"If crypto is not the answer to our money problems, what is?" Good FT article

[Horatio]

@ NRC, you make fair counterpoints above but if something can be improved even incrementally isn't that worth pursuing?
It may or may not stand the test of time & if it is displaced by a better alternative then so be it but isn't it worth trying to improve?
Even if technology x does not win out, other players can learn from the exploits of technology x & improve their offerings.

What is the alternative? Status quo in perpetuity?

 

[NoRegretsCoyote]

However, as Horatio pointed out, large swaythes of the planet don't have well functioning fiat currencies,

This is a bit of a myth. For the last 20 years inflation has averaged between 5% and 10% for the large group of countries the World Bank defines as "low income".

Freedom to transact internationally. I gave the example last week of an eCommerce professional working on a self employed basis here in Latin America. He told me he accepts crypto from customers all around the globe. It's workable. The current system is not. As regards currency risk, these guys are not bothered about the currency risk of bitcoin when they look at the p poor performance of their local currencies

Volatility of Bitcoin vs US dollar or euro is comparable to the worst-managed currencies in the whole world. Saying there is less currency risk than the Venezuelan Bolivar is not saying much.

The illegal notion is not where this is at.

Of course it is used by transnational criminals. Europol and Interpol highlight this.

The barriers that are put in place by the legacy system is what this is about.

Most of these barriers are there to prevent money laundering, criminal activity, and tax evasion in the first place.

Imagine if you spend 100 euro with a merchant in Ireland, paying via visa/mastercard. Now imagine that he can pass on the 3-4% in fees if you opt for a direct crypto payment instead?

Those fees are more like 1%. And for that Visa/Mastercard will provide terminals, ancillary services, etc.

What is the alternative? Status quo in perpetuity?

I'm old enough to have been paid weekly by cheque and would troop to the bank every week to lodge this piece of paper. I'd then have to check my balance in the ATM every day until the funds had cleared and I could withdraw the cash. It was an awful use of my time and effort!

Payments services in fiat currencies have improved remarkably for the better in the last two decades and I do not see any obvious use case for cryptocurrencies. Once central bank digital currencies are ubiquitous they will have even less potential use in payments.

 

[tecate]

This is a bit of a myth. For the last 20 years inflation has averaged between 5% and 10% for the large group of countries the World Bank defines as "low income".

In no way is this a 'myth'. You think it's a myth in Turkey, Lebanon or Argentina right now? In those three examples, 130 million people are affected and that's just the start of it. Other than that, in what world is 10% inflation something not to bat an eyelid at? (I guess 2022 has normalised it, right?).

Volatility of Bitcoin vs US dollar or euro is comparable to the worst-managed currencies in the whole world. Saying there is less currency risk than the Venezuelan Bolivar is not saying much.

You're missing the point I made. Someone who has been exposed to hyperinflation isn't going to be as appalled by Bitcoin's volatility as you are. Also, in what you just stated, there's another issue. Bitcoin's volatility is not comparable with the hyper-inflation of the worst fiat currencies. In the case of the worst fiat currencies, that's not volatility - that's money go bye bye - permanently. Zoom out (rather than cherry pick timeframes working back from a hype cycle top) and look at the higher lows Bitcoin has put in year on year over 13 years. On that basis, no funds have been lost, quite the opposite.

Of course it is used by transnational criminals. Europol and Interpol highlight this.

Any peer reviewed papers I've come across in the past few years have all indicated that crypto implicates less illicit use than fiat currency.

Most of these barriers are there to prevent money laundering, criminal activity, and tax evasion in the first place.

And the world bank has come out and said long since that it does a p poor job in doing so. I disagree entirely with this nonsense. Check out Chris Giancarlo's thoughts on this (that I linked to in the post above) - and the approach that can be taken without causing all manner of friction.

Those fees are more like 1%. And for that Visa/Mastercard will provide terminals, ancillary services, etc.

They range between 1-4% in the western world. In developing countries, I've typically been asked to cough up 5% additional if I'm paying via visa to cover these fees.

Payments services in fiat currencies have improved remarkably for the better in the last two decades and I do not see any obvious use case for cryptocurrencies. Once central bank digital currencies are ubiquitous they will have even less potential use in payments.

If you think that CBDCs will make the likes of Bitcoin irrelevant, you've completely misunderstood what Bitcoin is. Quite the opposite - CBDCs will be the greatest advertisement ever for the likes of Bitcoin.

 

[CuriousGeorge11]

This is a bit of a myth. For the last 20 years inflation has averaged between 5% and 10% for the large group of countries the World Bank defines as "low income".



Volatility of Bitcoin vs US dollar or euro is comparable to the worst-managed currencies in the whole world. Saying there is less currency risk than the Venezuelan Bolivar is not saying much.


Of course it is used by transnational criminals. Europol and Interpol highlight this.


Most of these barriers are there to prevent money laundering, criminal activity, and tax evasion in the first place.



Those fees are more like 1%. And for that Visa/Mastercard will provide terminals, ancillary services, etc.



I'm old enough to have been paid weekly by cheque and would troop to the bank every week to lodge this piece of paper. I'd then have to check my balance in the ATM every day until the funds had cleared and I could withdraw the cash. It was an awful use of my time and effort!

Payments services in fiat currencies have improved remarkably for the better in the last two decades and I do not see any obvious use case for cryptocurrencies. Once central bank digital currencies are ubiquitous they will have even less potential use in payments.

I understand you fail to see any use cases for crypto so you must have a fairly good understanding of how to use it as you speak with such expertise.

I'm just curious if you could explain how someone could spend crypto in their local shop

 

[Duke of Marmalade]

Stablecoins! What a contradiction at the core of the cultist credo. Crypto is designed to escape the instability of fiat and yet for "stability" they require one of their own to be pegged to that instability. Go figure.

I think all this central bank riffing on about crypto even in critical vein just gives it credibility. Why don't they just follow the Chinese and call it what it is: utterly worthless.

 

[24601]

I provided a use case for an industry that turns over billions and by the way, how is it breaking any laws

Online gambling in America is illegal so people use crypto to gamble online

Eh, I think you answered your own question there chief.

 

[tecate]

I think all this central bank riffing on about crypto even in critical vein just gives it credibility. Why don't they just follow the Chinese and call it what it is: utterly worthless.

Well said comrade. It's that communist perspective that's been lacking the whole time.

 

[CuriousGeorge11]

Eh, I think you answered your own question there chief.

I dont think I did. Who said gambling with crypto was illegal

 

[24601]

I dont think I did. Who said gambling with crypto was illegal

I don't know if you're being intentionally obtuse but you said gambling is illegal in the US and that a use case for crypto is to circumvent this.

 

[Duke of Marmalade]

Well said comrade. It's that communist perspective that's been lacking the whole time.

This wasn't razor sharp wit first time round. After the umpteenth repeat it occurs to me that you might actually be meaning something. As a high priest of the cult can you explain to me why communists would be particularly opposed to bitcoin?

 

[tecate]

This wasn't razor sharp wit first time round. After the umpteenth repeat it occurs to me that you might actually be meaning something. As a high priest of the cult can you explain to me why communists would be particularly opposed to bitcoin?

I'll have to mope about and suffer the indignation of my wit not reaching comrade marmalade's standards - but I'll get over it. Do I need to explain to you how the authoritarian state/surveillance state/anything but freedom state Chinese communists would be particularly opposed to a decentralised currency that the people control rather than the regime controlling? So desperate is comrade marmalade in grasping at any old thing to support his world view.

So, I'm not even going to 'critique' you promoting China's view that Bitcoin is utterly worthless (I'll even bold that out for you) because for obvious reasons, it's an advertisement of Bitcoin's credentials and likelihood of further development and not the opposite. I draw the line just beyond critique of the central bank of central banks (BIS) 'turkey's don't vote for Christmas' view vis-a-vis Bitcoin.

But please do continue stating that China says Bitcoin is utterly worthless .....because it's utterly priceless.

 

[Duke of Marmalade]

@tecate "my worldview"? Yes that is cult stuff - if one is against bitcoin it must be because one has a faulty worldview. For what it's worth I would not be in favour of communism.

 

[tecate]

@tecate "my worldview"? Yes that is cult stuff - if one is against bitcoin it must be because one has a faulty worldview. For what it's worth I would not be in favour of communism.

"If one is against bitcoin" I'd imagine that it is possible to make your argument without relying upon a report produced by the Chinese that is the upshot of a policy decision taken by the CCP to try and suppress Bitcoin within the territory because it puts control in the hands of its users rather than that authoritarian, freedom suppressing, surveillance state.

 

[Duke of Marmalade]

"If one is against bitcoin" I'd imagine that it is possible to make your argument without relying upon a report produced by the Chinese that is the upshot of a policy decision taken by the CCP to try and suppress Bitcoin within the territory because it puts control in the hands of its users rather than that authoritative, freedom suppressing, surveillance state.

And Roubini is the nutty professor and Krugman got it wrong on fax machines. Chinese are commies. Shoot the messenger

 

[tecate]

And Roubini is the nutty professor and Krugman got it wrong on fax machines. Chinese are commies. Shoot the messenger

Your hero (Roubini) featured here in 2018 by way of a couple of youtube clips of him 'discussing' crypto - where he spoke and acted like a deranged lunatic. The story of Professor fax machine is relevant as it's a 'nobel' (and you tell us you will just trust unquestioningly whatever a 'nobel' spouts) - and in the case where he states that the internet will have no more impact than the fax machine, it's incredibly pertinent to the consideration of crypto. It demonstrates that he has no notion of technology. Bitcoin is a technology first - and financial innovation second.

But maybe I wasn't being harsh enough on the guy. Here is professor fax machine commenting on his alleged area of expertise - telling us that money printing doesn't lead to inflation.

https://twitter.com/x/status/1374381286530244614

 

[time to plan]

Online gambling in America is illegal so people use crypto to gamble online

Same with terrorism.

 

[letitroll]

Crypto is not the savior for anybody, anywhere.......all these morons thinking their gonna get their lambos that way and their nonsense journey to financial independence via crypto......which when you dig into it boils down to them watching a number on a screen move around and trying to get others "into it" so their coin goes up......get rich quick doing nothing except hitting a few phone buttons is an attractive alternative reality, its a fantasy.............but the solution to peoples money problems I'm afraid are the old fashioned kind.......under spend your income, delay gratification, get up in the morning and grind it out, do hard things, do them better than the other fellow, add value, go asleep do it all over again.

Can't remember who said it but the best way to get what you want (say money), is to deserve what you want......for the crypto peeps in for the 'easy' money well over time they will get what they deserve and its not what they expect but they will truly deserve it.

 

[tecate]

Crypto is not the savior for anybody, anywhere.

So what you're essentially saying is that the premise of the article is entirely wrong. A duplicate article could be written that 'flipping real estate is not the savior for anybody', 'trading stocks is not the savior for anybody'. It's wrong because it assumes that everyone is taking this approach and believing that to be the case. That's not the case.

There's a mistake being made - not just on AAM, elsewhere also - that characterises everyone involved in crypto in the same category i.e. lazy, thoughtless, greedy degens who's approach and input is 'number go up' and no more. Do those people exist? They certainly do. Do they account for everyone involved in crypto/blockchain? Absolutely not. There are the smartest of people working incredibly hard in the space. It would be a mischaracterisation to dump them in and tar them with the same brush as the people you're talking about.

.all these morons thinking their gonna get their lambos that way and their nonsense journey to financial independence via crypto......which when you dig into it boils down to them watching a number on a screen move around and trying to get others "into it" so their coin goes up......get rich quick doing nothing except hitting a few phone buttons is an attractive alternative reality, its a fantasy

I'll direct you to the point I made above. I've never mentioned the word 'lambo' here relative to crypto - and having just ran a search, it seems nobody else has either. I'm on record as saying here on a number of occasions that crypto is anything but easy money. There are plenty of hard working people directly involved in the digital assets space who are of a similar mind.
Going back 18 months, someone else here tried to tie my view on crypto to the 'have fun staying poor' mantra of the degenerates you're referring to. I had never used that phrase here (or anywhere else) - and nor had anyone else here - he was the first to use it in trying to tar and feather me with it. The point is that the existence of a category of people that represent what you're talking about doesn't represent everyone else associated with the digital assets space.

for the crypto peeps in for the 'easy' money well over time they will get what they deserve and its not what they expect but they will truly deserve it.

Dumb money gets dealt with in all markets - that is in no way exclusive to digital assets. Secondly, that it exists doesn't mean that there isn't something tangible, useful and innovative at the heart of the development of digital assets. That it exists doesn't mean that it's all 'dumb' (and as you've otherwise described in your post).

Going back a number of months, you said that crypto was done for as the days of excess cash were gone. Although I don't agree that crypto is done for, I do agree that excess cash sloshing around has major implications for crypto (and practically every other asset class). Why wouldn't it - it's tied in to the whole reason Bitcoin was brought into existence. However, have a look at the following and tell me that monetary policy post gold standard and in particular from 2003 onwards - doesn't have implications for all sectors - not just crypto.

https://twitter.com/x/status/1547545930995568640

 

[Duke of Marmalade]

@tecate unfortunately I took up your invite to "Read the full conversation on Twitter".
The very next tweet goes as follows:

Conversely, bitcoin has only been this cheap relative to its long-term trend 2.5% of history…

Translation - fill your boots.
Some of you may be scratching your head at the 2.5%. Surely $20k is is still in the top quartile of bitcoin prices since inception. Silly people. To get it to be "cheap" it is compared with its recent past. Put more simply the recent crash is amongst the worst (depends on time frames of course).
Hey, even a snake oil saleswoman couldn't make this stuff up.
According to these chancers when bitcoin is flying it is the only game in town and when it is tanking it's a steal.

 

[DazedInPontoon]

Put more simply the recent crash is amongst the worst (depends on time farmes of course).

Yes, if you think bitcoin will survive it's relatively cheap now. That's not to say it can't go lower, it's definitely moving with the macro landscape, and we've an interesting winter ahead in that regard.

Of course, on the other hand if you don't have any conviction about bitcoin at all you'll think it's bad idea to buy at any price, and probably oscilate between two states of not wanting to buy: "it's a bubble, anyone getting in now missed the boat" in bull markets. and "see I was right it's going down, it was a bubble, it's dead" in bear markets.