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I see this as a great opportunity to learn the next few lessons of traditional Finance system that lead to them not being finite and only driven by market force

I see this as a great opportunity to learn the next few lessons of traditional Finance system that lead to them not being finite and only driven by market forces. Crypto really feels like a speed run of human monetary history.

everfree 3y ago
> only driven by market forces Which money are you talking about? Most monies are driven substantially by monetary policy and other direct government intervention. The very reason fiat is no longer finite is due to government intervention in the 1930s (going off the gold standard). Bitcoin (e.g.) is actually much more like gold in that the amount of it in circulation isn't determined by any law, policy or intervention.
- tsimionescu 3y ago
  The amount of bitcoin in circulation is very much determined by policies - the software of the bitcoin clients and servers. It is quite possible that mining rewards will be altered in the future as the amount dries up.
  - everfree 3y ago
    And the software of the bitcoin clients is at least in theory determined by the users. If someone alters the amount of bitcoins out there, my wallet software won't recognize those bitcoins as legitimate.
    - lxgr 3y ago
      The value of your wallet lies not in what you believe in, but what everybody else believes in.
      - everfree 3y ago
        The value of bitcoin lies in its immutability. That's the only thing it really has left going for it.
        lxgr 3y ago
        Bitcoin is not immutable. The current chain would make absolutely no sense to a (full-validating) client from 2011 due to various additions and protocol changes. What it is, as a project, is being extremely conservative, but that's a human political value, not a property of a technical system.
        everfree 3y ago
        I'm referring to the immutability of issuance and balances. That's the type of immutability that matters.
  - somenameforme 3y ago
    The difference is this would require a hard fork, and the value of this fork would be determined entirely by market forces. Imagine if when the US decided to 'print' a few trillion bucks, it resulted in the creation of a new USD2 currency. And you were free to keep using USD1 or swap over to USD2. More or less the exact same thing has already happened with Bitcoin multiple times, with the outcome you could expect. It's quite interesting in an economic sense too because, unlike our USD2 analogy, in the Bitcoin world users actually keep all their money in both forks (so if you have $1000 in USD, you'd also have $1000 in USD2) yet disproportionately favor one currency to the point that e.g. Bitcoin Cash is worth $217 per coin, while BTC mainline is worth $26,000 per coin.
    - tsimionescu 3y ago
      Not necessarily. The main BTC software has already changed a few times over the years, and nothing prevents it from changing again. If the BTC maintainers and major miners would agree, they could very well push this change. The same way they decided to stop expanding the block size, for example. The forks were the result of a split in the community. Not every change actually results in a fork.
- somenameforme 3y ago
  It's more fair to say that currencies only decided to 'go infinite' starting in 1971. [1] Up until then Western currencies were still driven by the Bretton Woods System. [2] In this system the USD was convertible to gold at a fixed rate, which was a defacto gold backing. Of course 50 years feels like an eternity to most of us, because it's literally our entire existence. But on a historic scale 'infinite' currencies may yet end up being one of the most short-lived widescale experimental failures in monetary systems, ever. This is even more true if one considers that after we defaulted on our obligations under Bretton Woods, we almost immediately transitioned to the petro dollar, making the USD the only way to obtain the most in-demand commodity in existence. So it still kind of had a backing. We've only really started to become 'free floating' extremely recently as more major oil producers turn against the petrodollar. And it doesn't seem to be leading to happy places. [1] - https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/ [2] - https://en.wikipedia.org/wiki/Bretton_Woods_system https://en.wikipedia.org/wiki/Bretton_Woods_system
  - kibwen 3y ago
    > So it still kind of had a backing. ...Except for all the other major fiat currencies that are not USD.
    - somenameforme 3y ago
      There's a nuance here. When Germany and Canada trade, they settle that balance in USD. This means if another country just prints a bunch of money, they're actually going to suffer for it. By contrast, when the US prints a bunch of money, it means countries whose currencies strengthen against it stand to risk pricing themselves out of the biggest consumer market in the world. It tends to drive other countries to also weaken their currency. This is one of the ways that the US exports its inflation - "exporting inflation" being a term you could find a lot more hits on if this topic interests you. If you look at countries by debt to GDP, the US is peers with economies like Laos, Sudan, Italy, Venezuela, and so on. [1] The unique position of the dollar alongside being the largest consumer economy gives the government immense room to absorb economic blunders. At least until the house of cards collapses, which will make 1929 look like the good ole days. This is one of the many reasons people are interested in currencies that cannot be manipulated outside of normal market forces. [1] - https://en.wikipedia.org/wiki/List_of_countries_by_government_debt https://en.wikipedia.org/wiki/List_of_countries_by_governmen...
- lxgr 3y ago
  > Bitcoin (e.g.) is actually much more like gold in that the amount of it in circulation isn't determined by any law, policy or intervention. How so? Bitcoin is a set of political/economic ideas about money encoded into software by a group of humans, who are historically known to sometimes change their minds over time.
  - everfree 3y ago
    As long as I don't change my mind, my wallet software will not see any of those changes as legitimate, just as it didn't see Bitcoin Cash or Bitcoin SV as legitimate.
    - lxgr 3y ago
      If all you care about is your own view of your wallet’s value, you could get incredibly rich just by forking the chain in your favor :)
      - everfree 3y ago
        I care about the chain being immutable. A chain forked in my favor is a chain I don't care about.
        lxgr 3y ago
        The chain is very mutable! How would SegWit and other changes have been implemented otherwise? Or does the official chain stop at some point in 2011 for you, soon after the genesis block? Every fork happens in order to effect some change – and whether that change is beneficial or not is the matter of policy, not technology. Voting against a fork (with your mining power or wallet) is also a policy decision. You can't escape human nature in a system built and used by humans, not even in a very conservative/change-averse one, because conservatism is, once again, a human value, not a technological one.
        everfree 3y ago
baby 3y ago
Not all crypto are finite

everfree 3y ago

> only driven by market forces Which money are you talking about? Most monies are driven substantially by monetary policy and other direct government intervention. The very reason fiat is no longer finite is due to government intervention in the 1930s (going off the gold standard). Bitcoin (e.g.) is actually much more like gold in that the amount of it in circulation isn't determined by any law, policy or intervention.

tsimionescu 3y ago
The amount of bitcoin in circulation is very much determined by policies - the software of the bitcoin clients and servers. It is quite possible that mining rewards will be altered in the future as the amount dries up.
- everfree 3y ago
  And the software of the bitcoin clients is at least in theory determined by the users. If someone alters the amount of bitcoins out there, my wallet software won't recognize those bitcoins as legitimate.
  - lxgr 3y ago
    The value of your wallet lies not in what you believe in, but what everybody else believes in.
    - everfree 3y ago
      The value of bitcoin lies in its immutability. That's the only thing it really has left going for it.
      - lxgr 3y ago
        Bitcoin is not immutable. The current chain would make absolutely no sense to a (full-validating) client from 2011 due to various additions and protocol changes. What it is, as a project, is being extremely conservative, but that's a human political value, not a property of a technical system.
        everfree 3y ago
        I'm referring to the immutability of issuance and balances. That's the type of immutability that matters.
- somenameforme 3y ago
  The difference is this would require a hard fork, and the value of this fork would be determined entirely by market forces. Imagine if when the US decided to 'print' a few trillion bucks, it resulted in the creation of a new USD2 currency. And you were free to keep using USD1 or swap over to USD2. More or less the exact same thing has already happened with Bitcoin multiple times, with the outcome you could expect. It's quite interesting in an economic sense too because, unlike our USD2 analogy, in the Bitcoin world users actually keep all their money in both forks (so if you have $1000 in USD, you'd also have $1000 in USD2) yet disproportionately favor one currency to the point that e.g. Bitcoin Cash is worth $217 per coin, while BTC mainline is worth $26,000 per coin.
  - tsimionescu 3y ago
    Not necessarily. The main BTC software has already changed a few times over the years, and nothing prevents it from changing again. If the BTC maintainers and major miners would agree, they could very well push this change. The same way they decided to stop expanding the block size, for example. The forks were the result of a split in the community. Not every change actually results in a fork.
somenameforme 3y ago
It's more fair to say that currencies only decided to 'go infinite' starting in 1971. [1] Up until then Western currencies were still driven by the Bretton Woods System. [2] In this system the USD was convertible to gold at a fixed rate, which was a defacto gold backing. Of course 50 years feels like an eternity to most of us, because it's literally our entire existence. But on a historic scale 'infinite' currencies may yet end up being one of the most short-lived widescale experimental failures in monetary systems, ever. This is even more true if one considers that after we defaulted on our obligations under Bretton Woods, we almost immediately transitioned to the petro dollar, making the USD the only way to obtain the most in-demand commodity in existence. So it still kind of had a backing. We've only really started to become 'free floating' extremely recently as more major oil producers turn against the petrodollar. And it doesn't seem to be leading to happy places. [1] - https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/ [2] - https://en.wikipedia.org/wiki/Bretton_Woods_system https://en.wikipedia.org/wiki/Bretton_Woods_system
- kibwen 3y ago
  > So it still kind of had a backing. ...Except for all the other major fiat currencies that are not USD.
  - somenameforme 3y ago
    There's a nuance here. When Germany and Canada trade, they settle that balance in USD. This means if another country just prints a bunch of money, they're actually going to suffer for it. By contrast, when the US prints a bunch of money, it means countries whose currencies strengthen against it stand to risk pricing themselves out of the biggest consumer market in the world. It tends to drive other countries to also weaken their currency. This is one of the ways that the US exports its inflation - "exporting inflation" being a term you could find a lot more hits on if this topic interests you. If you look at countries by debt to GDP, the US is peers with economies like Laos, Sudan, Italy, Venezuela, and so on. [1] The unique position of the dollar alongside being the largest consumer economy gives the government immense room to absorb economic blunders. At least until the house of cards collapses, which will make 1929 look like the good ole days. This is one of the many reasons people are interested in currencies that cannot be manipulated outside of normal market forces. [1] - https://en.wikipedia.org/wiki/List_of_countries_by_government_debt https://en.wikipedia.org/wiki/List_of_countries_by_governmen...
lxgr 3y ago
> Bitcoin (e.g.) is actually much more like gold in that the amount of it in circulation isn't determined by any law, policy or intervention. How so? Bitcoin is a set of political/economic ideas about money encoded into software by a group of humans, who are historically known to sometimes change their minds over time.
- everfree 3y ago
  As long as I don't change my mind, my wallet software will not see any of those changes as legitimate, just as it didn't see Bitcoin Cash or Bitcoin SV as legitimate.
  - lxgr 3y ago
    If all you care about is your own view of your wallet’s value, you could get incredibly rich just by forking the chain in your favor :)
    - everfree 3y ago
      I care about the chain being immutable. A chain forked in my favor is a chain I don't care about.
      - lxgr 3y ago
        The chain is very mutable! How would SegWit and other changes have been implemented otherwise? Or does the official chain stop at some point in 2011 for you, soon after the genesis block? Every fork happens in order to effect some change – and whether that change is beneficial or not is the matter of policy, not technology. Voting against a fork (with your mining power or wallet) is also a policy decision. You can't escape human nature in a system built and used by humans, not even in a very conservative/change-averse one, because conservatism is, once again, a human value, not a technological one.
        everfree 3y ago

baby 3y ago

Not all crypto are finite