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No one is disrupting banks because the mega banks have the sole power of creating credit out of thin air, and no upstart fintech company has this power. To gain

No one is disrupting banks because the mega banks have the sole power of creating credit out of thin air, and no upstart fintech company has this power. To gain this power requires the creation of a bank, which as you can imagine, is probably the most gate-kept activity on earth. Andreesen talked about this in his Rogan appearance. The banks and gov brought the hammer down on crypto because it was a legitimate threat to the banking cabal which runs the American Empire.

scarface_74 2y ago
Yes and crypto doesn’t have any inherent risk like a sitting President creating a crypto currency where he has 80% of the currency, will probably make a half billion dollars and then do a rug pull. https://fortune.com/2025/01/22/donald-trump-net-worth-memecoin-red-flag-investors-rug-pull/ https://fortune.com/2025/01/22/donald-trump-net-worth-memeco...
- Waterluvian 2y ago
  That’s the thing I can’t ever come to understand about crypto. It’s purely about perception of value. At least with some precious metal, it has a floor value as a function of its practical uses and abundance. Which leads me to believe that the only thing that could be honestly said is that a crypto is purely about winners and suckers and timing.
  - mlinhares 2y ago
    In this specific case its also about buying access, so I doubt he'll rug pull, he can just direct the access requests to buy something.
  - sali0 2y ago
    The legal landscape forced the industry to be purely financial. Hopefully this changes soon.
  - doomroot 2y ago
    There are pros and cons of cryptocurrencies as money, just like gold, which cause people to speculate on the price.
    - myvoiceismypass 2y ago
      What are the pros of the trump coin or the melania coin?
      - Cthulhu_ 2y ago
        A brainwashed group of drones that are willling to pay money for it. But I'm convinced most people that buy memecoins like that are thinking that there's other suckers that will buy it and make the price go up.
  - tenthirtyam 2y ago
    > At least with some precious metal, it has a floor value as a function of its practical uses and abundance. I don't really give this argument much credence any more. If the value of, say, gold or diamonds were to drop their practical-use-floor-value, they'd be valued at probably less than 1% (maybe much less) of current value. I mean, how much gold is actually consumed by industry? And we even have industrial diamonds now. A friend argued to me that crypto is "A Terrible Thing" because its just used to fuel the (illegal) narcotics industry. At this point, I'm doubting that too - the market cap of all crpyto, and the value being transacted e.g. daily volume, has increased massively recently. Are we to believe that narcotics have caused that? I can't imagine so - more likely to me it's around 90-99% speculation which, you might well argue, is "Another Terrible Thing."
    - wat10000 2y ago
      I think the main thing precious metals have going for them is tradition. That’s no small thing. They’ve been considered valuable for millennia, and that’s likely to continue. Bitcoin might be replaced by some other fad in a decade. It’s like if you’re betting on a religion, Christianity is more likely to last than Scientology. They might both be equally made up, but one has demonstrated staying power.
    - XorNot 2y ago
      I mean, this is all true which is why we have fiat currencies. The UK government has consistently honoured debt for longer then the US has existed, for example.
      - nine_k 2y ago
        Inflation, and especially controlled inflation, is much easier with fiat money. Most governments see it as an extremely valuable tool.
    - amluto 2y ago
      The actual market value of diamonds is pretty low. You can pay a jeweler a lot of money for a shiny diamond, but good luck reselling it for a similar amount of money. Gold, OTOH, is fungible. You can melt it, mold it into different shapes bars, resell it, etc.
  - dumah 2y ago
    There’s at most a zero floor value on holdings of government debt, corporate equities, bank holdings, and any asset held by a custodian. The floor value of physical commodities with significant storage costs is negative. The market is aware of these possibilities and these risks are generally recognized as being embedded in asset prices as premiums.
  - halfcat 2y ago
    > It’s purely about perception of value All money has always been about perception, whether we used paper, shiny rocks, or sea shells as money, it’s always been about perception. Is it real or counterfeit, do you trust the person you’re transacting with, are enough people you know using it, and will people with weapons show up to protect your money if someone else tries to steal it? The “people with weapons” part turns out to be a key component. The novel thing about crypto is that you are less reliant on the “people with weapons” to protect you and tell you what you’re allowed to do with your money, and more reliant on the “people with encryption”.
    - wordpad25 2y ago
      No. Fiat is backed by tax base. US has more assets than debt. Additionally US is the largest economy in the world, how much would the right to tax it be worth? A lot. It's not at all just perception and influence as you claim.
      - macinjosh 2y ago
        So hyperinflation only happens when the tax base disappears? Perception and influence is clearly part of the picture.
        Spooky23 2y ago
        It’s one of the core attributes. Zimbabwe wasn’t going to be raising a trillion dollars of revenue.
      - abdullahkhalids 2y ago
        US economy has been second largest for over 10 years now [1]. [1] https://ourworldindata.org/grapher/gdp-maddison-project-database?tab=chart&time=1935..latest https://ourworldindata.org/grapher/gdp-maddison-project-data...
        malfist 2y ago
        I don't know where that site is pulling their data from, but not even the Chinese government claims their GDP is as high as that. And our GDP is higher than that site claims
  - miohtama 2y ago
    There is brand value in Trump. Trump is the largest meme on this planet. What should be the fair value of his fan coin?
    - dotcoma 2y ago
      Zero in 4 years’ time.
  - hinkley 2y ago
    The American dollar is also about perception of value, but via a maze of interlocking attributes that make it slow to move. A new fiat currency without a state sponsor is fragile by comparison. Always will be.
    - lanstin 2y ago
      But it isn’t just the military and the taxes, it is the labor of all the people who are willing to work for US dollars that give it value. While the majority of people paid in dollars are hard working and generally honest, it seems that the majority of people paid in cryptocurrencies are scammers or criminals in one way or the other, or else financial operators. So till more people are getting paid in bitcoin or whatever I don’t see why anyone will find it something other than a speculative asset for dollar owners.
  - henry_bone 2y ago
    That's true of everything we use as money, including precious metals. You can't eat them, live in them, use them as weapons, walk down the street in them. They have value bacause we all agree that they do and we all agree to use them as a means to exchange that value. Also, and this is important and I should have said it first, they have value because their supply is restricted. The same is true for crypto. It's fungible, private, and limited in supply. It's also independent of governments although they are doing their level best to correct that.
    - losteric 2y ago
      What are you talking about? We can wear gold, make weapons out of iron, cups out of copper… coins have both a fiat face value and real tangible value (the “floor”). Bitcoin has no intrinsic value. It’s entirely belief. That’s not a bad thing. MLMs can be very profitable, some turn into multi-generational institutions of faith. I own bitcoin because it’s like buying a share of the Mormon church early on. Absolutely, do it! But comparing it with gold? Come on, be real.
      - sgregnt 2y ago
        Bitcoin physical value is that, one way or the other, billions of humans got atoms in their brains, arrange in such a way that they recognize bitcoins, and have a certain understanding of it's setup... this is a lot of atoms, and is no small fit.
        losteric 2y ago
        You're describing the belief value.
      - henry_bone 2y ago
        [flagged]
    - pandaman 2y ago
      It's mostly correct except it's just the governments that agree to take gold and silver to settle debts (no, going off "gold standard" did not change this, gold and silver are still accepted as bank reserves around the world). And governments have the power to take your property to settle your debts with them. So for anyone, who is a subject of a government assigned debt (via taxation usually), gold has very practical value as it allows to keep one's property. The same is not generally true for crypto, perhaps in El Salvador they really take crypto to settle taxes but in any other country crypto only has value because of speculators.
  - AnthonyMouse 2y ago
    > At least with some precious metal, it has a floor value as a function of its practical uses and abundance. Suppose the price of gold is 80% perception of value and 20% utility for making electronics etc. Then if you buy it, 80% of what you buy is perception of value. You could get the same result by buying 80% Bitcoin and 20% commodity rock salt. Is someone who buys the latter any more of a sucker? What about somebody who then decides to divest the rock salt because it has a below-market rate of return when they have no direct use for it?
  - NoLinkToMe 2y ago
    Agreed. Even the scarcity is artificial, and based something between a contract and a gentleman's agreement, not any physical reality. That is, the bitcoin software can be changed if enough people want to, to make more of it. And you can create infinite copies of bitcoin software and call it bitcoin or something else. That's simply not true for the scarcity of gold. Finally, insofar as there are uses for the blockchain, the ostensible finite volume of bitcoin has no bearing on anything, as you don't need 'one of 21 million bitcoin' for its blockchain functionality, you can use 0.1 or 0.0001 bitcoin. It's infinitely divisible, and a small unit of bitcoin can get you blockchain functionality. And yet I've begun to put 5% of my monthly savings into it, as it seems to have become the long-term speculative asset. It doesn't seem to be going anywhere. But it really appears like an utterly ridiculous proposition, a self-fulling prophecy.
  - catlifeonmars 2y ago
    Precious metal floor value is not immune either, since (1) it is dependent on supply and (2) specific technologies/industries that require their use may become diminished or obsoleted. Definitely a lot less volatile than something not bound by reality though.
  - __MatrixMan__ 2y ago
    Are you proposing that "value" is meaningful in the absence of some perceiver? All value is the perception of value. The only difference is that it's easier to find people who value precious metals, but that sort of thing always depends on where you look. One can easily imagine situations where a position at the front of a queue is more valuable to the people nearby than a gold coin. Finding value in a blockchain is no different. It's just that none of the blockchains have yet managed to situate themselves such that people are likely to value their effects. Instead they're focusing on scarcity, which is kind of silly because all of the competition is equally empowered to create artificial scarcities. I think they'll figure it out eventually.
    - lesuorac 2y ago
      > Are you proposing that "value" is meaningful in the absence of some perceiver Yes. Gold conducts electricity. Bitcoin has no physically useful properties. However, I will admit a public ledger is actually probably very good for the USA so we can see all the grifting easily.
      - cle 2y ago
        Nobody cared that gold conducted electricity until very recently in human history.
  - PeterStuer 2y ago
    And fiat currency isn't purely about perception of value? Just as not all crypto is equal, the Zimbabwean dollar isn't remotely like the Swiss frank, just as bitcoin isn't remotely like hawktua.
    - pessimizer 2y ago
      > And fiat currency isn't purely about perception of value? Of course not. I don't know the laws of the country you live in, but in the US, the dollar is always acceptable as the payment of a court judgement and for the payment of taxes. That's not perception of value, that's value. All money is just IOUs, but getting an IOU from your landlord is different than getting an IOU from a stranger. You will have to pay your landlord in the future, or the landlord will send someone to physically throw you into the streets, and might be given license from the government to just take arbitrary possessions from you. An IOU from the landlord will automatically offset that. When you get IOUs from entities you don't have a ongoing financial relationship with, you need buyers who either 1) have an ongoing relationship with or are willing and able to transact with that entity, or 2) trust that they can find someone who has a relationship with that entity who will buy the IOU. 1) is value, 2) is the perception of value. Crypto has 3), in which there is no entity issuing or accepting the currency against a real debt (such as taxes or legal liabilities, which if not paid result in men in uniform hitting you with sticks, chaining you up, and locking you in a room), and no place to dump the currency other than other speculators. You can find people who believe in bitcoin, so bitcoin is liquid. But bitcoin support relies on a constant and enormous amount of marketing and lobbying, in the exact same way as "hawktwa." Crypto (thus far) only has value in that it can aid in criminal transactions (semi-privacy), and that enough wealthy people own it that they're now convincing weak governments to subsidize it. Dodging law enforcement and government handouts to the wealthy on one hand; maintaining preexisting legal obligations and paying taxes already owed on the other. Both fiat and crypto rely on government, but crypto is government subverting itself. Crypto only has value to the degree that governments allow or encourage lawbreaking and corruption. Crypto (as it is, not a hypothetically) is parasitic. > Zimbabwean dollar isn't remotely like the Swiss frank The Zim dollar is exactly like the Swiss franc, except it's harder to find people who pay Zim taxes and court judgements than people who pay Swiss taxes and court judgements. Just as hawktwa is exactly like bitcoin, except they lack the lobbyists, and the marketing is focused around a viral youtube clip. The big difference between the two classes is that you don't have to be convinced that government fiat is worth something, you know it is. The reach of crypto, outside of fraud and government graft (which is real value) is simply the reach of crypto marketing.
  - mandmandam 2y ago
    > That’s the thing I can’t ever come to understand about crypto. It’s purely about perception of value. It's not though. It became about that, in general, but there are crypto projects out there which don't focus on hype or valuation. It is functional and useful to be able to move value worldwide for 10% of the energy of a credit card transaction, decentralized, at sub-second speed, with no fees, even when just moving tiny fractions of a cent. There are a lot of maxis and bag holders trying to prevent people from figuring that out, but sooner or later a crisis will hit and everyone will remember what crypto was about in the first place.
  - WinstonSmith84 2y ago
    You're mixing up a bit everything. Bitcoin is totally different from Ethereum or Solana and these 2 networks are different from all the NFTs and meme coins launched on these Ethereum and Solana. By the way, if you thought that Trump was doing something illegal, which certainly sounds suspicious, well it isn't. This guy gives a good overview of the why https://x.com/wassielawyer/status/1881995797245600248 https://x.com/wassielawyer/status/1881995797245600248
    - kasey_junk 2y ago
      It’s not illegal for a celebrity to launch a meme coin or collectible. It’s not as clear if the President and his direct family can do the same. Anti-bribery/corruption is the concern with the coins (just as it was with his hotels in the first administration). Not the legality of the coin. But it’s moot, this admin has decided that norms don’t constrain it and it will not allow investigations into itself. So it’s de facto legal.
- buyucu 2y ago
  [flagged]
  - manquer 2y ago
    Are we really free not to be part of it ? This administration is also creating a sovereign wealth fund, which trump will exercise significant control over, I would be shocked if crypto and his coins specifically are not included. We are paying for it all one way or another, either with taxes or more likely higher inflation.
  - malfist 2y ago
    You and I are free to not buy it, but that doesn't mean Russia or b Saudi's or China or Zuckerberg isn't going to buy a bunch to influence our president
    - rendaw 2y ago
      Rather than regulate crypto, it might have been better to not elect him in the first place.
      - malfist 2y ago
        Trust me, I'd be a lot happier if that had happened.
  - hiddencost 2y ago
    A sitting president profiting off the presidency is a hall mark of a corrupt state. Doing it so openly suggests there's nothing stopping from doing so in much subtler ways too.
    - usefulcat 2y ago
      Doing it openly demonstrates that he thinks a lot of people (namely, people who voted for him) won't have any problem with it. In that case a corrupt state is not the biggest problem.
- WinstonSmith84 2y ago
  it's a ... memecoin - a category of crypto assets.
  - pavlov 2y ago
    It’s a funnel for foreign bribes. That’s literally the only utility of these Trump coins.
csomar 2y ago
You don't need a bank to create money out of thin air and creating a bank won't allow you to do that. I can create money out of thin air with you, if you are willing to accept my credit worthiness.
badgersnake 2y ago
Tether appear to have created a huge amount of USD out of thin air. Best not to pay much attention to Andreesen though.
- TeaBrain 2y ago
  On this point, I too have a really difficult time understanding how there is supposedly >$50 billion in treasury bonds backing Tether USDC sitting at Cantor Fitzgerald. It really does seem like the bonds backing tether just came out of thin air, unless tether was sponsored by an entity that gave them the wherewithal to obtain the bonds, for the sole purpose of moving money without KYC with tether.
  - FireBeyond 2y ago
    100% - even a few years ago, Tether claimed that they were receiving USD deposits approaching $5B per week. That amount of income is at the Saudi Aramco and others level. Of course, it was all supposedly being deposited into Deltec Bank, whose website was a Wordpress site, whose "Deputy CEO" couldn't remember the name of the country's two banking licenses, and which one Deltec held, or whether they held both. I guess it's hard to track all of those things when you go from getting your Masters in Science at HEC Lausanne at 15, and immediately being appointed a Professor of Finance at a Lebanese university, all while running your own hedge fund, "Indepedance (sic) Weath (sic) Management" from Jacksonville FL...
perrygeo 2y ago
> mega banks have the sole power of creating credit out of thin air Amazing that more people don't know this. Most people will insist until their face is red that bank credit is a "loan" with equal debits and credits on both sides of the balance sheet. Wrong. The borrower's bank account goes up. And the bank's balance sheet goes up (the loan is an asset). Viola, new money.
- danielmarkbruce 2y ago
  Take the next step. What happens when the borrower spends the money and the place they spend it banks with different bank? What's amazing is that more people don't think this through. They just take the "thin air" story and that's it.
  - alecco 2y ago
    Alice gets a 400k mortgage at bank A, so she gets 400k in credit at her (new?) account at the bank. Alice then pays to Bob for the house by transfering the 400k to Bob's account at bank B. No real money or gold is moved. Alice owes bank A 400k with money slave interest rate (e.g. 7%), bank A owes bank B 400k + interbank interest rate (e.g. 4%), and bank B owes Bob 400k (but they phrase it as "he has credit"). Both Alice and Bob's salaries are just credit at banks in the same system. If they sell their cars they get money from the same system. There's no way out. The banking system's accounting trick to create money was proven by prof Richard Werner. The limits on cash transactions are growing. To pay for something like a car you'd need a bag of papers as higher denominations to match inflation would never be printed. Cops can seize cash without much of an excuse. Customs can seize cash over 10k without much of an excuse. A small bank can only go down if other banks don't trust them. Like SBV a couple of years ago. But their assets are taken by a bigger bank. Lehman Brothers was a rare exception and it looks like Goldman wanted them to go down for some petty reason. But the AIGs will always be bailed out. More small banks going belly up and more bailouts are coming. The world is reducing exposure to dollar. Central banks are selling US treasuries and buying gold. The US dollar's empire is crashing down and the Western banking cartel is getting desperate. They'll try to drag the world into war or some other old trick.
danielmarkbruce 2y ago
Getting a banking license in the US at least is totally doable and lots of banks are created de novo every year. As another commenter noted, anyone can create "money out of thin air". Come to my corner store and buy an apple on credit. Poof! Credit was the original money, made out of thin air, and can be by anyone.
- kcatskcolbdi 2y ago
  Everyone has their own opinion of "lots" I suppose, but the quickest info I could come by in a quick search was 8 de novo created in 2021.
  - ianwalter 2y ago
    Sure, but because of fintech not as many need to get created. Fintech has made it relatively easy for new entrants to work with partner banks through BaaS platforms.
  - danielmarkbruce 2y ago
    Yup it's in the ~10's every year more or less.
- Red_Comet_88 2y ago
  Can your corner store credit be used to pay taxes? How long will your corner store survive if the IRS found out you were processing transactions in your own currency?
  - danielmarkbruce 2y ago
    No to paying taxes, mostly because the asset you'd have is an apple... The corner store at least has a receivable, but the IRS still won't accept that from them. But, at least in the US, before the national bank acts in the 1800's, various taxing entities specified which bank notes (or other assets) they'd accept and not accept. It was basically whichever bank notes circulated the most with no/little discount, some gold/silver coins, some government bonds. Ie acceptance by a taxing entity isn't really a clear line on "is/is not" money. Trading receivables has been going on forever, happens today, is totally legal. The corner store could sell the receivable, and many businesses to sell their receivables.
throwaway894345 2y ago
I remember reading about Monzo bank in the UK a lot some 5 years ago. I’m curious how they are doing these days. Seems like they’re still operating?
- ctippett 2y ago
  They're doing quite well it seems. Everyone I know seems to have an account with them. They've had a full, unrestricted bank licence since 2017 and have over 9.3m customers[1]. [1] https://en.m.wikipedia.org/wiki/Monzo https://en.m.wikipedia.org/wiki/Monzo
  - jen20 2y ago
    I used them during their beta phase and they were my primary bank until I left the UK. Exceptional service, and the only app from a UK bank that wouldn’t have made you want to cry with how awful it was.
jongjong 2y ago
Exactly. Bankers are modern-day royalty. Banks are granted special, exclusive powers by the state to issue/counterfeit the nation's currency as loans. Banking executives are anointed by decree. The idea of 'disrupting banks' is gaslighting because it pretends that they operate within a 'free market'.
wisty 2y ago
Crypto fans and gold bugs miss a very important point - if their favourite currency were to get big, banks would hold it as an asset, and issue loans in exactly the same way as any other currency. Do you want interest and the conviniance and security of a real bank? Give it to a bank to look after. There are maybe some risks, but there's also risks with a bitcoin wallet or physical bullion (theft, losing it). Do you want money now, and can pay it back later? The bank will loan it. Are the banks in trouble? The government can regulate, and even rescue them. A run can happen, but as long as the government and banks say the money is there, who cares about conversion to a bitcoin or bullion?
forgetfreeman 2y ago
Crypto has never posed a credible threat to any aspect of the establishment, and it never will. Need proof? You don't have to go through an arduous screening process to acquire and deploy compute. The finance industry saw a pool of dumb money forming and predictably decided they'd like a slice of the action.
- cbozeman 2y ago
  > an arduous screening process to acquire and deploy compute That right there is more unlikely than crypto becoming a credible threat to the banking establishment. If you want to see a lot of dead bodies of rich people in the street, tell the rest of the world they can't have their smartphone and laptop and Xbox and Playstation. That's a great way to get yourself killed.
  - forgetfreeman 2y ago
    lol what
  - JumpCrisscross 2y ago
    > there is more unlikely than crypto becoming a credible threat to the banking establishment Follow the money: Wall Street loves and lobbies for crypto.
snitty 2y ago
>The banks and gov brought the hammer down on crypto because it was a legitimate threat to the banking cabal which runs the American Empire. Price instability, confiscatory and variable transaction fees, several high profile frauds -- including in a so-called "stable coin". Crypto is its own worst enemy. Not the government.
- Cthulhu_ 2y ago
  Yeah, that "banking cabal" includes a heap of checks and balances that at least on paper stop financial crimes like scams, money laundering, market manipulation, insider trading, and they add guarantees like the relative stability of value, interest rates, and compensation if your bank does end up going bankrupt. You get none of those protections with cryptocurrency, which is exactly what scammers, criminal organizations, and financial libertarians want.
blackeyeblitzar 2y ago
If there isn’t sufficient competition for commercial banks, I think they should just be regulated as privately owned utilities for the public good or just be made into a public agency. What is the point of outsourcing this service to private industry if there is no working market dynamic?
cheriot 2y ago
> the mega banks have the sole power of creating credit out of thin air Every bank does that. The US has more than 4,000 of them.
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1oooqooq 2y ago
in brazil and india, american backed "fintech" could create credit like you descibe, plus none of the pesky revenue reporting required fom banks.
RayVR 2y ago
ah...I don't miss the shockingly willful ignorance of the crypto boom days. Go try your conspiracy nonsense on reddit and leave us be.
Cthulhu_ 2y ago
> and no upstart fintech company has this power Most of the cryptocurrency companies prove that this statement isn't entirely true though, unless I don't get it. That is, they generate cryptocurrencies out of thin air (credit) and say it has a certain value, then people pay them fiat money for those. They just generated value out of thin air and some compute cycles.
kasey_junk 2y ago
Everyone has the power to create credit out of thin air. What the banks have (now, due to long history) is a regularly regime where we expect the government to fix that credit when the bank gets those credit decisions wrong. In trade for that extraordinary treatment governments demand banks comply with a variety of regulations. I’ve worked for a long time in the banking and credit space, no one I know in that industry thinks Andreeson did a credible job explaining modern banking. To knowledgeable people he came off as either fundamentally ignorant or extremely deceptive depending on your cynicism levels.
- selecsosi 2y ago
  Thank you, this is something I think people really misunderstand about "money" in our system. Every time I create a "loan" for a family member I've technically created (i.e. debt) I've done the equivalent as to what a bank does to create "money". The question becomes if I can take the IOU I have from my brother, and trade that to another individual when I need to acquire goods. The fact we have a mechanism to create trust in trading debut is about assigning and managing risk in the payment of that debt, and transferring/holding that risk over time, which is a separate aspect to the raw creation of money concern (managing total debt loads).
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scarface_74 2y ago

Yes and crypto doesn’t have any inherent risk like a sitting President creating a crypto currency where he has 80% of the currency, will probably make a half billion dollars and then do a rug pull. https://fortune.com/2025/01/22/donald-trump-net-worth-memecoin-red-flag-investors-rug-pull/ https://fortune.com/2025/01/22/donald-trump-net-worth-memeco...

Waterluvian 2y ago
That’s the thing I can’t ever come to understand about crypto. It’s purely about perception of value. At least with some precious metal, it has a floor value as a function of its practical uses and abundance. Which leads me to believe that the only thing that could be honestly said is that a crypto is purely about winners and suckers and timing.
- mlinhares 2y ago
  In this specific case its also about buying access, so I doubt he'll rug pull, he can just direct the access requests to buy something.
- sali0 2y ago
  The legal landscape forced the industry to be purely financial. Hopefully this changes soon.
- doomroot 2y ago
  There are pros and cons of cryptocurrencies as money, just like gold, which cause people to speculate on the price.
  - myvoiceismypass 2y ago
    What are the pros of the trump coin or the melania coin?
    - Cthulhu_ 2y ago
      A brainwashed group of drones that are willling to pay money for it. But I'm convinced most people that buy memecoins like that are thinking that there's other suckers that will buy it and make the price go up.
- tenthirtyam 2y ago
  > At least with some precious metal, it has a floor value as a function of its practical uses and abundance. I don't really give this argument much credence any more. If the value of, say, gold or diamonds were to drop their practical-use-floor-value, they'd be valued at probably less than 1% (maybe much less) of current value. I mean, how much gold is actually consumed by industry? And we even have industrial diamonds now. A friend argued to me that crypto is "A Terrible Thing" because its just used to fuel the (illegal) narcotics industry. At this point, I'm doubting that too - the market cap of all crpyto, and the value being transacted e.g. daily volume, has increased massively recently. Are we to believe that narcotics have caused that? I can't imagine so - more likely to me it's around 90-99% speculation which, you might well argue, is "Another Terrible Thing."
  - wat10000 2y ago
    I think the main thing precious metals have going for them is tradition. That’s no small thing. They’ve been considered valuable for millennia, and that’s likely to continue. Bitcoin might be replaced by some other fad in a decade. It’s like if you’re betting on a religion, Christianity is more likely to last than Scientology. They might both be equally made up, but one has demonstrated staying power.
  - XorNot 2y ago
    I mean, this is all true which is why we have fiat currencies. The UK government has consistently honoured debt for longer then the US has existed, for example.
    - nine_k 2y ago
      Inflation, and especially controlled inflation, is much easier with fiat money. Most governments see it as an extremely valuable tool.
  - amluto 2y ago
    The actual market value of diamonds is pretty low. You can pay a jeweler a lot of money for a shiny diamond, but good luck reselling it for a similar amount of money. Gold, OTOH, is fungible. You can melt it, mold it into different shapes bars, resell it, etc.
- dumah 2y ago
  There’s at most a zero floor value on holdings of government debt, corporate equities, bank holdings, and any asset held by a custodian. The floor value of physical commodities with significant storage costs is negative. The market is aware of these possibilities and these risks are generally recognized as being embedded in asset prices as premiums.
- halfcat 2y ago
  > It’s purely about perception of value All money has always been about perception, whether we used paper, shiny rocks, or sea shells as money, it’s always been about perception. Is it real or counterfeit, do you trust the person you’re transacting with, are enough people you know using it, and will people with weapons show up to protect your money if someone else tries to steal it? The “people with weapons” part turns out to be a key component. The novel thing about crypto is that you are less reliant on the “people with weapons” to protect you and tell you what you’re allowed to do with your money, and more reliant on the “people with encryption”.
  - wordpad25 2y ago
    No. Fiat is backed by tax base. US has more assets than debt. Additionally US is the largest economy in the world, how much would the right to tax it be worth? A lot. It's not at all just perception and influence as you claim.
    - macinjosh 2y ago
      So hyperinflation only happens when the tax base disappears? Perception and influence is clearly part of the picture.
      - Spooky23 2y ago
        It’s one of the core attributes. Zimbabwe wasn’t going to be raising a trillion dollars of revenue.
    - abdullahkhalids 2y ago
      US economy has been second largest for over 10 years now [1]. [1] https://ourworldindata.org/grapher/gdp-maddison-project-database?tab=chart&time=1935..latest https://ourworldindata.org/grapher/gdp-maddison-project-data...
      - malfist 2y ago
        I don't know where that site is pulling their data from, but not even the Chinese government claims their GDP is as high as that. And our GDP is higher than that site claims
- miohtama 2y ago
  There is brand value in Trump. Trump is the largest meme on this planet. What should be the fair value of his fan coin?
  - dotcoma 2y ago
    Zero in 4 years’ time.
- hinkley 2y ago
  The American dollar is also about perception of value, but via a maze of interlocking attributes that make it slow to move. A new fiat currency without a state sponsor is fragile by comparison. Always will be.
  - lanstin 2y ago
    But it isn’t just the military and the taxes, it is the labor of all the people who are willing to work for US dollars that give it value. While the majority of people paid in dollars are hard working and generally honest, it seems that the majority of people paid in cryptocurrencies are scammers or criminals in one way or the other, or else financial operators. So till more people are getting paid in bitcoin or whatever I don’t see why anyone will find it something other than a speculative asset for dollar owners.
- henry_bone 2y ago
  That's true of everything we use as money, including precious metals. You can't eat them, live in them, use them as weapons, walk down the street in them. They have value bacause we all agree that they do and we all agree to use them as a means to exchange that value. Also, and this is important and I should have said it first, they have value because their supply is restricted. The same is true for crypto. It's fungible, private, and limited in supply. It's also independent of governments although they are doing their level best to correct that.
  - losteric 2y ago
    What are you talking about? We can wear gold, make weapons out of iron, cups out of copper… coins have both a fiat face value and real tangible value (the “floor”). Bitcoin has no intrinsic value. It’s entirely belief. That’s not a bad thing. MLMs can be very profitable, some turn into multi-generational institutions of faith. I own bitcoin because it’s like buying a share of the Mormon church early on. Absolutely, do it! But comparing it with gold? Come on, be real.
    - sgregnt 2y ago
      Bitcoin physical value is that, one way or the other, billions of humans got atoms in their brains, arrange in such a way that they recognize bitcoins, and have a certain understanding of it's setup... this is a lot of atoms, and is no small fit.
      - losteric 2y ago
        You're describing the belief value.
    - henry_bone 2y ago
      [flagged]
  - pandaman 2y ago
    It's mostly correct except it's just the governments that agree to take gold and silver to settle debts (no, going off "gold standard" did not change this, gold and silver are still accepted as bank reserves around the world). And governments have the power to take your property to settle your debts with them. So for anyone, who is a subject of a government assigned debt (via taxation usually), gold has very practical value as it allows to keep one's property. The same is not generally true for crypto, perhaps in El Salvador they really take crypto to settle taxes but in any other country crypto only has value because of speculators.
- AnthonyMouse 2y ago
  > At least with some precious metal, it has a floor value as a function of its practical uses and abundance. Suppose the price of gold is 80% perception of value and 20% utility for making electronics etc. Then if you buy it, 80% of what you buy is perception of value. You could get the same result by buying 80% Bitcoin and 20% commodity rock salt. Is someone who buys the latter any more of a sucker? What about somebody who then decides to divest the rock salt because it has a below-market rate of return when they have no direct use for it?
- NoLinkToMe 2y ago
  Agreed. Even the scarcity is artificial, and based something between a contract and a gentleman's agreement, not any physical reality. That is, the bitcoin software can be changed if enough people want to, to make more of it. And you can create infinite copies of bitcoin software and call it bitcoin or something else. That's simply not true for the scarcity of gold. Finally, insofar as there are uses for the blockchain, the ostensible finite volume of bitcoin has no bearing on anything, as you don't need 'one of 21 million bitcoin' for its blockchain functionality, you can use 0.1 or 0.0001 bitcoin. It's infinitely divisible, and a small unit of bitcoin can get you blockchain functionality. And yet I've begun to put 5% of my monthly savings into it, as it seems to have become the long-term speculative asset. It doesn't seem to be going anywhere. But it really appears like an utterly ridiculous proposition, a self-fulling prophecy.
- catlifeonmars 2y ago
  Precious metal floor value is not immune either, since (1) it is dependent on supply and (2) specific technologies/industries that require their use may become diminished or obsoleted. Definitely a lot less volatile than something not bound by reality though.
- __MatrixMan__ 2y ago
  Are you proposing that "value" is meaningful in the absence of some perceiver? All value is the perception of value. The only difference is that it's easier to find people who value precious metals, but that sort of thing always depends on where you look. One can easily imagine situations where a position at the front of a queue is more valuable to the people nearby than a gold coin. Finding value in a blockchain is no different. It's just that none of the blockchains have yet managed to situate themselves such that people are likely to value their effects. Instead they're focusing on scarcity, which is kind of silly because all of the competition is equally empowered to create artificial scarcities. I think they'll figure it out eventually.
  - lesuorac 2y ago
    > Are you proposing that "value" is meaningful in the absence of some perceiver Yes. Gold conducts electricity. Bitcoin has no physically useful properties. However, I will admit a public ledger is actually probably very good for the USA so we can see all the grifting easily.
    - cle 2y ago
      Nobody cared that gold conducted electricity until very recently in human history.
- PeterStuer 2y ago
  And fiat currency isn't purely about perception of value? Just as not all crypto is equal, the Zimbabwean dollar isn't remotely like the Swiss frank, just as bitcoin isn't remotely like hawktua.
  - pessimizer 2y ago
    > And fiat currency isn't purely about perception of value? Of course not. I don't know the laws of the country you live in, but in the US, the dollar is always acceptable as the payment of a court judgement and for the payment of taxes. That's not perception of value, that's value. All money is just IOUs, but getting an IOU from your landlord is different than getting an IOU from a stranger. You will have to pay your landlord in the future, or the landlord will send someone to physically throw you into the streets, and might be given license from the government to just take arbitrary possessions from you. An IOU from the landlord will automatically offset that. When you get IOUs from entities you don't have a ongoing financial relationship with, you need buyers who either 1) have an ongoing relationship with or are willing and able to transact with that entity, or 2) trust that they can find someone who has a relationship with that entity who will buy the IOU. 1) is value, 2) is the perception of value. Crypto has 3), in which there is no entity issuing or accepting the currency against a real debt (such as taxes or legal liabilities, which if not paid result in men in uniform hitting you with sticks, chaining you up, and locking you in a room), and no place to dump the currency other than other speculators. You can find people who believe in bitcoin, so bitcoin is liquid. But bitcoin support relies on a constant and enormous amount of marketing and lobbying, in the exact same way as "hawktwa." Crypto (thus far) only has value in that it can aid in criminal transactions (semi-privacy), and that enough wealthy people own it that they're now convincing weak governments to subsidize it. Dodging law enforcement and government handouts to the wealthy on one hand; maintaining preexisting legal obligations and paying taxes already owed on the other. Both fiat and crypto rely on government, but crypto is government subverting itself. Crypto only has value to the degree that governments allow or encourage lawbreaking and corruption. Crypto (as it is, not a hypothetically) is parasitic. > Zimbabwean dollar isn't remotely like the Swiss frank The Zim dollar is exactly like the Swiss franc, except it's harder to find people who pay Zim taxes and court judgements than people who pay Swiss taxes and court judgements. Just as hawktwa is exactly like bitcoin, except they lack the lobbyists, and the marketing is focused around a viral youtube clip. The big difference between the two classes is that you don't have to be convinced that government fiat is worth something, you know it is. The reach of crypto, outside of fraud and government graft (which is real value) is simply the reach of crypto marketing.
- mandmandam 2y ago
  > That’s the thing I can’t ever come to understand about crypto. It’s purely about perception of value. It's not though. It became about that, in general, but there are crypto projects out there which don't focus on hype or valuation. It is functional and useful to be able to move value worldwide for 10% of the energy of a credit card transaction, decentralized, at sub-second speed, with no fees, even when just moving tiny fractions of a cent. There are a lot of maxis and bag holders trying to prevent people from figuring that out, but sooner or later a crisis will hit and everyone will remember what crypto was about in the first place.
- WinstonSmith84 2y ago
  You're mixing up a bit everything. Bitcoin is totally different from Ethereum or Solana and these 2 networks are different from all the NFTs and meme coins launched on these Ethereum and Solana. By the way, if you thought that Trump was doing something illegal, which certainly sounds suspicious, well it isn't. This guy gives a good overview of the why https://x.com/wassielawyer/status/1881995797245600248 https://x.com/wassielawyer/status/1881995797245600248
  - kasey_junk 2y ago
    It’s not illegal for a celebrity to launch a meme coin or collectible. It’s not as clear if the President and his direct family can do the same. Anti-bribery/corruption is the concern with the coins (just as it was with his hotels in the first administration). Not the legality of the coin. But it’s moot, this admin has decided that norms don’t constrain it and it will not allow investigations into itself. So it’s de facto legal.
buyucu 2y ago
[flagged]
- manquer 2y ago
  Are we really free not to be part of it ? This administration is also creating a sovereign wealth fund, which trump will exercise significant control over, I would be shocked if crypto and his coins specifically are not included. We are paying for it all one way or another, either with taxes or more likely higher inflation.
- malfist 2y ago
  You and I are free to not buy it, but that doesn't mean Russia or b Saudi's or China or Zuckerberg isn't going to buy a bunch to influence our president
  - rendaw 2y ago
    Rather than regulate crypto, it might have been better to not elect him in the first place.
    - malfist 2y ago
      Trust me, I'd be a lot happier if that had happened.
- hiddencost 2y ago
  A sitting president profiting off the presidency is a hall mark of a corrupt state. Doing it so openly suggests there's nothing stopping from doing so in much subtler ways too.
  - usefulcat 2y ago
    Doing it openly demonstrates that he thinks a lot of people (namely, people who voted for him) won't have any problem with it. In that case a corrupt state is not the biggest problem.
WinstonSmith84 2y ago
it's a ... memecoin - a category of crypto assets.
- pavlov 2y ago
  It’s a funnel for foreign bribes. That’s literally the only utility of these Trump coins.

csomar 2y ago

You don't need a bank to create money out of thin air and creating a bank won't allow you to do that. I can create money out of thin air with you, if you are willing to accept my credit worthiness.

badgersnake 2y ago

Tether appear to have created a huge amount of USD out of thin air. Best not to pay much attention to Andreesen though.

TeaBrain 2y ago
On this point, I too have a really difficult time understanding how there is supposedly >$50 billion in treasury bonds backing Tether USDC sitting at Cantor Fitzgerald. It really does seem like the bonds backing tether just came out of thin air, unless tether was sponsored by an entity that gave them the wherewithal to obtain the bonds, for the sole purpose of moving money without KYC with tether.
- FireBeyond 2y ago
  100% - even a few years ago, Tether claimed that they were receiving USD deposits approaching $5B per week. That amount of income is at the Saudi Aramco and others level. Of course, it was all supposedly being deposited into Deltec Bank, whose website was a Wordpress site, whose "Deputy CEO" couldn't remember the name of the country's two banking licenses, and which one Deltec held, or whether they held both. I guess it's hard to track all of those things when you go from getting your Masters in Science at HEC Lausanne at 15, and immediately being appointed a Professor of Finance at a Lebanese university, all while running your own hedge fund, "Indepedance (sic) Weath (sic) Management" from Jacksonville FL...

perrygeo 2y ago

> mega banks have the sole power of creating credit out of thin air Amazing that more people don't know this. Most people will insist until their face is red that bank credit is a "loan" with equal debits and credits on both sides of the balance sheet. Wrong. The borrower's bank account goes up. And the bank's balance sheet goes up (the loan is an asset). Viola, new money.

danielmarkbruce 2y ago
Take the next step. What happens when the borrower spends the money and the place they spend it banks with different bank? What's amazing is that more people don't think this through. They just take the "thin air" story and that's it.
- alecco 2y ago
  Alice gets a 400k mortgage at bank A, so she gets 400k in credit at her (new?) account at the bank. Alice then pays to Bob for the house by transfering the 400k to Bob's account at bank B. No real money or gold is moved. Alice owes bank A 400k with money slave interest rate (e.g. 7%), bank A owes bank B 400k + interbank interest rate (e.g. 4%), and bank B owes Bob 400k (but they phrase it as "he has credit"). Both Alice and Bob's salaries are just credit at banks in the same system. If they sell their cars they get money from the same system. There's no way out. The banking system's accounting trick to create money was proven by prof Richard Werner. The limits on cash transactions are growing. To pay for something like a car you'd need a bag of papers as higher denominations to match inflation would never be printed. Cops can seize cash without much of an excuse. Customs can seize cash over 10k without much of an excuse. A small bank can only go down if other banks don't trust them. Like SBV a couple of years ago. But their assets are taken by a bigger bank. Lehman Brothers was a rare exception and it looks like Goldman wanted them to go down for some petty reason. But the AIGs will always be bailed out. More small banks going belly up and more bailouts are coming. The world is reducing exposure to dollar. Central banks are selling US treasuries and buying gold. The US dollar's empire is crashing down and the Western banking cartel is getting desperate. They'll try to drag the world into war or some other old trick.

danielmarkbruce 2y ago

Getting a banking license in the US at least is totally doable and lots of banks are created de novo every year. As another commenter noted, anyone can create "money out of thin air". Come to my corner store and buy an apple on credit. Poof! Credit was the original money, made out of thin air, and can be by anyone.

kcatskcolbdi 2y ago
Everyone has their own opinion of "lots" I suppose, but the quickest info I could come by in a quick search was 8 de novo created in 2021.
- ianwalter 2y ago
  Sure, but because of fintech not as many need to get created. Fintech has made it relatively easy for new entrants to work with partner banks through BaaS platforms.
- danielmarkbruce 2y ago
  Yup it's in the ~10's every year more or less.
Red_Comet_88 2y ago
Can your corner store credit be used to pay taxes? How long will your corner store survive if the IRS found out you were processing transactions in your own currency?
- danielmarkbruce 2y ago
  No to paying taxes, mostly because the asset you'd have is an apple... The corner store at least has a receivable, but the IRS still won't accept that from them. But, at least in the US, before the national bank acts in the 1800's, various taxing entities specified which bank notes (or other assets) they'd accept and not accept. It was basically whichever bank notes circulated the most with no/little discount, some gold/silver coins, some government bonds. Ie acceptance by a taxing entity isn't really a clear line on "is/is not" money. Trading receivables has been going on forever, happens today, is totally legal. The corner store could sell the receivable, and many businesses to sell their receivables.

throwaway894345 2y ago

I remember reading about Monzo bank in the UK a lot some 5 years ago. I’m curious how they are doing these days. Seems like they’re still operating?

ctippett 2y ago
They're doing quite well it seems. Everyone I know seems to have an account with them. They've had a full, unrestricted bank licence since 2017 and have over 9.3m customers[1]. [1] https://en.m.wikipedia.org/wiki/Monzo https://en.m.wikipedia.org/wiki/Monzo
- jen20 2y ago
  I used them during their beta phase and they were my primary bank until I left the UK. Exceptional service, and the only app from a UK bank that wouldn’t have made you want to cry with how awful it was.

jongjong 2y ago

Exactly. Bankers are modern-day royalty. Banks are granted special, exclusive powers by the state to issue/counterfeit the nation's currency as loans. Banking executives are anointed by decree. The idea of 'disrupting banks' is gaslighting because it pretends that they operate within a 'free market'.

wisty 2y ago

Crypto fans and gold bugs miss a very important point - if their favourite currency were to get big, banks would hold it as an asset, and issue loans in exactly the same way as any other currency. Do you want interest and the conviniance and security of a real bank? Give it to a bank to look after. There are maybe some risks, but there's also risks with a bitcoin wallet or physical bullion (theft, losing it). Do you want money now, and can pay it back later? The bank will loan it. Are the banks in trouble? The government can regulate, and even rescue them. A run can happen, but as long as the government and banks say the money is there, who cares about conversion to a bitcoin or bullion?

forgetfreeman 2y ago

Crypto has never posed a credible threat to any aspect of the establishment, and it never will. Need proof? You don't have to go through an arduous screening process to acquire and deploy compute. The finance industry saw a pool of dumb money forming and predictably decided they'd like a slice of the action.

cbozeman 2y ago
> an arduous screening process to acquire and deploy compute That right there is more unlikely than crypto becoming a credible threat to the banking establishment. If you want to see a lot of dead bodies of rich people in the street, tell the rest of the world they can't have their smartphone and laptop and Xbox and Playstation. That's a great way to get yourself killed.
- forgetfreeman 2y ago
  lol what
- JumpCrisscross 2y ago
  > there is more unlikely than crypto becoming a credible threat to the banking establishment Follow the money: Wall Street loves and lobbies for crypto.

snitty 2y ago

>The banks and gov brought the hammer down on crypto because it was a legitimate threat to the banking cabal which runs the American Empire. Price instability, confiscatory and variable transaction fees, several high profile frauds -- including in a so-called "stable coin". Crypto is its own worst enemy. Not the government.

Cthulhu_ 2y ago
Yeah, that "banking cabal" includes a heap of checks and balances that at least on paper stop financial crimes like scams, money laundering, market manipulation, insider trading, and they add guarantees like the relative stability of value, interest rates, and compensation if your bank does end up going bankrupt. You get none of those protections with cryptocurrency, which is exactly what scammers, criminal organizations, and financial libertarians want.

blackeyeblitzar 2y ago

If there isn’t sufficient competition for commercial banks, I think they should just be regulated as privately owned utilities for the public good or just be made into a public agency. What is the point of outsourcing this service to private industry if there is no working market dynamic?

cheriot 2y ago

> the mega banks have the sole power of creating credit out of thin air Every bank does that. The US has more than 4,000 of them.

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1oooqooq 2y ago

in brazil and india, american backed "fintech" could create credit like you descibe, plus none of the pesky revenue reporting required fom banks.

RayVR 2y ago

ah...I don't miss the shockingly willful ignorance of the crypto boom days. Go try your conspiracy nonsense on reddit and leave us be.

Cthulhu_ 2y ago

> and no upstart fintech company has this power Most of the cryptocurrency companies prove that this statement isn't entirely true though, unless I don't get it. That is, they generate cryptocurrencies out of thin air (credit) and say it has a certain value, then people pay them fiat money for those. They just generated value out of thin air and some compute cycles.

kasey_junk 2y ago

Everyone has the power to create credit out of thin air. What the banks have (now, due to long history) is a regularly regime where we expect the government to fix that credit when the bank gets those credit decisions wrong. In trade for that extraordinary treatment governments demand banks comply with a variety of regulations. I’ve worked for a long time in the banking and credit space, no one I know in that industry thinks Andreeson did a credible job explaining modern banking. To knowledgeable people he came off as either fundamentally ignorant or extremely deceptive depending on your cynicism levels.

selecsosi 2y ago
Thank you, this is something I think people really misunderstand about "money" in our system. Every time I create a "loan" for a family member I've technically created (i.e. debt) I've done the equivalent as to what a bank does to create "money". The question becomes if I can take the IOU I have from my brother, and trade that to another individual when I need to acquire goods. The fact we have a mechanism to create trust in trading debut is about assigning and managing risk in the payment of that debt, and transferring/holding that risk over time, which is a separate aspect to the raw creation of money concern (managing total debt loads).

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