I was actually paid in crypto for few days of some programming work once. I wish I held to it all rather than spending most of it.
Personally I think the biggest issue with crypto now is, one that it promotes huge value inflation and Ponzi-like schemes (we are seeing it with BTC and ETH), two horrible energy use inefficiency. From a bitcoin transaction that requires orders of magnitude more energy to process than any other transfer of value known to humanity to Ethereum "virtual machine" for smart contracts that is most inefficient way to execute arbitrary code ever invented...
I used to be a big proponent of crypto overall. I still have some holdings in it, but I can't unsee the idiocy in PoW crypto once I saw and understood it clearly.
I wondered for a while what is so specific to crypto that it became today's tulips? (Rather than gold futures, stocks, real estate etc) and then I understood all those asset classes are already used like this. Every kind of asset that can will eventually be used in some kind of pyramid scheme. Just look at the price of gold compared to few years ago, real estate in many large cities, stocks etc. It was absolutely inevitable that crypto as it became a trusted store of value would become a vehicle for speculative bubbles/pyramid schemes.
So then the question is, can crypto fulfill the role of a currency (requiring some level of value stability) and be a vehicle for speculative pyramids at the same time? I don't think so.
Proof of Work is one problem with crypto that perhaps Proof of Stake will resolve.
The other problem is much more fundamental. How do we create crypto that maintains stability without having to resort to typical "stable coin" strategies like holding other currencies and selling/buying them to artificially adjust the value. Is it possible to create crypto that would maintain its value in the long term in distributed - no central authority manner while discouraging pyramid investment schemes.
And finally, once someone invents such crypto would anyone actually hear about it as most promotion of crypto seems to be done by people who got in early and hope for their holdings to increase in value.
Agreed. It's the difference between deflationary assets and inflationary currency. Bitcoin's core, fundamental problem is that it's deflationary. Therefore it will never be useful for economic transactions, because any society which fully commits to bitcoin as their currency will have their economy grind to a halt. Why would I buy a new car today when it's going to be cheaper tomorrow?
There's a reason why the Fed targets a ~2% inflation rate for the USD.
That and the energy cost, both direct as well environmental.
It always surprises me how little cryptocurrency advocates seem to understand basic macroeconomics and unintended consequences, especially on sites like this.
Think again. You have been brainwashed. You buy a car so that you can go to work. You know that the car produces more value than 2% deflation. You don't buy the car if you don't have a job.
What happens to economy if people buy only things that last a very long time or things that increase their productivity? What happens to economy when companies are forced to produce those things?
Inflationary economy is a total disaster. We produce things that don't last to consume things that don't last. Insane amount of human work output is wasted.
If you measure economic growth by amount of pointlessly running in circles, then yeah inflation is good for economy.
> The other problem is much more fundamental. How do we create crypto that maintains stability without having to resort to typical "stable coin" strategies like holding other currencies and selling/buying them to artificially adjust the value. Is it possible to create crypto that would maintain its value in the long term in distributed - no central authority manner while discouraging pyramid investment schemes.
The value of a cryptocurrency is mostly tied to its adoption. Future adoption is uncertain, so there is naturally a lot of volatility right now. If adoption stabilizes, the volatility will likely decrease markedly. In fact, since many cryptocurrencies have a fixed supply (or the supply follows a predetermined set of rules), one could argue that they could end up less prone to speculative pricing than fiat.
I am as much a crypto skeptic as you can find but even I know people who could only pay in crypto and I lost business by not being able to accept it.
The financial regulations around the world are often very strict. A lot of people need to go around them. Sure, a lot of them are drug dealers, gambling operators etc. but there are also people in China struggling with capital control regulations as one example.
A few people that I work with order THC gummies from some sketchy source, delivered via mail, that they pay for with crypto. Pornhub still exists, despite having their credit card processing de-platformed, so I guess somebody is paying them some crypto.
But no. I've never met anyone in real life who uses crypto for mundane transactions, where fiat currency is an option.
>A few people that I work with order THC gummies from some sketchy source
I have heard from a friend that typically those 'sketchy sources' are just buying gummies from stores in legal states (cough California) and shipping them out.
My friend would get the gummies in the bags ready for retail sale. Same with other items like vape pods.
