[shawnz]

I don't think it is a paradox at all but simply a separation of concerns. I believe government regulation is essential to a healthy economy, but it can still be useful to have methods to store and transact value outside of centralized control in case there is a failure of government.

It's kind of like how the fourth amendment makes it easier to commit crimes, but we accept it as a society anyway because it is more important to provide opportunities for individuals to defend themselves against government overreach. It is part of the checks and balances that ensure a healthy democracy.

[nepthar]

I agree. There is nothing to suggest that something can't both behave in a regulatory environment and exist if that environment fails. Cars, for instance - They require registration so long as the body enforcing registration exists. If that changes, cars can still run.

[ineedasername]

The paradox is in both wanting the cars (well, crypto) alive & function and also not be subject to the regulatory environment, while that environment is alive & functioning. That seems to be the dream of a certain subset of crypto enthusiasts: Widespread crypto that bypasses existing regulations. I don't think it can get to that point. In order to gain widespread adoption, you need on-ramps & off-ramps for people to actually use it. Those are the regulatory choke points for crypto. Like an unregistered car you can drive on your own property, but the minute you take out on the highway you're obligated to play by the rules that govern the highway.

You can't buy crypto without the consent of banking systems that are subject to regulatory frameworks. You can't make a loan payment with crypto without converting it to the local currency, putting it in a bank, and writing a check or ACH transfer or getting the bank to convert it to local cash.

The vast majority of major transaction that require money cannot be done with crypto, and as that changes they will still only be done with crypto by interfacing with systems subject to regulatory structures. That keeps unregulated crypto in relatively small scale shadow economies. Sort of like cash, except cash is more or less dead as a means of making large transactions.

[pmiller2]

What exactly makes XRP worth anything, though? Isn't it theoretically pegged to the USD?

[shawnz]

Yes, XRP is a bad example of what makes cryptocurrencies useful/interesting for many reasons. I'm just speaking to them in general

[pmiller2]

Well, okay, what makes BTC inherently worth anything, then? Who cares that someone, somewhere, some time ago, solved some useless math problem? Why dedicate the equivalent of 7 nuclear power plants' worth of electricity[0] to it, when we could use that electricity to offset fossil fuel consumption?

I have literally have yet to have anyone explain this adequately beyond the level of "there's a market for it, so, obviously people think it's worth something."

---

[0]: https://news.bitcoin.com/the-bitcoin-network-now-consumes-7-...

[llamataboot]

There’s lots of things worth lots of money that don’t have much use value. So yes, in a market, the definition of price/value is generally where supply and demand meet.

As for why people currently /want/ bitcoin, I assume some people find it a good speculation instrument, some people hope that it will be a more stable store of value than fiat currencies, some people have political reasons for wanting to own some, some technical, etc

What’s to explain beyond what’s there at face value? People “want” bitcoin enough to buy it, other people are willing to sell it...

Now as we move further and further away from BTC (not including significantly different cryptocurrencies - ethereum has other advantages for example) into like dogecoin, which has held value for years, it’s clear that we are getting mostly into pure speculation territory. But from a market perspective, even that territory is fine, just don’t want to be the last one holding the bag...

[pmiller2]

This is roughly what I've been telling the HODLers among my friends and acquaintances for years: there is no intrinsic, fundamental reason why BTC has value. It has value because people say it has value. And, if that sounds awfully like the "fiat currency" they tend to heap so much derision on, well, it should.

The USD is nothing more than an "economy token" to show how much one is winning capitalism. Likewise, BTC is some sort of economy token, but I'm not sure what it means. I'm sure the bottom will fall out of BTC far sooner than the USD, and I will welcome that day, because then we can repurpose the electrical power that runs the BTC network toward productive uses, rather than propping up some financialized mirage.

[shawnz]

You are right that fiat currency and bitcoins are alike in that they both have no intrinsic value. I don't think any "bitcoin evangelist" would say otherwise.

[ineedasername]

It's not about "winning capitalism". Money is simply an abstraction layer over something like direct bartering which has liquidity problems that increase with the complexity and number of goods & services on offer. I might agree that capitalism is about "winning" and money is used to keep score, but not that money is intrinsically tied to that game. And there might be a better abstraction layer you could place over people's time & effort than either money or direct bartering. Command economies are one option, but economies seem quite a bit too complex for that to be a feasible alternative at the moment. There's probably other options, but I'm certainly not smart enough to think of something new on that topic.

[noxer]

Demand. Just that. And no, its obviously not pegged to the USD or to anything. Price is a direct result of supply and demand. It has value because people pay for it.