this post was submitted on 18 Mar 2025
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the problem with crypto is that when you try to explain it, it sounds so stupid that someone else thinks you have to be explaining it wrong
but if you want explanation, this one is fine https://ic.unicamp.br/~stolfi/bitcoin/2020-12-31-bitcoin-ponzi.html and this https://www.ic.unicamp.br/~stolfi/bitcoin/2021-01-16-yes-ponzi.html
So the same as most currency that isn't backed by actual valuables? Like the US dollar after it stopped being backed by gold like 100 years ago?
Crypto is a world currency that people have assigned value to. Pretty much all other money is a currency that individual countries have assigned a value to. Both types can be just as worthless. Hyper inflation has made money from many countries worth less than a roll of toilet paper to wipe your ass with. For that matter, the US dollar could buy you 30 rolls of toilet paper 75 years ago. Now it can only buy you like 1 roll.
You have a good point, the value of any money (even a lot of gold's value) is a social construct, i.e. only what the population makes of it. For that reason, I don't think that crypto is inherently bad, but the fact is that most people trading aren't using it as money (you know, an intermediate good to facilitate trades), they're attempting to use its wildly fluctuating value to make a quick buck. Those types of trades ironically only make it more volatile, and are what made it volatile in the first place, so there's now a vicious cycle. Will crypto ever stabilize? Fuck if I know, I'm not qualified to talk about this, but frankly I think you could say the same about most people in the stock market and especially in crypto. Maybe if a critical mass of people start actually using cryptocurrency as a currency it'll change, but who can say.
Crypto has already started stabilizing. But only proof of work can demand the trust and longevity to make it so. Everything else has the threat of a scam. Do not trust proof of stake. Research those terms and the Birds Eye level of the crypto they represent for more info.