Not everyone got the web, chat, or social networks, but loads of people did and people from all backgrounds. Things like Geocities, AIM, MySpace, early Facebook, early search engines, etc. had millions of users very rapidly. They penetrated beyond the tech-savvy early adopters within years. Cryptocurrency is more than 10 years old and hasn't seen anything like this.
The vast majority of what I see in cryptocurrency is just speculation. It all seems like a giant very complex over-engineered online casino app.
Yes there are use cases outside of that but they seem much more niche. The people saying "there is no use case" are over-arguing their position, but I think the actual non-gambling use case is small.
I strongly suggest doing a comparison of O(log n)-style adoption curves between Bitcoin, and say- cell phones, computer networking, or really any innovation that became ubiquitous and for which we have the data... I think you'd be surprised at the similarities.
If I look at the adoption curves of cell phones or computer networking, I see a steady increase.
If I look at the adoption curve of Bitcoin as means for payment, the peak was multiple years ago when many companies in my area experimented with accepting it as payment - I could order a pizza with Bitcoin, I could buy an airline ticket, etc; but now those companies have stopped accepting them. There are multiple niches of business which do accept Bitcoin, but overall there has been a significant decrease at least in practical use - there has been some upsurge in digital asset related transactions, but in any case the adoption is certainly not growing exponentially like for other growing technologies, if we look at transaction rates at e.g. https://blockchair.com/bitcoin/charts/transactions-per-secon... then we're at the same level as of 2017, and below the peak.
There are huge regulatory and societal roadblocks for crypto to be used as envisioned not as present during those other cases of wide technological adoption.
For crypto to be valuable, merchants need to use it. Transactions need to be cheaper. A stable decentralized financial system needs to emerge.
The use case is a world without central banks and central currency manipulation.
People who don’t see the use case don’t understand the scope of what direct exchange of currency without central management entails.
There are arguments against that world and in favor of central currencies. The roadblocks are enormous, maybe insurmountable. And perhaps that world would be worse or lead to more authoritarian control rather than less. But I don’t think anyone who believes in the potential denies crypto will take time to have a lot of mainstream use simply because the main use case is so large.
Credit and hard crypto currencies are not incompatible. The main difference is crypto sets hard limits on underlying denominator of value and distinguishes it from credit.
There are potential liquidity problems and endless debates about whether having everything backed by crypto like bitcoin would be a net positive. I don’t have the background to get into all the economic implications and I’m not entirely sold on this alternative crypto based future I’m presenting being a good thing, even if possible. Rather than dismiss these types of arguments, though, I’d like to see more central bank advocates explain why creditors which accumulate bitcoin would not be able to act similarly to current issuers of credit, but more checked and decentralized because none would have control over the production of the underlying value representation that’s borrowed against.
I think the major roadblock is the fact that bitcoin was conceived as anarcho-capitalist money, and for it to succeed anarcho-capitalism would have to succeed. And that's not going to happen, because anarcho-capitalism is not viable way of organising a society. It should be obvious to anyone who has delved into the literature.
Gold was the world reserve currency for millennia and acted similarly to bitcoin and other crypto currencies. You can still have emergent government structures many of the bitcoin people would hate on top of a base store of value which is not centrally produced by governments.
I agree. But the promises that bitcoin makes can only become reality if anarcho-capitalism itself becomes a reality. Otherwise, if the government continues to tax you, and banks continue to hold fractional reserves, what is the point of using something so anti-economical and impractical as bitcoin, when you can just use a more convenient currency?
If the supply of money is distributed it becomes more difficult to manipulate.
Fractional reserves in a world backed by bitcoin can’t be bailed out if banks screw up. If people want to exchange whatever government backed medium might sit on top of it to actual bitcoin the banks wouldn’t be able to if they spread themselves too thin.
That's not what I meant. The majority of money in circulation is not issued by central banks, but instead is money that is created out of thin air by commercial banks that operate under fractional reserve banking. In other words, fractional reserve banking expands the money supply. This means that if bitcoin became money, the supply of bitcoins would not be fixed at all, contrary to what many of its advocates believe, because fractional reserve banking would create a colossal amount of new bitcoins, just like now it creates colossal amounts of new dollars. So the promise of a fixed supply of money cannot happen, unless a world-wide ban on fractional reserve banking occurs first, somehow.
Bitcoin and fractional reserve banking are compatible. And a fractional reserve system based on bitcoin would be different than what we have now. It’d be similar to what we had before nixon took us off the gold standard.
Banks depend on reserves and rules issued by the fed, and those reserves and rules are subject to arbitrary supply changes.
It is impossible for a non sanctioned bank to get reserve notes or have authorization to create notes banks lend out representative of that (dollars).
In a world where fractional reserve banking still exists, but is backed by bitcoin, you’d have lots of “bitcoin notes” being created, NOT bitcoin. No one would be creating new bitcoin apart from miners.
The faith in a “bitcoin note” would be tied to it’s ability to be exchanged for actual bitcoin in a wallet address.
The benefit (or downside, depending on your perspective) is that a central government would not have complete and total control over the supply of reserves that the banks get, and if banks lent poorly, they couldn’t get new emergency reserves from thin air. They’d have to get bitcoin from someone or go under.
There would be a fixed supply of the underlying reserve that people pass around iou’s for.
> In a world where fractional reserve banking still exists, but is backed by bitcoin, you’d have lots of “bitcoin notes” being created, NOT bitcoin. No one would be creating new bitcoin apart from miners.
No, this is a misunderstanding of how fractional reserve banking works. Bank deposits are money, despite the fact that they might be only partially backed with reserves. Bank deposits are not IOUs. And the same is true of bitcoin deposits held by the public at crypto-exchanges. Theses bitcoin balances are bitcoins, despite the fact that they might be only partially backed with reserves. These are not a "bitcoin notes", but actual bitcoins. And therefore more bitcoins can be created by exchanges simply by lowering their reserve ratio.
> the same is true of bitcoin deposits held by the public at crypto-exchanges. These bitcoin balances are bitcoin
No, those balances are not bitcoin.
If it is not a balance assigned in the distributed ledger, it is not bitcoin.
I understand that the ious in the dollar system are the money. You are misunderstanding the difference in how the reserves would be generated in a world backed by bitcoin. Saying bitcoin is the same as an iou not on chain is an egregious misrepresentation.
Bitcoin in a world with “bitcoin notes” backed by fractional reserve banking would be very similar to gold when dollars used to be exchangeable for a set amount of gold. It is not the dollar in that comparison, it is the gold. But it has the added property that it is easily transportable and could also act as a direct form of payment.
It is not practical to buy a sandwich with the equivalent dollar amount of gold, even when there was a static exchange rate between the two when we were on the gold standard.
It would, however, be practical to ALSO directly exchange bitcoin, in addition to exchanging “bitcoin notes”. Direct exchange is the original vision of crypto, but a world where people primarily exchange “bitcoin notes” instead of bitcoin still benefits from the fixed supply of what the note can be exchanged for.
The vast majority of what I see in cryptocurrency is just speculation. It all seems like a giant very complex over-engineered online casino app.
Yes there are use cases outside of that but they seem much more niche. The people saying "there is no use case" are over-arguing their position, but I think the actual non-gambling use case is small.