Comment by keithwhor | Hacker News Reader

Comment by keithwhor | Hacker News Reader

I'm just going to drop this in here, this is a quote from Patrick McKenzie during a live chat on Product Hunt [1] that John Collison tweeted out back in April [2]. It's an answer to: "What is one thing you believe that others disagree with you on?"

It's a pretty cynical view, but worth digesting.

> The fundamental innovation in Bitcoin the social dynamics of the gold rush phase, which distribute cryptocurrency tokens widely for almost free. This creates a self-organized distributed boiler room to market Bitcoin. Bitcoin needs nothing else to get as big as it has; this is convenient because it has nothing else. Bitcoin has no utility as a means of transaction or a store of value. The blockchain is the world's worst database. The long line of very smart people on the other side of this bet have been scammed, are scamming, or both. Bitcoin will, accordingly, go to zero with the inevitability of gravity.

[1] https://cards.producthunt.com/cards/comments/452743?v=1

[2] https://twitter.com/collision/status/850454173384454144

This has been the dominant view of HN since the beginning. The only reason I didn't buy bitcoin at $1 was because of what I read on HN. Now it's at $4,000.

Not saying you should go out and buy bitcoin now, but logic often doesn't predict human actions.

Keynes: "Markets can remain irrational longer than you can remain solvent."

This ^^^.

But the bubble always bursts, and someone always gets stuck eating the soggy biscuit.

I highly doubt this is logic.

.. or that view of reality is missing important pieces of the puzzle. the idea this is "emergent" is laughable.

Well if you really believed it was a flawed technology but "fit for speculation" then you could have rationally bought in early just on that basis alone.

It's clear that many people buy a little Bitcoin and then become loud advocates for the currency; repeating the facts they like, ignoring the facts they don't; which has helped to power the increase in valuation so far, but has to run out of steam at some point (perhaps far, far into the future).

The underlying technology has interesting potential but I think we'll see it evolve through several generations before broad consumer utility (either direct, or through platforms) is realized.

That's the problem, HN's hivemind was saying it wasn't fit for speculation, and since I didn't know anything about it, I didn't even consider it.

Bitcoin has no value, but neither has fiat money. So if using it has benefits over fiat money, it will become the preferred medium of exchange.

I can see a lot of benefits, such as a global currency (no need to exchange money when going abroad), no (hyper)inflation (especially helpful in unstable countries), wire transfer immediately (not needing to transfer money during bank business hours), pay with your mobile phone (you have it already, and in the future you don't need a wallet), no government interference (illegal activity).

Hard to predict if Bitcoin will prevail or not, but it's hard to deny that it doesn't have potential.

Bitcoin, like any money, is valuable only insofar as someone else will accept it for stuff you want.

Bitcoin has been becoming more and more valuable. And it is deflationary.

Patrick McKenzie needs to address THAT.

He conveniently ignores the magnitude of people that have gotten people that have gotten screwed by the financial system, cheering on how great capitalism is because he is a winner in it. People continue ignoring the trends. Wealth inequality is massive, those not in the upper crusts of American Society have seen their status of living deteriorate, and people are still surprised that they are seeking alternatives to the current financial system?

It has utility in that it allows transactions to take place that wouldn't be allowed in the same form with other payment methods

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