Cryptocurrency

[RadioGAAGAA]

Fiat currency is regulated by central banks

Who regularly print more money which devalues the money already in circulation.

and has a stable value.

Tell that to people in the likes of Zimbabwe!

Crypto is not. A stable value is one of the things that makes currency useful and helps everyone to trust it.

Completely agree. Crypto is still far too immature to be useful.

Crypto is only trusted by a small number of tinfoil hat-wearing fanboys who don't understand what central banks do,

So tell us exactly what central banks do then...

Its utility as a means of exchange is limited to say the least.

Agreed. Far too cumbersome for small exchanges.

Paying for your big mac with US dollars is a lot easier than paying for it with Bitcoin.

But a sizeable international transaction is far cheaper with bitcoin.

[RadioGAAGAA]

For the avoidance of any doubt - I do largely agree.

Cryptocurrency as an "investment" is more or less pot luck. There are no compelling reasons right now for it going up* in value. It has little widespread acceptance and is too unstable to function as a useful tool - namely - transactions outside of bank fees - particularly international ones... and especially for multinationals wanting to move around profits outside the view of the taxman.

But - for people arguing it has, and can never have, absolutely no useful purpose - they need to get over themselves and broaden their horizons.


*especially bitcoin, which is far too resource expensive.

[Eamonnca1]

Fiat currency is regulated by central banks

Who regularly print more money which devalues the money already in circulation.

"Regularly?" That's been a recent phenomenon, and only in carefully controlled bursts. They've learned their lesson from 1930s Germany.

and has a stable value.

Tell that to people in the likes of Zimbabwe!

Hardly a representative example, wouldn't you say? That's like saying "tell that to the people of Venezuela" whenever someone suggests socialist policies. The extreme example is seldom a typical example. Hyperinflation is not something we see a lot of in the developed world these days.

Crypto is only trusted by a small number of tinfoil hat-wearing fanboys who don't understand what central banks do,

So tell us exactly what central banks do then...

Depends on the central bank. In the case of the US Federal Reserve, its remit is to control inflation and boost economic growth. Last time I looked, the ECB only had a remit to control inflation, hence austerity was a policy that gained more ground in Europe, which in my opinion slowed down the recovery from 2008 and caused unnecessary hardship. But this is digressing.

From the top of my head, central banks:

• Manage the money supply
• Control inflation
• In some cases they enable stimulatory policy
• Control interest rates by manipulating the bond markets
• Set the reserve requirements of retail and investment banks, which limits how much they can add to the money supply and controls the level of risk they can take

One of the main purposes of central banks is to smooth out the volatility that's inherent in markets. The volatility of crypto "currencies" is a good illustration of what happens when you don't have that regulating mechanism.

Paying for your big mac with US dollars is a lot easier than paying for it with Bitcoin.

But a sizeable international transaction is far cheaper with bitcoin.

How so?

[smelmoth]

The value of Fiat currencies are largely influenced by dynamics in the real economy.

And a cryptocurrency is not constrained by national boundaries. Therefore, in theory (which we may see over the ultra long term - or to be fair, never see), be more resilient to fluctuations than national currencies.

Obviously, now its still an immature sh!tshow.

But, rewind to the 2016 Brexit vote - if there were a stable currency that kept you on the fence and you could put your money in which wouldn't cost you an arm and a leg in bank fees and you could quickly liquidate to a currency of your choosing later on and would leave you at least neutral to any change in GBP vs. Euro - would that concept not be worthwhile?

Or, say, if I wanted to buy a car in Japan and import it to here. The choices are:
- go through a bank, taking the x% hit on the transaction from GBP/Eur to Yen
- go via cryptocurrency, 0 transaction fees.

A bit old hat to say currencies are constrained by national boundaries. They are constrained by their acceptance by boundaries. In addition to being able to use euros in Belfast or USD in Manila things like Revolut make that concept redundant.

Nor are their values bounded by national boundaries. Which national boundaries apply to the euro? And look at the volume of USD denominated transactions that have nothing to do with USA.

As for Brexit the dollar was pretty stable for the few to whom it mattered. Holding cash isn't smart. And crypto isn't providing any solution given its massive volatility and foundationless value.

As for buying a Japanese car directly from Japan fees and commissions have never been less and fees are tiny relative to base movements in the currency. On the latter more important issue crypto has been a basket case. If I meet anyone who has bought a car directly from Japan I will be sure to commiserate

[smelmoth]

Fiat currency is regulated by central banks

Who regularly print more money which devalues the money already in circulation.

and has a stable value.

Tell that to people in the likes of Zimbabwe!

Crypto is not. A stable value is one of the things that makes currency useful and helps everyone to trust it.

Completely agree. Crypto is still far too immature to be useful.

Crypto is only trusted by a small number of tinfoil hat-wearing fanboys who don't understand what central banks do,

So tell us exactly what central banks do then...

Its utility as a means of exchange is limited to say the least.

Agreed. Far too cumbersome for small exchanges.

Paying for your big mac with US dollars is a lot easier than paying for it with Bitcoin.

But a sizeable international transaction is far cheaper with bitcoin.

Some barrel scraping there.

Crypto is far more open to manipulation than fiat currencies. The decentralised model is often presented as a trump argument but it has yet to prove a good thing.

When you separate Bitcoin as a currency form blockchain as a system then I am not seeing how it's cheaper

[Eamonnca1]

I forgot to add, creating more fiat currency doesn't contribute to an environmental catastrophe in energy usage.

[trailer]

I forgot to add, creating more fiat currency doesn't contribute to an environmental catastrophe in energy usage.

I'd love to know what the traditional banking system uses energy wise. Do you think it runs off fairy dust and rainbows?

[Eamonnca1]

I forgot to add, creating more fiat currency doesn't contribute to an environmental catastrophe in energy usage.

I'd love to know what the traditional banking system uses energy wise. Do you think it runs off fairy dust and rainbows?

No. I don't think it runs off fairy dust and rainbows. But crypto currency is renowned for the amount of computing power it takes to mine a new unit. Fiat currency is not.

[Itchy]

I forgot to add, creating more fiat currency doesn't contribute to an environmental catastrophe in energy usage.

I'd love to know what the traditional banking system uses energy wise. Do you think it runs off fairy dust and rainbows?

No. I don't think it runs off fairy dust and rainbows. But crypto currency is renowned for the amount of computing power it takes to mine a new unit. Fiat currency is not.

Renowned?? For you have data to prove which currency is most energy hungry?

[RadioGAAGAA]

"Regularly?" That's been a recent phenomenon, and only in carefully controlled bursts. They've learned their lesson from 1930s Germany.

Please Eamonn.

Literally the first google hit:

https://www.cityam.com/almost-a-fifth-of-all-us-dollars-were-created-this-year/

and literally the second google hit:

https://www.forbes.com/sites/williammeehan/2020/10/21/can-the-federal-reserve-print-money-forever-or-how-continuing-to-print-money-to-support-deficit-spending-may-end-badly-with-chinas-help/

Hardly a representative example, wouldn't you say? That's like saying "tell that to the people of Venezuela" whenever someone suggests socialist policies. The extreme example is seldom a typical example. Hyperinflation is not something we see a lot of in the developed world these days.

But an example nonetheless.

I could point to relatively stable cryptos like USDT as well. But that doesn't suit your argument.

Depends on the central bank. In the case of the US Federal Reserve, its remit is to control inflation and boost economic growth. Last time I looked, the ECB only had a remit to control inflation, hence austerity was a policy that gained more ground in Europe, which in my opinion slowed down the recovery from 2008 and caused unnecessary hardship. But this is digressing.

From the top of my head, central banks:

• Manage the money supply
• Control inflation
• In some cases they enable stimulatory policy
• Control interest rates by manipulating the bond markets
• Set the reserve requirements of retail and investment banks, which limits how much they can add to the money supply and controls the level of risk they can take

One of the main purposes of central banks is to smooth out the volatility that's inherent in markets. The volatility of crypto "currencies" is a good illustration of what happens when you don't have that regulating mechanism.

Yes, and great job they did. That 2008 crash must have been a figment of our imagination then?

Oh, and by "manage the money supply", you mean - print money - which results in whats in your pocket today being worth less in a year.

How so?

Go see what your bank will charge you for the same privilege.

[RadioGAAGAA]

A bit old hat to say currencies are constrained by national boundaries. They are constrained by their acceptance by boundaries. In addition to being able to use euros in Belfast or USD in Manila things like Revolut make that concept redundant.

Nor are their values bounded by national boundaries. Which national boundaries apply to the euro? And look at the volume of USD denominated transactions that have nothing to do with USA.

Interesting take. Now lets flip that on its head.


A bit old hat to say currencies are constrained by national boundaries. They are constrained by their acceptance by boundaries. In addition to being able to use crypto in Belfast or in Manila things like ethereum make that concept redundant.

Nor are their values bounded by national boundaries. Which national boundaries apply to ADA? And look at the volume of XRP denominated transactions that have nothing to do with any country.

As for Brexit the dollar was pretty stable for the few to whom it mattered. Holding cash isn't smart.

Having "crisis agnostic" cash is a necessity if you are a business that imports and exports.

And crypto isn't providing any solution given its massive volatility

Agreed. Most are far too volatile to be useful. Tether is more useful in that regard - but has exactly the same issues as national coinage.

and foundationless value.

Once again - what is the foundational value of a dollar note? Or a fiver?

You've this perception that your pound or euro is worth something intrinsic. It isn't. Its worth exactly what whoever you want to buy something off thinks its worth.

[smelmoth]

RGG its really important that any discussions does not go down the Angelo style of tilting at windmills. I think you are in danger of that  with the national boundaries line of argument

A bit old hat to say currencies are constrained by national boundaries. They are constrained by their acceptance by boundaries. In addition to being able to use euros in Belfast or USD in Manila things like Revolut make that concept redundant.

Nor are their values bounded by national boundaries. Which national boundaries apply to the euro? And look at the volume of USD denominated transactions that have nothing to do with USA.

Interesting take. Now lets flip that on its head.


A bit old hat to say currencies are constrained by national boundaries. They are constrained by their acceptance by boundaries. In addition to being able to use crypto in Belfast or in Manila things like ethereum make that concept redundant.

Nor are their values bounded by national boundaries. Which national boundaries apply to ADA? And look at the volume of XRP denominated transactions that have nothing to do with any country.

I only mention national boundaries in response to this;

The value of Fiat currencies are largely influenced by dynamics in the real economy.

And a cryptocurrency is not constrained by national boundaries. Therefore, in theory (which we may see over the ultra long term - or to be fair, never see), be more resilient to fluctuations than national currencies.

I am not saying there isn't or won't be international acceptance of cryptocurrencies. I merely point out that its wrong to say that there is not international acceptance or some Fiat currencies.

As for Brexit the dollar was pretty stable for the few to whom it mattered. Holding cash isn't smart.

Having "crisis agnostic" cash is a necessity if you are a business that imports and exports.

Really? You think businesses routinely hold cash and hold it in a range of currencies? Would forwards not be the more routine approach of 90%+ of businesses involved in import/export/international settlement?

And crypto isn't providing any solution given its massive volatility

Agreed. Most are far too volatile to be useful. Tether is more useful in that regard - but has exactly the same issues as national coinage.

and foundationless value.

Once again - what is the foundational value of a dollar note? Or a fiver?

You've this perception that your pound or euro is worth something intrinsic. It isn't. Its worth exactly what whoever you want to buy something off thinks its worth.

The foundational value of any given crypto is zero. The value goes up or down based upon the the self interest proclamations of large investors. The value can collapse by 50% in a short period of time with absolute no changes in the real world economy.

Think of the set of circumstances that would be required for USD, Euro, Sterling, or Yen to fall 50% (interest rates in the host economy, inflation rate in the host economy, demand for and supply of that currency etc). Demand for any one of them is not going to collapse in that period but should it happen it would be visible. The small band of currency investors can react to it, Crypto has retail investors who wake up and find that that value has fluctuated overnight based upon a whim. Its a basket case in terms of investment

[Capt Pat]

I still have a load of Eastern European currency in my wallet from a trip I made in 2007. As worthless as ever, not accepted in bureau de change. If only I could invest it in crypto currency. Which is more worthless?

[RadioGAAGAA]

I am not saying there isn't or won't be international acceptance of cryptocurrencies. I merely point out that its wrong to say that there is not international acceptance or some Fiat currencies.

Fair enough

Really? You think businesses routinely hold cash and hold it in a range of currencies? Would forwards not be the more routine approach of 90%+ of businesses involved in import/export/international settlement?

Of course they do. Go look at annual accounts of any big business, they'll have millions, if not billions available in free cash. That doesn't stop them being leveraged - but they need cash to operate

The foundational value of any given crypto is zero.

Think of the set of circumstances that would be required for USD, Euro, Sterling, or Yen to fall 50% (interest rates in the host economy, inflation rate in the host economy, demand for and supply of that currency etc). Demand for any one of them is not going to collapse in that period but should it happen it would be visible.

Rewind to the first lockdown. If the shelves in the shops had went bare of food, you'd pretty quickly have seen just how thin that facade you think is a buttress actually is.

[Seamus]

Regarding the US Dollar, where did the government acquire the trillions for the stimulus packages over the past year with plenty more on the way? Inflation is well over 10%,

Immediately forgot everything you said after that gem.

No idea where you reside, if it is in the US it has got to be under a rock. Head for Home Depot, building materials up on average 70%, the gas pumps, up over 35% and go price used cars and trucks up 10% in April alone just for starters. This cannot be all down to supply and demand. Then there are the individuals, like the poster before you, who believes in all government statistics, be it inflation or unemployment figures, you name it. Governments well proven to be pathological liars in just about all aspects of our lives.   

So printing (done digitally now)  trillions of dollars from fresh air will have no consequences in the future when it comes to inflation? It already has. Also the global warming/climate change hoax has already inflated gas prices massively due to a presidential action last January.

Staying with "climate change" for a minute, an influencer, by uttering a few words on the bases of the hoax had the price of BTC drop 9K in less than one hour, bring the altcoins down with it. Remember the same influencer moved the worthless (at the moment) Dogecoin in the opposite direction. A couple of weeks later the Chinese government made a statement that they are restricting institutions from buying cryptocurrencies and curtailing BTC mining in the best interest of the hoax. All done purposely to scare the gullible public and manipulate the market.

Answer the question, where does the US government get the trillions to throw around like confetti at a wedding?  Don't bother telling me your opinion on the real rate of inflation, it's obvious you believe the lie.