> There is nothing of worth backing the dollar either
What a ridiculous notion. Uncle Sam has the world's largest economy, the world's reserve currency, and more than a few aircraft carriers. Just to name a few of the backing assets.
Russia still has a functioning economy, and it's currency problems are not of the same nature as those that plague crypto. In fact, Russia's monetary problems are different enough that even if they had crypto instead they would face similar issues trying to use it that they face with their dollars because of the way sanctions are applied. Crypto may have promise, but it simply doesn't completely solve the class of problems that some people want it to.
> Russia had a lot of dollars, and then suddenly they were worthless or disappeared
Yes, due to broad international sanctions orchestrated by the U.S. You're unwittingly supporting my point.
If Beijing or Washington ever get around to treating cryptocurrency as an existential threat, make no mistake the market will be crushed and you will lose everything.
This is always my reply to crypto-heads: if btc/eth/etc. become too inconvenient for the U.S. government, or interfere in some material way with currency policy, the government will simply declare crypto illegal or regulate it to the point of pain, and that's that.
> Uncle Sam has the world's largest economy... and more than a few aircraft carriers
The dollar isn't meaningfully backed by any of those things.
> the world's reserve currency
You mean the dollar? The dollar is backing the dollar? At least you're correct about that one, I guess, although perhaps not in the way you intend. 95% of dollar value is "impredicative", so to speak; the same is true for Bitcoin (or any good money).
> The dollar isn't meaningfully backed by any of those things.
Yes it is. Either naive or uninformed to think that the United States has never militarily intervened to protect the massive economic inertia it inherited and acquired after WWII, particularly the Petrodollar system. These actions provided massive value to currency.
> the world's reserve currency You mean the dollar? The dollar is backing the dollar?
Inertia is an asset. Incumbents have the advantage. Network effects matter. BTC benefits from this phenomenon as well.
Fair enough on the petrodollar system, but that seems to be on the way out.
> Inertia is an asset. Incumbents have the advantage. Network effects matter. BTC benefits from this phenomenon as well.
You're repeating what I said in different words; this is the impredicativity I refer to. The dollar is valuable because it is valuable. Same with Bitcoin.
This is not an apples to apples comparison. They're not even in the same galaxy.
USD does not wipe out hundreds of billions, nearly a trillion, in value in the span of a few days.
BTC has no defense against antagonistic nation states that decide to make it illegal for average citizens to own crypto, such as BTC in China, or those that just decide to make it exceeding difficult to exchange for their national currency electronically. Bonus pressure points if your currency happens to also be the prevailing global reserve currency.
Literally tomorrow the feds could tell Coinbase, Kraken, et al, games up, your asset class is primarily used to facilitate ransomware, drug trafficking, and money laundering, including transactions that involve deeply sanctioned nations like North Korea or Russia, therefore we will no longer allow crypto <=> USD transfers on any platform.
The banks these platforms use to secure USD funds would fall in line immediately.
Poof, the vast majority of retail investors that prop up the price of BTC no longer have access to it.
Countries have tried many different strategies over the years to not conduct international trade primarily via USD, but despite the massive benefits should they achieve that, they've always come up short. BTC especially so. Just ask el Salvador.
My general point here is that crypto enthusiasts are far, far too dismissive of the power of the pen, and the big old brick buildings, and the militaries that support these institutions.
Like other upstarts before, crypto will be bent to suit the needs of humans. And not just an elite, neo-feudal class of early adopters. Assuming it doesn't just implode on its own merit in the meantime.
What a ridiculous notion. Uncle Sam has the world's largest economy, the world's reserve currency, and more than a few aircraft carriers. Just to name a few of the backing assets.