Decentralized currency vs Virtual currency

10:59 AM

How come Malaysians choose M-coins, U-tokens and the likes over true decentralized cryptocurrencies like Bitcoins, Ethereum, Monero etc?

The whole point of not using fiat money is to be anarchist and not be enslaved by fiat money issuers.

When you use USD, you're surrendering authority to Federal Reserve. When you use MYR, you're surrendering authority to Bank Negara. The issuing authority can always manipulate the money supply to make the economy artificially "stable" or whatever they like. This is fiat money all about - having faith in a central issuing authority and living in hyperreality manufactured by your fiat issuer.

When you use decentralized cryptocurrencies like Bitcoins, no central power can manipulate its supply and value because the algorithm is set and no central servers in control. Not the creator nor the miners can manipulate it's supply. No trust is needed in this system because cryptography and mathematics has taken charge. You don't give up any authority to any central authority other than the free market which determine its value.

In fact, the only true form of free market will be a decentralized market with decentralized currencies. Free market by definition just not even possible when there is a central authority player in the market.

When you use virtual currencies like M-coins & U-tokens, instead of surrendering authority to Federal Reserve or Bank Negara who protect national interests, you're surrendering authority to companies who issue them: MBI & UFun etc whose real interest is in making themselves wealthy by getting real fiat money from you in exchange for "coins" issued at their whim.

Worse, as these "coins" issued by companies are not decentralized, they have centralized servers who can be shut down by themselves if company ceased operation or by government if targeted by law enforcement, which is happening now to M-coins & previously U-tokens.

This is unlike true decentralized cryptocurrency which cannot be practically shutdown by anyone including law enforcement as the market, the miners and the servers are all decentralized. Technically it can only be shutdown by owning 51% mining powers of the Bitcoins in the world for you to make a hard fork in order to shut down, but the investment it needs to make 51% mining powers (setting up mining powers more than total mining powers available today) makes it mean that to do such destructive act the "terrorist"/"destructor" need to destroy their own pocket so heavily before they can a serious attack on bitcoins.

My view is because many Malaysians want high nominal return. Bitcoins and other decentralized currencies can't be manipulated and thus value fluctuates a lot and no guarantee of high return. Whilst with virtual "fiat" currencies since the "fiat" issuer (companies) can manipulate it's supply and the rules, they can create a hyperreality of artificial high return, just like central bank create a hyperreality of stability in our economy.

Do you use any decentralized currencies or virtual currencies, if so, why?

(Note that I use the term "use" not "invest", currencies are meant to be used, not "invest/speculate")

Users and "investor" value different values thus have different projected behaviors.

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Kakyn Khok

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