- cross-posted to:
- [email protected]
- cross-posted to:
- [email protected]
35 crypto companies got together to make a change dot org petition called “Bitcoin Deserves an Emoji”.
F that
35 crypto companies got together to make a change dot org petition called “Bitcoin Deserves an Emoji”.
F that
Cryptocurrencies literally cannot function without speculative investment. Even in the absence of formal investors, *someone* has to be the first person to accept the tokens in exchange for something of value, in hopes that they will have value of their own in the future. Until then, the tokens are unusable.
Further, the market cap and liquidity of a cryptocurrency impose practical limits on what it can be used for. You can’t very well conduct a billion dollar transaction through a cryptocurrency that has a market cap in the millions. Investment raises the market cap, “unlocking” these higher-value use cases. Conversely, loss of investor confidence will reduce the market cap, and effectively reduce the utility of the coin.
This is why ability to scale is so important. The current market values of Bitcoin and the various alts are based far more on speculative investment than they are on usage. Those investors believe that the coins will see far more usage (and have far more natural demand) in the future than they do today. If that turns out not to be the case due to an inability to scale, investors will start to flee, and the vicious cycle will start.
I don’t think anyone needs to exchange cryptocurrencies for “something of value” for the investment to work, they just have to believe the currency itself holds value, where value is defined by supply vs demand. If enough people think others will believe it has value, then demand will increase. It’s basically how MLMs work, but it can sustain itself once it reaches a sufficient number of investors.
Adding transactions for real goods and services in the mix expands the reach of the currency and can stabilize demand a bit once the initial speculators have lost interest. So yeah, there’s absolutely a motivation for speculators to try to get others on-board. But it’s not necessarily a requirement, as we can see with other collector fads like Beanie Babies or Baseball Cards (the only value is in trading with other collectors), but just changed to be digital (NFTs are the strongest analogue).
However, just because speculators are rewarded if you use a cryptocurrency for transactions doesn’t mean you should avoid it. Use it if it provides value to you. The value proposition is:
Even without any kind of physical backing, cryptocurrencies offer an attractive value proposition. We could probably solve the above with fiat, but that currently is not a thing. I don’t recommend using cryptocurrencies for everything, nor do I recommend using it as an investment, but I do recommend using it for a few transactions here and there until you feel comfortable with it because of that value proposition.
It seems like you’re arguing against a position that I don’t hold? I’ve been invested in Bitcoin for a long time, and I’m quite familiar with its technical and socioeconomic dynamics. I’m skeptical of altcoins specifically, not of cryptocurrency as a concept.
Maybe? It reads like you’re arguing that you shouldn’t buy cryptocurrencies at all if you don’t understand how transactions are handled. I don’t think that’s true, and that will just discourage the normal, everyday person from getting started. You may need that info if you’re interested in investment/trading, but you don’t really need to get into the weeds if you just want to pay for some online services.
The important thing for lay-people is to recognize the value cryptocurrencies can provide, understand which cryptocurrencies are “stable” (as in, not some altcoin scam), and understand transaction times and costs. That’s honestly it. If we can achieve that, more people will start using cryptocurrencies for transactions where it’s available, more vendors will see it as a viable payment source, liquidity will improve, and developers will address the issues as they come up.
If you’re buying something other than the top few cryptocurrencies, then yes, I agree with you. But you’re not going to do that if your goal is to use it as a currency, because no real vendors are going to accept whatever that new altcoin is. If you stick with the big coins and your goal is to spend those coins, you’re not likely to get screwed. Bitcoin can work w/ Lightning, and Monero (my preference) is great on its own. Those are also the two that are most commonly accepted by vendors.
Maybe we agree there, idk. I think your comments read a little gatekeepy and from a “cryptocurrencies are investments” standpoint, and I think the focus should be “cryptocurrencies are currencies.”
Alright, fair enough. Keep in mind though that this comment thread started with an assertion that Bitcoin didn’t get it quite right, and Monero did, which is more of a big-picture analysis thing than merely “can I buy something with this”. My responses have been in that vein.
That’s fair. The Lightning network really is an interesting solution to the problem Bitcoin had, and I’m interested to find out if/when Monero will run into a similar problem.