Crytpo's and Alt-Crypto's.

When the East Coast banks went through their gyrations during and after the phase called in the American history books ' the free banking era' (1863 - 1865), was it ever the case that businesses and entrepreneurs actually made any profits...? Or was it simply that everyone lost money and eventually the currency notes issued by independent banks had to be stopped by the government and a national bank note substituted?

The question itself is flawed. Even the Wikipedia entry about the history of American banking mixes up ideas pertaining to the so-called 'backing of the currency' and losses of people holding bank notes.

These are two separate sets of facts which have to be looked at - and they pertain to entirely separate and different matters, although they are related. One item is the conducting (the action), ostensibly, of business and trade, and the other item is the means (money/currency IE the thing) via which trade (tangible sales) and business value exchange occurs.

The store of value feature of the currency in question is one thing, but the real physical sales and trade is completely a different thing!

What are these 'historians' trying to say? That the transcontinental telegraph never happened? That some of the most successful newspapers never were there at all? That iron bridges and intercontinental shipping never took place? That the railway never happened?

This is all simply ridiculous.

What happened was - all that happened was - that those people who didn't have a product or service to sell, failed, and those who had products and services that people didn't want to buy, failed. People who were not intelligent enough to handle the conditions of banking at the time, also failed.

People who were not intelligent enough to control the other side of their trade, failed.

You simply cannot make excuses about these things by sheeting all the blame home to the failure of a currency.

And in the same way today, ignorant people and those who permanently critique things, everything, all things, and are skeptics of everything, even of the proof they held in their hands yesterday and left on a shelf over night - believing it would fizzle into thin air suddenly while they were not looking - these individuals are making the same mistake about the recent vogue for 'all things crypto.'

For a currency to succeed for you, it is not necessary that it sit there in your top or bottom drawer for decades while you decide when you are going to convert that currency into the next physical set of actions and movements of value and hard things. It is only necessary for it to be liquid exactly at the point you require it to act as a medium  of exchange. People talk about intrinsic value or backing of money but there is no such a thing...

If you are using money tokens and a currency system as a holding pen for real things, products, or services, what you are doing is taking the risk that the 'security yard' that you have 'virtually' constructed for the real things is somehow immune from the same risks that a tangible, physical location has: flood, earthquake, fire, robbery.

Money is in fact always vulnerable.

And what people fail to understand is that the speed (instant liquidity) of transmission of nominal value of the real trade or sales, is entirely based on the strength of the two sides of the trade; not the money being used.

I can make the point by this example: if I want to sell a piece of real estate, and find a buyer, and then take some currency off that buyer, I am making myself financially vulnerable by thinking of the matter as just an asymmetrical affair - property sold for cash/the end. Wrong. That's only half the equation. The second half of the equation is - what do I want to do with the cash. If the answer is just hold onto it and wait awhile, then I am making my 'wealth' extremely vulnerable.

What I must do, is decide what I actually want to do, next; but if I think I 'want' to sit on currency then I MUST hold bonds because in the first place it is the only thing with a 'return of nominal capital guarantee.'

'Paper money' has no such guarantee; it only makes some pretense about you being able to exchange the thing for other things of the exact same nature, but not gold or silver or physical assets or physical capital.

The objection is always heard of course that say for instance, Bitcoin, will or might eventually 'collapse' - in other words, not function or be used any more as a currency at all.

This is preposterous nonsense. What 'might' happen is that the blockchain system doesn't function fully or efficiently - not that the 'Bitcoin' loses 'value.' It has no value! Except the last 'exchange' rate - same as any other currency!

No. Bad things will happen involving crypto-currency. Sure. And this is normal and happens with all currencies. And this only because silly people engage in silly behavior and do silly things all the time - not because 'the underlying value of' et cetera will disappear. There is no 'underlying' actual value in the first place; there is only the functioning idea of the blockchain system and the name or brand of 'crypto-currency' in question whatever it is. The usefulness of a crypto-currency crystallizes at the moment you contract a movement of a real good or service, for a sum in nominal 'price' or 'cost.' Because it is a creature of the digital and internet communications age, the only time a Bitcoin, for example, exists, is at the moment you contract and carry out a real physical transaction of some product, good, or service.

I mean 'critically exist,' not conceptually exist.

Bitcoins only exist in discrete packets of time, not continuously over all forward time itself to the final decay point or 'decline and withdrawal from use point' of 'Bitcoin' (and any alt crypto-currencies) and thus they are entirely unlike standard paper or bank money.