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Comment by nosuchthing | Hacker News Reader

It doesn't. Especially considering all the other cryptocoin networks which facilitate the same service the bitcoin network does.

The very limited number of exchanges essentially have an oligopoly, and as price climbs slowly the fall in price and 'runs on the banks' can happen extremely rapidly as the exchanges have no obligation to buy your coins for anything other then 'market rate' which assumes there's a buyer.

Oh, and market demand is largely driven by bots and speculators - not the actual functionality of the BTC network.

https://www.theguardian.com/technology/2014/may/29/bitcoin-b...

http://parasec.net/transmission/order-book-visualisation/

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BTC is a store of value. How does the functionality of gold figure into its value?

And yet you are ignorant of a decade long gold bubble and insist these things don't happen.

BTC doesn't store value.

What value is it?

Why is it good that bitcoin is so inefficient?

What are the alternatives and is it possible to improve any of the failures of bitcoin?

Are you speaking with a bias because you have invested in bitcoin and you want to cash out some day?

The Bitcoin network stores numbers in a distributed database. Why is that valuable?

Take a look at http://coinmarketcap.com/

What makes BTC rare or valuable?

Either you can keep on asking those questions or you can buy it. The value of BTC is what the world makes it to be.

Sort of like Beanie Babies

Is there an incentive to buy it though, beyond pure speculation? Maybe as a buy and hold investment I suppose?

At the moment it has very limited use as a practical currency - I can't buy my groceries with Bitcoin, I can't put fuel in my car with Bitcoin, I can't pay my rent or bills with it, and I can't use it at my local pub or any pub for that matter.

Bitcoin is capable of storing value because its features allow value to be exchanged. Of course that doesn't endow it with value. But we endow it with value because we inherently value a decentralized method for the exchange of value. Bitcoin's existence bootstraps its value.

>Why is it good that bitcoin is so inefficient?

It helps increase the confidence in bitcoin. We value the energy used to create bitcoins so that helps us recognize the value of the coins. It's no different than rare stones being valuable because of the work expended to find them.

Bitcoins are not valuable because it requires extreme amounts of electricity to sustain each transaction. Most people are unaware of that detail.

   at the time of Malmo's piece, he calculated that a single 
  bitcoin transaction requires as much electricity as the 
  daily consumption of 1.6 American households, and that 
  number has increased since then. "Adopting Bitcoin as a 
  major currency anytime in the next few decades," he wrote, 
  "would just exacerbate anthropogenic climate change by 
  needlessly increasing electricity consumption until it's 
  too late."

Other distributed ledger networks have designs which offer the same service to users, and in many cases are vastly more efficient in terms of electrical usage and actual speed of transactions.

Kidney stones are rare and require lots of work expended to find them. Don't confuse those precursors with establishing value.

https://motherboard.vice.com/en_us/article/aek3za/bitcoin-co...

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