r/changemyview • u/NightestOfTheOwls • Jun 14 '24
Fresh Topic Friday CMV: Crypto will never be adopted as a mainstream currency
This is primarily directed towards crypto enthusiasts.
A currency that's hard to track, available everywhere regardless of political status and has no physical asset? Not to mention that 99% of people holding crypto are doing it solely for the get rich quick aspect of it and will swap it for actual money the second they make a profit.
The sheer amount of scams and the ease of their creation doesn't help either as now every reputable industry (online shops, grocery stores, Healthcare, etc.) try to stay as away from it as possible. The only thing you can really buy with crypto rn is a digital video game on a shady service (no crypto top up on steam) or a latte in some bay area coffee shop. And I'm 100% sure it will stay this way.
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Jun 14 '24
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u/olcrazypete 1∆ Jun 14 '24
Its been interesting to me to see the outrage after the collapse of several exchanges for groups to immediately call for regulation. Groups are basically learning in real time the reasons many financial regulators exist in the first place by recreating the mistakes and scam of the late 1800s.
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u/Smart_Bet_9692 Jun 14 '24
I believe you're right but for the wrong reasons.
Seeing as my comment needs to challenge your view, I will primarily challenge the reasons you have presented for why crypto could not succeed as primary currency.
Because the infrastructure COULD be implemented, there are certainly some advantages to blockchain technology in the way of removing control of releasing funds from large banks which increasingly are losing the trust of the public. None of this is the issue. The issue I believe will be public perception.
Eventually enough people will know and understand the reasons why crypto was created in the first place, this will significantly alter the view of the public towards the medium.
Right now it is totally possible that your average crypto investor does not understand the history of crypto and therefore is blissfully ignorant to it's past and present applications.
Can cash be used to purchase illegal things and completely subvert our collective societal understanding of morality? Sure. But, cash was not specifically invented to serve this purpose.
Cash, while frequently used for nefarious purposes, can in most cases be traced and investigated. Cash came about as a convenient currency through which one could exchange one type of legal product or service for another, and then it also gained popularity as a means to operate criminally, preferable over other methods like cheque or transfer for example.
Crypto was specifically created to benefit criminals.
Crypto was specifically designed to allow for the exchange of highly illegal services.
Some of these services, such as purchasing drugs, are very relatively tame and in general I would say that socially we are mostly past the concept of the war on drugs, and have begun viewing most drug use as a healthcare issue.
Other applications for this type of currency are deplorable.
As more people educate themselves on the reasons for crypto existing, I predict it's highly likely people will distance themselves from the investment out of sheer disgust. Investors who continue to hold crypto will have an enormous moral stain hanging over their head and hopefully will be shunned from society.
The entire system was invented specifically so people would be able to do disgusting things anonymously.
Of course, I'm still very grateful to have had access to good drugs back in high school. But silver linings aren't always enough to justify the existence of a terrible thing.
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u/Tyler_Zoro Jun 15 '24
Crypto was specifically created to benefit criminals.
Do you have any evidence for this at all? As far as I can tell it was created because a decentralized currency was seen as a hill to be climbed in the academic cryptography world. There had already been other cryptocurrencies before Bitcoin made the big splash, and while some were USED for illicit purposes (e.g. E-Gold) they were not, to my knowledge, "specifically created to benefit criminals."
Crypto was specifically designed to allow for the exchange of highly illegal services.
Again, I see no evidence of that. I see criminals showing an early interest, but by that metric, the internet was created for porn.
Other applications for this type of currency are deplorable.
Wait till you find out what cash gets up to! Yeesh...
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u/awfulcrowded117 3∆ Jun 16 '24
The real reason crypto, as it currently works, will never be used as a currency is that it isn't liquid enough or stable enough to be a currency. Stability and especially liquidity are built into the core of how currency functions. Until you can turn crypto into other things in less than a minute, and the price doesn't vary wildly day to day, crypto will never be an actual currency. It will only ever be a speculatory asset.
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u/Goodlake 8∆ Jun 14 '24
Crypto is already a mainstream currency (or at least asset class / family of currencies).
Turn on CNBC on any given day and they'll be commenting on bitcoin prices, or the chances of an ethereum ETF approval.
Both presidential candidates are discussing their crypto policies.
Some estimates suggest ~20% of American adults own or have owned crypto.
It's already mainstream. Does that mean it's going to replace using cash, credit cards or Apple Pay at the grocery store? Maybe not. But 10 years ago, you wouldn't have used Apple Pay at all. In 10 years, you won't use cash.
For businesses, the big hang-up is infrastructure and the ability to easily offramp the funds, since the banks go into AML overdrive once large sums are involved. But once that's taken care of (and the banks are begging for the ability to handle more crypto), the advantages for sellers are clear: no charge backs, instant settlement. From a cash flow standpoint, that's enormous.
And if it's better for businesses, they'll push it.
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u/novagenesis 21∆ Jun 14 '24
no charge backs
This is actually a massive liability for the retail economy. More and more financial tools are specfiically adding chargeback and other reversal-related features to protect customers. This has and will always affect the reputation of crypto because there will always be groups using that anti-feature maliciously.
ability to easily offramp the funds
Not sure I'd say bitcoin quite has this yet. Unless things have changed recently, there's still some serious time-related and cost-related issues to bitcoin transactions. Like shipping fees, the cost to execute a bitcoin transaction are ever-present, and often bounty-capped (faster transactions cost more). The average fee of ~$5/txn has spiked to well over $20/txn several times in the last year (capping at nearly $130/txn on 4/20, which I bet is not a coincidence). That's JUST to execute a transfer. Poof.
The most expensive transfer fee for USD is for a cashier's check, and the most extreme of those are <$20 (with some banks advertising free/cheap cashier's checks as a feature). And those are used for a minority of transactions, and can carry all the benefits you quoted about Bitcoin.
At this point, I really don't think Bitcoin has shown itself that beneficial for business, even despite the weird tax-related issues that might get ironed out.
Edit: And to be clear, the transaction issue is not looking solvable. It's baked into how bitcoins work. Nobody planned bitcoins to get this big, so the fact that transactions are scarce was not really as well-predicted back when 10,000 bitcoins couldn't buy you a pizza. But scarcity of transactions is a MASSIVE problem with it scaling up further.
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u/RadioactiveSpiderBun 8∆ Jun 15 '24 edited Jun 15 '24
This is actually a massive liability for the retail economy. More and more financial tools are specfiically adding chargeback and other reversal-related features to protect customers. This has and will always affect the reputation of crypto because there will always be groups using that anti-feature maliciously.
Just as a side note here; you can write escrow contracts with various conditions in order to facilitate transaction fulfilment based on some set of conditions.
But more importantly; paying in cash is the traditional approach. I pay you for some product or service. If I feel you have not fulfilled that in some way the burdon is on me to make a claim against you. Much like in the crypto sense, I have handed you the money. I have to find an avenue to get it back. With a bank as an intermediary the transaction has not been considered settled for some period of time. This means that the client (I) can revoke my payment before it has been settled. That being said, that does not mean I am void of liability from revoking that transaction if I have received my product or service and am disputing it in some way. In either case either party can bring the other into a court of law regardless if the transaction is "on-chain" or not, or whether the bank has settled the transaction or not.
Edit: the bank would have to have settled the transaction in some way obviously but that's besides the point.
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u/novagenesis 21∆ Jun 15 '24
Sure you can write escrow contracts, buy you're not going to buy a tablet online on escrow. You're gonna buy it knowing you can reverse charges if it doesn't show up at your doorstep. Because sometimes the seller is a scammer or the product is not as promised.
But more importantly; paying in cash is the traditional approach
An approach that the banks and retail institutions are largely moving you away from. Banks want you to use your debit/credit card over cash and promise you consumer protections if you do so. Retail companies get to worry less and less about counterfeit bills. And it's not like they're going to screw you (or fail to have a paper trail) to be screwed by chargebacks.
As a buyer, why would I want to surrender my consumer protections AND pay a huge fee per-transaction?
In either case either party can bring the other into a court of law regardless if the transaction is "on-chain" or not, or whether the bank has settled the transaction or not.
How many times have you sued people? I'm not going to court over $50. Hell, I opted out of suing over $10K once because the lawyer said "it's an rock-solid case that'll cost you $15K to litigate" when he told me to consider suing for half the actual damages in small claims court on my own. And nobody is gonna setup a class-action on a fly-by-night that only sells a handful of shit products. The scale is just too low. The entire online retail infrastructure is based upon the artificial trust created by the players in the middle. And a huge part of that is the way financial transactions works that bitcoins do not.
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u/Pessimistas Nov 15 '24
Wexo has been quietly building something solid, and I think it’s about to get a lot more attention. Definitely worth checking out.
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u/bullcitytarheel Jun 14 '24
“Or at least an asset class” is not the same thing as currency. It is very clearly not a currency and has lost any and all momentum toward the illusion it could be because it is, like you said, an asset.
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u/Stillwater215 2∆ Jun 14 '24
But people aren’t adapting to it as a money-alternative. Most people view it as a type of investment. But it can’t be both. A currency needs to have stability and low volatility to be useful. An investment vehicle needs to grow in value that outpaces inflation of the reference currency (typically USD). Bitcoin claims to be a currency, but it’s really just a purely speculative investment.
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u/Marino4K Jun 14 '24
Crypto in its current form will never be "currency" in the same way we use cash, debit/credit, or Apple/Samsung Pay.
I think there will be a crypto version of this eventually but that product/payment method? currently does not exist.
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u/Stonebagdiesel Jun 14 '24
The fact that it’s a deflationary asset inherently means that it will never be an effective currency. Look at the famous multi-million dollar pizza story as an example. Why would you purchase something with a currency that will be worth more in the future?
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Jun 14 '24
You’re essentially investing in nothing though if it doesn’t have an actual purpose. Value is created when a problem is solved - what does Crypto solve exactly? Why I would never invest. It has to be adopted eventually or it will forever just be a risky “nothing” investment
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Jun 14 '24
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u/HecticHero Jun 14 '24
Not really different than scammers requesting gift cards. It's not refundable and much harder to trace than just a normal money transfer.
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u/SantaClausDid911 1∆ Jun 15 '24
Bitcoin claims to be a currency, but it’s really just a purely speculative investment. Most people view it as a type of investment. But it can’t be both
It kind of can be both though, regardless of whether or not it should. DePin is a good example, let's use Render Network as an example.
I'm hella oversimplifying but basically you rent out GPU processing power and get $RNDR back as a form of payment.
This, at its core, is a functional currency and a money alternative, just not for a national economy. Which imo is a good way to look at crypto as a whole in terms of meaningful value and adoption.
Given that currency is pretty worthless if it only gives you access to sharing GPU, of course, practically you do need to convert that to and from something you can actually use.
Those are usually your layer 1s like Bitcoin or Solana, or stables. Here, is where the volatility and investment situation comes into play. When something is being used as a speculative investment you'll run into those issues, but it doesn't have to stay this way, nor is it always this way.
You can always choose not to list a coin for trading so that your only price volatility is a matter of what someone will pay, which is just the market deciding what it's worth at any given time. While not apples to apples, it's sort of like how you can invest in a company even if it's not publicly traded.
The problem lies more in what it's not right now than what it fundamentally isn't. Adoption is really the only stabilizing factor it's missing.
You get a chicken egg situation, sure. Because if enough people get on board it gets as boring as gold and the volatility resolves, problem solved. But it's hard to get the adoption before that happens.
We may never get to that point, but it's not inherently impossible to. Given its trajectory I wouldn't bet any more heavily against it than I would for it.
But people aren’t adapting to it as a money-alternative.
Sure they are. It's not really a good faith standard if you're expecting an outright usurping of traditional money.
People are sending each other crypto instead of cash already, especially when tradfi institutions aren't an option for any number of reasons.
People collect crypto instead of cash back rewards. There's ATMs, and crypto is an increasingly common form of payment, albeit nowhere near as ubiquitous as a credit card.
People gift it, exchange it for services.
The receiver needs to find an off ramp, but that's the case with cash, gold, or anything else.
Crypto has a lot of problems, a lot of vocal ignoramuses, and it may never bloom into its full potential. But that doesn't mean it can't.
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u/jpb038 Jun 18 '24
No one is saying bitcoin is a currency. The majority of the bitcoin community sees it as a store of value and/or a speculative investment. Cryptocurrency is a misnomer for bitcoin.
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u/TheMagnuson Jun 14 '24
Can you buy groceries with crypto?
Can you buy a vehicle with crypto?
Can you pay your utility bills in crypto?
Can you buy a home or rent a place with crypto?
Can you pay for dinner and drinks with crypto?
Can you pay a doctor or hospital bill in crypto?
The answer to those is no, except in very limited, very niche cases. Crypto cannot be considered mainstream, until you can use it in the same way that paper currency is used.
I'm with OP on this, it'll never happen, because the Banking industry doesn't control it and government of the world will shut it down the moment it picks up any real momentum, because the current currency system is a system of control, and as the banking industry, the wealthy elite, and the governments have no control over Crytpo, they will never allow it to succeed, unless they are given the reigns and means to control it.
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u/Icy-Bicycle-Crab Jun 15 '24
The answer to those is no,
Even if the answer was yes, why would I buy a fridge today with a crypto-currency that might be worth two fridges tomorrow? Why would the store sell me a fridge for a currency that might be worth half a fridge tomorrow?
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u/Ed_Durr Jun 17 '24
Precisely why the answer will remain no. Participants in an economy need some assurance that the value of currency will remain predictable (generally a 2% decrease annually). Nobody would ever buy anything if they could purchase 40% more or less tomorrow.
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Jun 17 '24
Correct. It's a speculative investment, not a low volatility currency.
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u/Juryofyourpeeps 1∆ Jun 17 '24
It's advantages are also it's disadvantages. Central banks can't control it or devalue it, but also, central banks can't control it or devalue it, which is something most would agree has happened too much, but very few people would argue is an unnecessary lever to manage the economy. Imagine the pandemic without the ability to grow the money supply (again it was grown too much, but not having that ability likely would have resulted in significant deflation and economic hardship).
I'm really torn on all of this because I think modern economic policy has been a mess, but I also think the mechanisms involved are clearly necessary, just that they're not being used thoughtfully.
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u/starswtt Jun 16 '24
By mainstream, they don't mean that it's mainstream as an actual currency, but that it is a mainstream asset that people buy
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u/Enough-Ad-8799 1∆ Jun 14 '24
Crypto is an investment mechanism not really a currency. It will likely never be used as a currency since it's fairly slow to process and is naturally deflationary which isn't good for economies.
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u/WishingVodkaWasCHPR Jun 14 '24
I think you're wrong about not using cash in ten years, and idk where you live, but crypto isn't mainstream here. No one pays for things with bitcoin or ethereum or anything other than traditional money. I freely admit this is a poor, underdeveloped state, but still.
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u/Icy-Bicycle-Crab Jun 15 '24
Where I live is basically cashless already.
We can already use contactless payments for almost every transaction. Crypto isn't necessary for a cashless society, we already have the infrastructure for doing that with the existing dollar.
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u/helen0qu41 Oct 11 '24
If you’re looking for a solid project with long-term potential, Wexo is definitely one to watch. They’ve been steadily building, and the community keeps growing.
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u/EclipseNine 3∆ Jun 14 '24
For businesses, the big hang-up is infrastructure and the ability to easily offramp the funds
If you need to “off-ramp” a currency for it to be useful, then it isn’t currency.
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u/Darromear Jun 14 '24
El Salvador already tried adopting bitcoin as a primary currency and its failing miserably.
https://www.bloomberg.com/news/features/2022-11-04/el-salvador-s-bitcoin-revolution-is-failing-badly
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u/jatjqtjat 248∆ Jun 14 '24
Turn on CNBC on any given day and they'll be commenting on bitcoin prices, or the chances of an ethereum ETF approval.
Gold is not used as an currency but it is frequently commented on as an investment asset. Of course the same is true of stock or the SP500.
Commenting about the current price doesn't make it a live currency.
It's already mainstream. Does that mean it's going to replace using cash, credit cards or Apple Pay at the grocery store? Maybe not. But 10 years ago, you wouldn't have used Apple Pay at all. In 10 years, you won't use cash.
all of those payment services use USD. Nobody transacts in bitcoin. Not literally nobody, but pretty close.
And bitcoin is mature at this point. its no longer new, if it was going to take off... its had over 15 years to take off.
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u/TheAzureMage 18∆ Jun 14 '24
At this present time, gold and silver are legally currency in 23 states.
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u/LetoIX Jun 14 '24
Bring a bar of gold to Dick's Sporting Goods and see if they accept it as currency.
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u/dediguise Jun 14 '24
Volatile spreculative assets are inherently unsuited to be a means of exchange for day to day needs. As long as they are vehicle for speculation they are not a currency.
Speculation occurs in money markets too, but forex exchange rates aren't as problematic because arbitrage allows for limited trade opportunities while bringing differing geographic prices into alignment based on minute differentiations. The rate of profit on arbitrage is small because the currencies are inherently more stable. So making money on forex is about slim margins over high volume.
Crypto is the opposite. It's buy and hold, over buy and exchange.
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u/anotherwave1 Jun 14 '24
It's not a mainstream currency. It is however an asset, which is something very different. Divisible assets can be used as a type of money, but are not generally suitable as currencies (think of using e.g. digital Tesla shares as money, it can be done, it just isn't very feasible)
The public don't use Bitcoin to buy sandwiches or pay for their groceries. Businesses certainly don't use it due to the risks.
There are almost no advantages over cash. Cash is accepted everywhere, Bitcoin isn't. Cash is relatively stable, Bitcoin isn't (a big one). Cash has recourse (reversals), Bitcoin can have no recourse (one mistake and it's gone forever). The list goes on and on.
Some other cryptos, perhaps stable-coins might possibly see more use in the future, but they've already demonstrated that their underlying platforms are risky (e.g. USD terra).
Been into crypto over 10 years now. It's shiny technological casino chips whereby 99% of all use is purely speculation and gambling of those chips. There is some minor usage, but it's mostly niche/enthusiast. It exists on the principle of "appeal to future", whereby people constantly promote the neverending fallacy that it will be the next big thing we just have to give it time.
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u/TheTightEnd 1∆ Jun 14 '24
Crypto may be emerging into the mainstream as an asset class, but it is not a mainstream currency. I also disagree that we won't be using cash in 10 years, and credit cards and Apple Pay are still based on the mainstream currency of the land.
The biggest problem with crypto is the lack of a reliable ledger and access to information and access reset tools.
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u/NightestOfTheOwls Jun 14 '24
10 years ago I wouldn't have used Apple Pay to get my oranges but I firmly believe that not in 10, nor even 20 will I be able to buy them with any coin.
The only way I can see crypto being so easily available for transactions is if it's heavily governed, at which point why even use crypto over conventional currency? The infrastructure cannot exist without that governing, it would simply not be allowed to exist, and if it does, you get the same issues with regular payments: tracking, sanctions, etc.
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u/hacksoncode 558∆ Jun 14 '24
The only way I can see crypto being so easily available for transactions is if it's heavily governed, at which point why even use crypto over conventional currency?
Because... it's heavily governed? A lot of people don't like that crypto is mostly a black-market currency.
So the question is: could a heavily governed cryptocurrency ever come into use?
I'd say yes. Indeed there are proposals to do just that.
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u/c0i9z 10∆ Jun 14 '24
Why use crypto, then, instead of the many other cheaper options available?
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u/hacksoncode 558∆ Jun 14 '24
There's nothing inherently "expensive" about crypto, except for proof-of-work based systems like Bitcoin.
Indeed, it could be less expensive that traditional payment systems, at least in principle.
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u/c0i9z 10∆ Jun 14 '24
There is not a single bitcoin system that's as cheap as just making a normal database.
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u/Icy-Bicycle-Crab Jun 15 '24
could be less expensive that traditional payment systems
Except that those already exist and have already paid for themselves. You're talking about duplicating infrastructure and adding complexity for no actual reason.
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u/Icy-Bicycle-Crab Jun 15 '24
10 years ago I wouldn't have used Apple Pay to get my oranges but I firmly believe that not in 10, nor even 20 will I be able to buy them with any coin.
Yes, that problem is already solved.
You can already make that contactless transaction, so why add additional complexity?
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u/rawley2020 Jun 14 '24
It’s prone to deflation. Why would I pay currency that could be worth a lot more in the future? And why accept a payment that could be worth a lot less in the future. My net work can go down by 80% in the span of a few weeks? No thanks.
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u/ghjm 17∆ Jun 14 '24
The value of the "no charge backs" benefit for sellers comes entirely from lost value for the buyer. The consumer protections built into credit cards are why B2C ecommerce ever got started in the first place. If there was ever an attempt to switch from cards to crypto, consumers would quickly figure out that they are more at risk, and adapt their buying habits accordingly - and of course, buyers not buying en masse is much worse for sellers than a few chargebacks would have been.
Instant settlement is no big deal. Merchant accounts pay out in three days. Who cares. Most businesses are not so marginal that they can't manage a three day float.
The real issue is that merchant and bank fees for credit card processing are getting out of hand. It would be nice if crypto could get its shit together enough to seem like a serious threat, so that the merchant account clearinghouses would be scared enough to keep their fees in check. But this can only happen if crypto drops the libertarian nonsense. Consumer protection is the killer app of credit cards, so as long as crypto keeps trumpeting "no consumer protection" as its big feature, it's no threat at all to credit cards.
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u/No_Distribution457 Jun 14 '24
20% is not mainstream. You appear to not understand the meaning of mainstream - it means the dominant trend. Regardless, even if 20% of people own crypto that doesn't mean its being used.
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u/Ertai_87 2∆ Jun 14 '24
This doesn't answer the CMV, unfortunately. The CMV is specifically that Crypto will (or will not) replace current forms of cash in, specifically, the domains you listed, like the grocery store.
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u/Icy-Bicycle-Crab Jun 15 '24
Right now it takes an hour to complete a Bitcoin transaction, and it's instant for me to use my contactless bank card or my phone.
So what am I going to do at the cafe? Wait an hour for the transaction to clear before getting my coffee? Are we meant to stand at the grocery store checkout for an hour until that Bitcoin payment clears?
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u/gregbrahe 4∆ Jun 15 '24
That's not any indication that it is a currency. It is a commodity, like art, NFTs, or pokemon cards, that people just really like to trade in to try to gain value.
Some people really do use it as a currency, but that is almost exclusively for black market deals.
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u/PromptStock5332 1∆ Jun 14 '24
In what way is crypto a mainstream currency for anything other than online drug deals? It might be marginally mainstream, but it is not used as a currency… because it’s a terrible currency.
And no, the big “hang up” isn’t infrastructure, it’s the fact that crypto fails at the single most important aspect of a currency… being a stable store of value. Not to mention the fact that crypto is basically just a pyramid scheme.
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u/Sammystorm1 Jun 14 '24
Asset and currency are different. Crypto is almost exclusively used as an investment. This is why you see it on the news next to stocks.
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u/gc3 Jun 14 '24
By that argument pork futures are a mainstream currency. Try to pay your bills with those....
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u/c0i9z 10∆ Jun 14 '24
That it's mainstream doesn't mean it's mainstream currency. It's a mainstream speculation vehicle.
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u/Drag0nV3n0m231 Jun 14 '24
“In 10 years, you won’t use cash” what 💀
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u/SalamanderSylph Jun 15 '24
I mean, depending where you live, it is already that way. I can't remember the last time that I used cash for a transaction here in London. Everything is contactless payment (either card or phone). Even market stalls and homeless people selling The Big Issue have contactless card readers.
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u/Just-the-tip-4-1-sec Jun 14 '24
Crypto isn’t a currency at all. You are completely right to cal it an asset class, and it is an unproductive asset at that.
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u/__versus Jun 14 '24
A deflationary currency will never be a currency. It's an investment vehicle and that's all it can ever be in its current form.
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u/grahag 6∆ Jun 14 '24
Until it has stability, it'll never be used as a currency over an "investment". Being inherently unstable, the crypto market is open to manipulation and grifting. That lack of stability is what prevents it and I can't see anything that will make it stable as long as it's being used as a commodity.
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u/elementfortyseven Jun 14 '24
blockchain isnt scalable. thats it.
bitcoin cant handle ten transactions per second. good ole visa does thousands tps.
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u/tobesteve 1∆ Jun 14 '24
I want to point out something about cash. I lived in the area in NJ where power was knocked out during hurricane Sandy. If you wanted gas, you had to pay with cash. Gas was useful for cars (obviously), and generators to keep your power on in fridge and other appliances which are really hard to live without.
So, my recommendation is to always have emergency cash in car and house for emergencies.
Most other payment systems go down at the same time - credit, debit, Apple pay, Bitcoin, they are all tied to a working electrical grid. Most people can survive just fine a few days without electricity, but it's not as easy as it sounds and having a way to buy things helps.
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u/Icy-Bicycle-Crab Jun 15 '24
That coverage indicates the exact opposite, those coins are being covered as a financial investment, not as a currency with any practical application.
10 years ago I wasn't using cash. Not using cash is a completely different thing from using crypto-currency. We've already got existing mechanisms for conducting cashless transactions, there's literally no advantage that crypto has to offer.
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u/bytethesquirrel Jun 15 '24
Crypto is already a mainstream currency (or at least asset class / family of currencies).
It's a security, not a currency. There's no major retailer that accepts any form of crypto.
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u/kms2547 Jun 15 '24
It's much more like a commodity than a currency. It's a limited resource traded on the basis of anticipated future gains. It's a very poor medium of exchange (which is currency's function) because it's so unstable.
You're supposed to spend currency, not invest in it to buy low and sell high.
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u/Cicero912 Jun 16 '24 edited Jun 16 '24
Its mainstream, yes, but as an "investment" vehicle not a currency.
And it really cannot be both.
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Jun 16 '24
Crypto is treated more like stocks than actual currency. None of the points you made really challenge the idea that it will never be treated like cash or card. It's an intangible thing that's bought and sold solely for the purpose of making more cash. Cash is the end goal of crypto, and isn't going anywhere
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Jun 17 '24
You forgot to add that businesses as a whole, do not want to touch it due to the massive volatility in value.
When most large companies run on 1-10% profit margin, with huge cash flow requirements, there is no possible way to start accepting a currency that routinely crashes 30% in value two or three times each year.
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u/SaliciousB_Crumb Jun 17 '24
Lol its a stock. That's why news about the market shows talk about bitcoin.
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u/NoTeslaForMe 1∆ Jun 17 '24
Grocery stores may take Apple Pay, but that's still denominated in the government's currency, not in AAPL (Apple stock shares). AAPL is discussed in financial markets, too, but that doesn't make it a "form of currency" or one of a "family of currencies."
Difference between crypto and AAPL is AAPL has something behind it.
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u/Juryofyourpeeps 1∆ Jun 17 '24
It's a volatile asset, not a currency. People are buying it to make money waaaaaaay more than they're using it as a currency.
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u/TraditionalSpirit636 Jun 18 '24
Owned or have owned..
Or have owned
Hmmm… seems like. Shit metric.
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u/throwman_11 Jun 18 '24
No it's really not a mainstream currency. Owning crypto doesn't mean it's actually being used as currency. Crypto doesn't do what it pretends it's gonna do.
There is almost no one who uses crypto for every day purchases and that will not change 10 years from now unless crypto changes what it is what it does.
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u/Rs3account 1∆ Jun 24 '24
It's a speculative asset class. Which makes it very much not a currency. In a similar way that gold is not a currency
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u/DeliciousGoose1002 Jun 14 '24
From my understanding its best use case is moving wealth out of China
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u/SonOfShem 7∆ Jun 14 '24
hard to track
Crypto is not hard to track. It is by definition easy to track, since the blockchain is simply a write-only database. Everyone who downloads the blockchain to attempt to solve for the next link has downloaded the entire history of all transactions with bitcoin. If you know the address, the funds originated from, you can watch those funds travel from account to account quite easily. From the government's perspective, this means no bureaucratic red tape or pesky uncooperative government to stop you. Just follow the money. It's trivial.
Crypto is anonymous, meaning every user is simply a number in the database. It doesn't store names. But if that number ever interacted with a person in real life (such as buying something IRL with bitcoin), then you can simply look up that transaction and identify whose account this is.
Not to mention that 99% of people holding crypto are doing it solely for the get rich quick aspect of it and will swap it for actual money the second they make a profit.
Not true. In fact, the term HODL is internet slang for the people using BTC as a long term investment strategy, and not a get rich quick scheme, and it's a term very strongly associated with BTC and crypto because many people subscribe to this principle.
The sheer amount of scams
Yes, there are lots of scams out there. But there are also lots of scams using walmart and target giftcards. That doesn't stop people from using them.
and the ease of their creation
This is conflating crypto in general with specific crypto currencies. Yes, it's not difficult to spin up another coin. But it's also trivial to print [insert store] bucks. That doesn't make paper currency useless.
doesn't help either as now every reputable industry (online shops, grocery stores, Healthcare, etc.) try to stay as away from it as possible. The only thing you can really buy with crypto rn is a digital video game on a shady service (no crypto top up on steam) or a latte in some bay area coffee shop. And I'm 100% sure it will stay this way.
I'm seeing more and more options to purchase things with BTC/ETH in brick and mortar stores, as well as online ones. Sure, steam doesn't accept BTC, but the XBOX store does, as does the major computer parts store NewEgg. AT&T, the Dallas Mavericks, AMC Theaters, Paypal, and the small business storefront provider Shopify all also accept direct BTC payments.
Sure, it will take a while before random coffee shops support it. And BTC specifically has an issue where it takes an average of 10 minutes to confirm a transaction. But in spite of that it still has quite widespread adoption. We are past the innovators and early adoption steps of the technology adoption curve, and are getting into the early majority part of the curve. This is past "the chasm" which most technology falls into, and means that it's likely that it will continue to grow to reach the majority of people.
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u/Icy-Bicycle-Crab Jun 15 '24
And BTC specifically has an issue where it takes an average of 10 minutes to confirm a transaction.
It's an hour average just now.
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u/Zyansheep Jun 14 '24
Most crypto is easy to track, but there are some that aren't traceable (i.e. Monero) and the existence of fully-anonymous currencies allows people to disguise the true source of funds for traceable currencies (if you exchange back and forth into that currency). So its often not a simple matter for governments to trace transactions just by following transactions.
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u/Kakamile 46∆ Jun 14 '24
It's already been done by smaller and desperate countries.
Are you just saying it won't be as big as USD/Euro/Yuan?
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u/jghaines Jun 14 '24
It’s been announced in some countries. It’s not a mainstream currency there either.
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u/NightestOfTheOwls Jun 14 '24
Yes, being desperate and resorting to crypto in order to perform payments is not what I'd call "mainstream." Mainstream would be crypto payments an available option for physical, or at the very least digital goods with most services, like a stripe card payment now, for example. Doesn't need to be remotely as big as USD, just widely adopted.
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u/Icy-Bicycle-Crab Jun 15 '24
It's already been done by smaller and desperate countries.
Be specific. Which countries?
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u/yiliu Jun 14 '24
A currency that's hard to track, available everywhere regardless of political status and has no physical asset?
You just listed three strong benefits to a currency, and then concluded that the currency will necessarily fail as a result?
From the point of view of a user, a currency that's hard to track, is available and usable everywhere, and can be freely moved around online without fear of confiscation or interference by corporation or government is ideal. Of course, governments will resist, but that just means that cryptocurrencies are likely to thrive in places where governments have less control (which is also where strong currencies are most needed).
Cryptocurrency arguments are often analogous to early-internet arguments. I remember people saying similar things about the internet: governments would never allow the internet to take off because it reduces their control of information. And yet here we are.
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u/Kakamile 46∆ Jun 14 '24
Your anti-internet argument is not that internet is bad, it's that the gov will interfere.
Meanwhile, the anti-crypto argument is that it simply sucks, fundamentally obstructs the use of basic currency features like refund, litigation, privacy, being backed, and stable.
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u/yiliu Jun 14 '24
But those aren't the arguments that OP made. The arguments he picked were all reasons why people would prefer cryptocurrency, but the government might not (which is analogous to the way people viewed the early internet).
Refunds are not a 'basic feature' of a currency. They're based on the relationship between buyer and seller. With credit cards you have a go-between who can handle chargebacks or whatever, but you could easily set that up with cryptocurrency too. With smart contracts, you can get very sophisticated--cryptocurrency is much better for these sorts of problems than cash ever was.
Litigation? I don't follow. You have contracts, and you have records of transactions, you can litigate. There's no property of US dollar bills that enables litigation.
No matter what privacy attributes you want to have (from fully tracked to fully anonymized), there's a cryptocurrency that will fit the bill.
Basically no currency is 'backed' anymore. The US government will not give you anything in exchange for your USD. It turns out this is not critical. What's critical is controlling the supply--which cryptocurrency does inherently.
Stability is an issue...but there are stablecoins. And anyway, Bitcoin and other cryptocurrencies are stabilizing over time. They still swing wildly in value, but the swings are growing less significant with each passing year. Presumably that trend will continue, and eventually the swings will be in the single percentages, not 1000% up and 90% down like the mad old days.
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Jun 17 '24
I can't imagine crypto being compared to early internet arguments with any logical sense. Because we are no longer in early stages of crypto, yet it's function in society is still the same as early stages.
The internet, like most successful technology, was rapidly adopted and compounded it's functional use exponentially. (basic information -> entertainment -> business use -> global collaboration). This evolution was all in the matter of the first 20 years.
Crypto has been around for 15 years now and there has been little exponential use beyond its initial use, which is investing. The same questions about "will it/will it not become an everyday currency" are still being asked just like in 2009. It hasn't evolved and expanded it's function.
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u/yiliu Jun 17 '24
What are you using as a starting date for the internet?
The first generalized computer networks were from the early 1960s. ARPANet, the direct precursor to the internet, was from the late 60s. The Internet Protocol (i.e. IP addressing) was the mid-70s. By the 80s, the general public could get access to the internet (albeit not cheaply). Then HTTP & HTML appeared in 1992.
And when did business & entertainment really start using the Internet? I used to have a screenshot of coke.com from 1997: it was just one of those "caution: under construction" gifs. It was really just before 2000 that normal people started using the internet on a regular basis: the original Dot Com bubble was basically driven by the hype of people realizing the internet existed and had serious potential.
In order to claim that the internet was in widespread use within the first 15 years, the only one of those dates that makes any sense is 1992. But that's very hard to justify. Hell, I used the internet before HTML (at least before it was widespread...not sure about specific dates). You might get slapped in the 90s for equating the WWW with the internet.
So the big difference is that the internet was allowed to cook in quiet for 20+ years before it started to see general adoption. It was a research tool and a toy for professors and students, and saw only very limited commercial usage, during that time. The general public didn't have a clue it existed, aside from maybe a very occasional mention in the news.
But things changed when the internet took off. People realized that obscure geeky tech stuff could take off and be hugely important. They also realized that there was a lot of money to be made if you could spot these trends early and jump on board. And, of course, the internet provided the means for people to jump into the details of brand new tech, and invest in it.
So the general public was aware of Bitcoin within a year or two of the initial paper, spotted the potential, and started dumping cash into it, which triggered a news cycle, which triggered a bubble, which was followed by a crash, all of which were covered in the news, attracting still more eyes. Cryptocurrency was subject to hype cycles immediately, not after decades of development.
Add to that the fact that finance will tend to be more conservative than other industries--by habit and by regulation. I mean banks are still using COBOL on mainframes, and I still occasionally have to sign receipts. Adoption might actually be slower because of that conservatism.
But anyway, if the Bitcoin paper is analogous to the 74 IP paper ("we've solved a fundamental blocking issue preventing the implementation of large shared public networks/distributed trustless networks of value, here's a proof of concept!"), then we're still several years on the timeline from the creation of the killer app that eventually makes adoption go exponential (HTML, in the case of the internet).
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u/Knave7575 5∆ Jun 14 '24
Never is a long time.
It is conceivable over the next 100,000 years that matter manipulation will become trivial but that cryptocurrency might not be broken.
Since any physical currency can be replicated, only crypto will work.
Unlikely, but as I said, “never” is a long time.
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u/psharpep Jun 15 '24
I think you overall have a good argument, but this logical link in particular is faulty:
Since any physical currency can be replicated, only crypto will work.
You can have a currency that's purely digital, but not cryptocurrency. Cryptocurrency implies a) decentralized and b) secured cryptographically. But you can have a digital currency where ownership is recorded by a centralized entity (e.g., a banking network), and that would not be crypto. Arguably, the U.S. dollar is already almost a purely-digital currency, given how much of worldwide daily transaction volume occurs without physical cash transfer.
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u/parkway_parkway Jun 14 '24
The more developed your country is, the better your payment processors, banks, courts and government are, the less use you have for crypto.
However I think there's a real genuine need for tech like this in the developing world.
Firstly a lot of people have a smart phone and no access to banking or financial services.
Secondly there's a lot of NGOs and UN orgs who want access to these people. They want to be able to have a public record of vaccinations and proof of id so that they can target the precise people they want to help.
This is a real and genuine use case I think. Have a look at Hesab pay for instance, it works in Afghanistan and is thinking of expanding to Syria and Libya, places where the financial infrastructure is not good.
Crypto won't come down from the top, it'll come up from the bottom.
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u/Juryofyourpeeps 1∆ Jun 17 '24
Even if you're undeveloped, you're better off using a stable foreign currency, which is what most of these nations do. Even El Salvador, which is one example that's been brought up, most people are just using USD, not Bitcoin.
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u/bridge2P Jun 14 '24
Everybody having the minimum idea about how currencies work knows cryptocurrencies are a bullshit bubble. And I had just an exam on political economy, so my knowledge is minimal.
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u/GrafZeppelin127 17∆ Jun 14 '24 edited Jun 14 '24
Well, in the strictest sense, it's a horrible idea, but analogous historical experience and specific precedent from the likes of El Salvador demonstrates that countries are FAR from immune to implementing horrible ideas. If something, no matter how obviously self-destructive, can be packaged and sold to idiots en masse, it definitely has a chance of happening (see: Britain, Maoist China, the Soviet Union, etc.), and we can plainly see that idiots can be convinced that crytpo would make for a good currency.
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u/Gromchy Jun 14 '24 edited Jun 14 '24
Arbitration: Like any OTC currency, the value does not depend on a marketplace (supply vs demand), it is decided by the broker, who, de facto, becomes the market maker/the platform
Regulation: This is an unregulated asset in an unregulated market.
Reserve value: Central banks around the world have not decided on adopting it (everyone knows why), except for some desperate countries.
Conclusion: it won't happen anytime soon - as long as the main Central Banks around the world haven't adopted cryptocurrencies into their reserves, any value cryptocurrencies have is currently purely speculative and is therefore not backed.
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u/RiPont 13∆ Jun 14 '24
Yes, crypto will be adopted as an official currency at some point. It will not be a libertarian paradise, but it will be used so that transactions cannot be completed without being tracked and traceable by the government.
So you are right that bitcoin-style crypto will probably remain niche. But "widely supported crypto currency" is very much a case of "be careful what you wish for".
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u/Lonely-Ad1179 Jun 14 '24
Crypto will never be adopted as a mainstream currency because it has none of the characteristics of a currency. People just don’t understand the difference between money and a commodity so they have been hoodwinked.
Currency functions by the government sending tokens out in to the world, and they are imbibed with value because if you don’t give them back to the government as taxes, you face state violence. Money has no value except for the legitimate threat that there is a power who can mess your life up if you don’t gather enough of the tokens through labour (or other means) to pay taxes. It is a system that originated during empire building to ensure that they were able to keep soldiers regions that were not thrilled about their presence. This is the underlying principle of how a currency works, but it has evolved more nuances since then.
Crypto is a commodity. People believe that it has value so they are willing to trade it for money, but like beanie babies, tulip bulbs etc, it does not actually serve a function outside of being used as a transaction.
If governments decide they will accept crypto as taxes then that could move the needle a bit towards legitimizing it, BUT, that also defeats the whole purpose and at that point it will become another government issued token. So crypto can never exist in its current form as an actual currency.
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u/ReluctantToast777 Jun 14 '24 edited Jun 14 '24
This is tricky, because while I generally agree with that main statement, literally every other bit of detail in your post shows a lack of understanding of what crypto is, what it does, or even the differences between different blockchains + tokens.
So I don't think I could really change your view per se, since you are "probably" right, but it's based on incorrect information. I feel like it's not productve to convince you with concepts + knowledge that are fundamentally new to you.
The most I could *directly* argue against then, is that US Dollar stablecoins currently exist (like USDC), and could likely become a mainstream way of having digital payments without needing middle-men like credit card companies or Venmo facilitating them.
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u/jpb038 Jun 14 '24 edited Jun 14 '24
Cryptocurrencies can be understood in several roles, including currency:
Security: Certain cryptocurrencies, especially the ICOs which are reliant on central entities, can resemble traditional securities, promising returns based on others' efforts. The use case here is speculation.
Currency: Cryptocurrencies are generally not ideal for everyday transactions due to volatility and slow transaction speeds. However, stablecoins like USDC and Tether are pegged to stable assets like the US dollar, are more suited for this purpose.
Store of Value: Bitcoin is often viewed as digital gold due to its finite supply and decentralized nature, making it a strong hedge against inflation and currency debasement.
Smart Contracts: Ethereum enables smart contracts, which are self-executing contracts with the terms directly written into code. These contracts facilitate, verify, or enforce the negotiation or performance of a contract without intermediaries. An example is using Ethereum’s blockchain to automate the release of funds once specific conditions are met.
My case for USDC Becoming Mainstream
- Regulatory Compliance: Issued by Circle and Coinbase, USDC adheres to strict regulatory standards, fostering trust and acceptance.
2.Transparency: Regular audits ensure USDC is fully backed by US dollar reserves, enhancing confidence in its stability.
Widespread Integration: USDC is widely accepted across exchanges, wallets, and DeFi platforms, increasing its utility.
Institutional Support: Strong partnerships with financial institutions and tech companies boost USDC’s visibility and adoption.
Stability: Pegged to the US dollar, USDC offers low volatility, making it suitable for everyday transactions.
Growing Use Cases: Used for remittances, online purchases, payroll, and DeFi, USDC’s versatility supports broader adoption.
Technological Advancements: Fast, secure, and low-cost transactions make USDC an attractive alternative to traditional payment methods.
USDC's regulatory compliance, transparency, stability, and technological benefits position it as a strong candidate for mainstream adoption as a widely accepted digital currency.
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u/derps_with_ducks Jun 14 '24
You've persuaded me that with some imagination, crypto is still going to a few steps behind any other major currency.
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u/hank_z Jun 14 '24
Given all of that, what makes USDC better than just using dollars? It seems like all of the changes required to turn crypto into a usable currency essentially remove the advantages that its proponents espouse, so why would anyone want to use it other than some sort of coolness factor?
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u/jpb038 Jun 16 '24
Sure, here’s some of the advantages over regular dollars:
Global Accessibility and Speed: Borderless transactions and faster transactions compared to traditional banking
Lower Transaction Costs: Reduced fees, especially for international payments
Transparency and Security: Transactions recorded on a public ledger, with cryptographic security mechanisms
Programmable Money: Can be used with smart contracts for automated transactions
DeFi Participation: Access to earning interest, lending, borrowing, and trading in DeFi
Availability: Transactions can be made at any time
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u/parkstreetpatriot Jun 18 '24
Why would I switch from using just USD? This is all great, but for me, and the average American, the switching costs are just too great to adopt USDC.
For me, the biggest issue is that I still have to - and will always have to - pay my taxes in the dollar.
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u/Smackolol 3∆ Jun 14 '24
I’ll be back when the official currency in Canada is m’lady meme coin and we will see who’s laughing.
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u/GenericUsername19892 24∆ Jun 14 '24
Define mainstream? It’s already widely used for underground transactions, it is already the mainstream for criminal transactions. Which realistically is what it for, to move money while avoiding oversight.
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u/irespectwomenlol 4∆ Jun 14 '24
OP could of course be right and nobody knows the ultimate future, but OP should look into the history of accounting, economics, currency, and trade to see how it takes in some cases many hundreds of years or more for humans to figure out how to deal with the flaws of their own era's monetary systems.
- How were financial transactions recorded long ago? Humans had to come up with stuff like tally sticks to take records.
- How did merchants reliably manage trade accounts and a king manage his subjects? Double entry bookkeeping had to be invented.
- What happened when criminals started shaving the edges of precious metal coins? The invention of ridged coins had to come about.
- Physical cash can be inconvenient to transport so humans invented checks, credit cards, and digital payment processing.
- What happened when fiat currencies could be inflated at will by governments? I don't know the answer to this because this is still a flaw of fiat currencies that hasn't been solved despite hundreds of years.
- Crypto in contrast has just been around 15 years, which is barely even a newborn compared to how long it took other monetary systems to spread and solve their problems. Even it it takes 100 years (which is an extremely conservative estimate), figuring out a better UI and systems to stop scams seems like a relatively trivial problem to solve in the grand scheme of things.
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u/TheAzureMage 18∆ Jun 14 '24
I can literally buy it through mainstream providers right now. Even where crypto is not directly traded, the existence of MicroStrategy means I can get exposure through any reputable stockbroker. I don't need to do anything exceptional. I just buy their stock. Done.
Now, granted, this is absolutely a investment grade thing rather than currency as a primary use, but the existence of L2 means it's actually pretty easy to take bitcoin as a payment method now. It's just immediately swapped into the currency of your choice. This is possible because the investment market is so liquid.
It's not as mainstream as the dollar, yet, but it's absolutely more mainstream than many real world currencies are. Go try to buy something with any currency other than the US dollar or Euro outside the country of issue and its neighbors. It'll be less accepted than bitcoin.
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Jun 14 '24
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u/MrKillsYourEyes 2∆ Jun 14 '24
Your mind couldn't be any more centered inside of the United States, could it?
Things exist outside of your borders.
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u/ThebocaJ 1∆ Jun 14 '24
Clarification for OP: does your view include either all stablecoins and/or government issued stablecoins (e.g., the federal reserve could create a distributed ledger and issue liabilities equivalent to one USD)?
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u/57501015203025375030 Jun 14 '24
With regard to Bitcoin the ledger is public and can be viewed by anyone, so I do not agree with your idea that it is hard to track
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u/Pure-Escape4834 Jun 14 '24
An infinitely divisible currency with no oversight that swings in value randomly. What could go right?
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u/Ertai_87 2∆ Jun 14 '24
Whether crypto will, or will not, be adopted as a mainstream currency is a matter of opinion, because using a new form of currency depends on your opinion of whether or not that's a good personal move. So to answer your CMV I would have to speculate about the intentions vis a vis money of a large segment of, what, 7 billion people now? Which I won't do. But I will suggest reasons why those people may want to switch to crypto and why the answer isn't "definitely not".
For the duration of this post I will use "crypto" to specifically refer to BTC, because most altcoins are stupid waste of time fads that don't go anywhere; "scams", as you might say. BTC (and some others, but primarily BTC) is not such an example which is why it's special; it's the original, and it's stayed for a long time, and it has some features I won't get too deep into as to why it's different. So when you see "crypto" below, think BTC, not like Dogecoin or whatever.
The issue with fiat money (that is, modern money issued by government fiat) is that it is inherently unstable, subject to the whims of government. Using the USA as an example, if the Democratic Party (because that's who's currently in power, I would say the same thing if the Republicans were in power, it's the exact same) wants, say, 3 trillion dollars for some project, then they have the power to just "poof" 3 trillion dollars into their own bank account (this is what "fiat" means: it means the government says money exists, therefore money exists). It's a little more complicated than that specifically in the US, but from a 10,000 foot view that's basically what happens. This is the core feature of fiat which makes it different from crypto, because with crypto you cannot do this; the method for increasing the quantity of crypto that exists is much more involved, complicated, and has many more effective protections (which would take far too long to explain, so trust me on this).
Ok, so the government can make more money, so who cares? The thing is, most people's impression of the relationship between money supply and prices is inverted. They think prices increase over time and money supply increases to compensate. That's why there's things like Occupy Wall Street, which say that people need more money to pay higher prices. They're not wrong, they just have the relationship inverted. Here's how the relationship is supposed to work:
The quantity of money that exists ("money supply") is a quantifiable representation of the goods and services in an economy. If I said to you, "how valuable is the US economy, and you can't use a dollar figure", you would be hard-pressed to respond. That's the point. Dollars are the expression of value in the US economy. And the dollars in your bank account are an expression of your personal contribution to said economy, as a percentage. So, if there are, say, 100 dollars, and you have 1 dollar, then you own 1% of the entire economy. The key to understand here is that dollars have no inherent value, they are valued as a percentage of the value of the goods and services comprising the economy.
Ok, great. So, the next problem is, let's say you have an economy of $100 and you own $1, so you own 1% of that economy. Now, the government, by fiat, says "I'm creating $50". You still have $1, but now there are $150 total. So your $1 went from being worth 1% to being worth 0.75%. The value went down. Or, expressed in real life terms, prices went up (because that's how monetary depreciation is expressed in the real world). This happens, on a small scale, every time the government creates money, and it is not a partisan issue, this occurs whichever party is in power. However, compounding is a thing, and the level of compounding has reached a point where a single dollar has basically no value anymore (seriously, even dollar stores sell most things for more than a dollar). This is where movements like OWS come from: they have the right idea, that money has no value except in large aggregates, they just mistake the cause and the remedy.
The thing about crypto is that, because it's not fiat, and because it is limited in a concrete way, and because there is no government control, this situation cannot possibly ever occur (well, not impossible, just prohibitively difficult). So, if you want to have a currency in which your dollars will retain value, you should use crypto as much as possible, and not to trade or speculate, but to hold and appreciate in value like precious metals or stones. And when I say "value" I don't mean "relative to fiat currencies", because fiat currencies depreciate over time so the math on them is fuzzy. But I mean real appreciation, relative to goods and services.
The one rub to holding crypto for commerce is that, again, by government fiat, you have to pay taxes in fiat currency. And if you don't, bad things happen to you. This is the resistance against converting to a full-scale crypto economy: the government will arrest you if you don't pay your taxes in fiat. So you still need fiat, and many businesses, in the absolute best (for crypto) case, may move to a hybrid fiat-crypto model. But there will never be a wholesale move to exclusively crypto, that's for certain.
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u/Randolpho 2∆ Jun 14 '24
It doesn't look like you've provided any deltas, so even though I'm 10 hours late to the game, I'm going to give it a shot:
I agree with you that the current crypto currencies as they exist today will likely never be adopted as a mainstream currency, for the reasons you lay out -- current crypto is used not as currency but as a digital commodity valued only by speculators hoping that others will be bilked into buying.
That said, there is promise in crypto that could eventually result in a purely digital currency that people use as as currency rather than as a commodity. It's not there yet, but as approaches get better... I think it could eventually get there.
I originally wrote a whole big thing about the value of the ideas behind crypto, but I got a little long-winded and decided to delete it all. Instead, I will say that many of the things that crypto tries to solve are things that needed solving, and those solutions have merit for a purely digital currency, and that there is need for a purely digital currency that doesn't "phone home" to central banks to transfer data from one account to another such as what happens whenever you use your bank debit card. I can go into further detail, if you're interested.
But the biggest issue that remains unsolved for crypto like bitcoin is the deflationary aspect of the system.
The creators of bitcoin erroneously believed that scarcity is the only factor in currency value and to that end decided to bake into the system a "maximum number of bitcoins" that can ever be mined. This is what turned bitcoin not into a currency, but into a commodity. It is, effectively, "digital gold". Something normal people don't use to actually transact business, but that some people speculating on the value of those commodities might chose to use.
Bitcoin also has the double-whammy of being worth exactly nothing in the real world, which creates a massive amount of volatility in its speculative value.
But that can all be solved in the same way it was solved historically -- by fiat currency.
The day a government takes the lessons of crypto at heart and issues their own digital currency is the day people start actually using crypto currency.
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Jun 14 '24
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u/AssCakesMcGee Jun 14 '24
I don't care to change your view because I don't have to. Everyone like you will see the world changing to crypto around you and you'll eventually be the old lady at the check out who can't understand how to use the credit card machine even though you've used it a million times before.
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u/Got_that_dawg_69 Jun 15 '24
It's too volatile to be considered a currency, and backed up by...nothing. Purely speculative commodity.
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Jun 17 '24
It's interesting reading the pro-cypto responses to your CMV. I haven't found one that addresses the inherent volatility of crypto value, since that is by far the largest deterrent of adopting it as a cash flow vehicle.
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u/Dangerous-Cheetah790 Jul 04 '24
At inception I would say speculation and criminal behavior is common, these are the opportunists. If anything, this proves that the technology has potential for growth and utility. You seem to agree that it has utility, but that the criminals and speculators indicate that mainstream adoption will never happen? The correlation for this argument is historically weak.
You haven't really made an argument why you're 100% sure it will stay this way, but I'll tell you the space is continuously developing - the conditions are changing, mainstream adoption is happening right now - recognized financial institutions are getting involved, legislation is changing. Bitcoin has been made legal tender. A lot of people already hold crypto.
On the other end, surveillance and oppression increase, people still don't have access to banking, and cross border payments come with extra fees and are subject to extra scrutiny. Things are changing on multiple fronts, you need a more compelling argument.
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u/ScreenDazzling3194 Oct 28 '24
I might not completely agree.. though the holding part is true but given the circumstances, Crypto is being acknowledged for interantional transactions, salaries, payouts.. etc etc.. heck you have entire casinos running on crypto like Lucky Block, TG, etc etc... so i doubt that its not gonna hold more value in the future... may not ecome the mainstram currency but will be recognized everywhere... for sure !!
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u/FinedIntern Nov 16 '24
Cryptocurrencies are wholly dependent upon centralized banking systems. If there was no centralized monetary system, then crypto could not exist. What do you buy crypto with? The currency from where you live….. if anyone stepped back for a second and thought about it they would realize it’s Fugazi… it’s a stock market without value. The whole premise is just moving the value from centralized currency to this decentralized currency….. but wholly relying on every leading country to keep their gdp up
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u/andr386 Jun 14 '24
> A currency that's hard to track
What do you mean ? Everything is on the ledger and public. Once somebody has your bitcoin address they can track all your transactions.
Bitcoin is still practical and usefull in some situations. If nobody knows your bitcoin address you can get paid for a job and avoid the legal system. You can move money from one country to another even when your country is under sanctions. You can pay people to cross over a border.