>People buy crypto because they think it will rise in value, nor because it has any relevance as a currency (outside of certain illicit markets).

Source? As far as I can see, Bitcoiners are especially hammering the messages about Austrian economics, the right of freedom to transact, self-custody, separating money from the state and so on. Their scripture material, rarely talk about "price" at all. The maxis will even make fun of you with 1 bitcoin = 1 bitcoin meme. I don't want to make an equally ridiculous claim about "why people buy Crypto" - but clearly not everyone buys Crypto to sell in a week and make more USD.

> not everyone buys Crypto to sell in a week and make more USD

True. Recent price action seems to suggest that people actually may end up with less USD.

Not to cast too broad a brush, but humans are really good at rationalizing things and denying their true motivations.

Sure, there are some true believer libertarian cryptonerds still living the original dream.

I suspect, though, that for every "true believer" out there with actual deeply held beliefs about financial systems, you'll find countless others in it purely to ride the wave and speculate, who learn just enough of the jargon to befuddle objections in casual conversation.

Source: several non-technical, non-economist relatives who have "gotten into" cryptocurrencies in the past few years, trying to explain their merits to me.

Isn't any asset held because people think it will rise in value?

Yup, which is very compatible with the view that crypto is more accurately described as an asset than as a currency. If it were a currency, the constant large fluctuations and inflation of its “price” would be a bad thing, but as an asset? Great! Best of luck finding the greater fool before the rug is pulled out though.

GP comment wasn't about investment assets, but about currencies.

No. Cash holdings tend to be kept around to be used.

Right. But you do expect money to not lose much value in the future. With current national currencies, you can't retire on cash savings.

With crypto"currency" (which I agree is more like an asset), you can, if the supply is fixed and the demand were roughly the same.

Deflationary currency encourages savings, inflationary currency encourages spending. We're just so accustomed to a world where our money is steadily becoming worthless that sometimes we forget there are other options.

The "inflation/deflation" argument is a red herring. The shape of mining curves is much more important than their upper limit. For all of the bluster that deflationary systems are better for the little guy because their wealth isn't eaten by inflation, the logarithmic mining curves are the biggest source of wealth consolidation seen perhaps in human history, shifting absolutely bonkers amounts of wealth from latecomers to early adopters.

And while individual coins can be designed not to inflate, the overall proliferation of new tokens, forks, and entire blockchains does mean that there are way more assets over time. This sucks some of the investment out of older systems like BTC, putting downward pressure on their price. This can function similar to inflation and, in the extreme, send a very large number of these systems back down to zero.

Every year the federal government is creating trillions of new dollars diluting the value of your money and shifting the wealth to whoever gets their hands on that new currency, which is mostly large corporations and the wealthy.

Early adopters making a bunch of money doesn't concern me at all because that's a short-term issue compared to the USD wealth transfer which will continue forever into the future.

Crypto is new, and there's definitely a lot of volatility there with new coins popping up and being destroyed far more frequently than legacy currencies. I expect this will die down over time.

FWIW my time horizon for thinking about these things is 50+ years.

Imagine I tried to convince you to use my new foo-coin. The hand full people of who have the most foo-coins can issue themselves as many new foo-coins as they want, but nobody else can create any foo-coins. You would probably think this is a nonsensical currency that no one would think is reasonable to use. Except that is practically how the USD works. The USD is designed specifically for the purposes of corruption.

> the logarithmic mining curves

They're not logarithmic though. Most are exponential in that they are of the form Lim * (1-e^time) which might look like a log function initially, but has different asymptotics.

Several coins have a quick ramp up (high block subsidy) followed by a tail emission of fixed low block subsidy.

Only one coin has a pure linear emission, which helps to deter speculation.

You are right about the log thing. Can't brain in the morning.

Deflation has nothing to do with it, its purely driven by speculation.

Speculation is just an emotional word used to throw you off the scent. You are also speculating about the future value of the dollar.

Its true that fiat money's value is somewhat speculative, but speculation still has a specific meaning. It means you are investing not because you believe in the future value proposition of the asset (such as dividend payments, or liquidity value increase if all fixed assets of an enterprise were sold), but only because you expect the market price to increase. Often you expect the market price to increase for no reason other than you know many other people are speculating, so there is really no there, there.

What are your thoughts on the US Mint issuing official/legal currency in the form of gold and silver coins?

Counter example, I have part of my savings in crypto for no other reason that to protect it from the inflationary policies of the Fed. The ability to use crypto directly in trade is a bonus.

I don't see how that is a counter example. You are using crypto as an investment asset, not as a currency.

I am just hoping to maintain purchasing power of money I have earned by getting out of fiat currencies however I can. I shouldn't need to invest in anything to maintain the value of my money.

Staying ahead of - or keeping pace with - inflation is actually a primary purpose of investments and why many people invest in stable bond and money market funds.

Until the creation of the Fed and the destruction of gold money holding your money was how you maintained value. Investing was to grow your wealth. We are now forced to invest to maintain value and for most it is a losing proposition. If your investments cant beat inflation every year you are losing value.

By saying that investment is how you maintain value you are saying that the dollar is a bad store of value. Stability, which USD doesn't have, is a property of good money.

None of that changes what crypto is. Another property of good money is performing transactions in a few seconds and being accepted by local markets for goods and services.