Some great questions from @tpflug on #cryptocurrency that I thought others might also be asking... And, in this thread, I'm going to try to answer them...
Why care about crypto?
What can we do with them?
So much fraud & wasted energy: what am I missing?
Why care about crypto?
What can we do with them?
So much fraud & wasted energy: what am I missing?
Why care about #cryptocurrency?
Crypto-currency is to banking, payments and (soonish with Atomic Swaps) currency exchange – as the internet was to high-street retail, music buying, movie rental and more. It's going to change these industries. It's already beginning to change them
Crypto-currency is to banking, payments and (soonish with Atomic Swaps) currency exchange – as the internet was to high-street retail, music buying, movie rental and more. It's going to change these industries. It's already beginning to change them
We have to treat cryptocurrency now as we did the internet in the 1990s to early 2000s – a new technology, a new paradigm, a game changer but we're still exploring. Like when the dot-com bubble burst, the entities that survive will be the ones that matter. The ones people trust.
Why care about crypto-currency?
Because conventional currencies are broken, corrupted & a major factor in growing wealth inequality. Crypto-currencies promise to take the decision of how new units of a currency are created out of the hands of those driven by profit & politics.
Because conventional currencies are broken, corrupted & a major factor in growing wealth inequality. Crypto-currencies promise to take the decision of how new units of a currency are created out of the hands of those driven by profit & politics.
Why crypto?...broken conventional currency:
Most new units of currency are created by private banks with each loan they issue (loans are money created from nothing). About 3% then comes from central banks printing money or Quantitive Easing. Both are the main cause of inflation.
Most new units of currency are created by private banks with each loan they issue (loans are money created from nothing). About 3% then comes from central banks printing money or Quantitive Easing. Both are the main cause of inflation.
Why crypto?...broken conventional currency:
Cashless payments have taken over, the last 3% of conventional currency units circulating in physical form will be gone anyway. They're backed by nothing and are created in virtually unlimited amounts for profit.
Cashless payments have taken over, the last 3% of conventional currency units circulating in physical form will be gone anyway. They're backed by nothing and are created in virtually unlimited amounts for profit.
Why crypto?...broken conventional currency:
The cryptocurrencies that will win, after this exploratory period, will make the creation of new units of a currency uncorruptible by politics and profiteering – the original motivation of Bitcoin.
The cryptocurrencies that will win, after this exploratory period, will make the creation of new units of a currency uncorruptible by politics and profiteering – the original motivation of Bitcoin.
Q: What do they empower people to do right now which is otherwise impossible?
The poorest unbanked economies can enter the global economy (#litecoin). Your social media posts can be an instant source of income (@steemit). Your data can be a source of income (@iotatoken).
The poorest unbanked economies can enter the global economy (#litecoin). Your social media posts can be an instant source of income (@steemit). Your data can be a source of income (@iotatoken).
Q: What do they empower people to do right now which is otherwise impossible?
Much like the early days of the internet (1992-2002), once crypto-currency stabilises, it will be more about what they will empower people to do...
Much like the early days of the internet (1992-2002), once crypto-currency stabilises, it will be more about what they will empower people to do...
...What they will empower people to do:
Make cross border payments instant and cheap (currently, several intermediary banks are involved and it can take up to a week). Currency exchange will be trivial. You will be your own bank as far as currency is concerned.
Make cross border payments instant and cheap (currently, several intermediary banks are involved and it can take up to a week). Currency exchange will be trivial. You will be your own bank as far as currency is concerned.
...What they will empower people to do:
Everyday payments will be simplified (again, no intermediary banks needed). You'll get paid for all valuable content you create (rather than centralised social networks). You will sell weather data from sensors on your window-sill...
Everyday payments will be simplified (again, no intermediary banks needed). You'll get paid for all valuable content you create (rather than centralised social networks). You will sell weather data from sensors on your window-sill...
...What they will empower people to do:
And then there's all the things we haven't thought of yet. There's already so much being explored. Then there's what we'll discover, serendipitously, through all the innovations that will happen.
And then there's all the things we haven't thought of yet. There's already so much being explored. Then there's what we'll discover, serendipitously, through all the innovations that will happen.
Q:What i see is: *fraud* and LOTS of electricity wasted on mining. What am I missing?
Fraud is rife & scams are everywhere with conventional currency. Greed isn't something cryptocurrencies have solved (yet). But, they do provide mechanisms that may limit exploitation one day.
Fraud is rife & scams are everywhere with conventional currency. Greed isn't something cryptocurrencies have solved (yet). But, they do provide mechanisms that may limit exploitation one day.
Q:What i see is: *fraud* and LOTS of electricity wasted on mining. What am I missing?
Then, there's the way conventional currencies work today... I encourage you to watch @mike_maloney's Hidden Secrets of Money and @PositiveMoneyUK's Banking 101, both on YouTube.
Then, there's the way conventional currencies work today... I encourage you to watch @mike_maloney's Hidden Secrets of Money and @PositiveMoneyUK's Banking 101, both on YouTube.
Q:What i see is: fraud and *LOTS of electricity wasted on mining*. What am I missing?
Lots of energy is wasted on banking with huge data-centres and office buildings. Then there's the printing and transportation of cash. Crypto-currencies are solving this...
Lots of energy is wasted on banking with huge data-centres and office buildings. Then there's the printing and transportation of cash. Crypto-currencies are solving this...
Q:What i see is: fraud and *LOTS of electricity wasted on mining*. What am I missing?
Proof of Work mining (as in Bitcoin) is outdated & being replaced: Proof of Stake, SegWit & innovative non-blockchain solutions like Directed Acyclic Graphs e.g. the @iotatoken Tangle.
Proof of Work mining (as in Bitcoin) is outdated & being replaced: Proof of Stake, SegWit & innovative non-blockchain solutions like Directed Acyclic Graphs e.g. the @iotatoken Tangle.
Q:What i see is: fraud and *LOTS of electricity wasted on mining*. What am I missing?
For now, the upside to mining is that value of otherwise unused renewable energy that exceeds storage capacities can be turned into currency (seen how much China is investing in Solar?)...
For now, the upside to mining is that value of otherwise unused renewable energy that exceeds storage capacities can be turned into currency (seen how much China is investing in Solar?)...
A lot of people don't get it, but before you can... you need to understand how conventional currencies work (not the myths) and why they're broken. Many objections and fears about crypto-currencies are often about qualities they actually share with conventional currencies...
They're virtual (most conventional currency in circulation is digital; only 3% is physical cash and that's declining with ever increasing cashless payments).
They're not backed by assets or anything else (conventional currencies have not been backed by anything, like gold, since the 1970s and even then only a fraction of it was backed by anything).
It takes control of creating new currency away from central banks (they lost control of currency a century ago; commercial banks create new units of a currency each time they issue a loan – you're borrowing money made from thin air – which is why we have huge boom & bust cycles).
There's so much fraud. They use so much energy... etc. etc. (see above for those).
Once we all see that what we fear about #cryptocurrencies are all the things they have in common with conventional currencies, we can start focusing on how they can solve real issues: eg: boom & bust; growing wealth inequality; unbanked economies; centralised data exploitation...
...and how cryptocurrencies can solve many direct problems with conventional currency, like the fact that the decision on when new units of a currency are created is made mostly by people who profit from it rather than it being for the greater good of the people or the economy.
People criticised the early internet; now everything is different – how we do retail, dating, communicate, share information, create content, make money and so on. The same will happen with #cryptocurrency. It just depends on which side of the adoption chasm you want to jump in.
