So, a discussion came up in a popular community I'm a part of, comprised of individuals who are highly critical towards "crypto". I've typed up this explainer for them, and maybe others might find value in it, also, so I'm posting it here.
--
While I'm hardly objective, I've thought about it a lot, from numerous perspectives throughout my life, and perhaps others might find value in mine. I know not everyone here wants to read this (TL;DR), and that's fine, nobody is entitled to anyone's time, this is not really the place for this discussion, and yeah, people will call me crazy or shout me down and that's fine, I'm used to it, but hopefully someone here might learn from this or find it valuable, and in the very least this can ease my conscience knowing I've tried my best to explain.
So, the thing to know about "crypto" is, anything that calls itself cryptocurrency is a scam. We know who the founder is, they've allocated a significant amount of funds to themselves and insiders, the exchanges are in on it, and then they prey on unsuspecting retail investors. The other thing to know is that Bitcoin is different, in the whitepaper that presented it to the world, it didn't call itself "cryptocurrency", but a "peer to peer electronic cash system". There's a lot one has to learn in order to put money into it in a safe way, and if you don't know that, there's a very good likelihood you will lose your savings. This article is worth reading to better understand this:
https://www.swanbitcoin.com/bitcoin-vs-altcoins/
They'll also refer to themselves as "altcoins", or alternatives to Bitcoin, that offer more features than Bitcoin, and so you should give them your money instead, since it's better than Bitcoin and theirs will instead go to the moon. They'll also peddle things called "stablecoins", sold as something that can't possibly lose money, and might even "earn yield" (spoiler, you are the yield), and there's been a number of instances of these, none of them trustworthy, because they all require trust of some kind. All of these things are what Bitcoiners call an "affinity scam":
https://en.wikipedia.org/wiki/Affinity_fraud
Bitcoiners are essentially the doomsday preppers of the financial world, or monetary gun nuts ("right to keep and bear funds", "separate money from state"). I think it's also fair to call Bitcoiners religious zealots, there's a few good parallels; the message in the genesis block which implies Bitcoin's politically-motivated nature, as a response to the global financial crisis, there's also the prophet who "went nym for our sins", and an eschatology known as "hyperbitcoinization", a situation in which all other stores of value hyperinflate against Bitcoin (a furry came up with this term in 2014, btw).
This is the original article on hyperbitcoinization by Cosmos Stag:
https://nakamotoinstitute.org/mempool/hyperbitcoinization/
What we're preparing for is the possibility the central bankers might one day be really bad at their jobs. They seem to be doing a decent job so far, and I hope that continues well into the future, because I don't see Bitcoin as a "get rich quick" scheme. Some of us have turned to religion as a way to keep ourselves from losing our minds, for any number of reasons that hopefully seem quite obvious from those outside the community with a sense of empathy for people doing something they truly believe in.
For more on the perspective that Bitcoin is a religion, I very much recommend this highly critical piece on the community of Bitcoiners:
https://twitter.com/nic__carter/status/1666294372537606145
Regardless, if the central bankers screw up, especially the ones managing the supply of the global reserve currency, there's the possibility of what's called "financial repression". This is most common in currencies in developing countries, and it's basically a way to pay off debts denominated in their own currency:
https://en.wikipedia.org/wiki/Financial_repression
I'm not an economist, and this viewpoint runs counter to prominent, mainstream economics, but a theory has been put forth that money as a store of value can be compromised through monetary expansion, and debt issuance is a form of monetary expansion (as money that didn't exist before that's good to spend now). Think, mortgages, credit cards, student loans, car loans, corporate debt, treasuries, etc. In a system that's based largely on debt, with something like 97% of our money supply issued by private banks, and given guarantees on that debt by central banks, there's a possibility that things can go haywire and the Federal Reserve will have no choice but to financially repress the global reserve currency, which has never happened before (at least in recent times) and might result in chaos, or things might turn out perfectly fine. What it would cause is a massive wealth concentration into big banks, which is already happening now that big banks are earning very high interest rates on US government debt, treasuries. Another thing to know is that federal deficit spending is a form of monetary expansion, and the Federal Reserve is currently insolvent, using money they don't have to discourage big banks from lending (and further increasing the money supply, leading to monetary debasement and commodities price inflation). That said, I'm not predicting the system will collapse anytime soon, since nobody can know whether it will or it won't, or when. This is a good article for more information on this:
https://www.lynalden.com/broke-federal-reserve/
The best I can do is, try to build the technology needed to scale this system that automates away the role of central banks in a way that can safely serve the needs of everyone who might need it. For anyone with questions on how to put money in Bitcoin safely, I recommend reading the Swan blog post which was the first link above:
https://www.swanbitcoin.com/bitcoin-vs-altcoins/
Again, apologies for the long post, but thank you for reading, and I hope this was helpful to you in some way.
#bitcoin #orangepill #toximaxi
HunterBeast / Hunter ₿eaṩt
npub1qq…clxwk
2023-06-15 14:57:55
Author Public Key
npub1qqqqqqqrxtrcx8vut2vlrqa0c2qn5mmf59hdmflkls8dsyg9vmnqsclxwkPublished at
2023-06-15 14:57:55Event JSON
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"content": "So, a discussion came up in a popular community I'm a part of, comprised of individuals who are highly critical towards \"crypto\". I've typed up this explainer for them, and maybe others might find value in it, also, so I'm posting it here.\n\n--\n\nWhile I'm hardly objective, I've thought about it a lot, from numerous perspectives throughout my life, and perhaps others might find value in mine. I know not everyone here wants to read this (TL;DR), and that's fine, nobody is entitled to anyone's time, this is not really the place for this discussion, and yeah, people will call me crazy or shout me down and that's fine, I'm used to it, but hopefully someone here might learn from this or find it valuable, and in the very least this can ease my conscience knowing I've tried my best to explain.\n\nSo, the thing to know about \"crypto\" is, anything that calls itself cryptocurrency is a scam. We know who the founder is, they've allocated a significant amount of funds to themselves and insiders, the exchanges are in on it, and then they prey on unsuspecting retail investors. The other thing to know is that Bitcoin is different, in the whitepaper that presented it to the world, it didn't call itself \"cryptocurrency\", but a \"peer to peer electronic cash system\". There's a lot one has to learn in order to put money into it in a safe way, and if you don't know that, there's a very good likelihood you will lose your savings. This article is worth reading to better understand this:\n\nhttps://www.swanbitcoin.com/bitcoin-vs-altcoins/\n\nThey'll also refer to themselves as \"altcoins\", or alternatives to Bitcoin, that offer more features than Bitcoin, and so you should give them your money instead, since it's better than Bitcoin and theirs will instead go to the moon. They'll also peddle things called \"stablecoins\", sold as something that can't possibly lose money, and might even \"earn yield\" (spoiler, you are the yield), and there's been a number of instances of these, none of them trustworthy, because they all require trust of some kind. All of these things are what Bitcoiners call an \"affinity scam\":\n\nhttps://en.wikipedia.org/wiki/Affinity_fraud\n\nBitcoiners are essentially the doomsday preppers of the financial world, or monetary gun nuts (\"right to keep and bear funds\", \"separate money from state\"). I think it's also fair to call Bitcoiners religious zealots, there's a few good parallels; the message in the genesis block which implies Bitcoin's politically-motivated nature, as a response to the global financial crisis, there's also the prophet who \"went nym for our sins\", and an eschatology known as \"hyperbitcoinization\", a situation in which all other stores of value hyperinflate against Bitcoin (a furry came up with this term in 2014, btw).\n\nThis is the original article on hyperbitcoinization by Cosmos Stag:\n\nhttps://nakamotoinstitute.org/mempool/hyperbitcoinization/\n\nWhat we're preparing for is the possibility the central bankers might one day be really bad at their jobs. They seem to be doing a decent job so far, and I hope that continues well into the future, because I don't see Bitcoin as a \"get rich quick\" scheme. Some of us have turned to religion as a way to keep ourselves from losing our minds, for any number of reasons that hopefully seem quite obvious from those outside the community with a sense of empathy for people doing something they truly believe in.\n\nFor more on the perspective that Bitcoin is a religion, I very much recommend this highly critical piece on the community of Bitcoiners:\n\nhttps://twitter.com/nic__carter/status/1666294372537606145\n\nRegardless, if the central bankers screw up, especially the ones managing the supply of the global reserve currency, there's the possibility of what's called \"financial repression\". This is most common in currencies in developing countries, and it's basically a way to pay off debts denominated in their own currency:\n\nhttps://en.wikipedia.org/wiki/Financial_repression\n\nI'm not an economist, and this viewpoint runs counter to prominent, mainstream economics, but a theory has been put forth that money as a store of value can be compromised through monetary expansion, and debt issuance is a form of monetary expansion (as money that didn't exist before that's good to spend now). Think, mortgages, credit cards, student loans, car loans, corporate debt, treasuries, etc. In a system that's based largely on debt, with something like 97% of our money supply issued by private banks, and given guarantees on that debt by central banks, there's a possibility that things can go haywire and the Federal Reserve will have no choice but to financially repress the global reserve currency, which has never happened before (at least in recent times) and might result in chaos, or things might turn out perfectly fine. What it would cause is a massive wealth concentration into big banks, which is already happening now that big banks are earning very high interest rates on US government debt, treasuries. Another thing to know is that federal deficit spending is a form of monetary expansion, and the Federal Reserve is currently insolvent, using money they don't have to discourage big banks from lending (and further increasing the money supply, leading to monetary debasement and commodities price inflation). That said, I'm not predicting the system will collapse anytime soon, since nobody can know whether it will or it won't, or when. This is a good article for more information on this:\n\nhttps://www.lynalden.com/broke-federal-reserve/\n\nThe best I can do is, try to build the technology needed to scale this system that automates away the role of central banks in a way that can safely serve the needs of everyone who might need it. For anyone with questions on how to put money in Bitcoin safely, I recommend reading the Swan blog post which was the first link above:\n\nhttps://www.swanbitcoin.com/bitcoin-vs-altcoins/\n\nAgain, apologies for the long post, but thank you for reading, and I hope this was helpful to you in some way.\n\n#bitcoin #orangepill #toximaxi",
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