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Re: Cryptocurrency is an abject disaster

Sam H. Smith <sam@samhsmith.com>
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Hi Drew,

I am cincerely sorry about you not being able to provide free CI services like
you did before. But I do think you risk throwing the baby out with the bath
water on the question of cryptocurrencies.

First of all I would like to disclaim that nearly all the currencies are bogus.
A fools errand. But bad currencies already existed. Everyone knows that holding
strong currencies like USD or EUR is better than say pesos or rubles. That said
all of these currencies are leaky and will loose there value. It is simply a
question of how fast.

Our new currencies have the potential to not be so leaky. I, like you, do not
like ponzi schemes. And there is some of that going on. But I offer you this.
If the value of BTC/ETH/XMR stayed the same over some period. But the value
of EUR halved due to the ECB's money printing. Then it looks like there is a
ponzi scheme, when the real scheme is the governments ability to steal from
it's citizens through money printing.

Anyone buys crypto currency with the goal of making *more fiat* currency is
missing the point entirely, or involved in a ponzi scheme. The point is to
stay. To transact and save free from other people being able to steal
from you.

Now, I have some issue with your take on the energy situation. Your example
involves subsidized power plants, which I find bizarre. When you eat at a
resturant, is the food subsidized? Of course an economy will behave badly
if actors are not required to pay for the things they consume. If you want
left wind policy, give people money to buy energy with.

Now let's trace the value. A power plant somewhere is producing electricity
and selling it at a profit to a miner. The miner can't pull money out of thin
air. They can afford to buy the electricity because they get paid by the
network and it's users. Either directly through transaction fees or minting
of new tokens. So, value is transfered from my pocket to that of the miner
and the electricity producer. They secure and enable my transactions, that
is the combined service they provide me. In return, I am litterally *paying
the wages* of the power plant and mining operation employees. Everybody wins!

Well that is, assuming it's actually a good idea to use crypto currency. If
the whole thing is a waste, than I the user am the one being ripped off as
the other parties involved have already been compensated by me. So let's do
the maths, am I being ripped off?

Here's a recent XMR transaction of mine. I sent 3.5 XMR and paid a tx fee of
0.00004452 XMR. It's a bit miss representative to calculate a % fee since
all XMR transactions have a flat fee. But I want to compare it to a normal
credit card transaction. (0.00004452 / 3.5) * 100 = 0.001272 % fee. A XMR
transaction is about 0.008904 USD so it's very cheap either way you look
at it.

With that frame of reference a visa or mastercard payment seems absolutely
insane. The fee for merchants is 1-3 % of the value being transacted!

Now consider the fact that such a card transaction is impressively inferior
to the monero transaction. The time between when I buy a loaf of bread with
my bankcard to when the baker has recieved the money and can use it to buy
more doe is about 4 weeks! A monero transaction has fully settled in 15 min
to an hour. The card transaction went through several financial institutions
that can both log my transactions and censor the transaction. Not only do
they see everything that I buy, they can remove my ability to spend money
in an instant. The monero transaction is both completely untraceable and
invisible to all but the sender and reciever. You only need to have your
keys to be fully soverign over your money.

I understand your frustrations. The ability of individuals to transact with
full security and privacy at extremely low cost is an incredible invention
of the 21st century.
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