Mastodawn

Is cryptocurrency good for anything?

Is cryptocurrency good for anything? - Lemmy.World

Can I buy a pizza with it or pay my bills with it? Can my employer pay me in it? Or is it just an “emperor’s new clothes” thing? I just don’t see the tangible value in it. Rhetorical questions, BTW, I know you can’t buy a pizza with it, at least outside of some edge cases that I’m not aware of. I thought what made money money was everyone agreed it was valuable and was willing to exchange it for goods and services directly. I don’t see that with crypto.

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dhork 2d ago

I found crypto earlier than some. (not everyone – if I had more I wouldnt have to work anymore, haha!)

IMHO, the main value proposition of crypto is permissionless peer-to-peer payments. If we both have crypto wallets, and you send me an address to make a payment to, I can send that without needing anyone’s approval first. I don’t need any bank to agree to have me as a customer first, or any government to approve why the transaction is taking place. All I need is a functioning payment network, and the original Bitcoin white paper solved how to provide that and preserve anonymity. (Really Pseudo-anonymity, but only the nerds care about the difference)

As an academic experiment regarding permissionless payments, it is a resounding success. But, it turns out, Governments have laws regarding who can pay who regardless of the medium. So, just because Bitcoin enables permissionless payments doesn’t mean you done need to ask permission.

Furthermore, the rapid increase in crypto prices really doomed any chance at all for useful adoption. Because people don’t want to spend crypto anymore. They view it as a Store of Value, and who can blame them, given how it has risen from nothing to a > $2T market cap, even after the recent downturn? You used to be able to use crypto in regular transactions, but not anymore.

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[deleted]2d ago

So it is digital cash without the backing of a government and no stability.

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dhork 2d ago

You’re not wrong, but why is not having the backing of a government a bad thing?

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Jako302

Because a currency without a stable backing is completely volatile. Sure the value of normal currencies fluctuate, but apart from a few hyperinflation edge cases that’s at most a few percent each month.

Small cryptocurrencies fluctuate sometimes hundreds of percent each month and even the big coins can swing ±20% every few weeks. The only somewhat stable coins are the ones directly tied to real world currencies.

Having a currency that fluctuates this heavily in value creates the exact same problems as the ever changing US tarrifs did. There simply is no wax to reliably price goods and services for more than a few days. You essentially have to barter each trade.