to
| fixate on anything religion-related instead.
|
| Which is not surprising if you read anything else he has
| written (like on FP stuff): the guy simply does not have the
| mechanisms/wires for nuanced opinions in his brain.
|
| What would be interesting is figuring out the actual _why_ he
| developed such a deep hatred of cryptos.
|
| It's probably buried somewhere in the stuff he's been spewing
| over the years, but to find it, you'd have to read a lot of it,
| and my limit when I read his prose is around 5mn.
|
| If anyone happens to land on the relevant nugget, please post
| it here.
| acdha wrote:
| Describing it as being like art is the third attempt to rebrand
| after failing to be usable as a currency or store of value but
| it's even harder to buy that sales pitch because there is no
| inherent desirability to random hashes and there's no effective
| scarcity when everyone can create or fork a chain rather than
| pay a premium for other people's hashes.
| dsizzle wrote:
| He addressed the art "narrative"-- and dismissed that basis
| because cryptocurrencies "aren't being discussed or valued in
| terms of this model." I think he has a point. He doesn't
| discuss NFTs though, which seems pretty directly related to
| art.
| [deleted]
| gregjor wrote:
| Interesting that the negative comments so far consist entirely of
| _ad hominem_ attacks on the author, arguments for _blockchain_
| (which the article doesn't mention once), examples of fraud and
| bubbles in other contexts (irrelevant -- no one says crypto is
| the _only_ Ponzi or bubble), and libertarian attacks on fiat
| currency and government control of currency that don't address
| the utility of crypto.
|
| PayPal and Stripe and other financial players haven't adopted
| crypto. They have inserted themselves as intermediaries, taking a
| cut at no risk to themselves, and with no commitment to moving
| from dollars to crypto. They are in the same position as every
| grocery store and gas station selling Beanie Babies 20 years ago:
| offering what people will buy to make a profit (in dollars).
| cryptica wrote:
| > As we know from the history every of every other speculative
| mania, popular delusions based on the madness of crowds cannot
| sustain themselves indefinitely.
|
| Madness such as governments printing trillions of dollars of fiat
| to artificially prop up the stock market and in the process
| dilute the salaries of the world's entire productive workforce
| while rewarding incompetent executives by pumping up their stock
| prices? I agree, such popular delusions based on the madness of
| crowds cannot be sustained. Not to mention the ridiculous, over-
| sized, multi-billion dollar government contracts which are
| repeatedly handed out to big corporations and which add no value
| at all to society (how many trillions did the government waste on
| Afghanistan again? How many billions did they then award to
| Microsoft to build military VR gizmos?)... And what about the
| huge superannuation/401K funds which invest other people's
| retirement savings, without their explicit approval, into
| inefficient, frothy, zombie corporations (run by their friends)
| which are going to collapse once people actually start retiring
| and start cashing out their pensions in mass... And the
| government will then print more money to (yet again) bail them
| out and keep screwing over the average salary earner and
| taxpayer. That's why we need cryptocurrency.
|
| If you think cryptocurrency is mad, if you think Dogecoin and
| SHIBA INU coins are mad, you don't understand the fiat monetary
| system.
| [deleted]
| wallacoloo wrote:
| I appreciate the author sharing his views, especially because he
| does a good job of distilling them. If cryptocurrencies are truly
| novel, however, it's not clear that one _should_ be able to draw
| a direct analogy to an existing product. That they don 't 100%
| resemble money, or commodities, or stock, or art, isn't
| _necessarily_ a problem.
|
| My argument for owning Eth is that it's like buying real estate
| (yes, I'm making _another_ loose analogy). Why does a person
| invest in land? Because they expect something to flourish in the
| vicinity of their land, and they 'll be able to capture some of
| that increased productivity in the form of rent (or
| appreciation).
|
| Ethereum is a programmable ledger, and Eth is its unit of
| capital. A programmable ledger is a tool that can be used to
| _create_ things like a money supply the author describes. The
| next question here is "why would someone prefer to use an
| analogous system created on Ethereum over whatever exists today"
| and that answer can be some combination of transparency,
| usability, and legitimacy. If we want something like the elastic-
| supply currency the author describes, we can create one for
| ourselves. We can do so without providing limitless power to a
| centralized authority (i.e. the Fed). To some, the resulting
| currency will be more legitimate as a result. (checkout Rai or
| Liquity for examples of elastic/"algorithmic" stablecoins on
| Ethereum).
|
| In this view, today's value of Eth is largely speculative. On the
| other hand, this gives a way to fund development. New protocols
| like the ones I mentioned are able to capture the value they
| create only because there's already so much $ in this ecosystem,
| and that money's eager to pay a 0.1% fee for the benefit of this
| new product.
|
| There's a lot of circular activity going on, sure. Deflationary
| rewards, leverage, etc. If you haven't seen an 80% drop in crypto
| yet, be ready for it ( _seriously_ ). But as long as the influx
| in capital facilitates some level of actual new products -- as it
| _does_ appear to me to be doing -- then what really is the issue
| here? Maybe we can be satisfied in viewing it as a rather
| complicated machine for capital allocation? My biggest worry is
| that impending 80% drop: crypto is notorious for its volatility,
| but still each bull run draws in newcomers who think we 're past
| all the drops and find themselves surprised when they lose 80%.
| lupire wrote:
| Speculation and Investment are similar but different.
| jacquesm wrote:
| The thing that I really don't get about all the crypto promotors
| and the nay-sayers is why they don't even try to determine and
| admit their biases before writing stuff like this.
|
| Talk about 'intellectual incoherence'.
| dsizzle wrote:
| What sort of biases are relevant that you can't infer from the
| article?
| sparkie wrote:
| Paragraphs 4 and 5 are wholly biased opinions.
|
| Author seems to have absolute faith in policymakers to do the
| correct thing, and has a cartoon-like assumption about people
| only hoarding money.
| troc wrote:
| That is because somehow it is OK for the state to have no
| say in which god to believe in, yet for Dahl it is OK for
| the state to say what money to believe in.
| dsizzle wrote:
| So it seemed you inferred his biases just fine? (I
| certainly wasn't suggesting this was a neutral article on
| crypto!)
|
| Do you think it would have helped for him to explicitly lay
| out his worldview or whatever, like the person I responded
| to seemed to think?
| sparkie wrote:
| He does a good enough job laying his views it out in the
| article.
|
| > misreadings of basic economics
|
| Willing to bet he has never read Basic Economics[1]. If
| he had, he would know that several of the assumptions he
| makes in this text are fallacies. Of course, the author
| does not mean the work of Sowell when he says "basic
| economics," he means "Keynesian Economics 101 as taught
| at your local academy."
|
| > The actual desirable property of a currency is one...
|
| Desirable to who? Is it really desirable for savers to
| have their money debased?
|
| The author subtly admits he is a collectivist, and does
| not care for the individualist perspective.
|
| When it comes to money and value though, all transactions
| are performed by individuals of their own volition,
| unless otherwise coerced. An economy is an emergent
| property of the individuals. Making decisions about
| transactions 'for the sake of the collective' is a luxury
| of the already wealthy (and it is more virtue-signalling
| than actually benefiting of the collective).
|
| > "with a variable supply which a central bank can
| control to target a specific low inflation rate by
| measuring the purchasing power of the currency with
| respective to the domestic costs of goods."
|
| Author assumes it is even possible to target a specific
| rate of inflation and to even measure if that target is
| met, and whether meeting any target is a result of any
| interventions. Of course this is not possible because
| there are far too many variables. Mises and Hayek have
| both written in depth about the economic calculation
| problem[2]. Prices are the most efficient method for
| individuals to determine their economic activity - not
| central planning.
|
| > "A controlled inflationary currency with
| interventionist monetary controls encourages economic
| growth and stability over time."
|
| May or may not be true. I won't bother arguing with
| whether or not I think that is the case, but will note
| that the author assumes that the interventionist controls
| will be utilized correctly to the benefit of all. This
| goes back again to assuming that everyone has the same
| goals (collectivism), but more worryingly, there are some
| clear examples of the interventionists creating
| immeasurable struggle for millions of people. Consider
| Venezuela, or Zimbabwe. Moving zeroes does not create
| wealth.
|
| > "A national currency's value is derived from the
| requirement to pay taxes in the currency ...
|
| Absolutely false. Won't explain.
|
| > "However deflationary currencies do nothing but
| encourage hording
|
| True, when competing currencies are present. People will
| hoard the good money and trade the bad money.
|
| Eventually, people will not accept the bad money for
| payment of goods and services. They must spend the good
| money to meet their needs. People offering services will
| find ways to avoid providing those services to people
| wishing to pay only with the bad money, or will offer
| discounts to people paying with the good money.
|
| > ... untethered to the cost of goods ...
|
| The fiat money clearly can't be tethered to the cost of
| goods because prices keep increasing, almost without
| fail. The only exceptions are in highly deflationary
| markets where technological innovation outpaces
| inflation.
|
| If the price of X increases by 5% in one year, does this
| tell me that the product became more valuable or scarce,
| or does it tell me that the money became worth less?
|
| Fiat money can't tell you this. It is impossible to
| separate one from the other because the intervention
| influences prices and the prices then influence
| intervention. This "stability" is like a cat chasing its
| own tail. It is short-lived stability.
|
| Historically there has never been a "reference" commodity
| which could be used to determine if the currency is
| losing value or if other goods are increasing in value
| over time. The fiat money is typically used as the
| reference because it doesn't fluctuate much over short
| periods of time (assuming there no economic catastrophes,
| which is a big assumption in itself). The author admits
| he has a high time-preference and he seems unwilling to
| discuss the long-term effects, such as that on pensions
| and savings.
|
| A dollar today is 0.7 dollars in 5 years.
|
| 1/21M is still 1/21M in 5 years. This is the real
| stability we want if our goal is to measure how prices
| change over time. A fixed scale.
|
| > "As we see in crypto, they exhibit extremely volatility
| since no economic activity can be denominated in terms of
| them. One could never price a thirty year mortgage in
| bitcoin because its volatility makes it completely
| unpredictable and no sensible bank could calculate the
| risk of covering that debt.
|
| Here the author shows his lack of imagination. Sure it is
| the case that the bitcoin/fiat exchange rates are
| volatile now, but how does that change if bitcoin
| adoption continues to grow? What happens if bitcoin
| adoption reaches 50%, and has equal market share as fiat
| money? Does the exchange rate then tell you how volatile
| bitcoin is, or how volatile dollars are?
|
| In fact, the dollar has lost 99% of its value against
| bitcoin in one decade[4]. Talk about volatility!
|
| > There can be no separation of money and state, because
| the state is the only party that could issue money almost
| by definition.
|
| Wrong again.
|
| Money is an emergent property of people selecting the
| most saleable commodity, in their own subjective opinion,
| to conduct trade[3].
|
| The State can only intimidate and coerce through
| violence. When given free choice, people will act in
| their best self-interest, which is probably counter to
| the interests of the central bank and the cronies
| surrounding it.
|
| [1]:https://en.wikipedia.org/wiki/Basic_Economics
|
| [2]:https://en.wikipedia.org/wiki/Economic_calculation_pr
| oblem
|
| [3]:https://mises.org/library/origins-money-0
|
| [4]:https://usdsat.com/
| ur-whale wrote:
| :)
|
| What are _your_ biases, then, dear Jacques?
| jacquesm wrote:
| That I don't care either way, just watching this whole crypto
| thing from the sidelines. It's always been interesting to me,
| ever since I noticed DigiCash in the roaring 90's.
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(page generated 2021-11-07 23:01 UTC)