I’m not a fan of crypto currencies. The reason for my decision is that when I ask people who are all-in “what is so great about crypto [fill in the blank]?” they fail to produce any real answers. What I get are marketing sound bites and not any sort of communication from their bank informing them the country has changed currencies.
The passion for crypto looks and smells like a ponzi or pyramid scheme.
And so here I take the market speak to task. The cult of crypto’s followers talk a lot about crypto currencies in terms of:
free speech and privacy like they coexist at the user’s will. Unfortunately the law sees it differently as evidenced by any celebrity or any attempt made by Google or Amazon to anonymise data for analytics. So the idea that a crypto currency can be both transparent and private is simply not true. The people who want to know, know.
protection from inflation. Well that’s been demonstrated false. Recently there was a GOV jobless report and the BTC index did not move. In fact it might have gone down instead of up. Furthermore as a currency cryptos like bitcoin are subject to the same mechanisms as cash… If crypto were the currency of the land… government sells bonds, inflates the currency, people get greedy, cost of milk goes up, issues bonds and pays interest on previous bonds with the cash (crypto or other) they just created. Voila inflation with crypto.
no fees. crypto has fees. And lots of them. While the fees have moved from the merchant to the account holder and while it might appear to be lower it’s just an illusion or bait and switch. There are some interesting caveats in the bitcoincore description of fees. for example: in order to send someone 100SATS you have to have an unspent coin or aggregate of coins greater than or equal to the amount to send and fees. Consider you have one full BTC. You are expected to send the full coin into the transaction and wait for your change. But there is this little rule… (think office space) if the transaction yields some breakage amount then the miner keeps it. So you might not get anything back. Sadly there is no complaint dept. In that same example… instead of a full BTC if you had 100 individual SATS then your actual fee would be higher because one fee in particular charges for the number of bytes in the transaction and 100 individual SATS is much larger than on full BTC in terms of transaction data. As for the famous overdraft fees… They do not exist because these currencies do not offer interest or credit… They are no different than a giftcard.
taxes. you can always try to defraud the federal government, however, taxes are inevitable regardless of the form the currency takes. Here’s another of those positional issues. As an investment instrument taxes on BTC would not be required until the gains were realized, Either when converted back to cash or traded for product, services or donations… just like any stock etc.
no central authority. this is actually something that is very hard to prove as the evidence suggests otherwise. First there was a serious bug, early on, and only satoshi could fix it or so “they” say. The miners and nodes are all running software from the same source. The bigger issue has to be trust. While the model of the ledger is interesting in terms of replication, verification and consistency those attributes do not seem to be extended to the UTXO. The ledger by itself is the transactions with inputs and outputs. UTXO is a considered a sidecar table with is the list of outputs that have not been used in later occurring ubouts.(considered as unspent). While the set of unspent coins/SATS is supposed to equal to the actual number of coins mined it does not have the data integrity promises as the ledger. Get the ownership wrong (cough bug) and there is no way to correct it. In fact, correcting a UTXO might require rebuilding a node and in the meantime no transactions from the associated wallets. While 100BTC bug might get the attention from the core developers a 1SAT bug will not.
it’s peer to peer. Really? You have to ask the question: what is peer to peer? It’s certainly not the wallet holders. The wallet’s need nodes and the nodes need miners. These are all a collection of collaperating systems regardless of who owns them. And then there are bugs, version numbers, and so on.
the whitepaper, the whitepaper, the whitepaper. read the whitepaper. It’s only 8 pages long. While there are some similarities and maybe enough information to build a small model of a crypto currency it’s what we call vaporware.
anonymous. Most wallet holders buy their coins/SATS from an exchange. The exchanges are not specifically regulated, however, they have Patriot Act and other FinCEN obligations. So you are not as anon as you think.
instant anywhere transaction. the documentation says specifically… 10 seconds to 90 minutes OR LONGER. want it faster then pay a higher fee. And while the banks protect you from doing a transfer of funds to an embargo country if you succeed in a crypto currency you are liable and a criminal.
speed (of settlement) let’s review the documents again. 90min or longer. However, pinless debit instant settlement transfers the money right away. (see ATM)
others:… TBD
It is not too big to fail.
What they don’t tell you is that the BTC index can be manipulated. The little guy got ruins by swaps. The little guy is going to get ruined here too. It looks and smells like a redistribuion of wealth.