Bitcoin is sketchy in its own way. Sure, you could have got rich quick if you could tell the future on an arbitrary system of ones and zeros that some anonymous entity created on a computer so criminals could buy illegal substances. You could have also gotten rich by telling the future and investing in countless other options.
The issue is there is no backing to the currency. There are many who forgot the passwords to their wallets and have no way to gain access to lost fortune. China owns the majority of it so if the world accepts it, they have the majority of buying power. We don't know enough about the creator or what may happen with the currency in the future.
Finally, U.S. currency is basically the same thing, a virtual ledger. The only difference is that it has backing and can be forcibly manipulated. When the government gets desperate enough, they'll ban companies from accepting bitcoin transactions based on issues with taxing, tracking, etc. At that point Bitcoin only has it's initial value from 10 years ago, which is illegal transactions on the dark web. Basically worthless if you're not a criminal or interested in buying things on the black market through strangers on sketchy websites.
This is completely wrong. The backing for the currency is mathematics. It's no different than the encryption we use for e-commerce. If you do any online banking or buying and selling over the internet, then you trust that math enough to risk sending your wealth digitally.
There are many who forgot the passwords to their wallets and have no way to gain access to lost fortune.
You act like that's a bad thing. What this indicates is that only the person with the key can access the crypto. So unlike a bank, which you surely use, you actually possess the wealth yourself and no one but you can spend it (or lose it). If you bought gold and had someone secure it for you, then you are worse off than with this crypto that you could store securely on your own computer.
Finally, U.S. currency is basically the same thing, a virtual ledger. The only difference is that it has backing and can be forcibly manipulated.
The difference is that the US currency is actually backed by nothing but the word of the US government. That's why they can manipulate it and change the amount in circulation at will.
When the government gets desperate enough, they'll ban companies from accepting bitcoin transactions based on issues with taxing, tracking, etc. At that point Bitcoin only has it's initial value from 10 years ago, which is illegal transactions on the dark web. Basically worthless if you're not a criminal or interested in buying things on the black market through strangers on sketchy websites.
Except in reality, when they ban something, the value increases. Sure you won't be able to buy a Tesla with it anymore, but it won't stop people from holding it to protect themselves against inflation.
Backing refers to the idea that a currency is redeemable for some good at a fixed rate as used to be the case for US silver certificates.
I was thinking of it in the sense that there is some underlying thing giving the money value. It could be that it is redeemable for a physical metal, but in the case of Bitcoin it would be the mathematics securing the blockchain.
This is in contrast to fiat which has no backing, or you could say relies on force to back it. When you say that the cryptocurrencies have no backing, it sounds like you are implying they are conjured from thin air like fiat, which is false.
He hasn't responded to me so I don't know what he meant exactly. Another problem with currencies which are backed by physical commodities is you are relying on people being willing to honor that. As governments around the world have shown, being backed by something physical is only true until they change their minds.
Bitcoin is sketchy in its own way. Sure, you could have got rich quick if you could tell the future on an arbitrary system of ones and zeros that some anonymous entity created on a computer so criminals could buy illegal substances. You could have also gotten rich by telling the future and investing in countless other options.
The issue is there is no backing to the currency. There are many who forgot the passwords to their wallets and have no way to gain access to lost fortune. China owns the majority of it so if the world accepts it, they have the majority of buying power. We don't know enough about the creator or what may happen with the currency in the future.
Finally, U.S. currency is basically the same thing, a virtual ledger. The only difference is that it has backing and can be forcibly manipulated. When the government gets desperate enough, they'll ban companies from accepting bitcoin transactions based on issues with taxing, tracking, etc. At that point Bitcoin only has it's initial value from 10 years ago, which is illegal transactions on the dark web. Basically worthless if you're not a criminal or interested in buying things on the black market through strangers on sketchy websites.
This is completely wrong. The backing for the currency is mathematics. It's no different than the encryption we use for e-commerce. If you do any online banking or buying and selling over the internet, then you trust that math enough to risk sending your wealth digitally.
You act like that's a bad thing. What this indicates is that only the person with the key can access the crypto. So unlike a bank, which you surely use, you actually possess the wealth yourself and no one but you can spend it (or lose it). If you bought gold and had someone secure it for you, then you are worse off than with this crypto that you could store securely on your own computer.
The difference is that the US currency is actually backed by nothing but the word of the US government. That's why they can manipulate it and change the amount in circulation at will.
Except in reality, when they ban something, the value increases. Sure you won't be able to buy a Tesla with it anymore, but it won't stop people from holding it to protect themselves against inflation.
Backing refers to the idea that a currency is redeemable for some good at a fixed rate as used to be the case for US silver certificates.
In this sense, it's true that Bitcoin and other cryptocurrencies have no backing.
Bitcoin is preferable to government fiat because it cannot be diluted by centralized mandates and does not rely on any given authority to operate.
I was thinking of it in the sense that there is some underlying thing giving the money value. It could be that it is redeemable for a physical metal, but in the case of Bitcoin it would be the mathematics securing the blockchain.
This is in contrast to fiat which has no backing, or you could say relies on force to back it. When you say that the cryptocurrencies have no backing, it sounds like you are implying they are conjured from thin air like fiat, which is false.
He hasn't responded to me so I don't know what he meant exactly. Another problem with currencies which are backed by physical commodities is you are relying on people being willing to honor that. As governments around the world have shown, being backed by something physical is only true until they change their minds.