My problem with crypto

in bitcoin •  7 years ago  (edited)

I see how crypto works as an investement, or a store of wealth. That's easy. (Except maybe the last week or so, in which case it's been a wealth-sink, but that is actually at the core of my second problem.)

Problem 1: And this goes to the talk about "Amazon is going to start accepting Litecoin", or "crytos will replace fiat money". Let's say I go to Amazon, and want to pay for a US$19.95 book in Litecoin.

I've just converted the price now as I write this, and it comes to 0.11591039 Litecoin. What does that even mean? Who visualises "0.11591039" of anything, let alone currency?

And if you want to pay for the book in Bitcoin, it's 0.00188674, which is even more unintelligible as a unit.

Are these good prices, or too high? What will they be in a few hours? (See problem no. 2)

And what about when your teenager asks you whether they can borrow '0.000587' of whatever coin so they can buy whatever widget they're after?

The problem is, these numbers, mainly because they're decimal places, become almost meaningless code. I want my currency to be intelligible when I use it on a daily basis.

Problem 2: Price fluctuations. Both downwards, as we're seeing right now, or upwards, as we were seeing a few weeks ago. Whereas the inflation of fiat money takes place as a rate that is sedate by crypto standards, typically a few percent a year, the ups and downs of the crypto markets are insane.

As I type this, Eth has gone down 27% in just the last 24 hours, and Neo has gone down 35%. With value movements like that, who could feel secure about using them as currency? If I buy a widget today, would the same crypto buy two or three tomorrow? Or half a widget? Should I wait, or am I too late already, and should have bought it yesterday?

The same with selling something. Should I wait until tomorrow? Or will that bite me? If I put off closing the deal until tomorrow, will I benefit?

The clear danger here is that all daily commerce, from buying a house or a car, to buying a book or a carton of milk, will become a gamble. For a currency to be usable in real life, there has to be some sense of stability.

I think that the crypto that solves these two issues will gain a lot of traction in the wider world. Maybe Sophia can sort it out.

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