Cryptocurrency in simple details.

[Spongebob]

@WinterHold You keep making this argument that crypto is somehow different or perhaps even superior to other currencies.  It is not.  Other than not being created and controlled by a government, crypto is just another currency.  It won't be any less susceptible to economic conditions than paper or gold, either.

Mining crypto with a powerful computer does not in any way make it better or different.  That is a man-made, manufactured method intended to control the supply, and thus the value, of the currency, nothing more.

Gold is no more valuable than paper money and having to mine it doesn't make it valuable.  The limited supply of gold is the only thing that allowed it to be used as currency.  This is also true of silver.  Also the ability to determine its purity level was a big help.  A far more pure and ancient form of trade is barter.  Using gold and paper just makes trade more convenient.

Another thing, Nixon didn't create fiat money.  That appeared centuries earlier in the form of bank notes.  All Nixon did was dethatch paper money from a gold backing.

[WinterHold]

China won't be a friend and Russia too; actually we Muslims tasted the Russians twice -once in Afghanistan and then in Syria-; they are monsters, fiends that kill at will to implement their strategy.

China showed its claws against Muslims in the famous "Uyghur" concentration camps: 1 thing for certain: the Chinese government despises Islam by concept.

Moreso; the Chinese government fought Cryptocurrency and is one of the biggest enemies of it. 

But don't forget: Russians reached to America's White House through Trump.

Playing "politics" with these sharks will lead you to drown; the American Deep State is one of the sharks also.

---

Paper money equals to a certain "commodity" of value -like gold/silver/grain...etc; if you have 50 papers of money you should be able to go to the bank and exchange it with the "raw commodity".

Humans agreed through the ages to use "gold/silver" as the commodity to exchange for goods or services; in ancient times they used "the commodity straightforwardly"; evidence is the "ancient Roman gold coins" excavated.

As time progressed; and banker took control of the world; a more organized way to exchange "commodities"; so fiat money was introduced in the modern era by Nixon in 1971:



https://en.wikipedia.org/wiki/Fiat_money

Any paper money you hold in your hand is "fiat money" -a mere banknote- that you should go to the bank and exchange for a commodity; the commodity of all money you see today is literally "nothing"; there is no gold backing your fiat money, there is no commodity also; the only commodity there is "trust" that America will stay the first and only superpower in the world.

And as long as the USA is the strongest power; your fiat money has a value.


Cryptocurrency is the negation of that. It is a secured currency that can only be generated using computers through the mining process; it can be exchanged for fiat currencies once it is mined.

But I can already exchange commodities for fiat currencies (did so just yesterday, in fact). Why should I go through all the trouble of mining electricity?

Boru

Because America is not the first superpower anymore; other rivals came to the scene: now there is China and Russia, you also have the Islamic alliance that we saw manifesting in Malaysia in the Kuala Lumpur Summit. It is wise to admit that the "new world order" that America built is a mere "tiny political sleight-of-hand" that lasted only for 80 years since WW2's end.

Now the rest of the world started to rise; no one fights alone; America can never take out Russians, Chinese and Muslims in a row. It's common sense if you ask me; easy come easy go. 

That's why smart people began to look ahead of the collapsing currency (U.S dollar) of the collapsing empire (USA); and started to gather other currencies with real "commodities" backing them up.

What is the commodity of the fiat papers you hold in your hands?
That's the question you should ask yourself.

[BrianSoddingBoru4]

But I can already exchange commodities for fiat currencies (did so just yesterday, in fact). Why should I go through all the trouble of mining electricity?

Boru

Because America is not the first superpower anymore; other rivals came to the scene: now there is China and Russia, you also have the Islamic alliance that we saw manifesting in Malaysia in the Kuala Lumpur Summit. It is wise to admit that the "new world order" that America built is a mere "tiny political sleight-of-hand" that lasted only for 80 years since WW2's end.

Now the rest of the world started to rise; no one fights alone; America can never take out Russians, Chinese and Muslims in a row. It's common sense if you ask me; easy come easy go. 

That's why smart people began to look ahead of the collapsing currency (U.S dollar) of the collapsing empire (USA); and started to gather other currencies with real "commodities" backing them up.

What is the commodity of the fiat papers you hold in your hands?
That's the question you should ask yourself.

It’s backed by gold. So there. But I’m still not clear why my dollars need to be backed by anything.

Boru

[Foxaèr]

Unless they're willing to convert cash to crypto, it won't become a universal currency.

[BrianSoddingBoru4]

Unless they're willing to convert cash to crypto, it won't become a universal currency.

And as more economies switch to much cheaper means of generating electricity, the value of crypto is going to drop like a paralyzed falcon.

Boru

[ignoramus]

Unless they're willing to convert cash to crypto, it won't become a universal currency.

No govt in history has ever allowed a competing currency to coincide with the official govt currency.
The only reason that bitcoin is still in use is because the authorities don't consider it a thread. It's a mere speculative asset.

Winter, don't think for one second that bitcoin cannot be traced and/or confiscated.
Technically bitcoin isn't even currency. People can use it as a medium of exchange but people that hold bitcoin, don't have it to buy stuff. They have it as an investment which they believe will go up in value. A true govt currency MUST have a corresponding bond market (this gives the currency stability in price). Bitcoin will never have this status. Nor is it a coin, nor is it gold in color. It's a speculative asset. It will crash just like everything else before the end of the year and hold on to your hats because 2022 will be a doozie!

[WinterHold]

Unless they're willing to convert cash to crypto, it won't become a universal currency.

No govt in history has ever allowed a competing currency to coincide with the official govt currency.
The only reason that bitcoin is still in use is because the authorities don't consider it a thread. It's a mere speculative asset.

Winter, don't think for one second that bitcoin cannot be traced and/or confiscated.
Technically bitcoin isn't even currency. People can use it as a medium of exchange but people that hold bitcoin, don't have it to buy stuff. They have it as an investment which they believe will go up in value. A true govt currency MUST have a corresponding bond market (this gives the currency stability in price). Bitcoin will never have this status. Nor is it a coin, nor is it gold in color. It's a speculative asset. It will crash just like everything else before the end of the year and hold on to your hats because 2022 will be a doozie!

Bitcoin's transactions are public and can be viewed by everybody using the "blockchain"; but if a new address was generated by the user for every new payment; things will be private:

https://bitcoin.org/en/protect-your-privacy

In other words; if you used multiple wallets for different purposes, each transaction will be "isolated" in such a way that is not possible to associate them all together. People who send you cash cannot see what other Bitcoin addresses you own and what you do with them.

The commodity cryptocurrency backs is "electricity consumed by a computer in respects to the mining process". Computers that generate this electricity are made out of "gold-copper-plastic-glass-iron...etc"; that's your "raw; basic commodities behind cryptocurrency".

[BrianSoddingBoru4]

To paraphrase Lewis Black, nobody knows how the fuck economics works, so explain this to me: what is the advantage of a commodity-based currency over fiat currency?

Boru

[Spongebob]

@WinterHold Stop it!  Just stop it!  

For the last time.  Cryptocurrency is NOT BACKE BY ELECTRICITY!  That is utter bullshit.  That is simply what you need to mine new ones.  And in case you don't know, Bitcoin has a hard limit of 21 million units.  Over 80% have been mined and are in circulation.  Once that limit is reached, no more mining.  So your argument about electricity is utter nonsense.

As was pointed out correctly, cryptocurrency isn't even real currency, it's more of an investment vehicle.  And right now its a damn volatile one.

US dollars are not backed by gold, whoever said it was you are wrong.  No country's currency is that I'm aware of.

So what, if anything, are you saying that is worth hearing?  Crypto is fast influencing the way global markets work and how banking and trade is done.  It's encouraged advances in digital currency and faster banking exchanges.  Will crypto replace real currency?  I doubt it, but it might in the future, just not this year or this decade.

So, bottom line, calm the fuck down.

[HappySkeptic]

To paraphrase Lewis Black, nobody knows how the fuck economics works, so explain this to me: what is the advantage of a commodity-based currency over fiat currency?

Boru

For a currency to work, it has to have a limited supply, or people won't value it (or you get inflation).

For fiat currency, the limit is placed by the government.  Bitcoin has a hard limit.

There are problems with both.  With fiat currency, a government can be tempted to print too much.  With bitcoin, the limited supply incentivizes treating it as an investment and not a currency.

For any currency to work, people have to believe that it will have similar buying power a year from now that it has today.  If it goes down too much, it becomes worthless to hold, and if it goes up too much, it becomes risky to spend.