Who is "society"? Users of cryptocurrencies obviously find them useful, or hope they will be in future. The alternative to cryptocurrency and blockchain contracts are global alliances that make trading in dollars easy in all important markets and enforce contracts across jurisdictions. Billions of people who are not part of these alliances are left out and the rest are reliant on US/Europe remaining leading superpowers forever, those in power not developing a grudge against one's business and status quo enforced through military violence.
Even if we assume that Western led single market / contract arbitration regime is the way to go, threat of alternatives like crypto is the best way to get its rulemakers to behave, like to not cut off businesses that don't appeal to their sensibilities or devalue dollar with unreasonable speed. It is currently possible to order cannabis with credit card over a cell phone app. Without understanding that people would otherwise just use crypto and also evade taxes and any regulations, I am not so sure that would be the case.
"Users of cryptocurrencies obviously find them useful, or hope they will be in future"
Do they hope they'll be useful in the future because they think they're great technology that everyone should benefit from... or do they want them to be useful because they bought in early and want to get rich?
There's some interesting technology and philosophy angles there. ("What exactly is money and how does it work?") But the moment crypto became a speculative asset, it jumped the rails.
We get a lot of obviously not-ready-for-prime-time stuff hitting production because it's too lucrative (see any number of DAO and smart-contract schemes that imploded), and there's a systemic allergy to input from the outside world as to what normal consumers want (things like reversability and systemic backstops), because the current system appeals to speculators.
I'd see the case for "useful in the future" if there were more efforts to answer the no-breakthrough-tech-required "faster horses" problems people have with mainstream finance. FedNow is coming in months and will give me settlement in minutes for pennies, and likely very solid legal backing. This is faster horses. Crypto might offer similar settlement speeds, but I understand it depends on the particular chain I choose, and to an extent, how much I'm willing to pay to push the transaction through. I'd also wonder how reliably the courts will accept a crypto paper trail if there's ever a dispute on a payment. (Not necessarily because the trail is bogus, but simply because it's not a well-established precedent of who and what can be trusted)
Quick rant: it was so much fun playing with and testing the ETH ecosystem, it felt like we were really trying to reinvent how finance worked and outsourcing trust to static contracts. It felt like decentralized systems were at least plausible.
Then Elon and the second Doge wave happened... Mutant Ape NFTs getting hyped by people like Paris Hilton and Jimmy Fallon... Sam Bankman's clear deception and FTX buying sports stadiums... the same centralized actors that we were working to get away from completely hijacked the platform, seized the narrative, and basically tarnished all the fun aspects. It felt like when Facebook no longer required .edu emails and a flood of parents and spammers took over the website.
In most cases it's both. Like the people who were early to the Internet, they believe in a better world and they hope their early participation will be rewarded.
I was early to the internet, and the only financial benefit I ever expected from it was that I'd be able to have a good career because of the skills I'd developed.
I think early adopters more excited about being able to communicate in a fundamentally new way. The internet is more like the invention of the radio or tv.
Crypto is more like the invention of electronic cryptographically secure beanie babies with a semi-fixed supply.
Just like everything it depends on what you buy and when you buy and sell it. Post 2017 the largest theoretical gain from bitcoin so far was about 20x, if you bought at the post 2017 low in December of 2018 and sold at the 2021 high almost three years later. Gamestop stock almost matched that 20x for 2020-21 gains alone. Apple has been up well over 500x in the last 20 years.
Ethereum was a better deal during this time, but you'd have to know to buy it. And some people really made bank on altcoins, but again, right time to buy, right time to sell.
There's a limit on how much the crypto market can be worth with people still able to use it as a currency to buy things. Logarithmically we're closer to the top than to the original bottom, though like all markets timing can still yield very good returns, especially if everyone else is hodling like Fort Knox.
That's the problem with many hyped assets: they're only profitable in the short term if you buy in before the pump, and sell before the dump.
I still believe Ethereum is poised for a fair amount of growth in the long-term, though likely nothing near the rise it's enjoyed in it's last run. I say that only because it's an on-ramp to so many other cryptocurrencies.
For those with enough Eth to stake, Ethereum has the bonus that so many stocks due: perpetual dividends. Unlike stocks Ethereum, as a whole, doesn't have a liquidation value. The dividends are it. And your particular share of the pie can be constantly diluted by further stakes. Is a vote required to allow further stakes? Or can anyone stake if they meet criteria?
This strikes me more like a buyer's club than a stock.
It's a pretty big claim to say the ability to purchase cannabis online is due to crypto.
The legalization movement started well before crypto, and the consumer laziness to anything except online shopping has also been around a long time. It's a pretty "natural" development. Also, it's not available everywhere.
How does shifting from a physical currency based on the petrodollar to a digital currency backed by the petrodollar address any of this? Technology cannot solve problems of power…
Per Investopedia the petrodollar system was established in the mid-1970’s [0]
Per Wikipedia, the Vietnam war lasted from 1951-1975 and Laos from 1959-1975 [1]
In any case the argument wasn’t that the US only invades countries that try to sell oil in currencies other than USD.
It was that anytime a country tries to sell oil in a currency other than USD they automatically become enemies of the US and get invaded.
> How about militarydollar or imperialismdollar or neocondollar.
I think all those labels are also appropriate now that the Petrodollar system seems to be collapsing with Saudi Arabia, China, Russia and India all exploring the possibility of trading oil outside the dollar.
I see now -- the specific label of petro is wrong, but the general idea that the hegemonic control of critical commodities -> currency control is not then? And saying petrodollar would be like saying porkyuen or semiconductoryuen or something similar
>Billions of people who are not part of these alliances are left out and the rest are reliant on US/Europe remaining leading superpowers forever, those in power not developing a grudge against one's business and status quo enforced through military violence.
The claim that the only reason the US dollar is the reserve currency of the world is because the US military would invade anyone who uses something else is so often repeated on HN and reddit that is has become canon.
It would be interesting to read something that goes deeper into that topic.
In the mean time someone should tell European pension funds that they should not be betting what amounts to the combined GDP of several nations on just the S&P500.
> The claim that the only reason the US dollar is the reserve currency of the world is because the US military would invade anyone who uses something else is so often repeated on HN and reddit that is has become canon.
No, it isn’t. Nobody said this, certainly not GP.
What is canon is that US military might gives its economy a level of stability not enjoyed by any other country, and when combined with the size of the economy, makes the dollar an important asset for nearly everyone.
Most countries in the world don’t use the dollar, and yet the dollar remains hugely important to those economies. Who is suggesting the US is going to invade those countries?
US military would move against agents who disturbs free trade between willing participants, in circumstances where US itself is not trying to restrict free trade with sanctions. More or less, also not saying it's always a negative, just that it doesn't cover everyone's needs and is not guaranteed to do so for eternity.
Hey, at least people who buy drugs with bitcoin are actually getting tangible goods. Despite everything, TSR might have been the most "legitimate" use of cryptocurrency to date.
What an entitled, uninformed and privileged thing to say. People who live under oppressive regimes use monero to gain access to information or to pay evade government spying.
A Ponzi scheme pays profits to earlier investors with funds from more recent investors.
The US economy has problems, but I don't see how that's supposed to be one of them.
I don't think it's even (in 2023) a good model for BTC, although the adverts I saw for it when I first heard about it around the $250 price absolutely were that, and there are plenty of clone-coins that still do today.
2. If Social Security were to fail, the US government would be free to decide between canning it (or reducing it) or funding it from more taxes (or delaying retirement age, which is kinda both); in none of these cases is this itself going to threaten the USA economy or the USD currency.
Even if we assume that Western led single market / contract arbitration regime is the way to go, threat of alternatives like crypto is the best way to get its rulemakers to behave, like to not cut off businesses that don't appeal to their sensibilities or devalue dollar with unreasonable speed. It is currently possible to order cannabis with credit card over a cell phone app. Without understanding that people would otherwise just use crypto and also evade taxes and any regulations, I am not so sure that would be the case.