The elephant in the cryptocurrency livingroom

I’m a great fan of Bitcoin and its decentralized functionality. But from a practical perspective cryptocurrencies today have one fundamental flaw: lack of legal backing. Where the rubber meets the road is our legal systems, and today’s cryptocurrencies, even bitcoin, are outside of legal control.

Great, some people may think, let’s make a currency that is not dependent on the evil banksters around the world. Unfortunately, when we extrapolate that idea we end up with a society separate from the mainstream society. You can’t buy a Big Mac with bitcoins directly, and there is a reason for that, namely the lack of legal foundation.

Sure, cryptocurrencies still have actual value in fiat terms such as in dollars or euros, but they are like fleas on the back of the fiat elephant.

Just to let you know of some progresses, small but it is some

When I was in Japan last year the pub around the corner from where I was staying accepted bitcoin for payment for meals, beer etc.

Then there is a company in Queensland that is currently setting up a payment system for all the businesses in the international airport departure areas. They even have a development grant from the state government to assist them to do it.

Oh yea there are some coffee shops that accept bitcoin too. And one even has/had at bitcoin ATM in the shop. A couple of suburbs over from where I live.

Author of book quoting owner of a pub(-chain) in the UK, "Since I’ve started, I’ve taken about £17,000 worth:

Attack of the 50 Foot Blockchain: Bitcoin, Blockchain, Ethereum & Smart Contracts

I am accepting Bitcoin in the most naive manner possible, accepting zero-confirmation transactions. (Where you can see someone’s tried a transaction, but it hasn’t made it into a block yet; vulnerable to fraudulent customers double-spending.)

Which is pretty much the only way it can work in a pub setting. Zero confirmation has worked out so far. There’s been one occasion where a transaction wasn’t confirmed.

I have probably more than recovered that from people accidentally paying twice because we didn’t think the transaction went through the first time. For comparison, we take about fifty quid of bogus notes a year.

If some cryptocurrency would become big in terms of shopping etc, governments would make it illegal and then be able to shut down that growing movement is my guess.

You must have missed the part in my post where the company setting up their initial business offering to all the shops in the departure area is supported by the State Government. Their brief to the government was the plan to continue setting up terminals in all the tourist locations throughout the state and the the country and plans for abroad. Note: the Gold Coast are is probably (one of) the largest tourist areas in the Southern Hemisphere and worth a lot of money. So why give them support?

So you are saying the government is going to give them grants to help them to do this, then make it illegal???

Not if it remains a small use of cryptocurrencies. But I doubt that any government will allow any unregulated cryptocurrency to seriously compete with the established and legally regulated fiat currencies.

I think crypto will be acceptable form of payment - more so in next 3-5 years. No govt would want to impeded the progress and risk being left behind in the 21st century race to the top for technological advancements - bitcoin included. There will be noise etc but in the end - crypto will be accepted - erhaps with some rules/guidelines etc.

I think an imp point we all miss in this (including economists) is that adoption is being measured by how much are people using crypto or bitcoin to pay for services. I have been long making the point that people will not pay in bitcoin unless they get paid in bitcoin. Bitcoin to me is digital gold. Fiat is paper. Why would i exchange paper to digital gold and spend when I know its value is going to increase overtime. I think once people start getting paid in bitcoin, then they’ll expand the use of bitcoin in purchases as well. Payroll and other systems need to evolve to be able to pay in bitcoin. Just my thought. Or for everyone to be able to mine it. In any event, revenue has to be in crypto for expenses to be in crypto.

I doubt that governments (and the banksters) would give up their control of money, because that’s the main control tool for the entire society. Therefore no government will allow any unregulated cryptocurrency to threaten their fiat currencies. Governments may issue their own cryptocurrencies however, but those would be legally regulated and still controlled by the governments.

The why give them funding at all? Doesn’t make any sense at all. The was no political mileage to gain by funding them. The only mileage to be gain is that the company is successful and sees 100’s of millions of dollars worth of foreign money flow into the country via bitcoin and crypto. If the government did not want it to happen they could have not given them grants and they would have lost nothing.

It doesn’t make sense to give grants (money) to a company with proposal to see 100’s of millions of dollars from tourists flow into the country via crypto. So either the government people were idiots or they are not planning to do as you suggest?

Definitely with the rules and guidelines. Same as people using gold and silver as payments, there are rules and regulations (very minor), but they are not stopping it at all.

Sounds like controlled opposition to me. Those in power support selected, and maybe even created by themselves, projects. Heck, even Bitcoin was probably an NSA invention (or IBM) I suspect.

I guess if you ignore everything else happening around the crypto then you could imagine those things.

But I think I’m done here, not much to discuss when you view the world in that light (darkness really)

I confess I haven’t been following the crypto community recently, but if some crypto tech really would have become huge by now I would have seen it in the mainstream news. Although IOTA could become big I guess if combined with the Internet of Things (IoT). And even Safecoin could become big that way. But that’s more of a functional use than a monetary one.

As if the fiat elephant isn’t bad enough, here is my second blow at cryptocurrencies. Disclaimer: I make a harsh statement here to illustrate my point.

Scientific research has shown that money incentive is actually bad for inventions. And we can see this in the ridiculous toy like nature of cryptocurrencies where mindless fiat price speculations imitating Wall Street and the services rewarding content providers and sometimes even viewers with cryptocurrencies are nothing more than a bunch of online whores circle jerking their own content in a socially inbreeding way.

Meanwhile, the general public at large stays on YouTube and Facebook. Why? Because they are smarter than the so-called smart people in the cryptocurrency world and can sense the dirtiness of the attempt to combine 20th century money incentive with modern information technology.

To be fair, I have myself fallen into the money incentive trap many times, but when looking at the bigger picture it seems clear to me that money incentive is the wrong way for decentralized solutions. I could be wrong, and that decentralized solutions will have to be businesses in order to survive and thrive. We will see. I still think Ray Kurzweil is correct about his Law of Accelerating Returns and that price/performance of information technology will follow an exponential progress in the long run.