Linux Inventor Says He Doesn’t Believe in Crypto
u.today
- Linus Torvalds, creator of Linux, does not believe in cryptocurrencies, calling them a vehicle for scams and a Ponzi scheme.
- Torvalds was once rumored to be Bitcoin creator Satoshi Nakamoto, but he clarified it was a joke and denied owning a Bitcoin fortune.
- Torvalds also dismissed the idea of technological singularity as a bedtime story for children, saying continuous exponential growth does not make sense.
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The vast majority of the crypto world failed to understand one key concept, money is not the value for which goods/services are exchanged, it is the value by which they are exchanged. People do not have a use or value for money beyond what it can be exchanged for, if no one is willing to exchange for it, it has no value.
Crypto only had value as a currency if people would accept it for goods or services, and the only thing people ever accepted it as payment for, in any meaningful capacity, were illegal goods and services. The value beyond that was purely based on a speculative ideological assumption that people would abandon the traditional banking system for a new system that they couldn’t buy anything with.
That used to be true. Hardly any BTC is being spent on drugs nowadays. It's not anonymous enough. However, people are buying high value items like real estate and luxury goods with BTC.
Bitcoin is mostly being spent on electricity and new hardware.
Ftfy
most of the bitcoin being spent on electricity and hardware gets exchanged for actual currency before it is spent. And most of the luxury goods sales are gimmicks and limited time.
And there is a huge amount of criminal activity with bitcoin still, they just mainly use it to launder money now as the transactions are impractically slow and costly for anything but particularly large trades.
"The multi-chain era has had a sweeping impact on the distribution of illicit crypto volume as a whole, where Bitcoin’s share plummeted from 97% in 2016 to 19% in 2022. In 2016, two thirds of crypto hack volume was on Bitcoin; in 2022, it accounted for just under 3%, with Ethereum (68%) and Binance Smart Chain (19%) dominating the field. And while Bitcoin was the exclusive currency for terrorist financing in 2016, by 2022 it was all but replaced by assets on the TRON blockchain, with 92%."
TRM illicit crypto ecosystem report 2023
I don't know much about crypto but this doesn't seem right?
Didnt it hit an all time high recently? All while no one is using it to buy anything anymore?
A coin is worth what someone will pay for it, and people are paying lots because they think it will be worth more later.
It has no inherent value or utility.
That is not true, for the vast majority of the history of money it was based on a commodity that was valuable in its own sense. It is only in the last century that we have begun experimenting with currencies that are not pegged to the value of a commodity.
Cryptocurrencies derived their value from being a network of users (metcalfe's law) so they are more like a commodity money. Thing about something like Meta, which has a valuation in the trillions despite its physical assets not be worth nearly that and its functionality as a website being easily replicated on an alternative platform. The users are what is valuable.
True, but using grain or tools as a currency would make the modern financial system pretty much impossible. Even for simple banking, you need something small and light like gold or currency notes.
Gold is a commodity and you can create a currency that is backed by a commodity so you aren't actually trading the commodity itself.
Yes, gold is a commodity, but when used as currency it is acting as a medium of exchange and not as a commodity. Same with pieces of paper with the sign of the reserve bank governor, or data on a computer's memory. The gold, paper and hard disc all have intrinsic value, but when used as currency they are assigned an arbitrarily higher face value.
When you have commodity money, the value of the money is derived from the value of the commodity. You don't get to assign arbitrarily higher values to the money because the market determines the value. But yes, all speculative assets typically have a higher extrinsic value compared with their intrinsic value but I don't believe that has anything to do with it being a medium of exchange or not. That is just supply and demand.
The value of the commodity acts as a floor, but the face value is dictated by supply and demand, and demand usually exceeds supply, driving it significantly above the floor. Take gold, for example. Gold's intrinsic values are (1) it's pretty and can be used to make decorative items, and (2) it has some applications in electronics. It can't be eaten, can't be worn, and it's too soft even to make tools out of it. Yet, its extrinsic value is huge, because it is publically seen as a good medium of exchange and so a lot of people want it.