Galileo Galilei once said, “All truths are easy to understand once they are discovered; the point is to discover them.” Discovering truth about cryptocurrencies (cryptos) and showing that they are not money but faith based schemes that are bound to collapse, is the goal of this article. The first step toward achieving this goal is to explain why economic relations between people, where transfer of ownership rights is taking place, cannot be based on faith, and how, in that regard, cryptos differ from tangible goods and fiat money. After that, we will know what money actually is, and what it represents. Given this knowledge it will become clear why cryptos never were, nor ever will be money. The rest you can read here:
https://cryptofraud.wordpress.com/It is fiat currencies that are for most part faith based and forced onto us by the threat of violence. It is fiat currencies that have collapsed time and time again when the fiat Ponzi scheme runs out of steam. Normally as a result of reckless expansionary monetary policy backed by nothing more than empty promises. This is normally when the governments and banksters take nations to war in order to rinse and repeat the same old Ponzi scheme. The issuing and control of fiat currencies are centralized. This gives the issuers immense power and undue influence over the lives of people.
It is different with cryptos and with cryptos I mean digital tokens that for one enable peer-to-peer trustless (bankless) transactions within peer-to-peer economies driven by decentralized blockchains. And I am not in reference to cryptos that are used in Ponzi schemes such as Bitconnect or that are issued and controlled by governments and banksters.
Many cryptos are used as currencies, but the vast majority are utility tokens that unlock access to specialized software and the features it offer. Even those that are exclusively used as currencies have utility value in the sense that it enable peer-to-peer trustless transactions across the globe.
Very little to no faith is required for cryptos to work. E.g. smart contracts ensure that contracting parties don't need to trust each other in order for contracts to be enforced. The technology ensures that each party has to stick to his/her end of the deal. If not, penalties agreed on when the contract was signed, are automatically enforced without a third party having to step in and enforce it.
Now of course if someone has zero faith in the technology, then he/she will most likely not want to get involved. However, this doesn't take away from the fact that the technology works and is available. It is after all a tool that one chooses to use or not to use. Unlike with fiat currency, freedom loving people involved with cryptos are not going to force anyone to use it, especially not by threat of violence.
In all fairness, the use of cryptos in peer-to-peer economies can be seriously hampered if governments use violence or misinformation to persuade enough people not to participate (or if a calamity outside of our control strikes).
Intrinsic value is a misnomer. Anything has just as much value as someone or something is prepared to give to it. E.g. a dung beatle most likely attaches more value to a piece of dung than most humans. This while most internet users will most likely attach a higher value to the hardware and software that enable the sending of emails than dung. It is no different when it comes to cryptos. Even fiat currency has value beyond its face value. E.g. fiat currency in the form of notes can be used to fuel a fire, as wallpaper, etc.
I see you use gold and silver certificates and fiat money as examples of something that provide a legal entitlement (right) "to tangible goods or foreclosed property of borrowers." This "legal entitlement" that you're talking about can easily be diminished and outright destroyed. E.g. history has shown that they always issue more gold and silver certificates than the physical gold and silver to back it. This while they always destroy fiat currencies, which are nothing short of debt instruments, via reckless expansionary monetary policy. This represents an indirect tax and theft for that matter. This while with cryptos - technology and consensus - assure that only x-amount of a certain token can exist - its value cannot be diminished via the reckless expansionary monetary policy of a centralized authority. Yes, I can hard fork and create my own x token, but it will be worthless if there is no or little consensus to back it.
In addition, if you're hungry and I own a pumpkin, your fiat money doesn't give you the "legal entitlement" or right to my pumpkin. And when it is up for sale, your fiat money doesn't give you the right to buy it at a certain price. If I feel the fiat money you offer have too little value, then I will ask a higher price and perhaps even to the point where the "legal entitlements" that you hold are worth next to nothing - because you need a wheelbarrow full to be able to buy my pumpkin. Even if government forces me to sell my pumpkin at a certain price, then the overall supply of pumpkins in the market will dry up pretty quickly - leading to bigger imbalances and to the point where the "legal entitlements" you think you own, become worthless. And when the government fails that gave you the "legal entitlement," who is going to ensure that you're entitled to anything?
On the other hand, cryptos can be exchanged for almost anything, including property, gold, silver, fiat currency and what have you. And if I don't want to accept cryptos for the pumpkin - only fiat currencies, then those with cryptos who want to buy my pumpkin can exchange their cryptos for fiat and pay me in fiat. Unlike the governments and banksters, most people who are into cryptos are not going to force anyone to accept cryptos as payment. People have the choice to participate at free will. There is no need for violence or coercion to force people to use cryptos. It will be senseless to use violence. And the success of cryptos will at the end of the day not be dependent on the successes and failures of governments and banksters.
Now of course governments and banksters are most likely going to issue their own centralized cryptos and most likely force people to use it. However, I am sure there will be enough decentralized cryptos and consensus available to make their threats of no or little effect in no time. Assuming the masses wake up and realize the power that decentralized cryptos afford us.