[Cryptography] Krugman blockchain currency skepticism

grarpamp grarpamp at gmail.com
Tue Aug 7 23:50:10 PDT 2018


On Mon, Aug 6, 2018 at 7:24 PM, Bill Frantz <frantz at pwpconsult.com> wrote:
> OK, I can't resist any longer. Let's look at some payment and store of value
> systems:

Ok...

> Gold metal:

> Terrible for electronic payment.

Transferring electronic stock in GLD, or other forms of gold securities,
works fine, is slow and a lot of paperwork, but most would be terribly
happy to receive it instead of being stiffed.

> Likely to be accepted anywhere fiat currencies are weak.

Like Venezuela, Greece, Zimbabwe, etc... anyplace undergoing any volatility
or inflation event, now or past, since gold was removed / banned from standard
worldwide... anyone have links to news articles where any economically
significant fraction of the affected populous in such places was carrying
around and using gold instead of wheelbarrows full of fiat? None?

> Can be converted to fiat currencies where they are strong

Everything is convertible to any other thing, wherever and whenever,
doesn't mean you or your counterparty will want to,
at times it might be best to drop it in the rubbish, or keep it.

> Can be converted to fiat currencies, but the transaction may have to be reported.

"Have to" vs "is" vs "you volunteered" info are different things.

> If you become a refugee, gold can be carried with you.

Up to your limited capacity to securely carry weight and bulk.

> Can be stolen at gunpoint.

Carry a gun.

> Doesn't earn interest.

It can.

> The gold standard. :-)

Though fair a meme nonetheless, with cryptocurrency
a challenger approaching from a distance.


> Dollar, Euro, Pound Sterling (well regarded fiat currencies):

> Can be used with electronic payment systems.

Not before converting that paper / metal / poly physical into
something entirely different... digits in a database.

> Likely to be accepted anywhere.
> Easy to convert to other currencies

Not really, it's a pain to convert back, assuming you even
knew how to authenticate and wanted the foreign physical
in the first place..

> If you become a refugee, notes are transportable and accounts can be accessed
> if not frozen. (Pick a good jurisdiction for that account.)

They don't let you bring in "good" fiats, they keep it for themselves.
You're not funding that account electronically through the tight regime
you have to refugee from. Nor are you transporting their junk it past
all their checkpoint thieves on the way out, nor is it useful on the
other side.

> gunpoint, accounts can be protected from that attack.

Thug points to your / bankers dome. Govt thugs do same,
civil forfeiture, etc.

> Relatively stable in value over the long term

Nice smooth steady loss and redistribution, lovely.
Case Shiller Index... 2007 deja vu and pop before long.

> Accounts can earn interest.

But don't, not enough to even beat inflation these days,
a terrible SOV and investment.

> What world commerce runs on.

Can run on cryptocurrencies.



> Bitcoin:

> Not accepted everywhere.

Can be.

> the transaction is recorded in the blockchain, leaving a record.

Which if using cryptographically private ZKP blockchain like Zcash (ZEC),
is currently thought to be entirely private thus off the record.

> Can be converted to fiat currencies for
> wide acceptance everywhere

In the future, Neo, you won't have to.

> If you become a refugee, transport is limited by the electronic devices you can
> take with you.

False.
Memorize your brainwallet passphrase.
Encode keys on or in your body, clothing, luggage, books.
Ship ahead, or shard among people, or stash online.
Limitless secure options.

> Wildly changing value over the recent short term

FUD from anti's who don't understand introduction of new things,
decentralized cryptocurrencies into free markets, all covered before.
And Impressive increasing value over any long term window beyond
a year.

> and no long-term track record.

Nine years and counting, impressive for something that's pissing off and
disrupting fiat govt / banks worldwide. Hardly Pokemon or Linden Dollars.

> Can't earn interest

Value on "deposit" is value invested. Investments can earn.
Unless you invest them in shitty things like Lehman Brothers.
While cryptocurrency rising in adoption phase, it eats all others,
so no sane person can or will pay returns denominated in it,
until there are entirely cryptocurrency based businesses,
investment vehicles and cycles, or if its rate of rise falls below
other vehicles. Better to just buy / sell / short it directly.

> Not widely used in commerce.

Nothing stopping that but you.


> Eggs:

> (from the Economist Buttonwood column 7/21/2018 on hyperinflation in
> Venezuela): Not usable for electronic payment. Generally accepted for
> payment in Venezuela. Can be sold as a commodity in most locations and
> converted to other currencies. Not normally tracked by governments. Hard
> boiling recommended should you become a refugee to improve transportability.
> Destroyed by fire, but small fires may help them make a good meal.
> Relatively stable value over the long term, but individual eggs spoil in a
> matter of weeks to months. Can't earn interest. Used in commerce in limited
> locations suffering hyperinflation. Can directly provide human nourishment.

Can earn interest... give recently fertilized eggs to someone to hatch
under contract, you make eggs in return.


I'd peg / tether your price in cryptocurrency for a dozen eggs to each of every
one of today's hundreds of cryptocurrencies, at today's exchange rate,
provided you buy all the eggs you eat each month, from me, at the
aforementioned static crypto/egg peg, using the cryptocurrency of my choice
at each purchase, for the rest of your life. You'll always pay the same amount
of whichever crypto for your eggs, zero volatility, guaranteed. I
reserve the right to
add any new cryptocurrency at any time pegging it for you at that time, and to
terminate contract at any time by delivering a dozen hens a laying to you.

Feel free to hedge your backend with Tether (USDT)...
https://tether.to/


"Every day that goes by and [Cryptocurrency] hasn't collapsed due to legal
or technical problems, that brings new information to the market. It increases
the chance of [Cryptocurrency's] eventual success and justifies a higher price."
-- Hal Finney


Most people are simply closed minded old dog programmed statist
sheeple incapable of free thought outside their box (TV box too).
That's why they can't offer any debate sustainable reason why
decentralized cryptocurrencies *cannot* be used as money.
And why the cryptocurrency crowd, having made that leap, offers
numerous reasons, designs, updates, and ways in which they *can*.

For that matter, seems it'd be a lot more fun crypto coding
completely novel decentralized cryptocurrencies, than off in a
corner trying to digitize some crusty old fiat under orders from a
government / banks with no freedom to change that model :)


[bcc cypherpunks]


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