Ask HN: What is driving cryptocurrency value?

https://news.ycombinator.com/item?id=15827904

by tastyface • 9 years ago

11 8 9 years ago

news.ycombinator.com

Maybe an unusual question for this community, but here goes. I'm interested in speculating a bit on Bitcoin and other cryptocurrencies, but my personal code of ethics would prevent me from profiting off of something primarily used for dark or illegal purposes. (Online drug markets, money laundering, etc.) I'm not sure how much of Bitcoin's value is due to this stuff vs. legitimate uses or just excitement over a potentially revolutionary new technology. Any thoughts? Thanks!

whb07• 9 years ago

I hate being that guy, but if you use any reserve currency(USD,Euro) I'd argue that its those currencies being used in active drug/illegal markets.

If I show up to a drug transaction anywhere with a hardware wallet, I think I'd get laughed out. Yet that's not the same with USD. Or in the extreme case, If I went to Libya to purchase a slave it is safe to say they take Euros.

coryl• 9 years ago

You don't use it in individual transactions.

It's for wholesale drug operations. Usually drugs go at one time, money comes back another time. Only now instead of cash you could just use a crypto, but figuring out how to liquidate enough of it would be difficult.

quickthrower2• 9 years ago

Watching the Neflix doco on Escobar - one problem he had is having to hide large quantities of cash in holes around Columbia.

Not liquidating it all would be advantageous I'd think.

OTOH the DEA would love the traceability.

muzani2• 9 years ago

I saw some drug documentary too. Smuggling in drugs is only one part of the problem. Drugs are small and valuable. Smuggling out the money is an equal problem, because it was all large and bulky. If you bring an entire truck full of cocaine in, you're going to need more than a truck to pull it out.

So while you can buy a few grams or a slave with a briefcase of notes, it's not as easy for the dealer.

Crypto, if safe, would lower the risk by about 50%. Bitcoin is traceable but it seems that something like Monero might be better for this.

BjoernKW• 9 years ago

The “It’s used for illegal stuff.” argument by and large is just meant to scare off ordinary people.

Crypto currencies actually make it easier to uncover dark or illegal transactions because crypto currency transactions are inherently traceable. After all, traceability is the key feature of any ledger, digital or not.

It’s precisely because paper money isn’t traceable that laws against money laundering were created in the first place.

There’s a real ethical issue with speculating in crypto currencies though: Just as with gold or fiat currencies these assets don’t create any value.

muzani2• 9 years ago

The value is like gold. It is a limited resource. It can't be counterfeit.

The big difference is that gold is portable and much harder to destroy.

kleer001• 9 years ago

The only ostensible difference between crypto-currencies is in their code and network strength (people and computing power).

By value cash, and namely US $100 bills, are used for more crimes than anything else in the world, ever.

Don't do anything illegal with your bitcoin and you should be fine. Don't worry about what other people do, that's an endless and naive vortex of insanity. Basically mind your own business unless someone asks you a question.

zzzzzzzza• 9 years ago

A lot of people here saying crypto isn't used for anything illegal... erhm... Remember silk road boys? sure, the feds shut it down (more popped and and got shut down, I don't know personally but there's probably multiple variants on the theme out there now), but nowadays one of the big drivers is getting your wealth out of china (illegally), and are any of these guys reporting their capital gains to the irs? Shit tons of illegal shit happens with cryptos without even going into scams or hacks.

Ask HN: What is driving cryptocurrency value?

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