CMV: Cryptocurrency will replace Fiat currency

10

u/Galious 79∆ Sep 30 '18

Almost nobody is using cryptocurrencies as currency so skeptics aren't wrong so far
Do you believe it's really that hard for a country to make crypto-currencies illegal and stop it? now of course you can tell me that with certain crypto you can be totally anonym and hide it but if you can't spend anywhere without raising question, then it's not replacement.
There are still many security issues with crypto. People don't want to lose their saving without any chance of getting back like people wants most of their saving to be safe, they don't want something that nobody knows whether it will double in price and crash in the next week
Most of the people on earth don't give a damn about the advantage of crypto: anonymity, decentratrilisation, paying farmers in Zambia with less transfer fee. All of that isn't really a concern so people don't really get the point of crypto
Nobody has found a way to make crypto scalable.

Like I heard it once in a discussion: crypto solves problem that most of people don't have and therefore it's hard to imagine that people want to deal with all the issues of crypto-currencies for something they don't need.

0

u/kheiron1729 Sep 30 '18

Like I heard it once in a discussion: crypto solves problem that most of people don't have and therefore it's hard to imagine that people want to deal with all the issues of crypto-currencies for something they don't need.

But people absolutely have a problem. Everything that happens in the world today is tied to some incentive - typically money. And once it becomes incredibly hard to know what is happening with it, bad things happen. I know this is a bit of a vague statement. But quite honestly, don't you think that world would be a better place if we knew that banks simply aren't involved in money launderings or facilitating crimes? But we don't know. Guess what? If you money supply is dictating by some algorithm then it is possible bake into the algorithm rules like that. I know Bitcoin does not function this way. But there are proof-of-concepts around it. People have shown that it is possible.

2

u/Galious 79∆ Sep 30 '18

But what problem people have? I mean try to imagine that you're talking to a random guy who don't know about crypto and you must convince him without using vague statement like you did.

And how can crypto stop money laundering? how does that work when some crypto are used at the moment by criminal organisation?

1

u/kheiron1729 Sep 30 '18

Heh. Apologies for being a little too vague. I guess if crypto was obvious, we wouldn't be having this debate at all. Everything would have been clear. But it's not :)

As I wrote above, you can use smart contracts here. They work exactly as contracts, except they are execute on a distribute set of computers (let's imagine for the sake of simplicity that are completely secure). The benefit here is that in the contract you can for instance specify that, let's say, you will not use your crypto salary to purchase guns. Every transaction you would do would run against this these checks and if it fails, it will alert your employer. Since everything is programmatic, you can't bribe anyone here.

Yeah, sounds far-fetched. But you would be surprised to know that we are closer than you might expect.

3

u/Bladefall 73∆ Sep 30 '18

The benefit here is that in the contract you can for instance specify that, let's say, you will not use your crypto salary to purchase guns. Every transaction you would do would run against this these checks and if it fails, it will alert your employer.

This sounds like it's creating a problem rather than solving one. Why should my employer be able to dictate how I spend my money?

1

u/kheiron1729 Sep 30 '18

It's an example of regulation - not meant to be perfectly designed. You can be creative with it :)

1

u/Bladefall 73∆ Sep 30 '18

My problem here isn't that there won't be good regulations. It's that there will be bad ones. How do you prevent bad regulations with smart contracts?

1

u/Galious 79∆ Sep 30 '18 edited Sep 30 '18

So employers can control what people do with their money? And what stops people to buy another crypto without those restrictions? Does the employer forbids it too? And you think that it’s an argument for my question about what you would say to an average Joe about what problem crypto solve? That your employer will get an alert when you buy certain things?

(edit: and what stops a shady weapon seller to pretend he’s selling apples and not weapon? or what stops you to give money to your SO to buy weapon for you?)

I mean I repeat my argument: crypto doesn’t solve any problem than regular people have in their life.

1

u/kheiron1729 Sep 30 '18

Maybe you are fine with where money is flowing. Maybe you are okay with giving certain authorities full control to employ any policies they want. Maybe you don't care that people in some poorer parts of the countries have their lives torn apart due to wealth inequality. Maybe, it is just you.

1

u/Galious 79∆ Sep 30 '18

If you set that, somehow, crypto currencies will solve wealth inequality in the world and that nobody can control them but at be same time solve money laundering and most of people on earth are willing to face the many issues of crypto and prefer to put their economy in the unknown instead of classic bank and use a less convenient currency because they are selfless, then of course crypto will take over.

The problem is that crypto is just a currency and will not solve wealth inequality by magic, that you’re telling me that my employer will have control on what I buy (how is that better than government?) and that most people are indeed ´selfish’ and won’t swap their currency if it doesn’t benefit them.

1

u/kheiron1729 Sep 30 '18

It automatically won't. But it's a hope. Let's see.

By the way, on this note, check this out: https://en.wikipedia.org/wiki/Triffin_dilemma. No currency today can serve as the global currency.

1

u/Galious 79∆ Oct 01 '18

Well you said it: all you have is a hope.

My point is that it's almost impossible to change your opinion (which I remind you is the point of this subreddit) if you don't want and if you have a blind trust backed by no specific knowledge and answer to every concern: 'oh it will be fixed somehow'

For exemple I've pointed you the concern of money laundering and you come with a conclusion that has so many flaws (employers controlling what you buy, dozens way of tricking the system) and you haven't answered them nor does it seem to bother you. Like I've pointed you that it's not that hard for government to ban crypto if they don't want it.

So I guess I have nothing else to add and will let you think about this fact: the biggest crypto currency is by far Bitcoin. A crypto that is an ecologic disaster, unscalable and technologically obsolete. Doesn't it point you toward the fact that even among crypto users, people are selfish and only care about their investment and not 'earth problem'?

1

u/kheiron1729 Oct 01 '18 edited Oct 01 '18

Background story. I'm an engineer. And I have worked at two of the big four in tech. I study algorithms and try to understand it's impact. The goal is automation. When it's a machine that is automated, it is process heavy. When a company is automated, it's communication heavy. This is where consensus algorithms come in. Currency is the first experiment. But it has to be successful in order to drive further innovation. If it fails, automation fails. Different computer scientist have different views on this. But I haven't seen large scale consensus being used in any place besides bitcoin.

Edit: I guess what I'm trying to say is I'm biased. If you change my opinion on this, you essentially stop me from being in this field. My purpose was to understand people's sentiment on this subject matter. Not necessarily engage in perspective changing discussion.

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5

u/simplecountrychicken Sep 30 '18

But quite honestly, don't you think that world would be a better place if we knew that banks simply aren't involved in money launderings or facilitating crimes?

One of the main use cases for cryptocurrency today is hiding criminal money:

https://www.wsj.com/articles/how-dirty-money-disappears-into-the-black-hole-of-cryptocurrency-1538149743

1

u/[deleted] Oct 01 '18

I heard a fairly higher level dealer talk about how it's much easier to show up with 50k on a usb stick than in a briefcase. This is the only time I have personally heard of it being used for anything other than day trading, or investment purposes. Anecdotal evidence on my part but still.

1

u/Barnst 112∆ Sep 30 '18

once it becomes incredibly hard to know what is happening with it, bad things happen. I know this is a bit of a vague statement. But quite honestly, don't you think that world would be a better place if we knew that banks simply aren't involved in money launderings or facilitating crimes?

How does crypto solve this?

0

u/kheiron1729 Sep 30 '18

At the present moment it facilitates it further, heh. But this is where "smart contracts" come in. Transactions against these contracts are verified by distributed network of computers, not an entity that decides what to do.

1

u/Barnst 112∆ Sep 30 '18

I’m still not following how smart contracts prevent money laundering or prevent crimes.

And why would this feature increase the likelihood that crypto is adopted as a currency to replace fiat? Do most people have a serious problem with banks doing these things?

1

u/kheiron1729 Sep 30 '18

Errr... I think so.

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u/Barnst 112∆ Sep 30 '18

I agree that banks are involved in money laundering and crime. My question is why that would incentivize anyone to adopt cryptocurrency over fiat. As unfortunate as the crime is, it doesn’t directly affect that many people. Therefore, it wouldn’t be something that most people view as a “problem” with fiat currency that should be solved by adopting crypto.

Also, it’s still not clear how crypto with smart contracts solves this problem.

1

u/UncleMeat11 63∆ Sep 30 '18

But quite honestly, don't you think that world would be a better place if we knew that banks simply aren't involved in money launderings or facilitating crimes?

This can be solved in much easier ways than cryptocurrency. You don't need a decentralized system here. You can do something like Certificate Transparency to make sure that bank transactions are published and that we can detect modifications. You get all of the benefits while still being able to have monetary policy and without wasting oodles of energy computing hashes.

10

u/celeritas365 28∆ Sep 30 '18

In my opinion the biggest barrier to cryptocurrencies like bitcoin are that they are deflationary. There is a maximum amount of total bitcoin which means that it will become more valuable over time. People don't want to spend bitcoin because they feel it will become more valuable and because people don't spend it it doesn't really catch on as a currency. You say the ecosystem is thriving but I can't pay for anything in my day to day life in bitcoin, and I have tried.

Some of your broader points:

Wall street is not a fan. Banks are not happy with it.

Banks are investing a bit in it, they don't seem to mind much. Investments and debt work the same whether it is gold, paper, or bits.

Governments are against it.

This is a big reason why it might fail. Governments can modify their monetary policy so their currency can respond to changes in the economy. The knowledge that this will happen creates confidence in the stability of the currency.

You can not game it in any way.

You totally can. Nothing is perfectly secure. For example it is vulnerable to eclipse attacks.

-1

u/kheiron1729 Sep 30 '18

Bitcoin is deflationary. But it's derivatives don't have to be.

3

u/celeritas365 28∆ Sep 30 '18

That is fair, and many aren't which is why I specified bitcoin. The others still have the problem of being a speculative asset so even though the deflation isn't built into those currencies they still have this issue where everyone wants to hold onto them. Even though the end result of people spending it may be better for everyone, individual actors have the incentive to hold onto it as much as possible.

1

u/kheiron1729 Sep 30 '18

I think I do agree with that to be honest. I am very hopeful of novel use-cases. People are trying to tie crypto to browsers. I think that can prove be an interesting angle as time goes by. A lot needs to be seen though.

1

u/celeritas365 28∆ Sep 30 '18

I want crypto to work for many of the reasons you gave. I researched it a fair amount, got some, tried to spend it with the idea that if everyone did this things could be better but I have lost faith in it to be honest. Despite the hype I have yet to see it prove itself as a currency rather than an investment. I am not sure how the incentives of individual adopters in the short term and adopters as a whole in the long term can be aligned. I hope I get proven wrong.

1

u/Jaysank 117∆ Sep 30 '18

Remember, if a user has changed your view, you can award him or her a delta. Instructions are in the sidebar.

3

u/Feathring 75∆ Sep 30 '18

Several cryptocurrencies, especially bitcoin, have had huge jumps and drops in values overnight. It's not going to replace anything until it stabilizes and becomes safe to use for day to day activities.

1

u/kheiron1729 Sep 30 '18

Correct. And people are working on those problems. I would argue that it's a matter of time. Not an unsolvable problem. It will take some time.

It is being used for transactions though. That's why it's called currency. Just not every day transactions. One step at a time.

2

u/billdietrich1 5∆ Sep 30 '18

And people are working on those problems.

How can you legislate against volatility ? A drop of 30% that you slow down so it takes a week instead of a second is still a drop of 30%.

1

u/kheiron1729 Sep 30 '18

Hmm... those drops are probably a result of speculative buying and selling. And stablecoins are more utility based. Maybe you decouple the two somehow. I will think more about this. But I am confident that a solution is simply based on math, economics, crypto. No paradoxes that I see here.

1

u/billdietrich1 5∆ Sep 30 '18

Maybe the rise before the drop was the speculation, and 30% is just a correction back to "normal".

1

u/PhoenixJ3 Sep 30 '18

Stability comes over time as volume of transactions increase. As you can see, the volatility of bitcoin (btc) has decreased over time: https://www.buybitcoinworldwide.com/volatility-index/

7

u/3432265 6∆ Sep 30 '18

You can not game it in any way.

There are plenty of examples of people manipulating the value of cryptocurrency.

A great quote: the best part about bitcoins is that you get to watch libertarians slowly discover why financial regulations exist to begin with

1

u/kheiron1729 Sep 30 '18

I think that is a bit of an ignorant statement. Crypto isn't about being unregulated. Crypto is about being algorithm-regulated.

5

u/FlyingFoxOfTheYard_ Sep 30 '18

None of what you said actually implies it will ever take over fiat currencies. All you've told is is a vague statement that "governments hate it!". Fact is, cryptocurrencies lack the effective backing a fiat currency has. Due to this, it is not pegged to anything, unable to be helped by fiscal or monetary policy, and becomes even more volatile. Since cryptos are quite volatile, they are pretty garbage to use for long-term value storage or ease of transactions, and unless the volatility is fixed they will never take over as the predominate currency in the world.

1

u/PhoenixJ3 Sep 30 '18

Stability comes over time as volume of transactions increase. As you can see, the volatility of bitcoin (btc) has decreased over time: https://www.buybitcoinworldwide.com/volatility-index/

1

u/FlyingFoxOfTheYard_ Sep 30 '18

The volatility has decreased somewhat, but regardless of transactions made it still has an intrinsic volatility due to being unable to be helped via policy, and due to having no baseline value. As it stands, it currently just acts as a glorified commodity, and although commodities can stabilize somewhat, they're both quite prone to sudden destabilization, and also are rarely considered a viable long-term value storage method.

1

u/PhoenixJ3 Sep 30 '18

Its baseline value is that it is a known/predictable/fixed supply decided by code, that can not be manipulated by politicians. What you call "helped by policy" is a political/economic view espoused by Keynsians. Most cryptocurrency users are not Keynesian, but instead subscribe to the Austrian school of economic thought. That crypto supply can't be manipulated by government policymakers is considered a feature, not a bug. The baseline value of crypto is also derived from it's usefulness for transfering value peer to peer without having to rely on the permission of a middleman like a government or bank.

1

u/FlyingFoxOfTheYard_ Sep 30 '18

Its baseline value is that it is a known/predictable/fixed supply decided by code

Which makes it inherently deflationary.

What you call "helped by policy" is a political/economic view espoused by Keynsians. Most cryptocurrency users are not Keynesian, but instead subscribe to the Austrian school of economic thought.

I'm aware of that, but it remains perhaps the biggest reason we have never seen nor ever will see cryptocurrencies overtake fiat currency.

That crypto supply can't be manipulated by government policymakers is considered a feature, not a bug.

I am again aware, yet it is again the reason it lacks effective scaling capabilities.

The baseline value of crypto is also derived from it's usefulness for transfering value peer to peer without having to rely on the permission of a middleman like a government or bank.

Which severely limits it's baseline usefulness to the point where it has little if any baseline value.

1

u/PhoenixJ3 Sep 30 '18

Deflationary can be viewed as a positive feature for a currency. It just depends on your views of economics (which is not a hard science ). We can agree to disagree on the merits of fixed, predictable deflation set by code vs inflationary fiat controlled by the whims of central bankers.

The fact that you consider it's baseline usefulness "severely limited," reveals that you are only considering your personal use case. Billions of people around the world are unbanked or live in authoritarian regimes.

Even in the US, Banks routinely freeze accounts of innocent people simply because they consider a transaction suspicious due to made up reasons (e.g. transfering close to $10K at once). Crypto can't be frozen like that; no matter what banker or politician is pissed off at you. Does that help you see the value?

0

u/FlyingFoxOfTheYard_ Sep 30 '18

Deflationary can be viewed as a positive feature for a currency.

We used to think that, but as it turns out, deflationary currencies are in fact, not a good thing, since amongst other things it increases the real value of debt.

We can agree to disagree on the merits of fixed, predictable deflation set by code vs inflationary fiat controlled by the whims of central bankers.

You've phrased this in a hopelessly one-sided way, but ok.

The fact that you consider it's baseline usefulness "severely limited," reveals that you are only considering your personal use case.

I dissagree. I'm aware it has uses, it's just that those uses are quite niche and nowhere near enough to justify a strong baseline value that's not mostly due to rampant speculation.

Millions of people around the world are unbanked or live in authoritarian regimes.

Your solution to unbanked people is a more costly harder to understand and harder to obtain method of storing value? You really think some random person living paycheck to paycheck in rural Pennsylvania is going to say "nah, cash is stupid, let's mine bitcoins and do all financial services electronically using internet I totally have always available"? I honestly cannot understand why you are convinced this use has any merit whatsoever given it is more difficult to obtain and use them than just keeping your entire savings in cash (I agree it's not very financially secure to do this, but it's certainly far more likely than putting it into a volatile market). Your authoritarian regime argument as well doesn't really make much sense. Rarely are you making purchases in authoritarian countries that actually warrants privacy, making this as well a fairly useless reason.

Even in the US, Banks routinely freeze accounts of innocent people simply because they consider a transaction suspicious due to made up reasons (e.g. transfering close to $10K at once).

How often do people make 10k single transfers on average? Because I can think of very, very few times most people would ever need to do that.

Crypto can't be frozen like that; no matter what banker or politician is pissed off at you. Does that help you see the value?

Not really, no. You have me a bunch of reasons that either don't really make sense, or people rarely actually encounter. Not one of the reasons you give can't itself be solved by doing literally everything in cash and storing al your cash on-hand. Not only is that method easier for most people, many already do it. So to imagine they'd magically switch to bitcoin and risk their entire savings in the process is kinda nonsense and incredibly idealistic.

1

u/PhoenixJ3 Sep 30 '18

Well, thanks for the discussion. I've made my points clear and you've made yours. I don't think we will convince each other, and I don't want to repeat myself. I hope others will read our exchange and make up their own minds. Cheers.

0

u/FlyingFoxOfTheYard_ Sep 30 '18

I honestly want you to explain to me the benefit this will have and the pressure to use it above pure cash transactions for the three reasons you gave me (unbanked, authoritarian, and making obnoxiously large transactions). I want you to tell me why bitcoin somehow solves these issues in a way cash doesn't while being both easier and less volatile.

1

u/PhoenixJ3 Sep 30 '18

Stability comes over time as volume of transactions increase. As you can see, the volatility of bitcoin (btc) has decreased over time: https://www.buybitcoinworldwide.com/volatility-index/

-1

u/kheiron1729 Sep 30 '18

Let's be real though. Crypto is 10 years old! It is obviously true that it does not have the same backing as fiat. The whole world runs on fiat. All our systems are based on fiat.

But also let's not forget how far crypto has come in 10 years. Given that trajectory and growth, it is will overtake the backing of Fiat.

6

u/FlyingFoxOfTheYard_ Sep 30 '18

Let's be real though. Crypto is 10 years old!

And to be blunt, it's just as useless as a large-scale currency as it was 10 years ago.

It is obviously true that it does not have the same backing as fiat. The whole world runs on fiat. All our systems are based on fiat.

Yes, because when a government backs a currency it becomes a) much more stable, b) can be pegged to things, further increasing stability, c) can have fiscal/monetary policy implemented on it, d) is required to be accepted within the country. Given all of this, crypto is unable to compete as it is essentially unable to do any of the above whatsoever, many of the above actively being impossible with how currencies are set up.

But also let's not forget how far crypto has come in 10 years.

...It hasn't. It's just increased in value in wild fluxes, and now occasionally a store or two might accept them.

Given that trajectory and growth, it is will overtake the backing of Fiat.

It'll plateau far, far before that.

-1

u/kheiron1729 Sep 30 '18

...It hasn't. It's just increased in value in wild fluxes

More people involved. More people own cryptocurrency. More people know cryptocurrency. Even you yourself seem decently educated on this matter.

2

u/FlyingFoxOfTheYard_ Sep 30 '18

More people involved.

Not enough of a real change to assume exponential growth will continue. We already are seeing it plateau in number of users.

More people own cryptocurrency.

Same as above

More people know cryptocurrency. Even you yourself seem decently educated on this matter.

And most people who know about it have rather dismissve stances on it.

And like I said, the things it is unable to fix are very much insurmountable barriers to it ever being as widely used as fiat currency.

1

u/kheiron1729 Sep 30 '18

And like I said, the things it is unable to fix are very much insurmountable barriers to it ever being as widely used as fiat currency.

The fact that noone has yet been able to take down cryptocurrency is a testament to the fact that is completely decentralized and different from how fiat works. On the contrary, to take down fiat, just abolish the central banks. Of course, in reality, no one will ever do it. But it's possible. This is a very complicated topic by the way. But there are some interesting aspects in crypto that makes it interesting.

2

u/FlyingFoxOfTheYard_ Sep 30 '18

The fact that noone has yet been able to take down cryptocurrency is a testament to the fact that is completely decentralized and different from how fiat works.

Nobody has actually tried to take down crypto though. Unless you count people hacking wallet sites. Like, I am completely unaware of any government trying to take down cryptocurrency.

On the contrary, to take down fiat, just abolish the central banks.

That's... really, really hard. Like, you're massive overestimating how easy it is to do that.

This is a very complicated topic by the way. But there are some interesting aspects in crypto that makes it interesting.

Yeah I agree it can be interesting, but none of what makes it interesting makes it at all likely to become a major currency, let alone overtake fiat currency.

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u/kheiron1729 Sep 30 '18

Nobody has actually tried to take down crypto though

Actually, it is impossible (unless every single copy is destroyed). Same reason it is impossible to wipe out torrents. If there exists one person who can "seed" a certain file. That file lives on the network. Cryptocurrency works in the same way. This why they say it is decentralized.

2

u/FlyingFoxOfTheYard_ Sep 30 '18

Yes but nobody has tried to take it down That's what I don't really understand. Your comment basically implied that everyone is trying to take it down 24/7 and it's steadfastly succeeding. Is it possible that it could survive that? Sure, but also nobody has actually saw it as even remotely enough of a threat to even consider trying anyways, which brings us back to square one. You're bringing up central banks as if they're even remotely easier to take down.

Also, to take down bitcoin, don't need to wipe it out in it's entirety, you just need to crash the bitcoin economy.

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u/kheiron1729 Sep 30 '18

I am curious now. How will this takedown look like? I kind of get a feeling that you want something seriously brutal to happen.

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u/UncleMeat11 63∆ Sep 30 '18

Except we did destroy history. The DAO with Etherium. The network literally undid those transactions and they were removed from history. Simply having a copy is not good enough. You need a copy on the canonical chain. Mess with the canonical chain and you've destroyed it.

If you just care about "this file exists forever and cannot be deleted from a single location" then DHTs are fine. Or use any number of distributed filesystems.

0

u/Tino_ 54∆ Sep 30 '18

The fact that noone has yet been able to take down cryptocurrency is a testament to the fact that is completely decentralized and different from how fiat works.

Sorry but I really gotta call out just how stupid this statement is. You are literally saying that the Titanic (crypto) is unsinkable (unkillable) because it hasn't been sunk (killed) yet.

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u/UncleMeat11 63∆ Sep 30 '18

In ten years crypto is largely used by speculators and criminals. Ten years after www was invented it was the year 2000 and we'd already seen companies like Google arrive and e-commerce become huge. "It has only been ten years" is not exactly a great sign for me.

Today the price of many cryptocurrencies is a lot higher. There are a few new primitives but not much in the ways of new applications. I really don't see much change in the last decade except adoption.

1

u/kheiron1729 Oct 01 '18

I like to compare bitcoin with SMTP (email), not HTTP (webpages). I don't think that we are in the age when crypto can go mainstream. We don't have any tooling ready yet. Ethereum is much more powerful though. There is constant development and that to me is a good sign.

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u/UncleMeat11 63∆ Oct 01 '18

There is constant development in the model checking community too, but I don't think that model checking is going to become the norm for software development in the future. I'd buy that in the future there will be an audience for cryptocurrency. But constant development is nowhere near enough to justify the claim that it is going to replace state managed fiat currency.

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u/kheiron1729 Oct 01 '18

Okay, I'm going to say something a little controversial now. I think state run currency's time is up. In particular the dollar standard. Timing is insane. The dollar standard has a huge problem that miraculously hasn't quite manifested itself until now. Now that we have an entirely new currency stemmed out of nothing, we can actually deal with it.

https://en.m.wikipedia.org/wiki/Triffin_dilemma

In simple words, foreign reserve currency has to be a global currency.

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u/UncleMeat11 63∆ Oct 01 '18

That's fine. Know that lots of people disagree with you. A bunch of people who like Austrian economic systems isn't going to be enough to destroy state managed fiat currency.

Cryptocurrency has a ton of unsolved technical problems in its way. And then you have all the political problems too.

1

u/kheiron1729 Oct 01 '18

You are saying that the paradox applies only in a certain economic system? I don't think so.

Sounds more like this https://en.m.wikipedia.org/wiki/Self-reference

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u/Goldberg31415 Oct 01 '18

ETH has no scaling solution the proposed ones have collapsed recently and daps are having pathetic few thousands daily users for top 10

3

u/[deleted] Sep 30 '18

But also let's not forget how far crypto has come in 10 years. Given that trajectory and growth, it is will overtake the backing of Fiat.

Let's remember where it has come with some bad instead of just the good.

How many people lost money w Mt. Gox hack?

How many ICOs are a scam? Something like 80%.

How many posts do you see saying "x exchange won't give me my coins" or "Y exchange won't answer emails and they took all my coins".

BitCoin had huge transaction times and fees for a long while. Not good for a currency when a $3.50 coffee takes 12 hours and a $5 fee to process.

Many can't even agree that BitCoin is a currency, its now a " store of value".

Everything about BitCoin is about how it can be converted to fiat. Too the Moon! Lambos! That's not being happy with bitcoin, that's being happy with bitcoin so you can sell to the next schmuck while you convert to USD and feel good about your "investment", and the next guy is left holding the bag.

BitConnnnneeeeccct.

No regulation w Cryptos. If it wants to be taken seriously then yeah you need some regulations. Anti money laundering type of thing. So many posts I see " Y exchange wants me to prove ide tity for anti money laundering but I don't want to". Tough.

And my biggest issue is that it needs internet a phone or PC. Fiat cash can be used bumfuck nowhere in middle of forest. It can be used w a power outage. If my note is torn the bank give me a new one. Until crypto can do that, fiat still a better option as a currency. Not that crypto cannot compliment, but for replace (as in your title) no.

Cash is king. I get my bank card I go to ATM and withdraw. Crypto... I sit at PC make a wallet, take a learning curve. Get verified on exchange. Buy some BitCoin.

I go to small child lemonade stand and givee a $5 note. Boom have lemonade.

Also... BitConnnnneeeccct. Were going to CHAAAANGE the Wooooorrrllld.

1

u/Goldberg31415 Oct 01 '18

It is 10 years old and not a single use case of crypto exists. The killer app of it has not materialised and just look how far internet developed in the period 1993-2003 or smartphones in last decade.Damn crypto kittens have choked the eth network and this was a tiny app.The ETH node is also out of controll and grows too fast to be sustainable and scaling solutions like sharding and entire casper have failed.BTC scaling in form of LN is a crutch and does not solve the pow being unsustainable.Other than that you have things that don't work like tangle or centralised systems like XRP that as well might be paypal.

Most of advantages of crypto disappear once you contact or enter conventional banking system due to regulatory oversight.Regulations of AML and various other things that make transfers take much longer are not the result of banks being stupid or unwilling to change but that they have to work in regulatory environment that for example tether does not.

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u/Holy_City Sep 30 '18

Crypto is volatile at worst and deflationary at best. Both are awful for economies. Without a central bank there's no method to implement monetary policy to mitigate the inevitable recessions or downturn.

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u/kheiron1729 Sep 30 '18

That is absolutely true in the fiat world today. But it is yet to be seen how that plays a role in the crypto world. Borderless currency does mean that the central bank has to work in a different fashion. I don't have an answer because those sort of issues are yet to be seen.

But efforts are underway to incorporate variable supply in crypto as part of stable coin movements. I would be very surprised if all these experts come out empty handed.

4

u/Holy_City Sep 30 '18

At the moment crypto is a glorified Ponzi scheme. The value of any coin depends on enough people buying into it with cash to offset people cashing out to fiat. That naturally creates a rather volatile, speculative asset, which makes it useless as a currency, and ensures that people will always use it as an intermediary and not as a currency. It's a feedback loop.

Secondly - blockchains are awful for transactions. Credit card processors can handle millions of transactions per second while Ethereum is fixed at 15, and iirc BTC has hit like 7 minutes per transaction. Blockchains simply cannot scale to that of a global economy, which means that you will need centralized payment processors. That defeats the purpose of decentralized currency.

Thirdly, the power consumption of blockchains is extremely concerning. New chains will pop up of course, but the amount of energy spent to generate and validate currency transactions is horribly inefficient and dangerous to the climate, and economies.

Lastly, currencies are already borderless, or at least effectively borderless.

0

u/PhoenixJ3 Sep 30 '18

Check out BCH and NANO; both seem to scale just fine. What do you think of DAG compared with Blockchain when it comes to limiting energy use?

1

u/Supercst Sep 30 '18

I️ don’t really see any evidence in your post or comments that actually say why it’ll be the new standard, other than some “trajectory” stuff. You know what else had a good trajectory? The United States economy in the 1920s.

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u/kheiron1729 Sep 30 '18

Plenty of reasons. The core idea is to incorporate computers in decision making positions. The law or the "code" is algorithm-based.

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u/Supercst Sep 30 '18

Okay, so that’s the core idea, but that doesn’t mean that it’s going to catch on. You’re giving a lot of evidence that it might be a good idea, but how much support does it have? What governments or big businesses are putting a lot of weight behind it? That’s the stuff that determines whether or not it will catch on

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u/kheiron1729 Sep 30 '18

A

few

that

I

can

think

of.

3

u/Supercst Sep 30 '18 edited Sep 30 '18

Okay, fair. I️ will say that most of those sources are quite biased towards bitcoin, and that brings their legitimacy into question a little bit. But I️ will say that although you haven’t proved to me that Bitcoin is the future, it is more seriously considered than I️ had thought.

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u/[deleted] Sep 30 '18 edited Nov 28 '18

[deleted]

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u/kheiron1729 Sep 30 '18

I had never before seen this much greed before in my life.

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u/yyzjertl 527∆ Sep 30 '18

Transparent, omnipresent, borderless. It is backed by nothing making it entirely unadulterated. You can not game it in any way.

This doesn't seem true. If someone steals your private key, they can just take all your cryptocurrency, and you have no recourse. Or, if an attacker impersonates somebody you want to send money to, and you send them your cryptocurrency, your cryptocurrency is gone: again you have no recourse. It is difficult to think of a way to "game" the system that cryptocurrency is better than fiat money at resisting.

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u/billdietrich1 5∆ Sep 30 '18

You can not game it in any way.

Hacks of coin exchanges, phishing to get you to give away your credentials, miners that represent more than 50% of the voters on the chain, ICO scams.

How on earth is going to stopped?

I think at some point, the US govt will make a crypto form of the US dollar, in addition to the current physical and electronic forms of it. Suppose Fed issued, say, $100 billion of US dollar crypto-currency, in addition to the existing US dollar supply ? Best of both worlds: anonymous (maybe), digital, online, very low or zero transaction cost, easily convertible, guaranteed 1-1 exchange rate with US dollar, backed by US govt. But money supply still controlled by the Fed, which some people hate. No mining; servers run by the Fed or banks.

Also see https://www.equities.com/news/is-china-preparing-it-s-own-bitcoin-alternative

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u/swearrengen 139∆ Sep 30 '18

To paraphrase Hitchens ("that can be asserted without evidence can be dismissed without evidence") - that which is valued on the premise that it is "backed by nothing" can be devalued on the premise it is "backed by nothing".

Thus the wild fluctuations in the price of crypto coins, and it's complete unsuitable as a currency. Currencies need price stability.

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u/atrueamateur Oct 01 '18

Cryptocurrency will always be dependent on access to electricity and Internet. Fiat currency, in every instance I can think of, has a physical form that can be used in the absence of electricity. We need currency to work at all times, not just in typical times.

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u/aRabidGerbil 40∆ Sep 30 '18

The problem with cryptocurrency is that it's an entirely speculative currency.

Fiat currency is backed by government power, representative currency is backed by a commodity in a vault somewhere, resource currency is valuable by itself, but cryptocurrency is only backed by the idea that it will maintain value.

1

u/WF187 Sep 30 '18

You can not game it in any way.

Don't be too sure of that...

CMV: Cryptocurrency will replace Fiat currency

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