Who can explain cryptocurrency?

Amazon / Mgmt
CafeDiFior

Go to company page Amazon Mgmt

BIO
I will rule the world.
 CafeDiFior
Jul 5, 2017 45 Comments

How is it different from a gold-backed currency? What are the benefits? Why is everyone rushing to it? Is it a fad?

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 TOP 45 Comments
  • Amazon
    %^*+#}{

    Go to company page Amazon

    %^*+#}{
    Dude google it. Smh
    Jul 5, 2017 1
    • Amazon / Mgmt
      CafeDiFior

      Go to company page Amazon Mgmt

      BIO
      I will rule the world.
       CafeDiFior
      OP
      "A single conversation across the table with a wise man is better than ten years mere study of books." Henry Wadsworth Longfellow

      I figured I'd hear and learn from people who have had some experience with cryptocurrency.
      Jul 5, 2017
  • Twitter / Eng
    Aquaman

    Go to company page Twitter Eng

     Aquaman
    I still don't fully understand and therefore don't completely trust how a cryptocurrency acquires its value.
    A traditional fiat currency is backed by the issuing government's ability to levy and collect taxes in that currency. So, indirectly, on the strength and stability of the country's government and economy. For example, there will be demand on US$ as long as people are forced to pay taxes in US$. Obviously a crypto currency doesn't obtain any value from government backing.
    It's not similar to a commodity either. Commodity usually have mostly intrinsic value, with the exception of precious metals, which obtain some value from artificial demand (for example, gold is usually much more expensive than its purely functional value, because humans decided throughout thousands of years of their existence that gold looks cool and they should hoard it). A cryptocurrency doesn't have any intrinsic value, and it doesn't have the legacy that gold enjoys.
    It feels really weird that almost everyone I talked to who owns cryptocurrency has bought it as an investment and not because they need it to transact. It seems a lot of people are treating cryptocurrency like company stock or a commodity, and not a currency. So I feel that a lot of the current cryptocurrency value is just from speculative investor hoarding, and not real currency transactions involving goods and services. And I feel that a crash is inevitable as the speculators initiate the dump snowball
    Jul 5, 2017 14
    • @nvm sure ux is terrible right now. It is confusing even for technical folks like us but that will be improved over time and it's not a major hurdle to overcome.
      Jul 5, 2017
    • Digital coin is similar to gold coin but it allows digital transactions in terms of lack of government control. Today credit card companies provide digital transaction service but they are under government control.

      Most of the arguments here are also provided for Gold and gold gained lots of value after 2008 as people panicked and doubted the reliability financial system. It is still up a lot but lost quiet from the top. People who didn't doubt; they made good money.

      Today's financial system is not perfect but it allows capital movement to enable economical growth. people gave up on Gold hoarding because it doesn't improve economy so same will happen with any currency. You need to be able to keep your assets dynamic and fluid just like cash hence we need a banking system and hence we need government control to ensure trust in the banking system.

      The only benefit digital currency is distributed transaction processing and I am not sure how this is useful. Credit card companies provide this service with very low cost.
      Jul 5, 2017
  • Cisco
    FWxQ82

    Go to company page Cisco

    FWxQ82
    So the gold backed currency ended when Nixon signed the doc stating the $ is a fiat based system... aka believe this paper is worth $X because the US govt says so. This act expanded the fractional reserve system EXPONENTIALLY... aka creating a debt system where most of us could never get out of. One of the direct results of such action is the inflation of goods and services without any true productivity.

    cryptocurrency is simply a digital form of currency. The underlying technology, blockchain, is simply a digital ledger that verifies the authenticity and origin of the transactions between all parties involved publicly to eliminate/minimize disputes. This means that when a transaction takes place between 2 parties, there are multiple sources/servers there to record the transaction publicly. So in case of a dispute, the audit trail will obtain the digital ledger from all the recording sources to settle the event....An analogy to this would be a "high fault tolerance" in IaaS/PaaS


    The value proposition to cryptocurrency is the level of transparency, decentralization of the current banking system, and how unregulated (for now) it is-- as close to a true form of free market as possible.
    Jul 5, 2017 0
  • Microsoft / Eng
    deadpan

    Go to company page Microsoft Eng

     deadpan
    The thing that worries me about speculating in blockchain currency is that there is almost no barrier to entry. Every time a cryptologist implements a new idea for a currency, a new currency is invented. The supply of new ideas is basically unlimited, so the supply of new currencies is unlimited. When supply outpaces demand, cost drops.

    Virtual currencies are perfect examples of that common "backed by nothing" criticism of fiat currencies. Except that criticism is wrong.... Traditional currencies have government-enforced regional monopolies and government-enforced demand (taxation).

    Virtual currencies are backed only by consensus. And that consensus is being eroded by unlimited supply.

    So I think we're seeing a bubble, and I would hate to be holding a nontrivial amount of virtual currency when the bubble pops.
    Jul 6, 2017 7
  • Microsoft / Eng
    ☠Nutella☠

    Go to company page Microsoft Eng

    BIO
    The original S Nutella!! Bam Bam Lolol!!
     ☠Nutella☠
    It's way different than gold-backed currencies, in that it is a nothing-backed currency.
    Gold has industrial and other value. Nothing has no value at all. Are any currencies still gold-backed??
    Jul 5, 2017 0