When the Spanish brought their stolen Gold back from the Americas it more or less ruined their economy by flooding it with cheap money (tons of Gold chasing too few things of value). A similar crash in Silver happened when the Comstock Lode was found.
If you imagine that a precious metal standard would make the economy more stable you are absolutely wrong and history proves that. Gold is only preferable when the monetary authority has lost so much credibility they can't control the value of the currency anymore. Pegging one's currency to the US dollar is a modern equivalent of that idea. Of course now your entire economy is at the mercy of (US Dollar/Gold/Silver).
If things go really well and you produce 25% more widgets... well congrats, prices across the economy must fall because there is a fixed amount of gold available to circulate or be stored. Of course that's not really possible so the distortions happen in lots of other ways and people inevitably turn to privately issued paper or bartering just to make life possible.
Bitcoin has many of the same problems (inability to adjust money supply to economic activity) but it is slightly better than gold: we know it is deflationary (the supply of new coins decreases over time) so in theory all BT loans can have negative interest rates to account for that (deflation "cancelling out" part of the negative rate).
That is Bitcoin creating a problem, not solving one.
Inflation does not "devalue everyone's hard work", deflation does, by pumping up the value of debt relative to labor, i.e. making the rich richer and the poor poorer.
> hopefully in the future the price of the major crypto currencies stabilizes.
Given that their price is 100% based on speculation: not bloody likely.
Meanwhile the poor has its savings eroded, their paychecks have less and less buying power and they are forced to negotiate to get a raise to simply stop becoming poorer.
In other words, interest based debt is bad because it is exploitative. Something we've known for a long time now. Interest based lending is prohibited in Islam for that reason (as well as in Judaism and Christianity).
So you prefer the great depression style of economic crisis as opposed to inflationary periods?
Also people here greatly benefited from vast liquidity flowing into startups. You think that is possible in an inelastic currency?
Crypto solves problems very few people have. The enthusiasm relies on uneducated naivete.
About half of the world's population lives in an authoritarian regime. Having a savings account that is not tied to your ID, is not seizable by the State and that can be easily transferred if you have to flee the country is important.
So refugees who have the knowledge, internet and banking such that would allow them to purchase crypto.
Crypto seems more practical to own and trade.
Or do you mean owning a document that is backed by gold? Not the same is it?
If something happened to the blockchain, your key would be worthless. Much like a bank that got robbed.
Storing crypto currencies is also very expensive, at least for all popular ones. Proof of Work requires to chrun out hashes to secure the network from external threats and in the car of Bitcoin it costs billions each year. Compared to the relatively low number of users it's very expensive and resource intensive.
The fact is, you cannot touch crypto currency or take it home, you can just tell somebody else to move it to another vault. You cannot do it yourself unless you are lucky enough to mine the block with the transaction in it, which is futile unless you have a mining farm.
It's closer to a document than a physical key to a safe deposit box at a bank.
with bitcoin key you own the bitcoin and you always know (can trivially verify) that your bitcoin is there.
What you are talking about in regards to documents are scams. There have also been a plethora of scams in the crypto currency world. Making the distinction there is quite strange.
yes, thanks, that's exactly what current financial and banking system is - a gigantic scam. all you own is bunch of documents pinky-promising that your assets are there, except they are not.
and yes, if your private key is stolen - your asset is stolen, that's how real ownership of a digital asset works.
strange is you trying to equate ownership of IOUs, that make you entirely dependent on some third party, in terms of accessing your assets, and ownership of a private key, which is the only way anybody can ever access your assets.
I just wanted to have a discussion about the meta model of crypto currencies, you rather want to destroy the current bankingsystem instead.
nice try. my only agenda is to clear up the confusion in your mind about cryptocurrency ownership.
> you rather want to destroy the current bankingsystem
who said anything about destruction? i know full well that i will need to suffer through the scam of fractional reserve banking until i die. bitcoin is just a partial escape hatch.
> I just wanted to have a discussion about the meta model of crypto currencies
if you did, you wouldn't begin with logical fallacies and prejudice.
notice how you don't even respond anymore about ownership aspect, yet this was your central argument - that crypto is no different from gold in that aspect.
i'll just wait for you to actually address that central point - that will indeed signify if you want to have a discussion.
And if you lose your gold bar or coin, you also lose your gold.
Moving away from an inflationary currency that the government is able to keep printing more of and devaluing everyone's hard work, to something closer to the gold standard.
Of course, things are very volatile now, but hopefully in the future the price of the major crypto currencies stabilizes.