I think a lot of it is speculation.
Wanting to be in on the next big thing, or believing being there first will make them fabulously wealthy.
Personally, I thought it might be worth putting a tiny bit of money in. The risk might be worth it given that governments are basically on a path to destruction with what's happening politically. They are de-stabling systems, and printing money like crazy. A huge collapse could be on the cards, indeed a 'great reset', however in that case, crypto won't be relevant anyway. Bitcoin supply for instance is limited to around 21 million coins. A limited supply means that value should theoretically increase over time.
Now there appears to be huge flaws in the likes of bitcoin though. Apparently mining uses a great deal of energy, there are huge transaction fees, and the system is generally rather inefficient so can't be used for anything other than storing money. Also, bitcoin is not private and seems to be essentially traceable. One can trace which coins have been used in illegal activity, which has wide ranging implications, for example if a law agency takes exception to you or the coin, and also certain exchanges won't except these kind of coins. Therefore certain coins have more value, which creates a problem for the system. The coins in this instance are non-fungible. Also, it won't have escaped your notice that one individual, by the name of Elon Musk, has basically crashed bitcoin with a tweet, causing the price to fall by almost a quarter.
Having said that, privacy coins such as monero and pirate chain seem to solve this. Their coins are fungible, I believe. They seem to offer a genuinely private transaction. Privacy is something humanity should strive for as there is no reason why big corporations and governments should be snooping on your every transaction. It especially comes pertinent where totalitarian governments are concerned. This could be a game changer because governments throughout the world are trying to enact greater and greater control on their population. Human liberation is something we should all be striving for. My understanding is that a lot of coins such as Cardano are more efficient and use much less resources.
Of course, I don't know anything about it. That's just my understanding.
Currencies like the USD decrease in value because the government that controls them constantly prints more every year.
Cryptocurrency like BTC (Bitcoin), has a finite amount and no more can be created by anyone than the limit, because the amount is determined by an algorithm that is verified by everyone who participates (the computer network, aka "the blockchain". Therefore, while regular currency continues to decrease in value, cryptocurrency will continue to increase in value. (It is often compared to gold, another finite resource with value).
The "significance" of this is when I get paid, I put what I can into cryptocurrency, because what I keep as USD slowly loses value. So I am making my money grow, which allows me to obtain needed resources such as food, clothing, and other goods and services. Eventually, I am hoping we can do away with the middle man of USD and just use crypto directly. I always support businesses that accept crypto, as they are helping to make the future come about faster.
Don't know much about it but the currencies we have now are dependent on the stability of governments and cryptocurrencies are supposed to be independent from all that chaos. The US Dollar is the default currency standard for the world but with the way things are going it won't be for long.
You highlight the problem of it.
USD has been used as the reserve currency for 50 years, yet the US is able to just print more of it? Thats a problem.
Basically any developed economy has removed control over the money supply (=printing) away from the government itself.
That’s why governments dom’t print money in any advanced economy.
And for the record, it is quite important that more money can be printed. For all intents and purposes, it helps a lot in fighting crises.
The fed still prints money. It’s just done in a roundabout way through bonds. You can still have and use government funny money, but crytpo is important to have as a decentralized store of value.
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Depends on the specific cryto, but take bitcoin for example. It's a better store of value than gold. It's something that is finite, unreplicatable, and backed by an actual resource that must be expended (energy). That makes it more real than the fiat currency we use in our day to day lives.
Then you can build smart contracts on top of the technology. You can do it with bitcoin, but Ethereum is the cryto tech most known for it right now which can encode programed transactions into the blockchain.
The main point is that it takes control away from banks and governments. There's no government printing monopoly money, nor a central bank manipulating the currency to hit their inflation targets. It's a trade medium and store of value that we can all partake in yet no one controls. And the more people that use it, the more secure it is.
The financial market is super important in terms of shifting money from unproductive uses to productive uses, which makes it inherently incredibly important to the resilience and size of the economy.
Crypto, on the other, is far too small, too unstable and has too many limited uses to really meaningfully replace another financial instrument. While it is nice for those who invest, it has no critical role in basically any part of the economy, so we don’t need it
Normal currency can also be manipulated by the central bank, which also plays an incredibly important role to the stability of the economy and improves macroeconomic outcomes. That can also not be replaced by crypto, until there is a crypto issued by the central bank itself.
If that happens, it becomes important. Until then, it is not of great importance in providing a functioning inclusive financial market nor to achieve desirable macroeconomic outcomes (e. g. low stable inflation)
Well, the US dollar's value is based off of whatever the government feels like they want it to be whereas a lot of crypto is more free-market. Inflation is inevitable, so the value of your savings is essentially going down with every extra dollar printed. But owning crypto is like owning gold, the price of it is going to adjust for inflation and your investment will either retain or gain value over time.
It's a financial scam because there is no debts that has been taken in cryptocurrencies, this makes those currencies unstable. Another purpose of cryptocurrencies is to rise hardware prices. A currency that needs gigawatt on energy for hashes which are necessary for transfer from one wallet to another isn't less than insanity.
Cryptocurrencies generally have faster, cheaper transactions. Fiat cash (US Dollar or the Euro) is used for money laundering much more than cryptocurrencies.
However, I don't understand the hype. What I do understand is that there is an opportunity to make money in cryptocurrencies (and an opportunity to lose it as risk is involved), which is likely the reason so many everyday people are investing.
Crypto is the next big inflation hedge. And it's easier to buy something with fractional bitcoin than filing a few milligrams off a gold bullion coin.
They're just a way for some people to hide criminal transactions and cheat on taxes. So no, they're a pretty terrible idea. Who should you trust more, your government or some random hackers?
What do hackers have to do with it? Crypto is more secure against hackers than government or bank servers.
No, I'll stick to my precious metals so when the young folks want to cash in granddad's coin collection, granny's silver or their parents wedding rings... I'll buy them and make my money
Bitcoin used to be dirt cheap. The people who bought it and held on to it made multi millions.
They are hoping another currency will do the same.
We don't need it no but can it be useful clearly the same argument could be said about most things
It's useless long term unless it gets physical coins/cash and gets used im public services.
Why would it need physical cash?
There is physical bitcoins by the way. But no one doesn’t it because... why?
@AllThatSweetJazz because any currency that can't work without technology will never replace one that does.
I think you underestimate how much technology goes into physical cash. But sure it can. You can still keep and use your government issued Monopoly money, but you tie up your wealth in other assets like Bitcoin, gold, property, etc. Most people’s “money” isn’t in the form of fiat cash, and that’s an easily recognizable and uncontroversial thing. Many people barely use cash at this point. I haven’t used a bill to pay for something in years.
If the “technology” for crypto goes down, then that kind of situation would also mean your cash is probably useless too. At that point you’re better off trading in water and bullets.
@AllThatSweetJazz
Everything you just said is wrong.
Most people still use cash most of the time, and only really use debit or credit when they have to, I just used cash yesterday to get some food, clothing, and take a cab (who only accepts cash and coins by the way) and the registers at nearly every place I've been have to get emptied often.
The other day I was at a gas station that only accepts cash/coins.
Physical money circulates, and if it stopped being printed, the value of the dollar would go up, not down.
Fiat money is never going away because too many public services are tied up in it, retirement funds, disability incomes, road maintinence, public transportation (the busses here only accept cash and coins) and people don't want to reduce their existing wealth to worthless paper by switching currencies, and not everyone wants to drag around a smart phone.
You may not like centralized money, but we are stuck with it.
If you think cash and coins become useless without technology, then you sir must be really young, because for a very long time we used cash and coins when we didn't have cell phones or personal computers, and it wasn't until the mid 2000s that using debit online or credit at all, stopped being frowned upon.
@AllThatSweetJazz cash/coins is also more secure, less tracable, and easier/faster to get refunds with, the convenience of it is too high to give up.
“Most people still use cash most of the time, and only really use debit or credit when they have to”
All the examples you listed are not reasons why crypto wouldn’t work, that’s *their* failing to adapt their infrastructure. It’s just a matter of time until everything starts catching up. For example, trains buses and ferries here don’t accept cash anymore.
“Physical money circulates, and if it stopped being printed, the value of the dollar would go up, not down.”
Crypto circulates, and limiting inflation sounds fine. I’m not sure what your point is there.
“Fiat money is never going away because too many public services are tied up in it”
Again, that’s a problem of people not adapting or more likely *refusing* to adapt because they have the power and want to keep it. They like being the power that controls a centralized currency.
“not everyone wants to drag around a smart phone.”
But everyone will happily drag around a sack of metal and plastic/paper?
“people don't want to reduce their existing wealth to worthless paper by switching currencies”
If you swap to another currency it just transfer your wealth that currency, your wealth isn’t gone.
“You may not like centralized money, but we are stuck with it.”
Not so sure about that. Mostly people are just naïve about money and value.
But even so, you can still have it and use it, you can just split between multiple currencies. There are countries that accept multiple fiat. This would be no different. It would be easier with digitized transactions since you can swap between currencies arbitrarily. There are pay apps that allow you to pay for things in any currency. Touch your phone on the thing and it instantly swaps your fiat of the needed amount to the needed currency and pays for it.
“If you think cash and coins become useless without technology…”
All my country’s notes have little transparent holographic spots which registers scan to verify authenticity and denomination. All the machines which accept my cash detect the denomination of coin I put in. You use technology to verify serial numbers on bills. Without all that infrastructure confidence in the currency crashes since you may well be handing out worthless paper / counterfeit bills. And if people don’t *believe* it’s worth more than the paper it’s printed on then it’s not worth more than the paper it’s printed on. It’s all about confidence. Even a technology as old as paper relies on modern technology to *enforce* it’s value.
People muddled through with centralized currencies for a time, yes. That’s not a reason to desperately cling to them. They had their problems. Long before the 2000’s there was problems with fiat. Getting off the gold standard was pretty fucked up for example.
When people traded in precious metal coins hundreds of years ago, that was more legit. Once banks became prevalent and value was tracked and changed hands through numbers written on a ledger instead of physical exchange, all the fiat whether tracked by ledger or physical cash was increasingly compromised.
Crypto like Bitcoin and the *only increasing* ubiquity of smartphones and other economic accessibility technology, offer legitimacy that outperforms the precious metal currencies of old with an unreplicatable, finite, store of value, backed not by paper, ink, and men with guns, but the *energy* put into finding a hash; a resource that drives the value of the product to be comparable to it’s expense without any enforcement necessary other than the easily achieved consensus that we all want to preserve our wealth.
People use dollars or other typical currencies in bad ways, too. And as for the appeal in crypto currencies, that varies from currency to currency.
1. Nobody "needs" it, it's a money making method.
2. People invest in them because they want to make money.
The idea that cryptos are horrible for the environment is such bullshit XD ofc we need em, fiat is too controlled. Some cryptos use a lot more electricity than others, cardano is more lightweight
I’ve made a few hundred already this week just trading them. But I think it could help you to learn more about them.
do you really "need" anything in life besides food and shelter?
It's just the new 'in' thing, give it a few years and we'll be back to bartering
They are horrible for the environment
Not very bright huh?
@Bertha2000 what? Cryptocurrencies use more electricity than Italy and produce more greenhouse gases than Czech Republic.
Electricity is not bad for the environment.
How do they produce greenhouse gases?
@Bertha2000 Most crypocurrencies on earth are mined in China using electricity from coal power plants. The amount of greenhouse gasses is more than ENTIRE COUNTRIES.
Do you know what a cryptocurrency is? It’s INTERNET money.
@Bertha2000 how are new bitcoins generated? I don't think you understand what they actually are.
I just bought a cardano for long term.
I've never seen crypto used in a negative way.
Silk Road is a classic example. It was an online drug market which used bitcoin as mode of payment.
How is that negative if people are getting what they want
Touché! But it was against the law, and had a big share in criminal activities.
The law isn't always right. I cured my ocd with a drug from silk road
Dunno why but I felt so
¯\_(ツ)_/¯
It's fine, you just think differently. I like your name
ummm... thanks? And this time I'm not sure how should I return the compliment!
No need
No it is just a game for big fishs
Yes, and it will be the next big thing.
I bought some.
Hmm.. maybe
Nope
time will tell us this
Yeah better bang for your buck than the dollar
The US dollar is currently crashing from inflation but crypto is going up in value so defintely need them!
Yes.
No...
No we don't
I don't think so
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