Crypto Does 🧐 NOT HAVE TO BE 🤨 a currency: Explaining crypto value to a friend


This is a conversation I just had with a friend who is curious about crypto. I've change the names to protect the innocent.

The conversation was sparked by a video he sent me of Peter Schiff dissing Bitcoin and shilling gold as he usually does. It's always a good idea to ask questions before investing in something, and the questions also force me to reexamine what I know about crypto and ultimately understand it better and improve my ability to explain it. So I appreciate it.

(I might be wrong about @splinterlands token burns, have to check that one, but it seems like I read it somewhere. Anyway, it is possible and being done with other things like the HBD stabilizer. And they are bringing in a lot of new users, so definitely adding a lot of value long term.)

Here is the video that sparked the conversation

And here is the conversation

17:21 Karl McCurious I think he means because you cannot do everyday transactions with coins. I do see his point about how unless it can be valued like other fiat currencies it will only benefit those who bought early and sold before it crashes. Kind of like a pyramid structure

17:22 Karl McCurious But yeah it’s not actually “investing” when buying Bitcoin. It doesn’t produce any revenue or return like stocks or other investments into enterprises

17:23 Karl McCurious So I guess it depends on how you look at it.

17:42 Ken Dewitt It's not a currency and doesn't need to be. It's kind of like how they used to call movies "moving pictures" and cars "horseless carriages". We use the terminology of our day to describe something completely new whose applications go far beyond what we can currently imagine because we have no frame of reference for it. It was the same with the internet. There are hundreds of use cases that people are building or already built with this technology. When you buy or earn crypto, you are a shareholder or stakeholder in a decentralized autonomous organization or DAO. It is much more like owning company stock, except you are automatically on the board of directors if you stake your coins. This means you are also contributing to the programmers who build new applications that add value to the blockchain.

17:47 Ken Dewitt Case in point. Splinterlands is a game that uses the Hive blockchain. They bring in new gamers who buy card packs. Their payment can be in Hive or other cryptos, but is converted to Hive owned by the Splinterlands team. Then some of that Hive is burned, taking it off the market forever and increasing the value of the Hive coin because it decreases supply. So there IS (Adam voice) income from paying customers. Not a ponzi.

17:49 Ken Dewitt And this is just one use case. Another is the recent development of Podcasting 2.0 using Hive and the Bitcoin Lightning Network. Podcasts can now receive micropayments in BTC or Hive directly from their listeners at the push of a like button.

(The message above is referring to the new Podping application by @brianoflondon. I recommend following him and @podping for updates on their progress.)

17:51 Ken Dewitt Meaning they dont have to go to an external site like Patreon to support their favorite podcasters. So this reduces friction for the end user, making it more likely that people will pay for stuff they like.

17:52 Ken Dewitt I have never seen Schiff talk about any of the use cases outside money. Because he is a clueless dinosaur.

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