Why is there a problem with BOA tracking my spending and income versus a centralized system whose administrators are unknown controlling my assets? The double spending problem seems mythical.
Bitcoin has no problem accepting my credit card controlled by my bank to buy Bitcoin controlled by an unknown “decentralized” entity. If I want to invest in a stock I have accessible records. With Bitcoin it seems to be “Trust me Bro”.
I think you're misconstruing the double-spending problem. Essentially, what Yaya is saying is that, most of the time, when you want to send data from point A to point B, you essentially just copy it. When I email you a PDF, Gmail creates a copy of the PDF that appears in your inbox. So now there's two PDFs—one in my outbox, one in your inbox—where there was one before.
That's not a problem if you're just sending PDFs or mp3s or whatever. There's no problem with cash, because the monetary value is borne by physical currency. Stocks aren't the right comparison, because stocks aren't currency—I can't trade you two shares of Apple for three shares of Meta, unless we work out some sort of burdensome ad hoc deal, nor can I buy a pizza with my Apple stock. Money is still the medium of exchange.
And with digital currency, unless there's a centralized ledger (like a bank or credit card company or payment app) that keeps track of who owns what and processes all the payments, it's too easy to create a counterfeit record of an exchange.
Crypto solves this problem by creating a) a public ledger that anyone can examine, and b) ensuring the unique status of every currency unit through a mining process that involves solving unique, increasingly complex pieces of encryption that authenticate the transaction. It's not controlled by an "entity" at all—it's automated code, and everyone can see what it's doing.
There are all kinds of scams that can be run with crypto, but that's true of every medium of exchange. I can counterfeit currency, float checks, steal credit card numbers, and so on. I can trick you into investing in my business and then skip town. I don't know that crypto, when used as a currency rather than a speculative investment, is any more vulnerable than those other mediums. Though it's certainly harder to steal someone's crypto than it is to steal their wallet.
No, obviously it's created for profit. Anyone with the know-how and resources can create a cryptocurrency. That person could then launch it, while holding a ton of it themselves.
But that currency is only worth what someone will trade for it. So an honest broker will create a currency and keep their holdings, hoping it goes up in value as people actually use it and see it as desirable and stable enough to trade for on crypto exchanges.
A dishonest broker can mint a ton of crypto—holding the majority of it themselves—then hype it to the heavens, convince others to buy a lot of it, and then sell off their holdings as soon as they decide the market for it has peaked. That will net them a profit and send the value of the currency crashing, leaving everyone else holding the bag—that's called a rug pull.
If you founded a traditional company, held an IPO, and did that with your stock, you would be prosecuted. I don't think that's the case with crypto yet, which is why a lot of people advocate for regulation. Opponents to regulation say it will place undue restraints on legit currencies.
Then there are stablecoins, which, as Yaya explains, are pegged to the value of fiat currencies. So you can't get rich quick with them. But if you happen to, say, work a job in a country with weak currency that no one wants, you can still use that currency to buy stablecoins and trade them for better money.
I should also note that I know nothing about the technical end of this. I don't trade crypto myself because I'm terrified of financial risk, and I once convinced my girlfriend, way back in 2009, not to bother mining Bitcoin, even though she was way ahead of the curve, and if I had listened to her we would be mind-bogglingly rich, and I will never, ever live that down. So take what I say with a grain of salt, I suppose.
Why is there a problem with BOA tracking my spending and income versus a centralized system whose administrators are unknown controlling my assets? The double spending problem seems mythical.
Bitcoin has no problem accepting my credit card controlled by my bank to buy Bitcoin controlled by an unknown “decentralized” entity. If I want to invest in a stock I have accessible records. With Bitcoin it seems to be “Trust me Bro”.
I think you're misconstruing the double-spending problem. Essentially, what Yaya is saying is that, most of the time, when you want to send data from point A to point B, you essentially just copy it. When I email you a PDF, Gmail creates a copy of the PDF that appears in your inbox. So now there's two PDFs—one in my outbox, one in your inbox—where there was one before.
That's not a problem if you're just sending PDFs or mp3s or whatever. There's no problem with cash, because the monetary value is borne by physical currency. Stocks aren't the right comparison, because stocks aren't currency—I can't trade you two shares of Apple for three shares of Meta, unless we work out some sort of burdensome ad hoc deal, nor can I buy a pizza with my Apple stock. Money is still the medium of exchange.
And with digital currency, unless there's a centralized ledger (like a bank or credit card company or payment app) that keeps track of who owns what and processes all the payments, it's too easy to create a counterfeit record of an exchange.
Crypto solves this problem by creating a) a public ledger that anyone can examine, and b) ensuring the unique status of every currency unit through a mining process that involves solving unique, increasingly complex pieces of encryption that authenticate the transaction. It's not controlled by an "entity" at all—it's automated code, and everyone can see what it's doing.
There are all kinds of scams that can be run with crypto, but that's true of every medium of exchange. I can counterfeit currency, float checks, steal credit card numbers, and so on. I can trick you into investing in my business and then skip town. I don't know that crypto, when used as a currency rather than a speculative investment, is any more vulnerable than those other mediums. Though it's certainly harder to steal someone's crypto than it is to steal their wallet.
I assume the centralized system is not created out of the goodness of a person’s heart. Who creates the system?
No, obviously it's created for profit. Anyone with the know-how and resources can create a cryptocurrency. That person could then launch it, while holding a ton of it themselves.
But that currency is only worth what someone will trade for it. So an honest broker will create a currency and keep their holdings, hoping it goes up in value as people actually use it and see it as desirable and stable enough to trade for on crypto exchanges.
A dishonest broker can mint a ton of crypto—holding the majority of it themselves—then hype it to the heavens, convince others to buy a lot of it, and then sell off their holdings as soon as they decide the market for it has peaked. That will net them a profit and send the value of the currency crashing, leaving everyone else holding the bag—that's called a rug pull.
If you founded a traditional company, held an IPO, and did that with your stock, you would be prosecuted. I don't think that's the case with crypto yet, which is why a lot of people advocate for regulation. Opponents to regulation say it will place undue restraints on legit currencies.
Then there are stablecoins, which, as Yaya explains, are pegged to the value of fiat currencies. So you can't get rich quick with them. But if you happen to, say, work a job in a country with weak currency that no one wants, you can still use that currency to buy stablecoins and trade them for better money.
I should also note that I know nothing about the technical end of this. I don't trade crypto myself because I'm terrified of financial risk, and I once convinced my girlfriend, way back in 2009, not to bother mining Bitcoin, even though she was way ahead of the curve, and if I had listened to her we would be mind-bogglingly rich, and I will never, ever live that down. So take what I say with a grain of salt, I suppose.
Thanks for the information