| > But casual users can choose to store their crypto assets with a bank/custodian/exchange. It's not clear to me that this is meaningfully different than our current financial system. > Granted, it defeats some of the benefits, but not all. E.g. most crypto has low inflation compared to USD. Even though CPI inflation is ~2%, the money supply inflates around ~10% per year, whereas most crypto will inflate <1% long term. It's really not clear to me that this is a benefit, and even if it is was, there is nothing stopping the Bitcoin network, for instance, from deciding it wants to inflate after it has mined all the coins. The fact that the vast majority of mining is controlled by a handful of Chinese companies and that this is seen as preferable to The Fed for deciding whether or not to inflate seems crazy to me. But it's possible, even probable, that the people who make real money selling bitcoins will vote to make more bitcoins after they run out of bitcoins to sell, ie: squeeze blood from the stone. > With something like Cardano, I don't see what governments could do, apart from banning its use within their own jurisdiction. You're talking about a government that reads literally every single piece of internet traffic and likely has backdoors into many encryption products. > That's a fair criticism of Bitcoin etc., but future iterations of cryptocurrencies will surely include ZeroCash-style privacy at least as an optional feature, if not for every transaction. No, because anyone who wants to make a serious business out of these will be required to become a Money Services Business, and have a Know Your Customer (KYC) process. As I mentioned in my previous posts: we've thought about this problem before, we don't want money floating around that isn't easily traceable, and so we already have laws governing this stuff. It's not a matter of "design the right mathematical system to create anonymity." The Dudes With the Guns do not want that so it will not happen. These systems cannot meaningfully exist outside of the current political system without a real, guns and explosions, revolution. > I'm not saying it's a sure thing at all, but it seems somewhat plausible, no? There is literally no upside for the vast majority of the actors in your proposal. If a currency is truly deflationary consumers wont want to spend it, if it's not it's not meaningfully different. Consumers also want a layer of protection, which credit cards offer them. Big vendors (Microsoft, Valve/Steam, Overstock etc.) who accepted crypto have already decided to stop, and transaction volume is plummeting so I think your proposed series of events is extremely unlikely. The market is surely irrational, and there are a ton of things that exist that shouldn't, so who knows. But this stuff is not a good idea, there isn't any "mystery" left to it. We understand what's being proposed, it's basically all been proposed before, and it's an idea filled with huge problems that have only begun to surface because it is a nascent system. |