You mean the same governments that manipulate their currency’s value?
Or in the case of the USA, a government that is spending so much that they’re basically insolvent?
Comment on Is cryptocurrency good for anything?
snooggums@piefed.world 3 weeks agoSo it is digital cash without the backing of a government and no stability.
harrys_balzac@lemmy.dbzer0.com 3 weeks ago
TractorDuffy@lemmy.world 3 weeks ago
Correct response
dhork@lemmy.world 3 weeks ago
You’re not wrong, but why is not having the backing of a government a bad thing?
snooggums@piefed.world 3 weeks ago
A currency backed by a government has a very high chance of being able to be used at any time with a mostly stable value. Sure, if the government collapses it can become worthless, but on a worldwide scale that is far, far less likely and you will most likely know if it is headed that way ahead of time.
Governments add a bit of stability for currency used as currency and not as speculation.
dhork@lemmy.world 3 weeks ago
Tether is an interesting experiment here. They are traded as smart contract tokens on top of various blockchains. They don’t really have any intrinsic value, other than Tether LTD saying “every Tether is 100% backed by currency reserves”, and releasing unsatisfactory “audits” now and then. It’s main utility is that it provides foreign exchanges with a way to trade in something that is like Dollars without opening them up to the regulation that comes with trading actual dollars. It’s market cap is currently in excess of $180 B.
But, USDT has been around, in one form or another, since 2015. And while other “innovative” crypto products have crashed and burned, Tether has been able to keep its peg and has never failed to meet redemptions. Furthermore, it doesn’t need to be a scam. It’s whole point is to always be worth one currency unit, so all they have to do is invest that currency in safe conventional investments and they can literally make billions of dollars with very little overhead. The most obvious answer is that they are not a scam.
I still don’t really trust them, but I have used them on exchanges, always making sure to trade through Tether to something I can redeem on a US exchange for actual dollars. But, I have to acknowledge they have lasted longer the most crypto entities. I wish they would get a complete audit together, but at some point their reputation for having lasted so long needs to be worth something?
xep@discuss.online 3 weeks ago
Madoff’s scheme lasted for 30 years or more, surely that means it’s worth something?
Jako302@feddit.org 3 weeks ago
Because a currency without a stable backing is completely volatile. Sure the value of normal currencies fluctuate, but apart from a few hyperinflation edge cases that’s at most a few percent each month.
Small cryptocurrencies fluctuate sometimes hundreds of percent each month and even the big coins can swing ±20% every few weeks. The only somewhat stable coins are the ones directly tied to real world currencies.
Having a currency that fluctuates this heavily in value creates the exact same problems as the ever changing US tarrifs did. There simply is no wax to reliably price goods and services for more than a few days. You essentially have to barter each trade.