Cryptocurrencies have intrinsic value? Did the author intent to write that or was it an accident? S/he has grouped precious metals, which have purposes from engineering to jewellery - with solutions to arbitrary cryptographic problems, which are useless for everything except swindling.
Isn't using crypto as a currency equivalent to using precious metals as jewellery? Something like <10% of gold is used for industrial purposes and the rest is jewellery (superfluous personal adornment) and investment (value-storage). But compared to something like gold, cryptocurrencies at least have some valuable characteristics when used as an investment or financial tool: verifiable transactions, low-transaction cost, etc.
Cryptocurrencies likely follow a similar model. Useless to the lay-person except as decoration. Representing a "colossal waste of resources", but having access to the refining tools / techniques also has some commercial value.
Is gold useless except for swindling? Was trading land for gold (or vice versa- gold for land?) was that swindling?
I'd love to hear your rebuttal.
When gold is mined from the ground, planet Earth has less gold.
When a coin is mined, there's a bit less solution space for the class of crypto problem.
But when a Blockchain/protocol is forked, nothing of value is lost. In fact there's a gain in solution space. Eg BCash fork doubled the quantity of BCoin protocol solutions.
> Gold is practically useless day-to-day for a lay-person except as decoration,
And vehicles, phones, computer chips, the industrial applications that keep the planet functioning etc
We also use around (again allegedly) 220 TWh/year mining Gold.
The answer to "What is this item [the bits comprising your private wallet key] worth on its own?" is "Nothing" for cryptocurrencies, much like a 5 Euro bill is worth essentially nothing on its own. A gold bar or a bucket full of copper cents has an intrinsic value: it's metal that can be used for many engineering purposes.
I need to think about this some more...
Then why does every imagined new application of blockchain also create a new coin-type? If someone really does come up with the killer app for blockchain personal banking...well then why would they deploy it on the existant bitcoin network. And the next killer app, and so on. Now everyone is using the killer-app coin, why would bitcoin maintain value, or any of the clones.
This doesn't make any sense. The value of any currency is measured constantly by its users conducting trades: when you buy a coffee, you're measuring the value of the currency used; when you pay for a haircut, you're measuring the value of the currency used. That is far more frequent and larger than FX trading.
A quick search for pinned currencies brought up this nice list: https://www.investopedia.com/articles/forex/061015/top-excha...
Right now, in your situation, would you rather have a coffee or a haircut?
Would you rather have 2 coffees or 1 haircut?
And so on. There are plenty of exercises to determine how you (personally) value things, and also the shape of your utility curve. That was one of the most interesting classes I ever took: decision and utility theories.
A lot of the work was understanding the impact of different personal (or institutional) utility curves, how to determine your own and how to maximise you return not in absolute terms, but in relative terms using your utility curve.
When you take in account non-linearity of utility curves, lotteries make sense, for example, since for most people the utility of $1 is far less than 1 millionth of the utility of a million dollars.
The same with insurance. Insurance always has a negative expected value in absolute terms, but when you take in account that U(-$1) << U(-$1M)/1M, they make sense, since your utility-adjusted expected return is positive. That's also why your insurance should always have the maximum possible deductible.
Insurance works because companies and people have different utility curves.
In aggregate across a large population, however, a bottle of water has a fairly stable price.
Haircuts and coffee are also not commodities, there are quality factors involved so variable pricing based on location, supply/demand, and the like is expected.
Like if someone gave me 3 coffees I’d be good for the day, but 10 and I’d either be too wired to cut your hair well or drink 3 and watch the other 7 get cold and stale.
1. except for underflow, which reasonable financial computations never encounter, because their inputs are well-scaled.
And transitively that boils down to time - expenditure of the finite lifespan of humans.
It's a proof of burn system.
That's a spurious deduction. Inheritance is a mechanism of passing value store. Purely living off inheritance, reduces the stored value. This is a demonstration of the concept, not a violation.
This is assertion may be invalid when the problem domain includes either (a) compound interest calculations that require calculating a rational number raised to a rational power, (b) expected value calculations with random variables drawn from a probability distribution such as the normal or exponential that is defined using transcendental functions, (c) any formula involving e, pi or the mathematician's favorite, those three little dots ...
For example, the asserted feature of rational arithmetic does nothing for one facing the 6th grade arithmetic problem that introduced us all to the shortcomings of decimal numbers when I went to school: One quart of paint covers 5 square feet; paint costs $2.75 per gallon; how much will it cost to paint a circle 4 yards in diameter?
TL;DR: The article is Too Long; Don't Read.
