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Bitcoin and Other Cryptocurrencies Are Useless, The Economist Says (economist.com)
With few uses to anchor their value, and little in the way of regulation, cryptocurrencies have instead become a focus for speculation, The Economist magazine said this week. From the story, which may be paywalled: Some people have made fortunes as cryptocurrency prices have zoomed and dived; many early punters have cashed out. Others have lost money. It seems unlikely that this latest boom-bust cycle will be the last. Economists define a currency as something that can be at once a medium of exchange, a store of value and a unit of account. Lack of adoption and loads of volatility mean that cryptocurrencies satisfy none of those criteria. That does not mean they are going to go away (though scrutiny from regulators concerned about the fraud and sharp practice that is rife in the industry may dampen excitement in future). But as things stand there is little reason to think that cryptocurrencies will remain more than an overcomplicated, untrustworthy casino.
Can blockchains -- the underlying technology that powers cryptocurrencies -- do better? These are best thought of as an idiosyncratic form of database, in which records are copied among all the system's users rather than maintained by a central authority, and where entries cannot be altered once written. Proponents believe these features can help solve all sorts of problems, from streamlining bank payments and guaranteeing the provenance of medicines to securing property rights and providing unforgeable identity documents for refugees. Those are big claims. Many are made by cryptocurrency speculators, who hope that stoking excitement around blockchains will boost the value of their related cryptocurrency holdings.
Can blockchains -- the underlying technology that powers cryptocurrencies -- do better? These are best thought of as an idiosyncratic form of database, in which records are copied among all the system's users rather than maintained by a central authority, and where entries cannot be altered once written. Proponents believe these features can help solve all sorts of problems, from streamlining bank payments and guaranteeing the provenance of medicines to securing property rights and providing unforgeable identity documents for refugees. Those are big claims. Many are made by cryptocurrency speculators, who hope that stoking excitement around blockchains will boost the value of their related cryptocurrency holdings.
'The Economist' might not see evading capital controls as useful, but they are wrong.
Not an investment vehicle, but for 'in and out' in a day, good enough.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Bitcoin is useless until big players enter the game then suddenly it'll become vital for the country.
You're looking for domething useless and dangerous ? Look no further than high frequency trading.
"All art is quite useless." - Oscar Wilde
It's not their best headline writing, but TFA makes the point clear: cryptocurrencies are not currencies, let alone useful currencies. Their only "use" is speculation, and to an economist, that doesn't count as "useful".
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I honestly believe the single biggest impediment to the public accepting crypto as an alternative currency were all the hacks and corrupt coin exchanges that took people's funds and vanished.
Crypto-coins had the promise of being extremely secure and anonymous, but we quickly saw that unravel as folks learned how to trace transactions back through blockchains and as all of the web site compromises and coin-stealing malware arrived.
It's still too complicated for the average person to take a payment or spend crypto-currency. The unique wallet ID, alone, is a big, long, messy string of characters that nobody can remember. So they have to pretty much launch their wallet app and copy/paste the thing any time they want to instruct someone else to pay them. So that's another big problem. But really, a lot of this stuff can be coded into a more user-friendly UI, if someone is motivated to do it. (I think that's one of the promises of the new project out there to let independent musicians get paid directly for use of their music, without needing a middle man.)
But we're far from seeing the whole thing get stable enough so folks have a good handle on just what a given crypto-coin is worth. Everyone I know hanging onto any of them does so with a hope of reselling them at a profit at some later point in time. They're not keeping them like folks collect spare change in jars at home.
The fact it's existence depends on other actual currency means it is worthless on its own. Everyone who owns bitcoin is hoping to cash out for real money.
You can play a game with Magic cards and enjoy looking at Beanie Babies on your shelf while holding them as a speculative investment. Bitcoin is literally useless.
"vote back to you" - no it doesn't. it gives the vote to the existing whales, which for the hoi poloi entering the field, means "not you". it's like people trumpeting how the right to bear arms keeps them safe from "tyranny", when they have no chance to fight against an entity that can field APCs and drones.
Do you actually use it as the negotiated salary? As in 'X' number of bitcoins a year? Presumably you do a last minute calculation based on a more stable currency and by the same token she presumably cashes it out pretty quickly. That's a problem for what is ostensibly a 'currency'.
It sounds like you may have had a positive experience, purchased X bitcoins, but by the time payday came to pass, you probably needed a lot fewer due to boom, so you had spare. Conversely, if you paid what *should* be enough for her salary, using X USD to acquire them, say a week in advance, but on payday your account is suddenly short, that's a big problem. As it stands, the only way to have predictable income/spend relative to real goods is to minimize the time from when it's a stable currency, to cryptocurrency, and back to stable currency again.
There's some interesting (albeit too wasteful of energy) technology things going on, but the non-technical context does not bode well for the current cryptocurrencies.
XML is like violence. If it doesn't solve the problem, use more.
anonymous transactions
"You keep using that word. I do not think it means what you think it means." --Inigo Montoya
(It might feel anonymous today, but eventually they'll map out all the wallets to real identities and it'll be more traceable than if you had paid with a credit card.)
>because if she had held onto them she will be a USD millionaire many times over
It is telling that you say it in terms of fiat.
No, you don't. That is the vallue today. If the price goes to 0.000001 you won't have enough to pay her an hour.
You do not have that money at this moment., Only when you sell do you have that money.
This is how many people get "rich". They think that shares they have are the money they have.
When you bought 100 Bitcoins when they where 100 USD, the moment they where 20.000, you did not have 2.000.000 USD, you had 100 Bitcoins. If you have them now, you still have no USD, you have bitcoins.
OTOH if it goes to 0.5, you do not suddenly have 50 USD, you still have 100 bitcoins.
So when you say that you have enough for a few centuries, you must add 'if the value stays the same'
And unless you are a bank, it might be better, as a company, to invest that money into the bank by paying back loans or, if having loans is financially interesting, get better loans and pay less interest.
Because a few centuries is, say, 3 centuries, times 5.000 1.5MM at least. (as 3 is the lowest when looking at several)
Having that on a USB key and not doing anything with it, is not the wisest financial decision. As this is pure profit, it is very easily to look at the ROI when looking at doing several different transactions over a period of several years and find ways to pay her in a different way.
And I am sure there are ways to do payments via a banktransfer to a bank in Pakistan.With all the monies you made, taking the cost of those transfers should be a non-issue (and those costs should have been calculated beforehand anyway)
And if you are too dumb to figure that out Her is another way
The thing is that you are a willing participant in creating black money and try to figure out a way to talk yourself out of it. You should never have gone with payment in Bitcoin in the first place.
Don't fight for your country, if your country does not fight for you.