My impression is that cross-border payments are a pretty small use case, especially if you mean legal cross-border payments. I.e., “something the law allows you to do but you can’t find a financial institution to do it.”
> censorship-resistance
Sure, but again, fairly niche at this point in time in western countries. Most financial censorship cases I’ve heard of in the U.S. sounded pretty well deserved.
> trust networks
This is a niche of a niche outside. You could just say “cryptography enthusiasts” instead.
> access to credit
Example? As in, someone with bad credit can still borrow on crypto?
>> See Cross-border payments, censorship-resistance
Both being illegal. If something is censored by government, the tools to bypass or defeat that censorship are likely illegal, especially if used to distribute uncensored copied of that material. If governments have regulated payments across a particular border, bypassing those regulations is also very likely illegal.
If we are defining value, I would not say that value is equivalent to intrinsic value, or else the phrase "intrinsic value" would be redundant. Currencies have value even though they do not have intrinsic value. Notably, this value is as a medium of exchange, a unit of account, and as a store of value.
Bitcoin's capped supply increases its ability to store value, and so too does its demand increases. Yes, you could make a currency the exact same as Bitcoin, but it probably wouldn't be as good as a long-term store of value, because its network is smaller.
If we are defining value, I would not say that value is equivalent to intrinsic value, or else the phrase "intrinsic value" would be redundant.
Nothing has intrinsic value, value is a relational and marginal property - I value things differently than you, and you value the first litre of water differently than the thousandth. And even then the value of something is not fixed and may change over time, you probably now value things differently than you did as a child.
I'd like this to, but to me it's still unclear whether Bitcoin's potential will be just as a reserve currency and store-of-value (like Gold), or also as a unit of account and medium of exchange (like the dollar). I'm more confident in the former and less on the latter.
There's a difference between being known by the mainstream and being used by the mainstream. Bitcoin is the former, but not yet the latter.
It appears that Bitcoin's main use case is as a long-term store of value (like Gold, but digital). It will be very helpful to have a currency that anyone can use without one country's central bank controlling it, and with Bitcoin's strong network effects, its only a matter of time before it becomes adopted by more commercial banks, central banks, and individuals.
> It appears that Bitcoin's main use case is as a long-term store of value
If we grant this for the sake of discussion, bitcoin has been capable of this for more than a decade, the masses aren't interested in this, the only thing they like about bitcoin is the fun of gambling which is the mainstream success I referred to in my previous comment.
> It will be very helpful to have a currency that anyone can use without one country's central bank controlling it
Again, bitcoin has been capable of this since the beginning, it's a niche use case that has its place but the masses don't care, central bank money will always be superior due to its intrinsic connection to the governing authority of the region that mediates the economy - people want their stuff, they don't want bitcoin and have no reason to use it.
> its only a matter of time before it becomes adopted by more commercial banks, central banks, and individuals.
There's no reason for them to do so, least of all a monetary authority like a central bank. Peak bitcoin is what bitcoin looks like today.
Having a store of value is in fact appealing to the masses, especially those with weak national currencies. We know this because the rates of crypto adoption are highest in developing nations, where national currencies are not as strong.
Yes, the possibility of making a lucrative investment is also appealing, and is what's driving most of its current growth, but as BTC settles into its role as store-of-value (which may take 10+ years) it is expected to become less volatile, and adopted for this use case.
> central bank money will always be superior due to its intrinsic connection to the governing authority of the region that mediates the economy
There are two sides to this sword. In wealthy, democratic governments this allows for more control over the economy, boosting it in times of need, but for oppressive regimes it just gives the government more power to act in their own interest.
> * people want their stuff, they don't want bitcoin and have no reason to use it.*
People do not immediately use all of their wealth to consume things, instead they have to store some of it somewhere. This is one of the uses of currencies. In countries with high inflation there is difficulty for people to store any wealth at all in their central bank's currency, and have instead resorted to Gold, USD, and Bitcoin.
> Peak bitcoin is what bitcoin looks like today.
If peak BTC is what it looks like today, then there is no incentive for people to keep pouring money into it, so its value relative to Gold, USD should not increase too much from what it is today.
I believe we are still far away from peak Bitcoin, and that Bitcoin will continue to rise in value in terms of USD over the long run.
> they have to store some of it somewhere. This is one of the uses of currencies
Currency is for current things. You don’t store wealth in currency. Even in poor countries wealthy people store wealth in assets, be it real estate, businesses, cars, or cattle. Only poor people store their “wealth” in currencies, because they can’t afford any assets.
> there is no incentive for people to keep pouring money into it, so its value relative to Gold, USD should not increase too much
If there is no incentive to keep pouring money into it — not feeding the miners who maintain security and turning gears of the network — then indeed the value will not increase, but rather rapidly decrease.
> Having a store of value is in fact appealing to the masses, especially those with weak national currencies.
I think you're being overly generous in your estimation of the thought processes of the masses. All the normies I know that are into bitcoin (or talk about it) aren't into it because of "weak national currencies". The normies are into crypto because of hype and FOMO. "Hey did you hear, you can make a ton of money in bitcoin! What's bitcoin. It's internet computer money". "It's the future!" "Gotta get in early." That kind of nonsense. At best you get a few of the "fuck the government" crowd in the mix.
Normies don't spend one second thinking about the dollar beyond "how can I easily get more of them." When talking about economics they parrot "the Fed sucks" or "Biden destroyed the economy" narratives etc.
They want dollars because dollars lets them purchase everything they need and pay taxes. They're not interested in monetary policy beyond paying lip service.
I have to assume this is pretty universal the world over. People are just trying to survive, and [local_currency] lets them do that. Bankers and fiscal policy setters worry about the stuff you're talking about.
> The normies are into crypto because of hype and FOMO.
Hype and FOMO are indeed drivers of growth, but those alone would not explain why rates of crypto adoption are highest in countries with large unbanked populations.
While Bitcoin adoption in countries with strong national currencies like the US or EU is likely driven by FOMO and hype, its main appeal is as an investment/store-of-value for those who lack access to them otherwise, and that is why Bitcoin adoption is highest in unbanked populations.
Well I was replying to your comment about general appeal of bitcoin to the masses. Your last question relates as to why certain countries are adopting first. I think that's an important distinction, might not be the same underlying reasons.
I don't have answers, but I can throw out potential answers that come to mind.
- I agree there's utility to the unbanked. Having a bitcoin is better than having nothing. Could be better than national currency depending on the country you're living in. I still suggest that those people would rather get their hands on $$$ if they could.
- A lot of crypto is used for crime. 419 scams come to mind (yes I know a lot are in $$$). The point is that some of the adoption in these poor countries could just be explained by criminal utility.
I appreciate your perspective. My point being I don't think it's that cut-and-dried. My gut says bitcoin is better than nothing, but $$$ are better still for most.
Lastly, and it's an important point I keep forgetting to make. Almost everyone into bitcoin are into it because of the $$$ they can later get out of it. That's a huge litmus test for me, telling me that it's not about the bitcoin to them. They want $$$ at the end of the day.
Thing is, if someone needs a store of value that's not controlled by the bank, gold is already there - and, for most people, it being physical is actually an advantage (easier to secure in a way that they can understand and verify).
Then again, most people who hold crypto today, do so in third-party wallets on platforms like Coinbase. At which point the "gold equivalent" would be to buy gold certificates from your bank of choice.
Thus, the only practical value proposition of Bitcoin is that it can do long-distance transactions outside of the established bank network and its regulations. I'm not saying that dodging regulations is always a bad thing, but regardless of that it's a very niche use case by definition, never mainstream.
The reason why it is so popular outside of that niche is speculation. Which is also why we're seeing those wild swings - if the current price was anything resembling its real utility, it would be a great deal more stable.
> * being physical is actually an advantage (easier to secure in a way that they can understand and verify). *
Because gold is physical it is not easy to transport, and can more easily be seized by the government -- both of which make it a worse store of value. It is also worse because its supply growth rate is higher, which means that if you hold gold you are losing more value every year (absent changes in demand) than if you hold Bitcoin. In fact, we know exactly what Bitcoin's total supply count will be, whereas with Gold we do not. If BTC gains mass adoption, then it will be the best store of value that we have.
A tiny amount of gold costs a shitload of money. 1kg of gold costs around 60k eur. More than most people have in savings. No problems to transport something like that if you don't brag that you own it.
But the same applies to BTC. Telling others that you own a large amount of it is not a good idea. It can be stolen in various ways too. Like by an exchange that's owned by a trustworthy and altruistic billionaire.
It's been 14 years and BTC is not even close to mass adoption.
Even my mom knows what it is but has no need or interest to use it.
What would make "normies" switch to BTC if they haven't already?
I don't think it is so simple. There is already a EUR 10k limit on the amount of cash that you can carry across EU border without declaring it. In case of violations the money may be confiscated. I would assume that the same would apply for gold above some reasonable value (e.g. a really big gold necklace :) ).
> * I would assume that the same would apply for gold above some reasonable value (e.g. a really big gold necklace :) ).*
Whereas with Bitcoin, it is much more difficult to confiscate it because it's purely information. You might be trusting the manufacturer of a hard wallet to protect the privacy of your seed phrase, but once you memorize it no one can forcibly take it from you.
> Because gold is physical it is not easy to transport, and can more easily be seized by the government
For most people, the more immediate threat is not the government seizing it, but robbers and/or scammers. Defending against robbers isn't that hard, especially if you have so much money to park somewhere; but more importantly, it's well-understood. OTOH the average level of technical literacy makes malware and scammers much more dangerous, and Bitcoin is far more exposed to both.
The usual retort is, "just learn how to secure it properly, it's as easy as this 20-point list". When it comes to mass adoption, this is kinda like pitching Vim + LaTeX to Word users. It doesn't matter that you can secure Bitcoin better than gold, if you know what you're doing, because most people do not and will not.
> It is also worse because its supply growth rate is higher, which means that if you hold gold you are losing more value every year (absent changes in demand) than if you hold Bitcoin.
You can't realistically assume "absent changes in demand" IRL, making this point completely moot.
On top of that, scarcity is not the determinant of value in and of itself. It's easy to make tokens of which there's a limited supply, but it's much harder to convince everyone else that they're worth using. But, for gold, that part is already done, and this consensus has been stable for literally millennia. Bitcoin is still in a consensus-building stage, and it's not even clear whether it'll ever be achieved at all, much less how long it'll take.
> If BTC gains mass adoption, then it will be the best store of value that we have.
So, BTC should be mass-adopted because it is the best store of value, but it can only be the best store of value if it's mass-adopted?
BTW, I should be clear that I'm not anti-Bitcoin or anti-crypto in general - I just think that speculating on it is neither productive nor safe. Unfortunately, that's also 99% of all the economic activity in the ecosystem right now. Hopefully that bubble will burst eventually, and it'll go back to its crypto-anarchist roots.
Just like a dollar, digital currency would be liable to your central bank, whereas the digital forms of payment that you use now are liable to your bank.
So a digital currency would allow people to spend digital money without the need of a bank account.
Interest in crypto comes in cycles, and with each new cycle there are more incumbents that want to get involved. This bear market may have been particularly worrying for the industry, but I'm confident that in 5-10 years from now large financial institutions will again want to incorporate crypto. The networks behind these currencies are too resilient and the upside is too high to avoid.
Because 5-10 years is a long enough period for another generation of youthful greater fools to enter the market who weren't old enough to have been burned by the previous cycle.
Both. There are ongoing developments in Decentralized Finance and Identity Networks on Ethereum that are reinventing more parts of the current financial system, as well as the shift to proof-of-stake that is making Ethereum more scalable and efficient.
I focus on Ethereum just because it's the center of innovation in crypto nowadays. Bitcoin has only incrementally changed its software throughout the years and only gains more use as a store-of-value as demand for it increases (hype cycle).
After a bull market run it generally takes 5-10 years to reach its peak again.
You're right, my generalization is too early. It is based on crypto's correlation with the overall stock market since it is seen as an investment, which has always returned positive over a 15 year period. But this is more speculation than anything else.
Ethereum is not decentralized. Decentralization is the most important thing in a blockchain. The sooner everyone realizes that, the sooner we can start building momentum on the chains that are viable.
On almost every dimension Ethereum looks like the most decentralized network out there: Most nodes, most validators, most distribution of validators, most clients, most development teams, ease of making your own block.
What do you think is some of the more “modern and efficient material” we should be learning in school now?
Things that come to mind:
- Keyboard typing
- Converting between binary and base 10
I suspect we’ll start to see things we wouldn’t expect. Kids are growing up with phones and tablets, so keyboards are debatable, even though they’re commonplace. Consider asking a kid to tell time with an analog clock sometime.
I doubt many are writing papers longer than a page using a touch keyboard even if they're doing it on tablets. Physical keyboards are among the more popular tablet accessories.
The ability to put down written word is a basic element of literacy. They need to learn some way. Perhaps you are saying they type in on-screen keyboards?
People generally think and type much faster than they speak so probably not. Plus, no matter how robust speech to text becomes it still struggles with names and slang.
The average typing WPM isn't comparable to the average typing WPM someone has while working on say, an essay. Just like how the average speaking WPM isn't comparable to the same. Even more when what's being written has to be more proper than spoken language, where grammatical errors, broken sentences or stuttering etc is completely normal and easy to ignore.
We've had fairly robust speech to text for a few years now and the only places its seen real penetration in is basic personal assistant stuff involving short and simple queries, so I find it hard to imagine that anyone thinks that speech can replace keyboards as an input method.
Even with people I know who've tried to switch to using speech to text due to injuries, it's been a nightmare because there are no easy ways to use it for anything that isn't plain format-less dictionary language. For casual communication it sucks because people use a lot of slang, often even slang exclusive to their friend group, and for serious communication it doesn't work because "delete last word" or "cut sentence X and paste here" is objectively not as convenient/fast for say, the average western highschool student as doing the same via keyboard.
Not even considering how unrealistic it is to edit/format text via speech.
As a way to reason about this, look at some code (assuming you're a programmer) and try to think of how you would input it without a keyboard.
The main issue with speech to text is that it is not private, and that it pollutes the environment with noise. How would speech-to-text work for a college student making notes in a lecture for instance?
The only place it works is if you have your own private office (e.g. doctors dictating their notes), or at home.
Ah yeah I hate it when I go to the supermarket and get asked interview questions like "convert that number to binary". Such a useful skill to have for the general population
I know Miami hosts many crypto conferences, but I’m surprised you’d choose it over NYC or SF. Do you think that Miami is under appreciated compared to those cities or it really is more of a global center for crypto innovation?
I don't work in the industry but have followed it off-and-on, so take my opinion with a grain of salt. My impression is that Miami is more positive about the tech in general and is trying to deliberately make itself a hub for it. I don't get the same feeling from SF and NYC is such a huge market for every industry (especially traditional finance) that it can be hard to stand out.
A lot of things… the technological innovation, the developer ecosystem, the potential to change how society is structured. To me the core innovation of Ethereum is having programmable money, which will enable an entirely new financial system to be built.
There are many use cases outside of these. See Cross-border payments, censorship-resistance, trust networks, access to credit, etc.