There is no product being sold. People are being convinced to surrender working currency in exchange for a public database entry that records the fact they were duped.
The product is clearly the ability to exchange financial value friction-free and with no middle men or central authority. The various crypto coins achieve this property quite well with various tradeoffs on speed, anonymity, etc.
The exchanges are both --- the middle men *and* the central authority.
They set the "financial value" of crypto. They mint their own "stable coins" at will without any verifiable backing and use it to trade against their own "customers" --- because there is nothing to prevent it.
And yes, I am aware of the peer-to-peer exchanges --- which provide no real, practical alternative but to more or less follow along with the prices set by centralized exchanges.
Exchanges are not necessary for crypto. Not sure why you're conflating them.
Also, there is no central authority telling exchanges how they have to operate, that they have to collect certain kinds of data or regulate certain kinds of transactions (in theory). If you don't like an exchange's rules you can move to another or create your own fairly easily.
By contrast, consider how difficult it would be to start a bank.
Yes they absolutely are. Without them, there would be no crypto *market* --- centralized or otherwise. Everyone turns to the exchanges to value their crypto --- even those doing peer-to-peer (DEX).
Also, there is no central authority telling exchanges how they have to operate
Exactly! In the absence thereof, they become the defacto "central authority" --- by the sheer weight of their trading volume and the fact that they mint stable coins which can be used to influence any trading.
> Everyone turns to the exchanges to value their crypto.
Not everyone. And the fact that most turn to exchanges says nothing about crypto's dependence on them. If all exchanges were outlawed tomorrow Bitcoin would still not disappear.
Furthermore, the existence of multiple exchanges already refutes your claim that there is a central authority, de facto or otherwise.
Furthermore, the existence of multiple exchanges already refutes your claim
Bitfinex and Binance control the market by sheer weight of their trading volume.
The others have no choice but to follow their lead. If they don't, these "Big Two" will arbitrage against them and they have an unlimited supply of "stable coins" to work with.
Yeah, I remember when cryptobros talked about self-contained crypto economy. In that ideal scenario exchanges aren't necessary. But 14 years have passed and nothing has come of it. Off-ramps are still necessary.
Exchanges that deal with real money have to abide by rules and regulations of their jurisdiction. Governments can tell them what to do.
Crypto exchanges that deal with crypto only can indeed hide from governments, but if they steal your money - there's nothing you can do.
> And yes, I am aware of the peer-to-peer exchanges --- which provide no real, practical alternative but to follow along with the centralized ones.
Why? Centralised exchanges are more convenient, but as you've said you can use a local p2p exchange. It will cost you more, and take more time, but you can. In comparison, you can't make a SEPA transfer without a bank.
You can trade with third-parties, and if you want a paper trail you could notarize the trade, without having to submit your data to a huge private centralized database.
It is because you don't know what you are talking about when it comes to economics.
A currency that doesn't inflate, doesn't get spent. It gets horded and stops acting as a medium of exchange. Exactly what we see with crypto and why the currency part is bullshit with it.
It is just embarrassing how ignorant people into crypto are with economics. This is economics 101 stuff, most basic ideas.
it’s more that using fluctuations is bad logic for both crypto and fiat
being a user of US currency over the last 100 has been generally good for all involved
i’d say the same is true for ethereum (i’m a bit eth maxi with small holdings of other crypto)
if you are at all actually curious i wouldn’t read anything about crypto since the writing is so polarizing (crypto =scam or crypto is saving the world).
neither is true but no amount of words will give conviction.
download metamask, buy $500 of eth, swap it into usdc on uniswap, buy a shitty nft on opensea. then see if you like it. do not treat the $500 as investment. treat it like education.
There is no product being sold. People are being convinced to surrender working currency in exchange for a public database entry that records the fact they were duped.