If everything else fails, I know I can still have two things to pay with: cash and crypto.
Btw, crypto (like bitcoin) is only an alternative because of convention.
The complete history of bitcoins is globally trackable, and people could all decide that they'll pay more for bitcoins that came from Satoshi's initial hoard, or that they'll refuse to accept bitcoins that were ever seized by the FBI.
(Yes, there are mixers. But you'd just refuse to accept any bitcoin that took part in the mixer transaction, if any FBI coins were in there.)
Good luck buying groceries or paying the mortgage with Crypto.
Bitcoin doesn't store any energy.
Bitcoin is like a F1 car going around a track forever, with your name scribbled on it.
Not long ago we lived in a world where currency from anywhere other than the nation you were in (or maybe somewhere close by) was impractical to use on a daily basis. Things have changed now and the government's use of money as a tool to keep control of citizens is loosening. For better and worse.
(You conveniently left out “cash” from your reply. Cash. I’ll buy groceries with cash, if I can’t use my card.)
I think of them as representations of the idea that energy is (currently) so abundant and cheap that we can waste it on mining things like gold and crypto, a fundamentally ridiculous concept in terms of real actual human needs.
Once that stops being the case (when fossil fuel starts running out globally), the whole thing - cash, gold, crypto, stocks, bonds, property - everything falls apart.
You have to look at the reality. Crypto has been used overwhelmingly for scams and crime.
If "everything else fails" the internet has failed, and crypto will be worthless. Gold will probably still have some value, unless shit really hits the fan.
The primary purpose of a bank is to issue debt. That’s why they were created. A bank has to be able to “print” money to issue debt. This isn’t a flaw as some crypto fans like to think, it’s a very important feature. Debt issued by banks replaced the informal promise-based debt people used before we had banks. You didn’t need money on hand, or to borrow some coins from some rich dude, to get help building a barn. You got help from people in the village in exchange for some other goods or service you’d provide them in the future. Bank issued debt with “printed” money is the replacement to that, and it only works if money can be created on demand.
Crypto can’t “print” money on demand, by design. So it can’t replace banks.
If BuyMeACoffee was run like a dark web drug marketplace, it could support every country.
Apparently it powered online drug marketplaces before Bitcoin existed.
So has regular currency.
It's a sort-of flex, showing off, a demonstration of (energy) wealth. Humanities's peacock feathers.
An important difference is that your new token can't ever be confused with base money. In banks, we have base money, and we have bank money, and we pretend they're the same thing because banks are pretty reliable (not 100% but pretty). In crypto, the system won't let you lie like that. (Though you can create another new currency backed by a mix of currencies - this is what DAI does.)
Another important difference is trust. I can easily issue bonds in the real world and then just run off with the money and not repay them. If I try, a lot of heavily armed men will hunt me down. That doesn't really happen in crypto, and as things are now it can't happen, because if you make your identity and location known and issue crypto bonds, the same armed men will hunt you down for issuing crypto bonds instead of ordinary bonds, which is a crime itself (see what happened to Kik/Kin). So you'd have to stake something else to make people trust you.
https://en.econostrum.info/europe-restricts-cash-paymentss-n...
https://www.europe-consommateurs.eu/en/shopping-internet/cas...
Try doing that with crypto. Who are you going to arrest?
Bitcoin is valuable because people accept that it’s valuable, same as with cash, gold, crypto, stocks, bonds, property. The price of an apple is $2 is because I offered it to you for $2 and you bought it.
With crypto you don't hand over your coins to a third-party for safe keeping, you instead send coins directly to one another, just like with cash.
These transactions while not the majority of transactions I would wager is far larger in terms of dollar value that the whole crypto ecosystem.
The reality is that criminals will find loop holes in a system and they will exploit it if it is worth exploiting. Many of the checks done in banks now impede transactions. I was buying a car (private seller) and I couldn't transfer the cash without going through a fraud check, even though I had signed the transaction with a card reader in the app. It turned a 30 minutes of test driving the vehicle and checking docs into 3 hours of wrangling on the phone. BTW I am not the only person having these problems with banks in the UK.
As for what crime we are referring to as well in this scenario needs clarifying as well. I suspect that most of crypto transactions are through darknet drug markets. These markets reduce the risk of violence to basically zero when purchasing drugs. While I am not one of these people that is pro-legalising all drugs, the reality is that people are going to buying them.
FT Alphaville has a good article about it: "How much does cryptocrime pay?": https://www.ft.com/content/f40b7ac7-bb50-4712-aa7f-5219c2b18... (free sign-up)
To quote:
2025 Chainalysis Crypto Crime Report ... The authors have so far tracked over $40bn of crypto transfers to illicit addresses made in 2024, though they reckon the final total will be north of $51bn.
Intentional mixers aren't even the half of it. You have large exchange operators that use a single wallet. They file KYC paperwork with governments, but that's not in the blockchain. From the perspective of the blockchain their whole exchange is one big mixer. A billion dollars goes in, a hundred was tainted, a billion dollars comes back out. The only information to trace which $100 that went in is the $100 that came back out isn't in the blockchain, it's in the exchange's private accounting database.
But if you propose to taint every coin that has ever passed through a major exchange, that's pretty much all of them.
Every on- and off-ramp provider. EU legislation has basically created a database of real person to wallet mappings (for some subset of wallets). You can't take money from a wallet if you don't know who it belongs to (if you're an exchange anyways). The checks are a bit soft (ie. self attestation and stuff), but the public ledger part of crypto makes tracking far-far easier than with traditional banks.
The end game for this is that people in the West (and whoever they can pressure) won't be able to buy crypto to buy drugs or sell it when selling drugs, making it useless on a big scale.
Gold is a bit different. You could stop mining it today entirely and you could still have a gold currency. Stop mining bitcoin and it all effectively disappears!
Another thing banks do is, Alice is in New York and wants to pay Bob who is in Miami, or Kyiv, so instead of getting on a plane with a sack full of Benjamins she tells the bank to send money to Bob. Cryptocurrency is clearly an alternative way of doing this, with the advantage that then there is no middleman to refuse the transaction when the bank is being leaned on by a despot.
Some drug dealer is making $20,000/year selling drugs, but the drugs are sold for $50,000 because they had to spend $30,000 on grow lamps and electricity and rent in order to produce them. The same drug dealer also uses the same wallet to sell ordinary lawful gift cards for cryptocurrency and they only make $5000 from that but it's against revenue of $200,000 because the markup on gift cards is small.
For that they're attributing $250,000 of "crypto transfers to illicit addresses" to this person but there was only actually $20,000 of unlawful gain. Overstating the problem to demonize the target.
Second, Monero is still thought to be untraceable. In fact regulated entities are banned from exchanging it in the EU precisely because they can't trace it. (Zcash is also banned under the same law, but is considered technically inferior because not all transactions are private.)
Third, what do you even mean? Do you mean they'll go back to the last time those coins passed through a regulated on-ramp, and prosecute that person? For what? Buying cryptocurrency, then buying a legal product with cryptocurrency, is not illegal, and even if the product was illegal, the government most likely couldn't prove that. Also, the on-ramp was probably in a different jurisdiction. Perhaps for something like "acting as an unlicensed money transmitter" which is a thing they have done against users of cryptocurrencies. If they prosecute that in large quantities, will it fly?
Or do you mean they'll wait until someone takes the crypto to a regulated off-ramp, and then prosecute that person? For what - undeclared income? As far as I know, trading one cryptocurrency for another is a non-taxable currency exchange, at least in some EU countries, so they can't get you for that. And what if they declared it? Again, they might try "acting as an unlicensed money transmitter" of course. What if it never gets to a regulated off-ramp and just circulates peer-to-peer forever? It's more likely tyou think, since remember, regulated off-ramps are strictly banned.
Why do you believe it would suddenly make peer2peer cash to cryptocurrency exchanges unviable?
And if you meant tracing the Monero itself, I suggest you read up on how Monero works—and how it differs from BTC—first.
Yes
> A bank has to be able to “print” money to issue debt
Absolutely not, especially not in the context which you just said ("that's why they were created"). When the banking industry started in various Italian city states, money was state issued and backed by precious metals, and banks didn't create any new money supply. They gave loans, invested, kept deposits, etc. but without touching the money supply, which was managed by sovereigns and sovereign states.
- Alice deposits $100 into the bank. The bank owes Alice $100.
- Bob wants a loan. The bank offers him a loan of $50, backed by the $100 from Alice. The bank owes Alice $100. Bob owes the bank $50.
- Bob withdraws the $50 to spend on coke and hookers. The bank uses $50 of the money deposited by Alice to give to Bob. Bob has $50. Alice still has $100 balance.
The bank has just created $50. Everyone is happy unless Alice (and everyone else) wants to withdraw their money and they aren't able to get it back from Bob. That's a bank run.
"The estimated amount of money laundered annually worldwide is between 2% and 5% of global GDP, that is, something between US$ 800 billion and US$ 2 trillion."
source: https://www.unodc.org/lpo-brazil/en/frontpage/2013/10/29-uno...
So in your example, the bank can lend $1000 to Bob, backed by Alice's $100.
The bank may buy a government bond with it. In that case there's $100 of physical cash (money) that the government has, a $100 government bond (also money) that the bank has, and a $100 bank deposit (also money) that you have. There is now $300 in total.
Stacking money on top of money is fundamental to the economy. Normally (and enforceably in cryptocurrency systems) the different layers may not be confused, nor may different assets at the same stacking level. But it benefits whoever is creating the higher layers when you confuse them with the lower layers. When people widely bank deposits with base money, this benefits the banks because now the money they print becomes almost as good as base money. When people widely confuse government bonds with base money, this benefits the treasury because now the money they print becomes almost as good as base money. If people were to widely confuse Apple stock with base money, it would benefit Apple and its existing investors.
(Base money doesn't have to be gold by the way. It's anything that's issued without underlying value and widely accepted as a store of value. Fed notes serve as base money just fine. They have about as much actual real-world value as gold bars, which is none.)
But eventually, Alice wants her money back, the bank cashes in the bond, the government repays the cash.
So part of that value is the value of trust as a function of time. Trust in the bank, trust in the government, trust that they'll pay back their debts on a defined schedule. Plus interest.
All new ones. You can buy 'fresh coins' from miners directly.
You could also exempt some 'honourable' miners (ie a whitelist) from the taint.
All kinds of conventions are possible, depending on what people want to value.
The convention that all bitcoins are equally valuable is just that: a convention. And it's not even strictly adhered to, because some bitcoins are already more valuable than others.
Hence my restriction to crypto that is 'like bitcoin'. Yes, you can use some tricks like zero knowledge proofs to make untrackable crypto-currencies. But as far as I can tell, they aren't all that popular. For currencies that offer both stealthy and 'regular' transactions (I think like zcash), the vast majority of transactions are of the latter kind.
I agree with you on targeting the on- and off-ramps. But I think you got your use cases wrong.
Crypto has two major use cases these days:
- speculation (aka gambling)
- ransomware payments
Buying drugs is pretty far down the list. And so are pretty much all purchases of normal goods and services.