RE: Happy non birthday to you!

Well, I've been wanting to make a post about this for a while, but it would sound like hipocrisy. I think that cryptocurrencies are dangerous in the long term due to several reasons. I need to start talking about law and order, several thousands of years ago people had no laws and killed each other and took things from each other without retaliation. If we lived without laws today, I wouldn't be able to sleep or walk in the streets towards my job. Mankind came with a simple solution, in order to keep things calm between two people, a third one was needed, both people would give that third person the authority to stop both of them of their own free will, and thus laws were born. Laws are enforced by that third party in any way necessary according to the laws themselves in order to faithfully protect the first two parties. Of course, there is a lot of corruption and other factors influencing that third party, but that's the general idea.
Now, why bother bringing laws to cryptocurrency discussion?, well, this is due to backing and responsability. Suppose we go back to the two party example above, if I say I've got something that is worth as much as your house, would you accept it if you don't think so?, a third party needs to be the judge again, and what if I appear with a bunch of papers and tell you those papers are worth everything you got? will you believe it, would you "trust" it?. The keyword here is trust, if I have a billion dollar account and offer to buy your house, would you sell it?, you're receiving paper for that house of yours, or even numbers in a computer, yet you trust the value of that paper; the government and the banks work to keep that value. On the side of the cryptocurrencies, who will vouch for the value of a crypto? who will you trust to keep the value stable or to increase it? there is no one, no one at all.

So first issue, cryptocurrencies cannot be trusted, and this doesn't apply only to the value of the cryptocurrencies itself, but also to the fact that they are damn hard to trace, which means that all sort of illegit and not good behavior can occur using them, terrorism funding, drugs, human traficking, organ selling, the dark net is ripe with people moving cryptos to their benefits, since they're out of government control. Another core point is the cost of mantaining the currency itself, normal fiat currency is just managed in computers and printed or minted when necessary, the costs of mantaining such a system is very low and it supports big transactions without much effort. In comparison the cryptos need tons of computing power to do the mining and keeping the nodes running and registering the transactions. And what if someone decided to transfer 1 Trillion in bitcoins? the network wouldn't be able to tolerate that, the fees and the cost and the time would be ridiculous. But banks too have hefty fees, don't they? This is actually related to the third point I'm going to tackle now: Global nationalization.

Yes, you read that right, instead of globalization we're in a era of global nationalization that impedes the creation of anything truly worldwide, much less the creation of a worldwide currency. Countries close their frontier more and more every day, and we're surrounded by people who talk about feminism, machism, racism, and all sort of different genders. Instead of reffering to each other as citizens of planet earth or just humans we always refer ourselves by our titles and our countries, stuff like that... even for the Euro which had the full backing of several governments and banks it was a hard ride and they're still struggling with only a few countries in very close locations; can you truly believe a currency with no government and people's support can be adopted worldwide without drastic consequences? I can't convince myself to believe it, not while our modern socioeconomic system is like this.

The final problem is a purely fundamental economic one and it's the fact that cryptocurrencies are limited in amount. Let's assume for a moment that the world has abolished fiat and everything worldwide is priced in Bitcoins. For the sake of argument let's assume that money is distributed in the same way as it's today, soccer stars and financial firms have a huge amount of bitcoins while the average person only has fragments of bitcoins. Prices are suited to the average person of course, so a TV would be worth like 0.02 BTC or less, but what about fees for transactions then? wouldn't they be as hefty as the banks's current fees? food for thought. Returning to topic, since bitcoin is limited more bitcoins can't be printed and how would these people accumulate more riches? This is an issue, but even worse is what would happen if these people went on a buying spree, the market would be flooded in bitcoin, decreasing their value, so that the average person's bitcoin would be worth even less and they would be forced to part with bigger amounts, but in the end it would all go back to them, because they're the 0.01% of the population that holds control over the 99.9999% of the economy. So over enough time the gap between the rich and the poor would become even wider.

The final key point is the problem of security in such a decentralized environment, no one is to be held responsible for whatever happens, and forks can happens and, heck, let's use the right word: "SHIT" can happen, I was just reading about how several malwares and cracking techniques were being used against Bitcoin ATMs for example. Even government and banks can be hacked every now and then, but there is some degree of safety, in fact, at least in America, if your bank goes broke the government will pay you at least 50.000 dollars if you had at least that amount in the bank. And since transactions only occur between banks and bank accounts they're very secure because they have billions spent in safety, you can't compare that to the public safety of the chain, right?

Those points are enough to make me doubt the lasting power of cryptocurrencies and to be honest I only see them as a speculator's playground, a way to try and make some money since I live in a third world blockaded country and cannot trade forex or invest in stock indexes, trust me, I wouldn't get involved otherwise. Just as Starbucks said: "We don't want digital currencies, we're just providing a platform so you can exchange that and pay us in fiat", I also saw another interesting news: "Bitconnect's BCC is getting delisted due to lack of liquidity with a market capital of 5.6M" meaning that 5.6 millions are just disappearing because people can't accept the change of value, this is simple, someone who bought Bitcoin near 15k would willingly sell it for 800 or 700$? yet someone who just reaches the market won't pay 15k again, so the coins don't move and thus lose ALL value... another beauty of the free market.
That's it, what do you think? I believe that since you're a crypto enthusiast you have solid bases to rebate all of these points and convince me otherwise and I'm more than willing to listen if that's the case. Cheers and see you around.

P.S: This is more than 1200 words long, it's competing for the longest comment on steemit :D

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ejgarcia (52) 6 years ago

$0.00

crypto.piotr (64) 6 years ago

hi @ejgarcia

I just realized that you replied to me on Steemit. Sorry for such a late reply on my part.

I've got your email and i would love to keep in touch with you as Im impressed with your knowledge. The only thing is that Im not sure how to reply to you since you mentioned that you're not going to check that email :(

Anyway thanks for sharing your thought. I totally appreciate it.

Yours
Piotr

Well, I don't check that email, but you can find me on discord, and I do have another email, [email protected] that IS the email I check, the problem is that I cannot check it from my office, so I check it once per two or three days, but that one I do check often enough. It's been a pleasure to check some of your opinions as well and that post about AI was really good too and a good read.