I understand that some people in places like Argentina and Venezuela that struggled with very high inflation were able to shelter some of their money. It also can be nice for transferring money internationally.
I'm actually kinda surprised anyone was willing to be the other end of that transaction. Why would anyone swap your bolivar for bitcoin when you're doing it because you know the bolivar will soon be worth a lot less?
As far as I know, it's not how it works. They essentially swapped USD for BTC.
When the currency is crashing down like that, people try to discard it by bying something else (goods or other currencies). As I get it, exchanges were limited, so those who had better access to foreign currencies used this as an opportunity and provided services to those who weren't.
Think about remittances. One side wants Bolivars because their family is sending them money to live. The official exchange rate is dictated by the country and is a flat out lie. It is an illegal transaction, but not an immoral one.
It also works in emergencies, when other means are not available - which is a questionable thing, but crypto had allowed me to buy a plane ticket for my wife to leave Russia after the war had started.
For taxes there are apps that calculate it for you and if you use a platform like Coinbase it has some tax functionality built-in.
The transfer itself is very simple. You put in the target address, calculate the amount and submit. The awesome thing here is that it is much, much faster than any international bank transfer. With Ethereum you are looking at minutes and Bitcoin should still be under two hours.
Of course this assumes that both parties already have wallets set up and have a way to get money in and out. Everyone I've interacted with already had wallets and were also eager to keep it in crypto which made everything even simpler. Using this to send money to my parents would be a complete nightmare though. On the other hand, setting up a Coinbase account while screen sharing might work and be ok if they pull the money out anyways...
Yes, governments are thinking about the consequences of constantly inflating their money supply.
One very positive effect crypto has had is that it made this formerly poor cancer researcher with a pitiful retirement fund have hope for the future and not constantly lose his money to inflation and wages that haven't kept up with it.
One very positive effect crypto has had is that it made this formerly poor cancer researcher with a pitiful retirement fund have hope for the future and not constantly lose his money to inflation and wages that haven't kept up with it.
So, pretty much the same effect as traditional investing, or buying lottery tickets?
- Fucked up predatory remittance money shops, and forced them to lower their fees and actually start competing.
- Offered a more stable unit of exchange for people in places where fiat was not usable.
- Cheaper alternative method for fast, large transactions. Forced big banks that traditionally accommodated these transactions to innovate.
not only is it a stretch, it's almost certainly the opposite - a whole ton of GPU time that could have been spent training AIs got spent mining crypto instead.
Money allows for economic specialization, leading to greater productivity. You don't build an economy that produces cell phones when you're stuck bartering goats for wheat.
I feel like this is not answering the spirit of their question. What is bad about Crypto which isn't some nth-order effect of Money?
- When a layperson is scammed out of their Crypto the problem is that they lost Money because they used Money to buy the Crypto. (Yes, given the current ecosystem it is easier for my grandmother to be convinced to transfer all of her Crypto such that she can't get it back but that's bad because she's losing Money.)
- People are incentivized to run machines which "mine" Crypto -- but otherwise do nothing externally useful while also causing other negative externalities such as carbon emissions -- because the Crypto can be sold for Money.
