Bitcoin's Golden Future
bloomberg.com
bloomberg.com
Disconnect a country from the Internet (or filter the traffic) and you're forking the chain. Spend on both networks by buying other (unfiltered) crypto. There are states (even large ISPs) that can do that.
Also, the first thing to go in case of global conflict is the global Internet. Countries will try to damage opponent's internet links to gain strategic advantage.
Crypto currencies will be useless in this case, losing all of their value.
There's always the concern of a bug in the protocol, a solution to the hash function or plain old human stupidity that can crash the currency.
I guess my point is: be careful, this is still very much experimental, don't invest everything you have in them.
Pedantic nitpick - there are crytpocurrencies which are not distributed proof-of-work blockchains, and would not necessarily lose all of their value.
But, it wouldn't take too many parties having access to both networks to prevent the fork in the first place. The miners who control such things are very highly incentivized to keep their operation on the main or largest fork.
The alternative for the miners would be doing work on a fork that has the distinct risk of being worthless as soon as the network issues resolve.
There are very distinct risks. But ones that have "real world" parallels. Think bars of gold becoming less valuable than antibiotics now worth pennies. Or Marlboros. In the shit-hits-the-fan scenario, values of everything goes crazy not just cryptocurrencies. $1000 smartphones without electricity or networks become paperweights.
Not hard at all. Have a second uplink to the world wide net, e.g. via sat.
If an attacker is on both networks and trying to double-spend, it's extremely likely that someone honest is also on both networks who is successfully keeping the two networks fully synchronized. In this type of situation, you can make yourself safe just by waiting for 4-6 confirmations instead of the usual 0-2 confirmations.
Less so than in the past: https://blockstream.com/satellite/menu/
> I guess my point is: be careful, this is still very much experimental, don't invest everything you have in them.
Well, that much is obvious.
Furthermore unless I'm missing something these satellites broadcast the blockchain but don't relay new transactions. That means that if I'm stuck in some place without internet access I can use the satellite network to keep my copy of the blockchain up to date but I still can't make new transactions, effectively making it useless. I guess they could expand their services to allow for satellite transaction relay but that sounds very expensive.
Is this necessarily true? Forgive my ignorance but if we're talking Bitcoin, wouldn't the rest of the remaining miners around the world be able to account for this? And would the situation be meaningfully different in the country in question were China (or another of similar size/mining power)?
- If the region doesn't have a significant hash power (the case in most places in the world really) then the block rate will effectively go to zero, meaning that bitcoin will effectively "pause" here and be unusable until fresh blocks can be retrieved from the outside and new transactions broadcasted to the external miners.
- If the region has enough hash power to mine new blocks regularly the region will fork its chain. If it has more than 50% of the global hash rate this new chain will be the "real" one and will take over as soon as it's reunited with the rest of the network (invalidating the "outside" blockchain and all its transactions since the fork). If it has less than 50% hashrate then the opposite happens, as soon as the longer outside chain is received it'll invalidate the fork.
In both these situations bitcoin is effectively unusable in the minority fork since you know for a fact that the chain will be erased as soon as the network is reunited.
Here Adam Back said: "With a perpetual generator out back with a satellite dish, a Raspberry Pi by the generator, a local wi-fi hot spot, and the necessary software set up, you could be transacting globally with bitcoin."
Anyone can explain me why is the need for a local wifi hot spot here? And how much does it normally cost to setup a satellite dish?
Not to mention countries do have the ability to jam satellite signals. Here's the first article I find on google search: http://www.spiegel.de/international/world/silencing-unwanted...
Are countries exchanging actual loads of gold and/or cash around? If the answer is no, then isn't it all just data on a hard-drive?
In that case damaging internet links will have the same effect all around, though information can probably still go in/out in different ways with some effort. Is there some aspect of crypto currency that makes it different (honest question)?
Bitcoins however doesn't really have a intrinsic "rest" value. Anybody can (and many do) spawn a new blockchain out of thin air. Ironically Bitcoin is entirely about trust at the core. The trust that the other participants in the bitcoin economy won't lose faith in the currency and dump it. That trust is the only thing that gives the coin value.
That doesn't mean that failure is impossible but it smooths out a lot of minor fluctuations whereas, as you pointed out, if a Bitcoin competitor took off tomorrow there's no pressure not to adopt it instead other than the sunk costs which a small percentage of the general population has.
1 - Distribution (Metcalfe's law):
Metcalfe's law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2).
https://en.wikipedia.org/wiki/Metcalfe%27s_law
2- Schelling Point
Bitcoin is the natural Schelling point for those drawn to the advantages of cryptographic money.
https://en.wikipedia.org/wiki/Focal_point_(game_theory)
3 - Most battle-tested codebase. No cryptocurrency has been successfully operating for as long.
Ask how long either #1 or 2 would hold true if, say, a couple of large banks, Visa/Mastercard, Apple and/or Google, etc. launched a currency accessible to their existing customer bases. I'd give that a couple of days before Bitcoin would be a rounding error in the daily transaction volume.
The big long-term reason I expect that to happen is the deflation model baked into Bitcoin: every player which didn't acquire a substantial holding years ago has a huge incentive to find an alternative which doesn't mean they're putting effort into making someone else rich. Right now there's very little mainstream demand for Bitcoin but if that change it's hard to believe the finance people wouldn't be obsessed with ways to capture that revenue going to a third-party.
Again, my point is simply that there's little holding anyone who hasn't made a huge investment specifically in Bitcoin. If you have $10 equivalent sitting in an account and CitiCoin™ launches next week with attractive terms and mainstream merchant acceptance, are you going to think twice about bailing? Alternately, if law enforcement cracks down on the money laundering, etc. and prices drop, how many people will lose interest if it won't make them rich?
A key point here: of the comparatively few merchants who accept BTC, how many do their business primarily in Bitcoin and don't quickly convert to something else? That's the only group with a significant commitment to continued use; everyone else can switch on a whim.
That's the difference between a pure fiat currency like Bitcoin and something backed by a national government. Bitcoin has no inherent value beyond voluntary group consensus, which means that a panic, messy fork, or disinterest has no natural floor on how far it can fall. In contrast, USD are backed by one of the major world economies, hundreds of millions of people need them to pay taxes, and billions of dollars are paid to government employees, contracts, benefits, etc. Again, that's not immunity from problems but it's a huge inertial weight moderating swings.
It doesn't mean they would not be affected by internet going down. They would be hit hard. But they would not disapear.
> I guess my point is: be careful, this is still very much experimental, don't invest everything you have in them.
Also experimental: Central banking and fiat currency. The lifetime of these non-crypto backed coins isn't that great either. Also they tend to be devalued in times of war. Not sure I'd want to be holding onto paper money.
Yeah, a currency that strongly depends on a stable and free internet is much better in times of war. /s
Is there more mining capacity inside China than outside China?
If so, and the Chinese government used their well-known firewall against Bitcoin for a matter of days to weeks, would Chinese miners have the longer chain? And thus the chain?
I guess what I'm wondering is if the government of China has the ability to DOS Bitcoin as a payment system outside China at will.
Lets say China creates a partition in the bitcoin network between inside China and outside China. My understanding is that when they remove the partition, the longest blockchain "wins". If there is more mining power inside China than outside, that gives them the power to deny everyone outside China the ability to do transactions for the duration of the partition.
The network could be divided other ways, but I believe China is the only one who has the ability and incentive to do it. Although maybe you're right that the miners are connected enough to prevent it (I'm sure it would create chaos that would hurt them in the end). Although I don't know if the firewall is administered at the provincial level or the national level? I think it is much less likely for them to have national level connections since I believe the Chinese political system is controlled by ~100 people.
The chain will fork, and after Bitcoin + Bitcoin Cash and Ethereum Classic + Ethereum it's reasonable to assume both versions will co-exist to some degree.
It's like a USB stick but it stores inside a Bitcoin private key that's not revealed to the user unless they visibly break a part of the stick. This basically allows you to "load" bitcoins on the stick and give to others while being relatively certain of the "transaction" while of course being offline.
I assume it's probably possible in theory that with an electronic microscope or something similar a skilled engineer will be able to read that private key, but I haven't read of any reports that it has happened yet, but it all depends on the value contained to make it worth the effort and even then we won't know.
This basically allows off-chain & off-internet transacting which is really cool and enables the use in some more cases.
Personally I know that Bitcoin is not perfect, it has strengths and weaknesses but it's good enough for a lot of use-cases at the moment and it will keep getting better. There are quite a lot of talented engineers & cryptographers actively working on Bitcoin and cryptocurrencies that will move things forward quite a lot. Unlike Gold, Bitcoin can be upgraded to do more thing and evolve, be it Bitcoin or some other cryptocurrency, unless we live on an age of having govs ban a technology it will find its place on our daily lives.
Not that much. Most refugee camps have cell coverage and people there use btc as it's the only money they have access to.
And there's a satellite too now, so +1 resilience for Bitcoin!
Amazingly, not really. Bitcoin is a currency that's built to be disaster-proof, including world-ending scenarios like nuclear war between superpowers. You really just need 3 things:
1. A computer that can validate the chain.
2. The longest chain. This can be given to you via usb stick if the Internet is down.
3. Some way to send and receive blocks and transactions as the network continues building the longest chain.
A lot of work has gone into being able to achieve number 3 without full internet infrastructure. The example of a satellite beaming blocks to the world has already been brought up (though this is receive only, not send-capable for most people). However, people have also written software that can transmit blocks over HAM radio. You can't download the full blockchain over HAM relay, but you can relay blocks and transactions in real time, because the whole network is bottlenecked to about 2 MB per 10 minutes.
If you have wifi routers, you can set up point-to-point relay and broadcast systems as well. A point-to-point system can get well over 100 miles per hop. If the Interent were to suddenly fail, it may take a few weeks to connect everything together, but you could get Bitcoin up and running long before you could get anything like email working again.
> There are states (even large ISPs) that can do that.
While there are states that can split you from the main Internet, all you need is one relay that the state can't control to keep the Bitcoin network connected. It's not like a website where people have to keep asking a central server for data - once one person has relayed a block into an isolated network, the whole isolated network has that block. You can't keep the network isolated unless it's perfectly isolated, and on the scale of a country you are of course going to have people listening to the satellite broadcasts, setting up wifi relay points, or maybe even doing something less sophisticated like usb-smuggling which means it effectively takes a few days to be certain that a transaction has been confirmed by the broader network.
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TL;DR: Bitcoin is far more resilient than you give it credit, and it can survive the Internet going down. As long as you still have an ad-hoc way to transmit blocks to major areas, you can keep everyone fully in consensus. The infrastructure requirements of Bitcoin are far less than that of email, sms, or traditional website based, centralized infrastructure.
What's the verification mechanism if you're given two or three USB sticks all swearing they have the latest and greatest blockchain?
There is no such thing as an objective theory of value. ALL value is subjective (meaning each person values the same thing differently). The more you learn about what money is, the more you realize that there are qualities of money that make it valuable/appealing to be used AS money (e.g. fungibility, low to no inflation, difficult to counterfeit, scarce, easy to verify authenticity). This is why things like sand and hair make for poor money, and this is why the free market essentially chose gold as money before governments co-opted, confiscated, and controlled it. Gold would most likely be the primary money today if people had been free to transact using gold as money [0].
Governments stopped the use of gold as money because they can use fiat currencies to fund the operation of the government (by increasing the supply of fiat and buying their own debt with it), reducing the purchasing power of their own currency and acting as a tax on savers. Bitcoin is a serious threat to that because unlike gold, it is orders of magnitude more difficult for governments to confiscate and control.
[0] https://en.m.wikipedia.org/wiki/Liberty_dollar_(private_curr...
EDIT: Spelling
> What, though, is the value of a digital currency?
> It's a fair question, but one that could equally be leveled at gold. Since Richard Nixon ended the fixed $35 an ounce convertibility of gold in 1971, its value has risen at times (the 1970s, the 2000s) and fallen at others. The best argument to justify investing in gold these days is not that it's an eternal "store of value" but that its very weirdness makes it special: According to modern portfolio theory, you should buy the shiny stuff not for its superior investment returns, but because it doesn't correlate much to other asset classes such as stocks, bonds and commodities.
One can argue about the validity of the "gold is equally worthless" argument, but I was just impressed that the article didn't shy away from these hard questions.
But I'm tired of the BS line that "gold has no value" continues to be repeated as nauseam. If people value it, then it has value. If people don't, then it doesn't. End of story. Things don't have value because some Minister of Value makes a proclamation about what has value and what doesn't (USSR tried that, didn't work!)
All of your cases are about subjective value. Take out the buyer with personal interests on the other side of the transaction and see if it has any value.
A good test is to take what you think has value and move 10000 years into the future or the past and consider if everyone you encounter will value it. Do you think it will have value? If not, then no, it doesn't have any 'objective' value.
No it doesn't, but SEC has the power to allow the stock to get traded in the first place. So the value is subject to SEC's presence. If there is no SEC, there is no 'stock' for you to get dividends from.
> BMW costs more than honda because it is objectively a better car. By objectively identifiable metrics.
You discount the people do don't give care about the objective metrics. There's a lot of personal preference involved when one chooses a car to buy (apart from buying power).
>But in the US people are moving from cold climates to warmer climates, on average
Last time I checked, US has of 4% of the world's population. I'd wager more than 4% of the world would love to move to a colder climate.
>So, no, you are completely wrong.
I don't think any of the facts I've stated are. If you're talking about my opinion that there is only subjective value, well, that's subjective too :)
The only reason people pay more for a BMW than a Honda is because they perceive they're getting more value with a BMW than with a Honda. There is no such thing as an "objectively better driving experience" -- all value is derived from perception, and perception is individual.
Value is subjective, each person values the same objective metrics differently (e.g. soccer moms generally don't value sports cars as much as single guys, if they did then we'd see a bunch of soccer moms driving their kids around in sports).
Take Amazon as an example, in 2016 its net income was $2.4 billion, yet it currently trades at a total market capitalization (the value of all outstanding shares) of $471 billion (or approximately 196x its net income) [0]
Compare that to Ford Motor Company, in 2016 its net income was $4.6 billion, yet it currently trades at a total market capitalization of $45 billion (or approximately 10x its net income) [1]
So Ford was actually MORE profitable than Amazon in 2017, but it's market capitalization is only 10% of Amazon.
So what's driving the differences? People's perception of value. People perceive that Amazon will be more profitable than Ford Motor Company in the future, even though objectively Ford is more profitable than Amazon right now.
[0] Amazon Financials - https://finance.google.com/finance?q=NASDAQ%3AAMZN&fstype=ii...
[1] Ford Financials - https://finance.google.com/finance?q=NYSE%3AF&fstype=ii&ei=z...
Maybe, maybe not, it's subjective, only individuals can decide for themselves.
I'm not saying that the objective features are IRRELEVANT to a consumer's purchase decision, obviously they're not, but ultimately each person values what they're buying differently than the next person.
I'll run with your coffee example:
Let's say someone currently values a cup of Starbucks at $6 / cup and Starbucks is selling it for $4 / cup. If Starbucks raises their prices above $6 / cup (to $20 like you say), that person would no longer purchase Starbucks coffee unless their values change. But there's a good chance that SOME people (a small minority no doubt, but probably not zero people) currently value Starbucks at more than $20 / cup, those people would continue to buy coffee from Starbucks unless their values change.
As prices for Starbucks coffee increase and exceed the amount that individuals value it, those people will begin to explore alternatives on the market to determine if there is another comparable good that meets their needs at a price less than they value it.
that is true, but irrelevant. On average, overall value is highly correlated to objective metrics. so, this is why this conversation started. Price, including price of bitcoin, is not simply some subjective thing - it must be tied to some objective indicators. For example, price of coffee at Starbucks cannot be too far above what it costs to make coffee at home. It will be higher, since you are paying for convenience. But there is only so much that makes sense to pay for convenience and people won't pay more than that.
"There is such a thing as objective value. Stocks have objective value because they pay dividends. Real estate in warm climates has objective value because it's pleasant to be in a warm place in winter. BMW costs more than a honda civic because it is objectively a better driving experience."
You were claiming that value is determined by the objective features/metrics, now you're saying that "overall value is highly correlated to objective metrics" -- which one is it?
First you say it's objective, now you're saying it's just highly correlated? Those aren't the same things -- if objective metrics were all that mattered, value would be 100% tied to the objective metrics/features, but it's not.
If objective metrics were all that mattered, you could ALWAYS create something bigger, faster, or stronger and have it sell for more than the next best item on the market -- but that's not how it works. There are NUMEROUS example of products which were "objectively" better but failed because people did not perceive their value to be high enough worth purchasing.
it's both. You observe this high correlation, because objective metrics determine value. They do not account for 100% of it 100% of the time, only on average.
I keep using the term "on average", I think you keep missing its significance.
Nonsense. Nothing stops China from seizing all of the largest bitcoin mining operations tomorrow, and building some additional miners to conduct a 51% attack. They would then effectively control the network. Bitcoin is actually easier to control than fiat currency or gold because it requires network access.
You'll have to give us some sources for that I'm afraid, it's not at all obvious from my point of view.
Should China merely shutdown the miners the disruption shouldn't be too massive and only temporary while the difficulty adjusts to the new hash rate. But if they actually decide to use the miners "offensively" they could make a 51% attack and double spend bitcoins. Such an attack would greatly reduce confidence in bitcoin and would probably tank its value pretty hard. That sounds pretty harmful to me.
Bitcoin Q&A: Could governments take over exchanges?
https://www.youtube.com/watch?v=9PrJQeKl9w4
Bitcoin Q&A: Will governments ban cryptocurrencies?
Dollars are "guaranteed" to have value because they are "legal tender," ie you can pay your taxes and buy things with them. As long as the US government has power, that will continue to be the case.
I can definitely see btc being a viable currency in situations where a government's power is limited but, for stable countries, it seems more like a commodity, and that's definitely (at least it seems to me) how people are treating it.
Dollars (and all fiat for that matter) have value because once upon a time paper money was tied to a specific weight of gold / silver stored in a bank vault. Over the past 100-ish years that link was slowly eroded until the point where there was no backing whatsoever. Inertia is the only thing keeping fiat currencies going, and it's not going to last forever now that alternatives (like cryptocurrency) exist and governments can't shut them down (like they did with the Liberty Dollar [1]).
After a couple more financial crises in the West and bank bailouts I suspect ALL governments will have limited power in this domain, people aren't going to let their savings be inflated into oblivion for the rest of eternity.
[0] https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe
[1] https://en.wikipedia.org/wiki/Liberty_dollar_(private_curren...
If you don't pay your taxes, you will be jailed. How do you pay your taxes? Well that's up the government, and they went with dollars.
I don't agree with your explanation of why dollars have value. You seem to have a bone to pick with every fiat currency, which I think is very silly.
I go to shop and pay $0.5 for 2kg of potatoes (or a bottle of beer), and pay $4.3 fee, and wait 1 hour for confirmations?
For better or worse, Bitcoin has evolved into a financial-scale product, no longer something one would use to buy $0.50 of potatoes.
(P.S. $0.50 for 2kg of potatoes or a bottle of beer? both of those are a great deal)
So far I've heard about IOTA and Lightning Network.
In Europe bank transfers are free. I often send $1 or $2 to roommate bank account for something from refrigerator. Also in shop I pay $2 with VISA card.
Well, before "evolving" so elegantly it was pitched as a replacement to credit/debit card systems (which would charge a whole lot less for a basic $10 transaction), and prior to that as a final answer to micropayments on the Web (I am guessing charging $0.001 to read an article is off the books now). And somewhere along the evolvement it was supposed to be a payment mechanism for calling other people's APIs and various Web services.
What's the next step in this evolution chain? Service for realtors where the transaction fee is 6% of the value of one's house?
Who wants to wait _any_ number of blocks for a payment to clear, anyways? Blockchains provide a trust anchor that serves well as a settlement system, but they aren't intrinsically payment networks in and of themselves — the ideal experience is of course an _instant_ payment, and waiting for confirmations just doesn't cut it.
This is why so much effort is going into building payment rapid networks on _top_ of Bitcoin, using "rapidly-adjusted micropayment channels" [0] and routing protocols to build things like Lightning [1].
And you're pumping IOTA in this same post? Unbelievable, these days.
Current fee experience of Bitcoin: https://twitter.com/alansilbert/status/905106387260370945 Historical fees: https://bitcoinfees.21.co/
[0]: https://en.bitcoin.it/wiki/Contract#Example_7:_Rapidly-adjus... [1]: https://medium.com/lightning-resources
Why is this meme constantly getting repeated? As I said yesterday (https://news.ycombinator.com/item?id=15176214), paying 10+ satoshis per kB gets your transaction in the next block most of the time. It's still true as of today https://jochen-hoenicke.de/queue/#8h.
But thanks, if real fees are smaller i need to try it.
probably a combination of bad fee estimation (which will be be fixed in 0.15), a general skew towards high fees (the median is $2), and a general acclimation to high fees due to blockchain spam in the last few months.
People seem to get caught up on the word "value" and then rush to defend Bitcoin's use cases and unique technology as making it valuable. I don't think it's a diss when people say Bitcoin has no fundamental value. A thing having use cases or unique properties is not what "value" means in an exchange market sense. "Fundamental value" is also known as "intrinsic value" and is based on the BUILT IN return potential of an asset. So stocks and bonds have an intrinsic value because they generate a return, based on dividends or interests rates they pay.
A thing is only worth what someone will give you for it. So EVERY value needs to be in terms of something else.
An ounce of Gold, 1 bitcoin, 1 US dollar, have NO intrinsic value because you can hold them forever and they will never pay you a dividend or make a coupon payment on their own. Gold has a few practical uses in jewelry and industry but that's not why it's important. Bitcoin and the dollar have ZERO "value" beyond being a place to store something else's value. Well back in the day a dollar in the bank might earn you a small interest rate but hello 21st century. Bitcoin doesn't even offer an interest rate. Gold is not a good long term investment. But Gold is good to have in case of emergency. I imagine bitcoin will be similar. Bitcoin and gold COST you money to own them. The people who make money off gold are the miners and then forever after the banks and security companies who store physical gold for you at great expense. Bitcoin should be similar in this sense as Bitcoin can create a spread income over the energy costs and the transaction fees it generates every 10 minutes.
My guess is since 90% of the bitcoins that will ever be mined will be mined within the next 2-3 years. And there will be lost coins. So maybe 15 million coins will be around long term and that number will slowly shrink. The fees will start to be more important.
I don't think Bitcoin is a Ponzi scheme. Bitcoin has a ton of great uses and tech features. And most importantly it has signaling properties. While Bitcoin is unlikely to be the main digital currency people on a daily basis as the 1 MB limit does appear to cause issues. It would be very bad for all digital currencies if bitcoin went away.
The advice that the usurper needs to be 10x better to win is applicable here, imo. It might even be 100x given the bigger stakes and greater risk aversion of the parties.
So perhaps one day a new coin will overtake Bitcoin, but my guess is that the coin will need a very distinct advanatge to gain traction.
I wonder what will drive adoption from the general public. And I wonder whether AGFAM will play any role in it.
Is there anything that fixes the wasteful mining process? To me that seems like a serious flaw in Bitcoin.
But a quick search sent me to https://iota.org, and oh my gosh, that website is impossible to use. Uninterruptable animations and completely broken scrolling. Oh well.
EDIT to add: suddenly I'm reminded of "For the love of God, please tell me what your company does" from the other day (https://news.ycombinator.com/item?id=15170182). Probably the incomprehensible website means Iota is aimed at big businesses, not individuals.
If a competitor is able to fix some of Bitcoin's serious problems, it deserves to win. Though I can understand if you're worried about competitors that lack some of Bitcoin's key properties.
The deflationary aspect of Bitcoin will probably get in the way at some point - hypothetically, if you owned BTC and USD today, why would you ever spend a BTC? Spending even costs you money (in transaction fees), while saving doesn't. It's the system that rewards hoarding.
It's got one of the most exciting whitepapers I've read. Also has a great Board of Directors and some really great advisers behind it.
That argument never made any sense to me. What's the fundamental value of $1?
People assign value to all things based on how desirable they are (the demand). There are rare exceptions, like when a government ties their national currency to something like the dollar, but that immediately creates a black market, where it trades for its real value, and because of that, the government exchange only works one way (to buy or to sell). See Bolivar as a current example.
And then Bitcoin is accepted in tens (maybe hundreds) of thousands of online stores.
Also only something like 10% of gold is used industrially, the rest is regular hoarding.
And Bitcoin has other uses as well.
But even if you ignore all that, you still can't answer what the fundamental value of 1kg of gold is - it's value is determined by the supply/demand, and has a lower limit, which is it's mining cost, which also changes all the time due to depletion, fuel costs, technological advanvements, land costs, etc.
The fundamental value of cryptocurrencies is a shared agreement of value amongst investors.
I imagine some snotty 14-year old would argue that there is no fundamental distinction between the two but that's not being economically serious.
If people stopped believing in America, the dollar would go. How little would have to fail for Bitcoin to have the same problem. I've heard that if the person who owns the large stake in Bitcoin were to transact even one of their coins, all hell would break loose. That doesn't spell stability to me. Neither does "forking" the currency.
Interesting, considering that the purchasing power of the dollar has been long in decline. It holds its place against other currencies, but with dollars you can't buy as much stuff/assets today as you could yesterday.
It's quite clear to me which one is a more moral system.
Again, based on your own definitions.
It's quite clear to me which one is a more moral system.
It's not really clear to me how this word salad you've thrown out is supposed to be an actual argument.
The fundamental value of a national currency is not violence. It is civil society.
I think that the same argument could be held for digital currencies, they were created for a similar purpose and then would also have fundamental value. The value that digital currencies has is far more tenuous than fiat currencies or gold.
But don't get me started on the value of gold. Gold has the same issues as fiat, it's just more likely to be stable after the complete breakdown of society.
That's the difference.
Huge difference /s
Double_a_92 is pointing out a distinction -- USD is pure legal tender, that is mandated by the US government to be accepted for payments of debts. Bitcoin is not.
exactly.
I can wipe my butt with a dollar bill. I can use that dollar bill to snort a line of cocaine. I can make a paper football out of it. I can use it to help roll a joint. I can fold it into a small coin purse to hold change and keep it from rattling in my pocket.
The dollar bill, being a physical object, has some utility, and thus some value.
Can you do any of those things mentioned above with a Bitcoin?
You can settle $1 of government debt with $1.
If someone owes you $1, you can offer to take other amounts of other goods or currency, but you are required to take cash dollars.