[josefrichter]

I disagree. I believe there's a lot of areas where crypto can bring much more efficiency and transparency into financial markets, and that's a good thing. I agree the point is not to replace banks, but perhaps evolve them, bring about new types of financial institutions, products and instruments.

[ben_w]

While I expect there are important new types of financial institutions, products and instruments that may be evolved by cryptocurrency experimentation, I would be extremely surprised if normal people could do a coherent analysis of the pros and cons of them, and expect they would not be able to distinguish the good ideas from the scams. I mean, look at how many people think literal lotteries are a good investment, or who are furious about the existence of inflation, or whose mind is blown when they first learn about fractional reserve banking.

I don’t know what you mean about efficiency, as there are multiple different ways to count this. Energy efficiency clearly isn’t a selling point, so can you expand on what you do mean?

[lowkey]

I’m furious about the existence of inflation. I think it should really be called monetary debasement instead of inflation. Satoshi Nakamoto created Bitcoin in part to provide an alternative inflation free money option.

Why am I being naive or foolish to be furious about the existence of inflation? Is it a good thing that I simply misunderstand?

I am genuinely curious. Please help me understand.

[EugeneG]

I believe the accurate answer here is twofold: - money is perpetually not supposed to be a great perpetual store of value relative to goods and services. Government policy aims for some inflation, fears too much and fears too little. Why? Because a bit of inflation is an incentive to use your money on more productive asset - eg don’t hold on to it but instead invest in a startup or go use someone’s services or goods (go to a restaurant!). The issues happen when inflation is so high that the money melts away before you have time to figure out how to use it productively. Deflation is also bad because then people stop spending on services, stop investing - and just hold onto money. (“No I don’t want to invest in this startup! I have the best investment I need, just holding onto my cash!”) That slows down the economy. - either way Bitcoin doesn’t solve inflation in any way. It’s just another asset - that can go up or down or whatever, and happens to have gone up for a long time (just like Facebook stock) and then dropped a lot. Just like any stock or any asset, Bitcoin can have higher-than-inflation real returns or lower-than-inflation. And more recent returns have definitely been lower. What will happen in the future? Who knows. Same answer applies to the S&P500 and to Gold and to the new condo in my neighborhood.

[ben_w]

Curiously, I was just thinking how I personally am often wrong about inflation right before logging back in to see what responses I’ve had to this comment.

One of the important things I tend to forget, is that effective rate of inflation is different for different people within the same economy.

For example, the official rate of inflation in the U.K. right now is 5.4%, but if you’re poor, you’re likely to be constrained by fuel prices (which just went up ten times that: https://www.msn.com/en-us/news/world/uk-faces-record-rise-in...) and food (which has done worse, but unevenly and over the whole year: https://twitter.com/BootstrapCook/status/1483778776697909252).

This is because inflation isn’t just caused by just governments printing money, it’s also caused by a reduction in the availability of things to spend that money on and even the rate at which money changes hands (https://en.wikipedia.org/wiki/Velocity_of_money).

There’s also a totally unrelated argument that I can follow but not adequately repeat about the impact of various levels of inflation on consumer spending and the feedback that has on employment etc., but that’s not an argument that I expect to do anything at all to reduce anger.

[JohnHaugeland]

> I think it should really be called monetary debasement instead of inflation.

That suggests that you don't know what inflation is.

.

> I am genuinely curious. Please help me understand.

You say this too much. You can't understand from fly-by comments on the internet, which is why you're in the state that you're in.

If you're actually as genuinely curious as you pretend to be three times a day, go to the library and read a book.

All you're doing is chattering on the web. You will never understand anything this way.

[lowkey]

> All you're doing is chattering on the web. You will never understand anything this way.

Is that why you feel justified throwing insults instead of engaging like an adult? This isn’t the only comment where you’ve directed insults my way. It seems you are only capable of name calling, not substantive discussion.

[josefrichter]

well, that has nothing to do with crypto, right? that's the case with current state of affairs already.

[ben_w]

Current state of affairs is regulated to prevent most normal people from getting into serious trouble most of the time, crypto not so much.

[lowkey]

I believe the current state of affairs has governments holding a monopoly on lotteries and actively promoting and marketing said lotteries to the financially illiterate. The odds of coming out ahead are wildly better in crypto vs lotteries. Perhaps we should put an end to government-controlled scams such as lotteries before claiming that regulated industries can do no wrong?

[ben_w]

I’m not saying regulated industry can do no wrong, I’m saying the graph of for frequency vs. quantity of wrong for regulated is smaller overall and closer to the axis than for unregulated.

[lowkey]

I would counter with the great financial crisis of 2008 - and the stated reason for the creation of Bitcoin. Those were all regulated banks and financial entities that were deeply involved in a fraudulent scam to mis-represent the quality and contents of their mortgage backed securities. They took sub-prime mortgages and then added massive amounts of leverage and somehow the ratings agencies all gave them a AAA rating. This was all in a heavily regulated environment and as such it proved the need for a decentralized alternative.

My questions for those who trust in regulation:

-Why was no one ever prosecuted for this fraud?

-Why did regulation not work in the case if the 2008 GFC?

-If it didn’t work then, why would it work the next time?

[civilized]

What kind of efficiency are you talking about? It's far, far from clear -- at best -- that crypto can be more energy-efficient than traditional banking.

Transparency? Really? For whom? Do you want your taxes on the blockchain for everyone to see?

[zikduruqe]

I am not an expert in crypto at all, but what I would love to see maybe, is some type of stablecoin supported by the USPS. USPS used to be in the banking business and are now looking into it again. Is there an opportunity for the USPS to support USDC, to replace money orders to help serve the underbanked?

I dunno.

https://executivegov.com/2021/10/usps-launches-pilot-banking...

[XorNot]

Why wouldn't the USPS just be a bank, with accounts with the Fed and FDIC insurance though? The USPS not providing banking services is because Congress won't let it.