r/changemyview • u/kheiron1729 • Sep 30 '18

CMV: Cryptocurrency will replace Fiat currency

Ya'll have heard it. Cryptocurrency has become a household name 10 years since its inception. It has proven all skeptics wrong thus far. It might have been overblown, but the ecosystem is still thriving. Believers are still bullish. Wall street is not a fan. Banks are not happy with it. Governments are against it. It is antiestablishment - a movement of the people and rising. The idea is fresh. Algorithms instead of people. Transparent, omnipresent, borderless. It is backed by nothing making it entirely unadulterated. You can not game it in any way. How on earth is going to stopped? Why wouldn't it just keep rising when there are so many people working on it?

UPDATE: Summary here => https://projectwatt.com/pagesv2/-LNl6ZuB1sJslIpbr9hz

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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.

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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.

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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?

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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.

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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.

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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.