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Comment by preseinger | Hacker News Reader

Money is the exclusive right of sovereign nations. Crypto is not money.

Kind of, if it is widely accepted as a medium of exchange I would count crypto as money. The irony is that the only crypto that is money is stablecoins. There is RAI but the Terra Luna incident made me sceptical of algorithmic stablecoins. If RAI survives the ETH crash, which it so far does, I am looking forward to the next generation of algorithmic stablecoins. Who knows, maybe it is actually possible to do what the central banks of the euro and dollar do in a smart contract and suddenly Milton Friedman's dream of replacing the central bank with a computer comes true. Yet at the same time it crushes the idea that Bitcoin or Ethereum will ever amount to anything more than a digital collectible.

I personally am interested in a currency that does price level targeting but I have my doubts that it would work with a cryptocurrency because the oracle that collects the CPI is going to be centralised.

I will admit getting the CPI right is easier than getting central bank policy right.

Bitcoin has already failed as a currency, and this is why it should be really seen as a digital collectible. Actually, it is worse than that: it can go away if the miners lose interest in keeping the chain around.

ETH is not meant to be a currency. It is meant to be a scarce resource like oil and its value is in its requirement to power the crypto economy that is based on the Ethereum blockchain. With ethereum, there will be plenty of people who might be in accepting payments (with stabletokens or other ERC20), but no interest whatsoever in holding ETH.

Are stablecoins “widely accepted as a medium of exchange?”

I know some places accept Bitcoin. Tesla accepts Dogecoin for some products.

What can you buy with stablecoins?

You can pay your balance at https://communick.com with DAI.

You can pay for work and fund developer grants with DAI via https://gitcoin.co

Aside from that, if you are interested in accepting payments with crypto, checkout https://hub20.io, a self-hosted payment gateway.

If you have anything for which banks will take the value seriously enough to borrow against - stocks, for instance, fit in this category - then the path of going from non-money -> money creation is pretty direct.

I'm not sure if banks would let you point to 100k in bitcoin or such as assets that would help qualify you for a mortgage, but doesn't seem too out there. Or do the 2-step route and sell the crypto and use it as your downpayment to leverage up into that mortage from an initial investment of $100 or so in 2011. Still inflationary - you've turned your initial tiny investment into purchasing power for a house and all it took was someone else deciding to invest in the crypto you were selling instead of more traditional vehicles, so they also feel like they have the same amount of assets/wealth as they would've otherwise.

EDIT: putting it another way. Money is one thing. Consumer behavior is another. People spend not just based on their "money" but based on their total assets and expected income as well, so things that pump up those on-paper asset values will lead to higher spending and inflationary pressure in the same way that "giving them money" would.

Borrowing against a Ferrari 458 doesn't turn Italian supercars into ersatz currencies, in any meaningful sense.

Money isn't just something you exchange for goods and services. It's directly linked to the sovereignty and economic soundness of its issuing authority. Imagine if a country started accepting tax payments denominated in something they have no influence over. Holding Bitcoin reserves necessarily means ceding economic power, and therefore autonomy, to a third party. For failed states without any economic autonomy to begin with, this bargain might be fine. But for everyone else on the international stage, this is a total nonstarter.

Wars have been fought over monetary authority! We've had this discussion as a species already. What we have now isn't some pathological problem that needs to be disrupted. It's actually the outcome of a rational evolutionary process over thousands of years. Does it have problems that can be improved, yes. Should it be thrown away in favor of a new system built from first principles, absolutely not. That would be a new dark age, a dystopia.

I am not pro-crypto, was simply agreeing with the poster two levels up that crypto is inflationary, despite it's proponents claims, because once you open that door you open it to any number of new supplies of "money."

I'd wager the average car and average house both would be cheaper if you couldn't borrow against them. Property might even be a large enough asset class that that would impact other things.

What about the sovereign nations that accept it as legal currency and/or for taxes?

Can you enumerate those nations? Are any of them not failed states?

No, it is not.

Money is the exclusive right of sovereign nations!

How else are Erdogan, Madura, et al going to fund their piggy banks & militaries?

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