# What is the endgame of cryptocurrencies? **URL:** \ **Category:** Factual Questions\ **Created:** [July 11, 2017, 10:45pm UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040 "2017-07-11T22:45:22Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Alessan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/alessan/32/465_2.png) [@Alessan](https://boards.straightdope.com/u/Alessan)\ **Post date:** [July 13, 2017, 5:22am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/41 "2017-07-13T05:22:44Z")
> [@Princhester](#): > > You completely miss my point. Sure bitcoin can go south, and in my view it’s far more likely that bitcoin will go south than most traditionally stable national currencies. The point is, the difference is or is largely quantitative. _Everything_ can go south. > > The only proposition that I disagree with is the proposition that traditional currencies have, in the real world, some sort of bedrock value that cryptocurrencies do not. People are very quick to point out that cryptocurrencies are castles built on thin air, but in my view we are all living in castles built on (at best) somewhat solidified air. I disagree. So long as governments have to accept their currency as taxes, the currency is exchangeable for something concrete: FREEDOM. And I don’t mean freedom in an abstract sense, but rather \*literally \*freedom from being sent to jail for not paying your taxes. Every dollar, every cent is a fraction of a get-out-of-jail-free card, and to me, that’s as concrete as you get - more concrete even than gold, which, let’s face it, is really only good for making bling. ---
**Author:** ![Princhester](https://avatars.discourse-cdn.com/v4/letter/p/3e96dc/32.png) [@Princhester](https://boards.straightdope.com/u/Princhester)\ **Post date:** [July 13, 2017, 8:09am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/42 "2017-07-13T08:09:45Z")
You can go to jail for debt in your country? I don’t think so. ---
**Author:** ![Nava](https://avatars.discourse-cdn.com/v4/letter/n/da6949/32.png) [@Nava](https://boards.straightdope.com/u/Nava)\ **Post date:** [July 13, 2017, 8:40am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/43 "2017-07-13T08:40:55Z")
> [@Princhester](#): > > You can go to jail for debt in your country? I don’t think so. You can’t go to prison in yours for not paying due taxes? Al Capone’s lawyers would be surprised to hear that. ---
**Author:** ![Ramira](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ramira/32/344_2.png) [@Ramira](https://boards.straightdope.com/u/Ramira)\ **Post date:** [July 13, 2017, 8:49am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/44 "2017-07-13T08:49:48Z")
> [@SamuelA](#): > > Citation needed. From what I know, most of the endpoints are grey market and there is no legal requirement for them to keep records. So at the present time, bitcoin is mostly anonymous. It is _not_ in fact easy for the police at the moment. There is as a citation[this Forbes article](https://www.forbes.com/sites/andygreenberg/2013/09/05/follow-the-bitcoins-how-we-got-busted-buying-drugs-on-silk-roads-black-market/#7203e96adf76) describing the experiment by the journalists working with a computer scientist that demonstrated how they could ID supposed anonymous transactions. It is indeed supporting Chronos’ statement and showing the supposed anonymity is false as the transaction clues can be accumulated and cross referenced with the chain. The physical cash is more anonymous. ---
**Author:** ![Ramira](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ramira/32/344_2.png) [@Ramira](https://boards.straightdope.com/u/Ramira)\ **Post date:** [July 13, 2017, 8:55am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/45 "2017-07-13T08:55:02Z")
> [@Chronos](#): > > Sure, the US Dollar has had some periods where its value has fluctuated greatly. But can you find _any_ period in the dollar’s history, and _any_ period of the same length in bitcoin’s history, where the dollar has fluctuated more than bitcoin? Correct, the cyber currencies do not demonstrate good properties to date for the general operational stability of the value for transactions. They are showing the signs of being essentially simply the speculative vehicles, like a gold asset but stripped of the non speculative usage properties. The technology may be interesting for development in the financial services but the idea of the crypto currency is something that looks like something that is appealing to the anglo saxon fringe political tendencies and the criminals not having full understanding that the promise of anonymity under normal usage is a mirage. ---
**Author:** ![GreenWyvern](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/greenwyvern/32/2834_2.png) [@GreenWyvern](https://boards.straightdope.com/u/GreenWyvern)\ **Post date:** [July 13, 2017, 9:13am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/46 "2017-07-13T09:13:33Z")
The difference between a national currency and and a cryptocurrency is that a national currency [ul] [li]Is backed by the laws, national institutions, and social structure of a nation.[/li][li]Is controlled by the government of a nation.[/li][li]Is used to pay government employees, to receive taxes, duties, and fines, and for all financial transactions by individuals or companies with the national government.[/li][li]Is used by many millions, or hundreds of millions, of people for all the transactions of their daily lives - billions of transactions of every type every day.[/li][li]Is accepted by any and every business and individual.[/li][li]Is used for government bonds, and transactions between nations.[/li][/ul] A cryptocurrency, or a commodity, or any arbitrary means of exchange is none of these things - and can never be - because it is not backed by a whole society. A currency which is not backed by a national government, and by the laws and institutions of a nation, is just a private, unenforceable arrangement between individuals. It can never be used for financial transactions within the legally established social framework of a nation. ---
**Author:** ![Ramira](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ramira/32/344_2.png) [@Ramira](https://boards.straightdope.com/u/Ramira)\ **Post date:** [July 13, 2017, 9:16am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/47 "2017-07-13T09:16:53Z")
> [@GreenWyvern](#): > > …It can never be used for financial transactions within the legally established social framework of a nation. ??? The bitcoins are used for the financial transactions, fully legal. This is a weird and nonsense statement. ---
**Author:** ![Lord\_Feldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lord_feldon/32/341_2.png) [@Lord\_Feldon](https://boards.straightdope.com/u/Lord_Feldon)\ **Post date:** [July 13, 2017, 9:19am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/48 "2017-07-13T09:19:55Z")
> [@Nava](#): > > You can’t go to prison in yours for not paying due taxes? Al Capone’s lawyers would be surprised to hear that. Al Capone went to prison for lying about his income, not for failing to pay taxes. ---
**Author:** ![GreenWyvern](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/greenwyvern/32/2834_2.png) [@GreenWyvern](https://boards.straightdope.com/u/GreenWyvern)\ **Post date:** [July 13, 2017, 9:23am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/49 "2017-07-13T09:23:17Z")
> [@Ramira](#): > > ??? > > The bitcoins are used for the financial transactions, fully legal. This is a weird and nonsense statement. Sure, it’s not illegal, but that’s not the same thing at all. Try to pay your taxes or a traffic fine with bitcoins and see what happens. ---
**Author:** ![Princhester](https://avatars.discourse-cdn.com/v4/letter/p/3e96dc/32.png) [@Princhester](https://boards.straightdope.com/u/Princhester)\ **Post date:** [July 13, 2017, 9:32am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/50 "2017-07-13T09:32:02Z")
> [@Nava](#): > > You can’t go to prison in yours for not paying due taxes? Al Capone’s lawyers would be surprised to hear that. What **Lord Feldon** said. If you are simply unable to pay taxes, you are made bankrupt. Ain’t no such thing as debtor’s prison in any first world countries of which I am aware. ---
**Author:** ![Ramira](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ramira/32/344_2.png) [@Ramira](https://boards.straightdope.com/u/Ramira)\ **Post date:** [July 13, 2017, 9:37am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/51 "2017-07-13T09:37:57Z")
> [@GreenWyvern](#): > > Sure, it’s not illegal, but that’s not the same thing at all. Try to pay your taxes or a traffic fine with bitcoins and see what happens. The same thing as what happens when I have a foreign currency, it is converted or must be converted. This has not anything to do with your strange and incoherent statement. ---
**Author:** ![jz78817](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jz78817/32/1028_2.png) [@jz78817](https://boards.straightdope.com/u/jz78817)\ **Post date:** [July 13, 2017, 9:40am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/52 "2017-07-13T09:40:44Z")
> [@Lord\_Feldon](#): > > Al Capone went to prison for lying about his income, not for failing to pay taxes. what’s the difference? ---
**Author:** ![Ramira](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ramira/32/344_2.png) [@Ramira](https://boards.straightdope.com/u/Ramira)\ **Post date:** [July 13, 2017, 9:58am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/53 "2017-07-13T09:58:29Z")
> [@jz78817](#): > > what’s the difference? The deception versus the idea of ‘inability’ all of this is however a completely naive and pointless diversion - there is the ample historical record of the parallel currencies in the usage, the idea that the acceptance for the payment of the taxes is the necessary condition for an operational currency is not supported by the actual demonstrable history of currencies. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [July 13, 2017, 10:34am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/54 "2017-07-13T10:34:43Z")
> [@Mosier](#): > > Don’t you think it’s a little unfair to compare bitcoin to the _most_ stable national currency in the history of the world, instead of the typical or “average” national currency? It’s like trying to compare the Best Picture of 1960 to whatever movie happens to come out first in 2018. _Of course_ the historical best example of one is going to beat the first ever attempt of the other. No, I don’t think it’s unfair. If you’re making the choice between dollars and bitcoins, then the fact that dollars are better is the reason you choose dollars. If bitcoins don’t work as well as dollars and dollars are available, why choose bitcoins? To use your movie analogy, this is like deciding you want to go to the movies tonight and you’re deciding which movie to go see. If you think one of the movies is better than the others, pick that movie. You don’t argue it’s unfair to the other movies that they’re being compared to the best movie rather than to a typical movie. You just pick the best choice that’s available. Unless you’re taking your kids. Then you have to pick _Despicable Me 3_. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [July 13, 2017, 10:54am UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/55 "2017-07-13T10:54:59Z")
> [@Hellestal](#): > > Nooooooope. Yeeeeeeeeeeeeeeeees. To address your other points, you’re seem unclear on what it means for a currency to be backed. It has nothing to do with how the currency is generated. Bitcoins are generated by a mathematical process. Sudoku puzzles are solved by a mathematical process. There’s no objective reason why a mining a bitcoin has any more value than solving a sudoku puzzle. There’s no real asset behind a bitcoin. It’s the equivalent of owning a fantasy football team. If the guys in your fantasy football league all decide they don’t want to play fantasy football anymore, how much is your team worth? You can argue that there’s no real asset behind a real football team also. After all, people might decide to stop watching football and then how much value would there be in owning the New England Patriots? You might as well own a soccer team. But that’s a false comparison. People do watch football and there’s no evidence that they’re going to all stop doing so. So the New England Patriots are a real asset. Their ongoing worth has been established. Even if Robert Kraft woke up tomorrow and decided he no longer cared about football, he knows there are other people who do care and would be happy to pay him for the assets he no longer cares about. ---
**Author:** ![DPRK](https://avatars.discourse-cdn.com/v4/letter/d/4491bb/32.png) [@DPRK](https://boards.straightdope.com/u/DPRK)\ **Post date:** [July 13, 2017, 12:28pm UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/56 "2017-07-13T12:28:21Z")
The specific idea behind Bitcoin, according to its author, is merely that coins are randomly generated at a certain rate and that there is no control over the money supply by central banks or cartels. (Arguments can be made that it is clumsily implemented and/or has failed to achieve these design goals; for instance, for lack of better research at the time he decided to distribute the initial coins by “mining”, which immediately led to the formation of mining cartels.) So from that point of view the stated endgame for an ideal bitcoin-like currency would be something like a foreign currency except the value would be stable because it would be mathematically impossible for a national bank to devalue it (like some idealized gold bricks perhaps?). It might be interesting to debate whether this makes any economic sense. Of course there are other forms of digital money, tokens, ledgers, etc too for various purposes. ---
**Author:** ![Hellestal](https://avatars.discourse-cdn.com/v4/letter/h/3ab097/32.png) [@Hellestal](https://boards.straightdope.com/u/Hellestal)\ **Post date:** [July 13, 2017, 4:13pm UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/57 "2017-07-13T16:13:11Z")
> [@Little\_Nemo](#): > > you’re seem unclear on what it means for a currency to be backed. It has nothing to do with how the currency is generated. You are now trying to tell an astronomer that the moon is made of cheese. > [@Little\_Nemo](#): > > Bitcoins are generated by a mathematical process. Sudoku puzzles are solved by a mathematical process. There’s no objective reason why a mining a bitcoin has any more value than solving a sudoku puzzle. Different kinds of math can be used for different things. The math used for sudoku is not the same as the math used for Bitcoin. The math used for Bitcoin is designed for the protection of Bitcoin ownership. The differences between the two types of math are objective differences. These objective differences in math provide objective reasons for their difference in value. The differences between these mathematical processes would be easily distinguishable by anyone with a math education beyond the middle school level. (Not that a middle schooler could understand the encryption, but they could recognize that the kinds of maths are different.) You do not seem to understand this. I will adjust my own posting style accordingly. > [@Little\_Nemo](#): > > There’s no real asset behind a bitcoin. There is no “real asset” behind a US dollar either. This has been explained before in this thread. When your criticism encompasses both together, you demonstrate that you understand neither. You should understand something _before_ you try to criticize it. > [@Little\_Nemo](#): > > It’s the equivalent of owning a fantasy football team. If the guys in your fantasy football league all decide they don’t want to play fantasy football anymore, how much is your team worth? > > You can argue that there’s no real asset behind a real football team also. After all, people might decide to stop watching football and then how much value would there be in owning the New England Patriots? You might as well own a soccer team. > > But that’s a false comparison. You are making an assertion here. Now here is the problem. (Again.) You need the evidence for your assertion to **distinguish the relevant cases** in an objective manner. Does your following “argument” distinguish the cases? > [@Little\_Nemo](#): > > People do watch football and there’s no evidence that they’re going to all stop doing so. So the New England Patriots are a real asset. Their ongoing worth has been established. Even if Robert Kraft woke up tomorrow and decided he no longer cared about football, he knows there are other people who do care and would be happy to pay him for the assets he no longer cares about. Now let us do a simple replacement: > [@](#): > > People do [trade Bitcoin] and there’s no evidence [yet] that they’re going to all stop doing so. So [Bitcoins] are a real asset. Their ongoing worth has been established. Even if [a Bitcoin owner] woke up tomorrow and decided he no longer cared about [owning Bitcoin], he knows there are other people who do care and would be happy to pay him for the assets he no longer cares about. Every sentence still applies. Not at the same confidence level into the future, but every replaced sentence remains true for the present You claim two things are the same as each other and they end up being objectively different in painfully obvious ways. You claim that two things are different, but your argument for what is supposed to make them different ends up applying to both things equivalently. You might not be personally embarrassed by your posts here. You might not even understand the fundamental issues that I’m raising. Nevertheless, I am becoming vicariously embarrassed on your behalf. ---
**Author:** ![Lemur866](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lemur866/32/434_2.png) [@Lemur866](https://boards.straightdope.com/u/Lemur866)\ **Post date:** [July 13, 2017, 4:39pm UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/58 "2017-07-13T16:39:04Z")
> [@jz78817](#): > > what’s the difference? All the people you hear about, like Wesley Snipes, who go to jail over their taxes? They don’t go to jail because they owe the government a jillion dollars and don’t pay. Lots of people owe the government jillions of dollars, and they don’t go to jail. You only go to jail when you try to defraud the government. Filing a fake tax return that hides your income is a crime. Owing the money and not paying it is not a crime. Yes, the IRS can seize your assets if you owe money and don’t pay it. If you owe a million dollars and have a million dollars in the bank, the IRS will get a judge to order the bank to take the million dollars and hand it over to the IRS. But if you owe a million dollars and have zero assets, you’re not going to go to jail, you’re just going to owe the IRS a million dollars plus interest, and they’re going to try to seize any future assets you may get your hands on. And if you owe a million dollars, and tell the IRS that you have no assets, but you secretly have a million dollars in the bank, that’s when you go to jail when they find out. ---
**Author:** ![GreenWyvern](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/greenwyvern/32/2834_2.png) [@GreenWyvern](https://boards.straightdope.com/u/GreenWyvern)\ **Post date:** [July 13, 2017, 5:07pm UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/59 "2017-07-13T17:07:25Z")
Suppose a group of people decides to trade among themselves using cowrie shells. They set up a cowrie shell exchange which exchanges dollars for cowries and vice versa. They agree that they will accept cowrie shells for goods, and they speculate in cowrie shells (by buying them with dollars). The number of shells is limited, but anyone who wants to spend time wandering along the sea shore trying to find cowrie shells is welcome to do so, and to use any shells they find. However, cowrie shells are not legal tender in the country, cannot be used for paying taxes or for any government transaction, and are not accepted by most shops and businesses. How is this different from bitcoin, except that bitcoins are mathematical rather than physical objects? ---
**Author:** ![Ramira](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ramira/32/344_2.png) [@Ramira](https://boards.straightdope.com/u/Ramira)\ **Post date:** [July 13, 2017, 5:59pm UTC](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040/60 "2017-07-13T17:59:10Z")
> [@GreenWyvern](#): > > S… > > However, cowrie shells are not legal tender in the country, cannot be used for paying taxes or for any government transaction, and are not accepted by most shops and businesses. > > How is this different from bitcoin, except that bitcoins are mathematical rather than physical objects? The traceability of the block chain and the non physicality are very different. Your hang up on the legal tender is a developped country obsession. the history of developing countries having the de facto parallel currencies (as in the Mark, the Dollar) that are dominant even to the legal tender is the ample refutation that this aspect is very relevant. the same for the idea that the ability to pay the taxes to the home government is also a key condition. the factors of the stability in the relative value to the other means of exchange and other means of the storage of value, the historiy of the reliability and the liquidity, these are the quite demonstrably important factors for a successful currency. [Previous page](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040.md?page=2) [Next page](https://boards.straightdope.com/t/what-is-the-endgame-of-cryptocurrencies/791040.md?page=4)