Comment by practice9 | Hacker News Reader

Comment by practice9 | Hacker News Reader

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Same could be said for US dollar as a world currency, couldn't it? Do you think its model is sustainable?

British pound has enjoyed a long history and was used as a currency for international trade until early 20st century. Then dollar took over.

One could argue it's because USA emerged from WW2 as a super-power.

But it would be foolish to say that only a major war or a fall of the empire will change what currency people use.

I'm not arguing for Terra as it was really a bad design. But it is odd that so many people just reject the idea of cryptocurrencies.

It's a big sandbox, big experiment with thousands of people working on the new primitives. Even if 80% projects are scam or failures, 20% might be revolutionary. The US dollar as it is today went through several iterations

It was kind of a stablecoin in the early days, pegged to the value of Spanish dollar which was more popular. There were also Continentals that failed and many colonial currencies that were outlawed IIRC.

What you're describing is totally different in scale though. When the British pound got displaced as the currency for international trade it didn't suddenly lose 99.9999% of its value in a weekend. And whilst the Dollar isn't guaranteed to be the most popular currency for international trade, it's still going to be the currency a bunch of guys with guns insist Americans pay taxes in. There are real reasons people must hold real currencies. There are no reasons that anyone needs to hold crypto.

I'm not saying crypto has no value, but I'm saying it's not comparable to a modern currency. You might be right that it's similar to some historical examples of weak upstart currencies most of which failed, but even those were backed by a lot more than just... what? In this case we're literally comparing to currencies that are often backed by nothing.

> it's still going to be the currency a bunch of guys with guns insist Americans pay taxes in

Well, yeah, most currencies are defacto backed by military force. That fact creates bad incentives.

Crypto doesn't have this luxury, it can be only be backed by the trust in code. If the currency is trusted - because it's open-source, open for all to use, is well designed - it's value is going to go up. See Bitcoin and Ethereum as best examples of this.

This make a decision whether to use a particular coin similar to choosing Python vs JVM and their ecosystems.

To be fair, I don't think stablecoins work well in that context. The information on how they are backed is not completely public, the companies issuing stablecoins are not that well audited...They are blobs of closed-source "stuff" that look like 1$

Sure, and UST is another example of this, it built a multi-billion dollar market cap by obfuscating the fact you were buying a perpetual motion machine. The incentive created by "trust the code" is "lie about the code". Which is why you'll hear several thousand reasons why BTC is valuable but none are as compelling as "Those bunch of guys over there will shoot you if you try and undermine it", and most of them aren't even as compelling as "Number goes up".

The theory is that the market can efficiently decide whether the code actually does work. But the practice is that you can make billions tricking people about what the code does. And often it's people who have never even glanced at the code telling you what it does. I would wager good money that there was no one invested in UST that understood the code.

Currencies rise and fall, and US dollar may as well get replaced by the Chinese yen as the world reserve currency by 2050. But that does not in any way merit cryptocurrencies, whose uselessness is independent of the failures of the US monetary policy.

Your argument reminds me of the Politician's fallacy, which goes like: "we should invest in an alternative asset in case the US dollar fails, cryptocurrency is something, thus we should invest in cryptocurrencies." Go read this thread to understand the numerous criticisms of cryptocurrencies and then think why any of the existing cryptocurrencies should be worth beyond $0 (or slightly more, I admit they are novel and thus could be a collectible).

[1] https://en.wikipedia.org/wiki/Politician%27s_syllogism

> British pound has enjoyed a long history and was used as a currency for international trade until early 20st century. Then dollar took over.

The British Pound is still worth about the same proportionately to the dollar as it always was, and no-one would look at you funny for paying for stuff in pounds.

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