I don't believe it's the case that currency is only valuable if people have faith in it, and that's creating a false equivalency between shells, beads, crypto, and dollars.
Dollars are a medium of exchange because they are legitimized by the government, primarily because they are the only thing you can pay your taxes in if you live in the US, which creates an ongoing demand for them. If we all decided to change to beads, for some reason, we'd still have to buy dollars to pay the US government.
> Dollars are a medium of exchange because they are legitimized by the government, primarily because they are the only thing you can pay your taxes in if you live in the US
No, they’re a medium of exchange because they have the desired properties due to collective belief (stores value through time, common unit of measure, subdivideable). If I could pay taxes in push-ups, push-ups wouldn’t be a medium of exchange.
> If we all decided to change to beads, for some reason, we'd still have to buy dollars to pay the US government.
No, the IRS would simply not be able to collect because there would be no USD market of any kind for seized property. Zero demand for dollars would be stable.
Sure seems like holding dollars was a lot better than holding crypto the last few years, so not sure where you are getting that USD is not much better. Anyways, they're not really comparable since it's pretty clear at this point that crypto isn't a viable medium of exchange even at feature-set level (ignoring the problems with its volatility - everything you can buy with crypto got 66% more expensive in the last 6 months, which is worse than price rises under USD inflation).
But how badly have things been trending with the USD vs other true mediums-of-exchange (i.e. currencies that you can use to pay for normal things, like food, clothes, energy, taxes, etc)?
Seems like not very differently. Inflation, induced by monetary policy, pandemic, and war is affecting all significant medium-of-exchange currencies and economies right now. None of those real currencies is realistically going to take over reserve currency status from USD any time soon.
It’s impossible to quantify “contributed in part”, but this would not explain rampant inflation across nearly all developed countries [https://www.pewresearch.org/fact-tank/2022/06/15/in-the-u-s-...]
Why do crypto maxis keep saying this? At the very least, the entire USA population uses USD daily and have an entrenched interest in continuing to use it.
How do you possibly think you could convince all of them to switch to your fav crypto, just because you’ve been “stacking” it?
Right, and NFTs perform the extremely valuable function of preventing FOMO; or in the case of celebrities: fear of missing a fashion statement.
This entire series of debacles has proven that cryptocurrencies are not immune to human stupidity, which was supposed to be the main selling point of it all. It has spectacularly failed.
Absolutely ridiculous assertion.
Crypto schemes certainly deserve much of the scorn that has been poured on them recently, but the way things are trending with the $US dollar may not be all that much better. Modern Monetary Theory, which is widely embraced in some circles may not be much more reliable than crypto, and in particular the fact that MMT relies on preserving the reserve currency status of the dollar isn't always recognized clearly (this is why MMT applied in countries like Argentina and Venezuela results in the devaluation of the local currency).
The fact that the Fed's rampant quantitative easing during the pandemic has now contributed at least in part to rampant inflation might indicate that that reserve currency status is faltering (compare to QE during 2008-2009, which did not cause an inflation spike). It's not the only factor driving inflation (supply chain breakdowns, fossil fuel exports, etc.) but it's something to think about.
No - don't sell your Treasury bonds to buy bitcoin, please. But perhaps it's time to think about reviving Bancor?
https://en.wikipedia.org/wiki/Bancor