The discussions around crypto here kind of proves that you cannot use popular opinion in HN to predict the future. People were very negative (and still are) about crypto. Market cap kept proving them wrong year after year and we are here with around $2.6 Trillion and yet people here still think crypto is going to die.<p>It's interesting because in startups, you learn from the first day that you should listen to customers and follow the demand. The demand is very high and some people were puzzled how other people where depositing money in "shady" exchanges. Yet, that's a perfect example of "demand" that needs instruments to be satisfied.<p>Reality check: Most of the world suffers from hyper-inflation at worst and inflation at best. Not everyone lives in the USA/Europe and has access to good banking and investment options. Not everyone cares about their governments like in a developed first-world country.<p>Crypto is here to stay and it is going to play a significant role in global finance. Somebody here should read what the bureaucrats at the IMF thinks, or look at the roads in New Delhi. Gov. blocking crypto, yeah, right.
An interesting angle that seems overlooked in articles about India and China "banning" cryptocurrencies is that these efforts are often linked to a desire to create centralized digital currencies.<p>e.g. from this article: "India is also looking to make a framework for the official digital currency that will be issued by the Reserve Bank of India."
Well, they can try, but even with centralized exchanges, a VPN will do. And then there are decentralized protocols.<p>Once you have some of your money in cryptocurrency there's no real way for anyone to stop you from moving your money around however you like. The only points that can be controlled are interfaces with banks.
Honest question I constantly think about and have never been able to answer about the future of cryptocurrency development: Why/when would a government ever want <i>less</i> control over the primary means used to transact within its borders?<p>This is one of the, if not the most, important levers it has to wield power. Governments have fought wars and enslaved entire continents to protect and increase the value of their means of account. Even recently, think of how hard the US works to maintain the dollar as the only currency that can be used international oil transactions aka the petrodollar.<p>Ultimately, cryptocurrency is a technological attempt to solve the problem of a fundamental lack of trust in our traditional institutions. After all, its powered by a set of <i>de-centralized</i>, <i>trustless</i> protocols. If you use crypto as an inflation hedge, that means you don't trust your government to not de-value your labor via printing tons of new currency. If you use it to carry out transactions, it means at least a small part of you has doubts that our that our current, centralized payment processing institutions won't unilaterally roll those transactions back or eliminate them outright in the future. Ditto for property rights and NFTs (and all the other use cases that guarantee a transaction is recorded by distributing it on chain).<p>Allowing crypto-currencies to supersede local currencies would not only put governments at the mercy of the mob (or perhaps a small number of whales and exchanges) for determining the value of their citizen's output, it would be an existential admission of their failure. Other than governments that have already failed at administering a currency like El Salvador, why would any self-respecting government with a functioning currency admit defeat like this?
Looking at "India's first crypto Unicorn" you wouldn't know that government is planning to block anything.<p><a href="https://coindcx.com" rel="nofollow">https://coindcx.com</a>
Easiest way would be to block exchanges. Though one could go to another country and withdraw and convert the money, the more countries that block exchanges, the more targeted one could be towards the remainder for money transfers.
Majority of the people who gamble on crypto are doing so only to make a quick buck. They neither know nor care about the ideology, decentralization, removing intermediaries and other such lofty goals of crypto. Most people are in it because they either saw someone making a lot of money or read about it in the media and they also want a piece of it.<p>It's speculation, plain and simple. If not ban, government needs to regulate it like it regulates other speculative markets.<p>As for the libertarian goals of removing the central authority - that's not happening.
Crypto is increasingly looking like a Ponzi scheme to me. I know this is going to be an unpopular opinion on HN but it's no less true.<p>The fact is that blockchain solves a problem for almost nobody. The primary use seems to be to avoid real or threatened government intervention. These uses are largely illegal, by definition (eg bypassing capital controls in China). Now you can argue the morality of such laws but that's irrelevant.<p>Cyrptos have wildly failed as a "currency". Even so-called "stablecoins" just peg themselves directly or indirectly to fiat currencies so they're really just adding another point-of-failure. We should be calling them "cryptoassets" not "cryptocurrencies".<p>As for escaping government seizures and the like, try telling that to Ross Ulbricht [1]. This year, China started to crack down on crypto mining [2].<p>The "security" of crypto is a myth. They can and have forked and have well-known weaknesses (eg 51% attack). I can't help but think of this [3] wrt security.<p>Proof-of-work wastes a ton of energy for basically nothing and, just like China, countries will increasingly clamp down on this, especially as voters increasingly face rising energy costs.<p>Proof-of-stake is basically a fantasy of how we'll solve PoW problems with a lot of hand-waving. It having not happened yet is pretty good evidence of this being a fantasy.<p>All it really takes is for action by the US and/or EU to say something like "financial institutions who trade in cryptos lose access to the banking system" and the market implodes. Sure the government can't stop you adding more transactions to the blockchain but for what? If no one can take your "currency" what value does it have?<p>Weirdly, crypto has seen the resurgence of gold bugs who have long held an irrational hatred for fiat currencies, completely with false claims in some cases (eg the US dollar was never 100% backed by gold, ever).<p>Things like reversible transactions and the ability to print money are actually a feature not a negative as they're often portrayed.<p>And even if you get past all this, you want users to securely manage a wallet when failure to do so means they could be irreversibly be robbed of their balance?<p>Governments are slow to react and they tend to only react to things that become viewed as a threat. Crypto is so niche it's not a threat. But that doesn't mean the US government couldn't fatally wound the crypto market tomorrow if it chose to.<p>[1]: <a href="https://en.wikipedia.org/wiki/Ross_Ulbricht" rel="nofollow">https://en.wikipedia.org/wiki/Ross_Ulbricht</a><p>[2]: <a href="https://www.nytimes.com/2021/09/24/business/china-cryptocurrency-bitcoin.html#:~:text=China%20intensified%20its%20crackdown%20on,for%20newly%20created%20crypto%20tokens" rel="nofollow">https://www.nytimes.com/2021/09/24/business/china-cryptocurr...</a>.<p>[3]: <a href="https://xkcd.com/538/" rel="nofollow">https://xkcd.com/538/</a>
Tokens like Bitcoin, Eth, NFTs etc are the only thing one can own in the digital space.<p>So if a country makes the possession of cryptocurrencies illegal, it makes their people digitally possessionless.<p>This would cut them off from the next version of the web. Similar to how North Korea cuts of their people from the current web.<p>So far it seems no country that cuts of their people from the internet has been able to flourish.
People are pretty arrogant around here, but we're reaching the next phase of crypto: Government Competition. The current crypto ecosystem is probably allowed so the tech can flesh out organically, then the best bits and bobbles will be plucked for inclusion in official government-approved currency. What State wants to be the guinia pig for any of this stuff - your whole country could collapse. Let people figure it out and give them all the risk, the State can take over later.<p>Other coins will be considered exclusive pathways for money laundering and will be nerfed like bearer-bonds or precious metals are in the US.<p>There's no actual resource - violent or material - that backs any crypto. The only backing is it's novelty. Once the novelty is copied by the State, it will be rubbed out IMHO.