So, with the sudden popularity of Dogecoin, people have jumped on board like strippers at a glittery stiletto sale. What are your opinions? Have you joined in? Personally, I would hop on before it shoots through the roof in value. More attention = higher value, so why the fuck not get some scrap together, and sell it off in the future? It won't hurt to give it a shot.

Hell, maybe you could make some cash to run FH, Yom.

I don't like the idea of meme-based currencies. If older === more valuable then allow me to introduce you to Nevada-coin.

Seriously, though. As a cryptofuck I'll be the first to praise what bitcoin was supposed to be. My paranoia levels are over 9,000 and a decentralized currency that has such simple anonymity is a boon; on paper.

The fact is that while crypto currencies are great from the standpoint of cryptography and ideology they're worse then awful from an economic standpoint. The idea of paper money is that it's backed. In the event that you want to opt out of the US dollar you can exchange it for a non-currency thing of value. That used to be gold, these days shit's complicated but the basics stand.

The "thing" that crypto currencies use as a unique and difficult to replicate token of value (coin) is in fact a specific number that when hashed produces a number with a specific quality (has a lot of zeroes, spells out porn actresses names, ends with "doge") that can be verified. This has no intrinsic value. If I went to McDonald's and tried to pay in bitcoins or litecoins they'd kick me out hungry. If I went there and put a strip of gold-pressed latnum on the counter I'd walk out with an armful of double quarter pounders and a blowjob. Imagine trying to explain the value of a unique number to an angry fast food employee.

It warrants more investigation and perhaps in the future there will be a crypto currency that's backed by something valuable but my opinion is that it's faddish.

We need a crypto-currency backed by the most important product of all.

PORN.

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I still traffic in the ancient 'Magic Good' Currency.

All I have is magic evil. I spent all my magic good on… porn. I have plenty of porn, though! I second Yom's currency.

I have never understood crypto currencies or how they work, simply because I have never gone through to figure out the whole process from their creation to redeeming them to where they go or whatever. Nor do I care, for I will never bother with them.

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A friend linked me this.

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The writer of that article has got a lot of points wrong, and then ends up wrecking his credibility by talking about UNKNOWN AGENDAS. (Like those guys up north who shot some bigwig to pieces).

Bitcoin is a tool, much like any other. For example, you can use a watering can to water some plants, or clobber some schmuck over the head to the point his skull fractures.

And much like any commodity, the price on bitcoins is not fixed. You find a stash of Inca gold in your backyard, you're gonna sell 'em low to get money fast. Same thing here.

Much like game arcade coins from the 1990s, bitcoins will stick around for a while, until some new tech supplants them.

That's what I think.

Now I want to buy Iron Dome anti-air missiles with bitcoins.

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Is bitcoin a commodity or a currency? Again, no clue about this shit, I just dislike it because it seems to have lots of loose ends.

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Allow me ramble endlessly on the subject. (Imagine if Pandora actually had worms in that box. Like the Worms Armageddon worms. Imagine that box of worms being opened.)

There are a few key questions to answer before I tear apart that shit article you were horrifically linked (beat that person with a stick for linking you to something that purports opinion as fact) in what I can only imagine to be vengeful malice.

1. What the living crotch-rot is a bit coin?
Bitcoin is the first widely implemented and recognized crypto currency. Like Litecoin, Dogecoin and others, it is used as a currency that is entirely digital based on some unique piece of data that takes work to create.


2. What are crypto currencies?
A crypto currency is such a currency that uses cryptographic function to produce its tokens. When you spend an amount of these tokens you transfer control of the data required to verify the math on the tokens to another party. The system uses a distributed hash table to decentralize the network. Participants in the network share the computational load to verify the validity of each mathematical token; such participants receive a minuet transaction fee for doing that work.


3. What are their good points?
• Crypto currencies are highly anonymous and require additional forensic effort to verify the identity of either party involved (important to ensure freedom of speech as governments have begun to crack down on what they call "dissent").
• As a decentralized currency there is no banking authority that can artificially create economic havoc (as we have seen happen recently in several countries and in the past: 1912 American economic depression).
• As a digital currency online payments can be made simple and without credit card companies ("credit" is the multi-trillion dollar industry of debt that these companies would spend a lot of money to protect; even discrediting systems like bitcoin).


4. What are their bad points?
• It's not backed. This means there's no safety net. If everybody that uses bitcoins now suddenly stopped using them you're the proud owner of a lot of nothing.
• It's slow. Verifying a transaction can take longer than a customer in a retail store is willing to wait while the system makes sure the transaction went through. If a simple way to forge tokens was found (a matter of time.) or if anybody was smart enough to simply use an empty account (which would take just as long as a "full" account) then this would lead to massive fraud and abuse.
• It's easier to lose. Each "wallet" is tied to a unique number that's cryptographically secure meaning it's as close to impossible to memorize as technically possible. A single "accidental" wipe of your drive and all your money is gone. Forever.
• It's easy to steal. If I can read the wallet file then I can empty your entire account and you would never be able to track me down.
• It's value is entirely arbitrary. There's no reason that one token of bitcoin can't fluctuate in exchange rates from being worth all the money in the world to zero and back every day. This is tied to not being backed.


5. What could the future hold for crypto currencies?
If they stayed where they are now we'll be lucky to see any real future use of such currencies. So many issues need to be addressed. I can safely say all of the following things based on them happening or Moore's law.
• Exchange rates will drop dramatically in ways only seen in movies where stock market junkies jump off buildings.
• Exchange rates will skyrocket for no apparent reason to the average user that can't be bothered to monitor news about the value of their currency. Seriously, how often do you read the economic news or consider that your currency could plummet in value overnight?
• Criminals will embrace the currency and prudes will shun it; and vice versa.
• A few rich users will use powerful computer networks to generate massive amounts of tokens and unbalance the network for the average user trying to make it worth their time.
All this and more.


6. What would an "ideal" system look like?
Imagine the treasury of your country deciding to issue one cent at a time and only to the people working at the mint. That's the current state of crypto currencies. This is not how the system should work. In order to compete or replace a standing currency you need to operate on the notion that all the currency that will be in the system during normal usage is already out there. There are 2 100 000 000 000 000 units of bitcoin currency at most. That's a pitiful 21 trillion "dollars" (assuming 100 cents to a dollar) compared to all the currency in circulation on earth.

An "ideal" system would have a much larger number than that. Possibly using several different currencies to make a satisfactory number. If we assume that we reversed inflation by some means (huge assumption) then went back to pre-1800 prices and did the math we'd arrive at a comfortable minimum wage of five to ten cents per hour and a "upper middle class" floor of 10 thousand dollars annually. (The current upper middle class floor is $300k/yr in America.) Multiply this by the current spread of wealth on Earth as a factor of the population and account for growth rates then arrive at your number. It would be difficult to put too much emphasis on how subjective that number is.

A crypto currency would need to have a physical token that can be verified to have a given amount on it. Imagine a clear, possibly polycarbonate coin with an e-ink readout of the current value of the coin. The coin would contain a memory bank that could store as many as 10, 25, 50 or 100 dollars worth of tokens but of course it could store less. It would also contain a small RISC CPU that would verify the tokens during load. The coin would be RFID based and light up red/green/blue for invalid/valid/something transaction states to verify quickly the status of the coin. Each coin would be digitally replicated in a secure DHT/cloud so that if lost or destroyed the unique tokens on the coin wouldn't be lost. This would require a unique identifying number for each coin which would add to the security and allow "touch-and-go" payments like the RFID based payment systems now in-place all around the world.

Such a system could only function if backed by a physical resource that has true value. Precious metals, stones and even parcels of land are all valid commodities that would give each token a value that's measurable and tangible. One US dollar is worth about enough gold to electro-plate a quarter. One ideal crypto currency token could be worth a square meter of land or 0.01 carats of sapphire. As people buy into the system with other currencies the system would construct vaults and fill them with the valuable resources that back the currency or buy and manage the land that represents the value of a token. As these materials or land becomes increasingly scarce the value of the currency would grow and as more people used the currency more of the tokens would be put into circulation thereby balancing the growth in value.

The system would have a maximum amount of currency higher than what will ever be in circulation and without any form of credit in the system (since it's pointless and inherently inflationary) the amount of tokens in circulation could be adjusted without changing the amount of precious resources backing the currency. This is similar to the system we have now with two notable exceptions:
• The ideal crypto currency has no central authority.
• It also is transparent.
Having no central authority means no one party can radically change the value of the currency. This is implemented as multiple, independent vaults/caches of physical precious resources and tokens. Each vault/cache would generate a certain amount of coins and tokens and be responsible for them with a system of checks and balances to regulate the entire system. If any one vault went rogue the system would auto-correct and retain its value and power.

Being transparent means anybody in the world can see exactly how many tokens, coins and precious resources comprise the system at the moment. The decisions to change the amounts of those three things are made publicly and there is no secrecy. The system is open to critique and evaluation by all. If bad decisions are being made the system will lose faith and people will begin to use other currencies. Multiple, competing crypto currencies that share this model would actually make this an idealized version of the monetary system now in place on Earth.


7. What does macro economics have to say?
Macro economics says that crypto currencies in their current state do more harm than good. Say everybody stopped using the US dollar within the next 24 hours and used litecoin instead. Three important things would happen alongside hundreds of other things that aren't relevant. First we'd not be paying taxes. LTC completely by-passes taxes and all crypto currencies are currently being used tax-free. Next the prices of literally everything would become unstable and fluctuate heavily from block-to-block, site-to-site and even hour-to-hour. Then we have the fact that what is now the US dollar is seen as worthless by any foreign government.

Let's talk about that last one real fast. These days the good old American dollar is backed by our word. We say it's good and the world takes that at face value. If you don't know what the "reserve currency" means look it up because that's the US dollar. Our word is literally as good as gold. That's true because we've worked hard to make that true. Most places on Earth see the US dollar as a symbol of power. People that can't say his name right would recognize him if they saw Benjamin Franklin walk down the street. But what the fuck is a litecoin? It's digital? and constantly changing in value? No, thanks.

Bringing us back to the first two things. Without taxes our government would collapse. Pure and simple, no question about it, the glue that binds this country (or any country) together would dissolve and come to rely on hand-outs. Those hand-outs, and the taxes if they implemented them on litecoin would have different values based on what time it was, where you were and could range from incredibly large sums of "money" to not enough for a homeless man to pick up off the ground. Without a stable value my price of .1 LTC per hour of work could be dirt cheap and look not worth the time to contact me or be so high you couldn't possibly afford it.

If you're thinking that being recognized as a "legitimate" currency would fix these things you're deluding yourself.


8. What does a CPA and MBA have to say?
I've spoken about this with a certified public accountant and a friend with a master's in business administration to get their takes on crypto currencies. The CPA said that it sounded "like an outright nightmare" that she "would rather get hit by a bus" then have to deal with. The MBA holder said plainly that "any system like that is destined to fail" regarding the current crypto currencies.

As you can see, I haven't been taking this laying down. I don't think crypto currencies are ready for the immense job of replacing our dollars, yen, wuons and other internationally traded currencies but they warrant further effort. Maybe in time we'll be able to break the hold that malevolent central banks have on the world. Today is not that day.

My friend is an economist, so I kind of expected them to give me something professional. Apparently they just hate it horribly. (Normally they link me things that have merit, so that's surprising to me. After reading your post I have come to the conclusion that their white-hot rage against cryptocurrencies may be expected, and as such it is likely they may just agree with every bit of hate against cryptocurrencies that they possibly can.)

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