Is this really true? I buy stuff with crypto all the time.

It's how I learned about crypto in the first place- back ~2015, I ordered legitimate, had-a-prescription medication for my father from overseas using bitcoin, as it was the only way I could get it, as the even-with-insurance price in the states was beyond our means. Wound up doing so for several years, and it was much easier than dealing with the 'normal' ways of payment. A lot of the things I order from overseas in general I pay for in crypto, simply because it's cheaper & easier than doing regular currency conversions. I'm talking about regular things, like specialty foods, or everyday items I can't find in the states. Nothing even close to grey market or sketchy. Just regular financial transactions, using crypto.

I'm sure by numbers my <$100-equivalent purchases are small potatoes, but how is that not also true for regular money? There are billions of dollars of capital sloshing around in the markets, but that doesn't make my personal-level spending not useful.

I guess I don't totally know how to respond to that; I have no idea what everyone is using it for. That's rather hard to know just looking at the blockchain, or even reading message boards like this. I have no problem spending it; pretty easy to convert it to gift cards that can be spent anywhere (they give you a kick back even), there's some places that do take it directly (not restaurants, or car repair, but like electronics stuff on the internet). And of course you can just sell it for fiat on an exchange then turn around and dump the fiat for stuff (in this case, fiat is kind of the weak asset since no one really wants to hold cash for long). Plus, it can buy some stuff you can't get with fiat (e.g. overseas purchases not tied into USD, or all the dark web stuff people talk about). It feels pretty darn liquid; I've never had a problem turning BTC into stuff. And it is way more so than gold, land, even stocks and bonds; none of which can turn into stuff in under an hour much less without audit/paper-trail/control. Only fiat is more liquid, except no one wants to hold fiat; just turn it into something else actually worth having. The real problem is getting BTC. Lots of roadblocks in acquiring it and generally the people who have it would rather pay you in fiat and keep their BTC.

...you do realize that most of the world's money supply exists in the form of derivatives, right? A single-digit percentage is actual cash. You're committing a strawman. They didn't say anything about how the proportionality of crypto's use breaks down - they simply stated that it has achieved the basic use it set out to. And they're 100% correct - I use crypto to buy things quite regularly (email, VPN, etc), and will continue to. Really, the only thing preventing me from doing so more often is hard-headed people refusing to support it, because it's "mostly speculative."

Here's an infographic: https://www.visualcapitalist.com/all-of-the-worlds-money-and...

> Such a vanishingly small percentage of cryptocurrency activity is actually used for trade

In reality, an overwhelmingly large percentage of tangible trade is fasciliated by one specific cryptocurrency for one particular umbrella of goods and services that may have something to do with onions.

What percentage of dollars are used for trade, as opposed to investment? Does it matter?

You can use bitcoin as a saving mechanism, which is the primary purpose of money, as long as you can trust that it is tradeable to something else. There are hundreds of millions of people who use bitcoin in this way.

For using it as everyday currency, there are debit cards that automatically convert your bitcoin to local currency at the time of payment. There are probably millions of people who use these debit cards. Bitcoin itself isn't suitable for everyday payments yet.

> And when Tesla decided to allow purchases via BTC

The main reason I don't buy things with cryptocurrency is that it would trigger a liquidation event and short term capital gains taxing.

Due to that, for US residents and citizens, it's not functional as a currency in its current form. I'm vehemently against taxing of cryptocurrency or treating it as a security by the IRS, but that's the way it is now.

> Such a vanishingly small percentage of cryptocurrency activity is actually used for trade (as opposed to speculation) that it is a novelty and newsworthy when it actually happens.

First, that last part is definitely not true. People do accept Bitcoin and buy things with it, and it’s not newsworthy at all unless it’s a meme-driven electric car company boss doing it. But secondly, why do these percentages actually matter? At what point does my valid use of something become dismissible because another use case which you don’t like gets popular? Do we dismiss people who actually like playing the Pokémon card game because lots of people collect the cards purely for speculation now?

It was a media sensation because it was Tesla doing it, not because of what was being done.

Tesla and Musk are attention-sponges and it's a large part of how they're still operating.

Yeah, I use crypto for purchases quite frequently. From hotel rooms to supplements.

You can use Lightning (a Bitcoin technology) to send BTC which is extremely cheap in comparison. Talking fractions of a cent.

You can use Ethereum Layer 2 tech like Loopring, zkSync, and eventually Optimism which Coinbase supports in the Coinbase Wallet. They haven't even added support for Lightning

Via the Polygon commit chain, these issues are fixed. Polygon's adoption is through the roof, saving Ethereum's butt. Hence the massive price climb.

Ah, the old Keynesian argument...

Well, now that it exists, what would you as an individual rather keep your cash in compared to inflationary fiat held in an account with negative interest rate?

I hate it when the government sneaks around back and lowers my score all the time. It'd be nice to retire someday before I'm dead.

Why do you expect the government's laws to be forever reasonable, or reasonable for everyone all the time? Can you be guaranteed a vote if you've already been made a criminal? I'm skeptical of BTC as a currency, but divorcing the state from the capacity to control who can transact seems like a fantastic check on government power in a world where surveillance is becoming increasingly perfect. Think of Bitcoin in this context as digital cash, in relation to a a potentially centralized digital currency.

I cant vote in the US. In argentina, however, the government seized my bank accounts and made it illegal to trade foreign currencies.

This assumes your vote matters. Governments around the world are consumed by regulatory capture and corruption.

Jews who fled Nazi Germany would like a word with you.

Government has always been the principal enabler of every war, genocide, and mass abuse of human rights through history. Divorcing them from control of money is a massive human rights advancement, and most people recognize this.

He was talking about paying w/bitcoin. You don't need KYC for that.

It's because once people put their money into a cryptocurrency they have a stake in not seeing it fail. The more they have in the cryptocurrency, the more they need it to retain value.

If your life savings were at risk of becoming worthless, you would also be defending cryptocurrencies as rabidly as these people.

"As a market practitioner of many decades" -- I like that phrase.

In the first phase, it was purely retail speculation. However, we are now entering into a new phase. ETFs are being issued. This makes it easier for institutional money to buy. Also scary. I'm not concerned about "fast money" (hedge funds), but rather "slow money" like pension funds.

Final phase: I notice that investment banks are slowly beginning to open cryptocurrency trading desks. They may trade directly, but mostly they are interested in derivatives. That is my biggest fear. How is that any different than CDS on MBS/ABS/CDO? (Credit default swap on sub-prime mortgage bonds) In short: The underlying was junk loans. Derivs on crypto feels like the same wolf, but in a different skin!

Seems like cryptocurrency mania is substantially more insane then tulip mania.

Ah yes the typical HN commenter who sees hundreds of millions of people doing something and assumes that he knows better.

Ya... And the internet is used for pirating media, porn, wasting time browsing, gaming and the other millions of "useless" things that it's associated with. The amount of sheer time wasted on the internet is incredible, let alone all the filthy illegal things that are happening on it.

Guess we can throw the internet into the trash bin too.

So does any traditional government issued currency, credit cards and banking loans and that doesn't make them useless to me.

Would I work for a crypto startup or as a crypto developer in the US if I'm not a citizen? No

Does crypto work as advertised? Yes

Social wellfare, a 401k, etc... are also "get in first get more money out if you get in late" schemes. A lot of people already cashed out their crypto to tangible assets and are set for life. A lot of other people have our pools as a risky investment and every once in a while rabalance and it puts food on the table. It's full of people with bad intentions but open your eyes, so is the world, those people are also doing pump and dumps and pyramid schemes with fiat and the stock market and putting hits on drug dealers over snail mail or dead-drops.

Source for the last point? I’m quite certain this is not the case anymore.

That doesn't cause the positive use cases to not exist.

So does the internet. It was even worse in the early days of the web.

Huge advantages for both. For example, something that's only possible on a blockchain is a flashloan. This is where you can get a loan for any amount (liquidity provided) as long as you repay the full loan amount in the same block. This primitive alone allows for much higher velocities of money since value can be moved and repayed in a single block (on the order of 10 seconds).

All of the advantages of defi boil down to increases in velocity of money. For example you can deposit funds into a contract and receive a token that represents your liquidity position. You can then use this token in other applications. So now you have this composability of money which allows people to create new financial primitives.

Non custodial, trustless loans mean I can get a loan against my existing assets without ever interacting with any individual or being subject to scrutiny. A single smart contract can do the job of entire banks.

I understand crypto perfectly and I strongly believe that it's ultimately useless. The difference is that I have no financial incentive to tell everyone I know about crypto, whereas you certainly do.

I'll leave it up to the audience to decide which one of us is biased.

I ignored crypto for several years because I put too much weight on opinions from HN. I'd probably be retired by now if I'd actually paid more attention.

Not anarchists, ancaps and right libertarians.

Crypto-currency has inbuilt hierarchy, as people with more hashrate have proportional power over the monetary system. This is more hierarchy than an elected chairman of the fed, for example.

And possibly those ideological people were also get-rich-quick people as well.

the funny thing is that cryptocurrency was fairly useful as a currency in 2014. There were a number of bitcoin ATMs in my city, and a number of businesses where you could spend it. It seems to me that the whole block-size debate proved the failure of the system, since the interests of a few ultimately triumphed over the best interests of the system as a whole.

I mean on HN you really do see a very anti-cruise ship sentiment whenever the topic comes up. They are really really wasteful and worse than commercial ships since they pollute the very water people want to visit for its beauty.

I wouldn’t really be all that upset to see them banned but there’s no momentum for it. Crypto just happens to be really visible to a lot of people who see no personal benefit for its existence.

"The issue is using more power than all of Argentina for one currency. "

It's using the power of Argentina for an MLM/Ponzi scheme that doesn't apparently create any value.

If it were a) broadly useful and b) used less power it would be another story.

'Cruise ships' at least allow people to 'cruise'.

Bitcoin doesn't use GPUs for mining. Bitcoin mining is performed with custom ASIC hardware. GPUs cannot compete as they're not built for purpose.

In a sense, we could say “lack of CO2 in the atmosphere” is the scarce resource which is being depleted.

( Maybe kind of like how you can think of something which can burn by absorbing oxygen, as releasing phlogiston (which is just a lack of oxygen, in a certain sense)? )

Monero is an actual coin with a blockchain, mineable by normal people, low fees, good transaction speed and always on privacy features that actually work. Shib is just a meme token created to compete with dogecoin.

Shiba Inu is just a token on the Etherum chain.

There is no privacy and they've done some weird stuff to play the numbers.

E.g. they sent half of all SHIB to the creator of Etherum, why? Because that doubles the "circulating supply" and therefore market cap while not increasing the available supply at all.

This is a scheme to artificially increase the market cap, which mostly worked because VB burned 95% of all the SHIB he got & it got a lot of press.

Monero also has active, on-going development. Shiba Inu, Dogecoin, and all the other meme coins that have sprung up as a result of the smell of free money in the air were created in the space of a couple of hours using Ctrl-C Ctrl-V of existing open source code, then released to the world with no care to actual function or any further effort other than pulling the rug when enough suckers have bought in.