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Comment by wintom | Hacker News Reader

“Rosenstreich at online trading firm Swissquote said bitcoin’s surge harks to the surprises of the U.K. referendum on European Union membership and President Trump’s election.

“We have underestimated the populist movements,” he said. “There is growing unease on how central banks and governments are managing fiat currencies. Ordinary people globally understand why a decentralized asset is the ultimate safe haven.””

That’s the reason for 10k and it will be the reason for 100k. 100k puts the market at cap at a trillion, it’s not that crazy if you remember that Gold is several times that and other than looking good as jewelry it has no other real intrinsic value. No one likes to talk about that though, they like to demonize bitcoin which actually does something gold could never do. Force trust in a world where you can’t trust anything.

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>No one likes to talk about that though, they like to demonize bitcoin which actually does something gold could never do.

Just playing devils advocate, but you can't replicate/duplicate gold. On the other hand I could create 21M cryptocoins on a blockchain (calling them Bitcoin2 or even just Bitcoin if it pleases). I can make them function identically, similarly or more efficiently than Bitcoin. I can create a new blockchain (network) or put these coins on an existing blockchain (say the Ethereum blockchain). How much would you pay for all 21M Bitcoin? How much would you pay me to create you 21M Bitcoin2 and transfer 100% of them to you?

You say Bitcoin is $10k because ordinary people understand why a decentralized asset is the ultimate safe haven. If that is your premises it makes little sense to compare Bitcoin to gold, compare Bitcoin to other currencies. Why does Litecoin = $100 and Ether = $500? Bitcoin may do something gold could never do, obviously, but can it do anything any other cryptocoin/token can't?

The real irony is cryptocoins and blockchains couldn't even exist without gold, because it is a necessary component in the machines that created bitcoin, that hosts blockchain nodes, mines, hosts wallets and facilitates transactions.

>On the other hand I could create 21M cryptocoins on a blockchain (calling them Bitcoin2 or even just Bitcoin if it pleases). I can make them function identically, similarly or more efficiently than Bitcoin. I can create a new blockchain (network) or put these coins on an existing blockchain (say the Ethereum blockchain). How much would you pay for all 21M Bitcoin? How much would you pay me to create you 21M Bitcoin2 and transfer 100% of them to you?

Econ 101: The price of a currency is based on people's trust in that currency.

>The real irony is cryptocoins and blockchains couldn't even exist without gold, because it is a necessary component in the machines that created bitcoin, that hosts blockchain nodes, mines, hosts wallets and facilitates transactions.

That's not irony. Thats a happy coincidence.

"Econ 101: The price of a currency is based on people's trust in that currency."

Right, but how many people really trust Bitcoin? And by trust, I mean trust that it will retain its value for the foreseeable future.

I have trust that the Euro will retain its value, so I feel confident pricing my product and services using it. On the other hand you'd be crazy to price anything in Bitcoin.

No one has trust in Bitcoin as a currency. Some people have some degree of trust in it as an investment vehicle, which is fine. That doesn't make Bitcoin a currency any more than gold is.

I wouldn't say no one. There are a number of companies that trust Bitcoin enough to use it in trade for their goods and services. For example, ProtonMail (a secure private e-mail provider) trusts Bitcoin enough to accept it in trade for its services.

So, the same thing that gives the Euro and Gold value (that people will take it trade for goods and services) is one of the components accounting for Bitcoin's valuation. The majority of Bitcoin's value at this point is likely speculation. However some percentage of the value is not derived from currency arbitrage or speculation.

Even if Bitcoin trade participating merchants do not trust the market valuation of Bitcoin enough to be willing to hold Bitcoin for very long after they accept it as part of a transaction (and therefor immediately convert it to USDs) it is still valued by the participating merchant in line with the trade. The same could be said for the value of the electronic ledger recordings created by credit cards. They are generally viewed to have around equivalent value to USDs. But, they are not a currency either.

> I have trust that the Euro will retain its value

You must feel very betrayed every year when you look at the inflation rate and the price increases...

The euro zone had around 1.5% inflation this year, what are you talking about?

How is that retaining it's value? That's nearly 10% gone after 7 years.

And that's assuming 1.5%, some years are worse.

> On the other hand you'd be crazy to price anything in Bitcoin.

Why? It was easy to add Cryptocurrency as a purchasing option for the online store for my shed business. My buildings are priced in dollars, but people can use crypto to pay and the crypto value is pegged at the current rate of trade on an exchange.

Bonus: I can use the crypto to go buy materials - never have to convert it to dollars.

If they're priced in dollars and converted into Market price Bitcoin at the checkout... then they're obviously not priced in Bitcoin.

For international sales we accept euro/yuan/pounds/etc but instantly convert it to dollars. I would say that we are pricing in those currencies.

But from what I understand, I still owe you $10, even if I pay you in pounds or euros.

>Econ 101: The price of a currency is based on people's trust in that currency.

That is the beauty of blockchain right? Its trustless! I'll create 21M of Bitcoin2 on the Ethereum blockchain and send you the smart contract address you can verify on etherscan and boom there is no trust needed.

Edit: As to Irony, OP could have used anything to justify the value of Bitcoin, it is ironic he would select Gold and say it has no intrinsic value other than looking good as jewelry, when it is a intrinsic component to the Bitcoin ecosystem. Notwithstanding, I don't think its a coincidence OP compared Bitcoins value to gold.

The OP meant "trust that it will continue to hold value", not (merely) "trust that transactions happen as intended". The blockchain crypto-magic only ensures the latter.

Right, it's not irony. All things couldn't exist without elements, like gold. Truisms aren't ironic.

You can do the same thing with Facebook or Twitter, but the value is not in the code or functionality, it really is in the network of people using it.

Why can't you replicate gold? What is gold? It's some elementary particles (like quarks) arranged in a certain way that we all agree are valuable. We could easily agree that some other arrangement is valuable (such as Aluminum).

Here's an interesting presentation by the Winklevoss twins that steps through the elements and narrows down which could be used as currency and why:

https://www.slideshare.net/winklevosscap/money-is-broken-its... (Slides 7-17)

good point...also what happens if we start digging on Mars, or some other planet and find 1000 tons of gold?

187,200 tonnes of gold has already been mined. So another 1000 is going to be a blip. At 1M it could become interesting though :)

https://www.gold.org/about-gold/gold-supply/gold-mining/how-...

I am certain that asteroid mining will happen sooner and be far more profitable.

For all intents and purposes finding a large deposit of gold is the same as duplicating bitcoin. Except the former can happen easily and the latter requires some immense investments to achieve.

You say 21M "cryptocoins" but you couldn't, however, create 21M BTC arbitrarily.

As long as that number stays the same (it isn't completely immutable) then BTC has real scarcity - making it a store of value, like gold. Throw in some additional properties that BTC has that gold does not, and an argument can be made that BTC is at least a decent value store.

Even at $100,000/BTC, Bitcoin would still have a ~1/5th of the market cap of all gold mined.

And in a truly universal sense - gold is made by stars. There are 100 billion stars. There's only one Satoshi in the known universe ;)

But there have been multiple bitcoin forks— bitcoin cash essentially doubled the amount of bitcoins in circulation.

Good luck buying some BCH and spending them as BTC.

Bitcoin Cash is BCH. Bitcoin is BTC. There will only be 21M BTC. As far as I know, there will also be 21M BCH. But BCH != BTC.

Only if people use it.

What exactly is a BTC? BTC is man made, and depends upon computers and software. And the people who control the software can change their minds, if they so choose. So what a BTC is now, may not be what it is later, including its scarcity. See also the ETH and BTC forks.

Gold on the other hand exists naturally in nature, and doesn't change based upon someone else's whim.

So no, BTC is not like gold.

BTC is what the distributed consensus says BTC is. You can’t fake that without pouring billions into building up mining infrastructure to organize a 51% attack and even then the distributed consensus will simply fork around your amazing achievement of successfully doing a single double spend?

So yeah, BTC is definitely not like gold, it’s way better.

Well, you can't double spend gold. You either have it or your don't. And until the matter replicators come into existence, nobody can fork gold.

As to your argument for the 51%, say, Visa comes out with a fork called VisaCoin(TM) that allows one to use a visa card to make transactions directly from VisaCoin (which is a BTC fork).

So that was two to ten people, maybe and what an ad slogan?

And here's the ad slogan: "When you go to the Fog City Diner in San Francisco, take your visa card, because they don't take BTC!"

How is BTC better than gold? What can I do with a bitcoin? It's just data. It's still a fiat currency. Gold is specifically not a fiat currency because it has real world applications. I will agree cryptocurrencies are better than other forms of fiat currency in that there is a definitive quantity, similar to a non-fiat currency, but it's intrinsic value is in the trust others will accept it in exchange for something that has real value.

Suppose a solar flare destroyed all existing digital equipment. What would a physical printout of a wallet be worth?

Bitcoin is better than gold because in virtually all aspects

- it’s scarce by design, not by our belief in inability to find more of it on this planet or some asteroid

- it’s mobile, transporting gold is pain in the ass

- it’s secure, securing a little piece of paper is easier than deposit of gold

- it’s divisible, sividing gold into nanograms is not practical

- it has transaction platform built in

As for practical application of gold - it’s not where gold’s value is derived from.

And what if an asteroid hits the earth and we are all dead?

This kind of gets into some philosophical points, so I'll take them 1 by 1.

> it’s scarce by design, not by our belief in inability to find more of it on this planet or some asteroid

Scarcity is ironically one of the reasons gold is treasured. It's a natural scarcity not a man made scarcity.

> it’s mobile, transporting gold is pain in the ass.

Most gold exchanges don't require you to physically take gold home with you. It's stored in a vault and traded like any other security.

> it’s secure, securing a little piece of paper is easier than deposit of gold

BTC is not a piece of paper, and requires that only one person not be smart enough to break the BTC encryption model.

Gold can be stolen, but not all of it at once. But apparently BTC can be stolen too.

> it’s divisible, dividing gold into nanograms is not practical

Today's cost of gold to grams is $40.17. Practically speaking, we don't need nanograms to get to penny scale. A centigram of gold is good enough.

> it has a transaction model built in.

I hand you an ounce of gold. You give me $1000 dollars or something else in value that I want. That transaction method has been trusted for eons now.

> Suppose a solar flare destroyed all existing digital equipment.

Suppose someone invents a way to turn lead into gold?

One of these things is not like the other!

In their absurdity they are. Oh, and in the way that the two events would wipe out the function of a store of value for bitcoin and gold, respectively.

how exactly does this happen. This has to involve protocol change or is there something in bitcoin protocol that forks around a chain when a double spend is detected. And how exactly is a double spend detected ?

Diuble spend is detected when a longer chain is published to contest the currently accepted chain with orphan depth of more than 5-6. This is huge deal and will decimate butcoin valuation for sure, but just as with acceptance of segwit and hardforks around protocol bugs in the past - there can be agreement made to deploy a version of bitcoin software to hardcode which chain is valid.

Not saying this is easy but when the project is attacked like that, there will be some action.

By "distributed consensus" you mean couple chinese guys who own all bitcoin mining?

Bitcoin mining is fairly diversified, with new players about to enter hardware business.

If we decide to say that iron is gold as well then we have created more gold on our whim.

Bitcoin is defined as having only 21 Million tokens in supply. Until the majority of people change their belief in that it will have that many.

The idea of what BTC is controlled by a dev core of several thousand developers.

The idea of what Gold is is controlled by 6 billion people.

the decentralization of btc (# of miners and holders) is hard to beat...

"Ordinary people globally understand why a decentralized asset is the ultimate safe haven."

Ordinary people have never heard of bitcoin. I have relatives working in finance who don't understand bitcoin.

At this point the arguments for or against the idea of cryptocurrency are pretty irrelevant. Bitfinex has injected millions of dollars of fake money into the ecosystem, users are reporting an ability to withdraw money from it on Reddit, and their Twitter account's last message was reports of a DDoS two days ago with no updates.

https://twitter.com/bitfinex https://www.reddit.com/r/bitfinex/comments/7fx9z9/bitfinex_w...

Perhaps Bitcoin will recover from this fraud or another cryptocurrency will take the lead in the space, but we are headed for a crash.

"Bitfinex has injected millions of dollars of fake money into the ecosystem"

please, explain what money is "fake" and what "injected" and "ecosystem" mean.

Bitfinex controls Tether, a single source cryptocurrency supposedly backed by and pegged to the US dollar. The market cap of Tether has risen $188 million dollars to $678 million in one month:

https://coinmarketcap.com/currencies/tether/

If Tether is what they say it is, this can only come from investments of US dollars. Ie nearly $400 million dollars of investment in one month.

On November 21 Tether announced a hack in which they lost $30 million.

Bitfinex is extremely likely to be insolvent at this point. Users are complaining of an inability to withdraw funds on Reddit, and Bitfinex's Twitter has a days old announcement of a supposed DDoS attack, with no updates:

https://twitter.com/bitfinex

https://www.reddit.com/r/bitfinex/comments/7g8cp3/eth_withdr...

Tether has been traded on other exchanges for other cryptos, meaning that these other cryptos have been inflated by purchases with fake money.

This is a good outline of the scenario I think is about to play out:

https://prestonbyrne.com/2017/11/26/the-bear-case-for-crypto...

Bitfinex'ed is an anonymous Twitter and Medium account that is explaining the Tether fraud much better than I can:

https://twitter.com/Bitfinexed

Tether announced a hack in which they lost 30 million USDT, not USD. As they don't plan to redeem those USDT to USD, in no sense Tether lost 30 million USD. As far as I can tell, Tether lost nothing.

Do you still think the Tether is still held by the thieves? They traded it for other cryptocurrencies, out of Bitfinex, the second they stole it.

That is, of course, if it actually was a theft, and it was actually for $30 million. It's a single source currency, no one but the people running Tether knows what's actually behind it.

the topic is - bitcoin (Bitcoin hits $10,000). how is tether related to bitcoin? there are hundreds of coins of various credibility.

I'm not clear on the the details, but if you wanted to look in to it a lot stems from their "Tether" crypto currency which is supposedly backed by real US Dollars, but many suspect that they created new unbacked "tethers" to buy and bid-up BTC.

In a sense people are worried that they're literally making up money on the promise they have US Dollars so they can buy up BTC and sell it to maybe regain the missing USD? Unclear.

Need to remember that this is the same place, I believe, that was "hacked" and they spread the losses across all their customers if their costs were actually lost or not. Details have been hard to come by which is where the suspicion seems to have really started.

While bitcoin stores value in fiat, eventually that may not be the case and bitcoin will just be worth bitcoin. I know that day is likely very far off but if enough economies collapse, price stabilized and people adopt bitcoin as a currency, we may stop caring what a bitcoin is worth in USD, Yen, AUD, what have you.

I'm not convinced this is true anymore. My only information source is anecdotal, but I've been amazed at how many non technical people I've talked to lately that know about Bitcoin. Many are even buying little bits on coinbase. Their knowledge doesn't run deep, but it certainly exceeds levels of "never heard of it."

Are you in a major city in North America, Japan, South Korea, China, or Europe?

If so, I don't think you have a truly representative sample.

On the other hand, I still think governments are going to ban it once they understand it. But for now: :D

You probably just covered > 50% of the population of the earth there. If that isn’t “ordinary people” than what is? People aren’t all rural farmers anymore.

No I'm not. Major cities are Toronto, NYC, Chicago, Tokyo, etc. Not Vilnius, Ottawa, or Brussels.

Brussels is the centre of power in the EU. I have nothing against Toronto, but just because its population is higher doesn't really award it the status of being more "major".

Being important or good at one thing doesn’t make you a major city. It’s that you’re not known for one thing that makes you important. NYC has software, banking, media, art, culture, dining, etc. DC or Brussels just has one thing: political power.

Yes that's totally fair. I'm not in a major city but I do think my sample has poor representation.

And I totally agree that they'll ban it once they understand it :-)

Governments are ran by special interests. When special interests are invested in bitcoin, governments won’t touch it.

Ordinary people (48.3% of them) aren't on the internet, either.

http://www.internetworldstats.com/stats.htm

Even then, there are plenty who are on the internet without really understanding what it is they're using. They just know how to pattern match (netflix.com will take me to movies + tv but no idea how or where it comes from)

I think on a surface level, they'd say sure, digital money, why wouldn't that be the future but they assume it comes from an "authoritative" source such as the UN or a government.

I wonder whether people associate money with government simply because that's what most money labeling says.

If I were living in a world where money had just been invented, I suppose I'd care mainly that whoever was issuing it was trustworthy enough not to issue extra on the side.* Otherwise I wouldn't really care where it came from.

I'm not sure if I'm agreeing with you, disagreeing, or just continuing the discussion.

*Eventually I'd come to understand that inflation is not necessarily a bad thing, but my first instinct would be that I'd value money only if it were scarce.

So you're saying these average people that say "sure, digital money, why wouldn't that be the future" also "understand why a decentralized asset is the ultimate safe haven"? Huh?

How are you interpreting the term "understand"?

Does the average person even understand what a "decentralized asset" is?

Wait till Africa stops using their local currency mobile payments and switches to crypto. Internet use won’t matter as bitcoin and I’m sure many crypto to follow won’t hinge on an internet connection.

Maybe. My point wasn't so much that people need internet to use cryptos as that our definition of "ordinary people" is pretty skewed compared to the actual world population.

Agreed. Just asked my wife, “What’s Bitcoin?” and she replied, “What? Sounds like a game. I’m trying to work.”

This is nonsense. This is being driven by speculation / minuscule interest rates / greed. Very little of the demand for btc in the past year is due to lack of faith in institutions.

You might be right, but in Zimbabwe it actually was driving the price like this. There it already reached 10K at the end of October. Why? Hyperinflation of the local currency.

http://edition.cnn.com/2017/10/31/africa/zimbabwe-bitcoin-su...

I think you're dead on right in what is driving it, but I get the feeling you are suggesting those are poor reasons for the drive. I tend to think they are good reasons. I also don't think greed is always negative, though it certainly can be. However much of the activity in the free market that benefits everyone is, at some level, based on greed.

Sure, that's how it started. But as the adoption increases and price skyrockets, more people will understand the value of the concept of decentralization.

If the value prop of Bitcoin is that it is a store of value comparable to gold (which is now what it is being sold as as far as I can tell), it doesn't need to skyrocket in price. It needs to hold value during a recession. How in the world is that going to happen when so many people holding it right now are speculators looking to make a buck? They will flee and the price will tank. How is that a store of value?

The truth is, nobody really knows what is driving the price up. It’s not the DNMs, the high price and fees are a PITA for them. Could be artificial pump via USDT. Could be individuals or even nations under financial sanctions dumping cash into the markets. Could be speculators in Western markets. Could be people in countries with unstable currencies looking to hedge their losses. We know all of these are factors - unless tethers are actually backed 1:1 by USD - but due to the decentralized and pseudonymous nature of the currency there is little way to know what the prevailing reasons are unless and until it all comes tumbling down. Gox blew up in 2013 and the full story only came to light (well, sort of) this year.

Or it could be all of the above and then some. For some reason we as humans like everything neat and tidy and be able to point our finger at one thing and say this is it. If there’s anything you can learn from the world and why it operates the way it does and how some events that would seem unthinkable eventually transpire, is that the world is much more complex than anyone gives it credit. This goes for economies, markets, bitcoin growth, wars, policies, lobbying and just about everything else. So yeah, I’d say it’s a number of reasons.

Yes, this exactly. I've been trying to point this out as much as possible. The key to future success is adoption, and the precursor to adoption is awareness and interest.

Let me try to make the case for why Bitcoin could be a useful beyond greed.

I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations).

On the other hand, I can definitely see the utility in a censorship-resistant digital medium to store wealth. To me, this latter use case has much, much more potential to serve the unbanked (as well as the banked).

Some use cases I can think off the top of my head:

(1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key.

(2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat.

(3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad.

(4) You are whistleblower Julian Assance and have been cut off from the financial system as a way to censor your speech. Bitcoin allows you to have an unbreakable digital "Swiss bank account" that the authorities are not able to reach.

This reminds me of Peter Thiel's recent words about Bitcoin [1]: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments."

Reference: [1] https://www.coindesk.com/peter-thiel-bitcoin-like-reserve-fo...

Please stop posting repetitive comments to Hacker News. At this point you're spamming and that's totally not ok.

Is it considered spam because of its substance or because it's repeated verbatim?

E.g. if I take the same exact comment but paraphrase it every time I post it, would that be ok?

The reason I ask is because I see a few accounts post the same tired criticism of bitcoin over and over and see no reprisal for spam.

I would be interested in understanding what the objective rule here is, since I checked the guidelines and could not find references to comment spam definition.

Thanks.

Paraphrasing the same thing would not be ok either. People are here for conversation, not repetition.

> You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat.

How exactly do you transfer your wealth to BTC in this scenario? There aren't many people willing to sell BTC in exchange for a rapidly devaluing third world currency. Realistically, to use any of the large online exchanges, you'll need to convert it to some common currency (like USD or Euro) anyway. But if you can do that, why would you buy BTC, instead of just storing your money in that common currency? It's going to be a lot more stable.

You'd need to get it while you had a chance (see China, Japan, Korea making massive volumes and for a while a lot of the price gains). Once it all freezes up then all you can do is work/trade/exchange for the BTC or USD from those who have it just like it probably always has in situations like that.

Except now they can't literally come take the USD nor can they freeze in-country or off-shore banks so if that's a real scenario for you BTC is a pretty nice deal.

People in Venezuela are actively trading lots of bitcoin every day, in person. You can see this in the LocalBitcoins data: https://coin.dance/volume/localbitcoins

This is a pretty misleading response.

So, okay, some of the fortunate people who do have access to USD/EUR are trading it for Bitcoin on LocalBitcoins, not just storing it. But you're making it sound like this is a graph of ordinary Venezuelans trading their hard-earned bolivar into lucrative Bitcoin, which it almost certainly isn't.

The y-axis on the Venezuela chart is denominated in Bolivar. I assume it's Bolivar being traded. Why would you assume otherwise?

> I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations).

Until recently that was one of the main utilities of Bitcoin and the mainstream community changed the discourse to "reserve of value". BitPay, Coinbase, Xapo et al were created with the idea of transactions.

This is just one of many observations about how people arguments are not consistent.

I think many organizations behind Bitcoin are responsible for delaying relatively simple innovations to make Bitcoin useful for transactions.

You're describing money laundering and selectively choosing to represent the positive examples of it.

I think the point is that positive examples do exist, not that there are no negative examples.

money laundering is legitimising illicit profits but disguising them as legitimate income. none of the examples above fits this definition.actually, it is the opposite - protecting your legitimate gains from illegitimate actions of government.

You are right, I am using money laundering to mean 'anonymous monetary transfer of arbitrary size/value', which most governments don't allow as far as I know.

Neither Wikipedia [0], Investopedia [1], nor the International Compliance Association (ICA) [2] seem to agree with your definition.

You seem to confuse a technique to combat money laundering with the laundering itself.

[0] https://en.wikipedia.org/wiki/Money_laundering "Money laundering is the process of transforming the profits of crime and corruption into ostensibly "legitimate" assets."

[1] https://www.investopedia.com/terms/m/moneylaundering.asp "Money laundering is the process of creating the appearance that large amounts of money obtained from criminal activity, such as drug trafficking or terrorist activity, originated from a legitimate source."

[2] https://www.int-comp.org/careers/a-career-in-aml/what-is-mon... "Money laundering is the generic term used to describe the process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source."

If i carry a pocket knife, would you call me stabber? "anonymous monetary transfer of arbitrary size/value" is the knife, money laundering is the stabbing.

There is absolutely nothing that would prevent a government outlawing and criminalizing bitcoin at any point in time. With one stroke of a pen government can outlaw owning bitcoins or performing any transactions in bitcoins. I'd say this is bound to happen eventually with certainty because no government would be willing to lose control on currency (especially ability to pull it out of thin air) and thereby the power they exert on economy as well as other nations. You can count on this. So all those scenarios you mentioned are meaningless because any capital you have in bitcoins is bound to evaporate overnight and reduced to zero at the whim of the government.

See: https://en.wikipedia.org/wiki/Virtual_currency_law_in_the_Un...

Congress may have the power to prohibit virtual currencies (VCs) under its power “[t]o regulate Commerce with foreign Nations, and among the several States”[64] and under its exclusive constitutional power “to coin Money” and “regulate the Value thereof.”[64] In a November 2014 decision, the Court upheld the power of regulators to prosecute a defendant who “designed, created and minted coins called ‘Liberty Dollars,’ coins ‘in resemblance or in similitude’ [or made to look like] of U.S. coins."[65] Although the defendant did not pass the Liberty Dollars currency as a counterfeit, the currency were in close enough “resemblance of coins of the United States or of foreign countries” and consequentially fell under the authority of 18 U.S.C.A. § 486.123 The Court has not decided if § 486 includes the power to prohibit VCs, but if a Court decides that the purpose and intent of VC resembles United States or foreign currency it may fall under § 486. The Stamp Payment Act of 1862 prohibits anyone from “mak[ing], issu[ing], circulat[ing], or pay[ing] out any note, check, memorandum, token, or other obligation for a less sum than $1, intended to circulate as money or to be received or used in lieu of lawful money of the United States.”[66] The Court has not decided if Congress has the power to prohibit VCs under this Act or any other existing regulation or statute.

> If Starbucks accepted Euro in US for its coffee it would be a crime

I don't believe that's true. The US dollar is only mandatory for two things: for settling debts (the lender must accept USD to extinguish debt) and for paying taxes. Otherwise people are free to trade as they please - euros, chickens, whatever.

IANAL, but there have been laws on the book prohibiting bartering in any substantial amount for a while. Of course, the IRS is not going to chase you down for swapping with your neighbor, but large scale "bartering" is definitely frowned upon. What's to stop people bartering a yacht for a house and avoid taxes?

You can barter all you want, you just have to pay the taxes on the fair market value.

https://www.legalmatch.com/law-library/article/bartering-law...

> almost every country requires that transactions must occur in its national currency.

I've never heard of such laws. You have a source on this?

This is definitely not true, many businesses in Latin America will accept dollars, and not just in Mexico.

For this to happen there would need to be global heads of governments consensus and look how wonderfully the UN is working... it’s a joke. So the scenario you paint is impossible.

Japan has already embraced cryptos as a legal currency. They won't be the last. As this happens, there will be geopolitical factors at play and it won't be that easy to simply "outlaw cryptocurrencies".

What does this mean? I'm in Japan right now and if anything, Japan is a cash society still and most small stores don't even take credit cards.

The Government has done the opposite of banning bitcoin. They've outright legitimized it.

No, they have not forced private businesses to accept bitcoin.

Great. I'm none of those things so I'll keep my money out of it.

I've read this before ... oh wait, you keep posting these examples

Five times in the past day, to be exact!

Here's the other four...

https://news.ycombinator.com/item?id=15792805

https://news.ycombinator.com/item?id=15787235

https://news.ycombinator.com/item?id=15787155

https://news.ycombinator.com/item?id=15786568

"I can totally just casually think of certain use cases right off the top of my head here spontaneously, let me see here... [PASTE]"

I'm actually taking too a few people in Venezuela who may do some work for me and I'm going to pay them in Bitcoin, it seems a much option than their currency at the moment.

The negative examples in this case would be equally if no more scarier.

Also unlike most people think, these days nobody has their money stored beneath their mattress.

More or less all money, is invested some where.

You're still not getting it my friend.

`100k puts the market at cap at a trillion, it’s not that crazy if you remember that Gold is several times that`. Similar things heard during every irrational bubble.

I believe people often trot out the 'actual worthlessness' of fiat currency, to support a misguided idea that btc must be the democratic antidote which will free countless millions from the financial enslavement of the global financial machine.

Currency is currency BECAUSE its sponsored by government. And the payments system only works because you are indemnified. By the FDIC. By Chase Credit Cards. That is, the evil banks. How so for btc?

BTC hits 10k while US readies to pass tax overhauls to increase an already alarming wealth inequality. Freedom fighters should pick the right battles.

>Currency is currency BECAUSE its sponsored by government. And the payments system only works because you are indemnified. By the FDIC. By Chase Credit Cards. That is, the evil banks. How so for btc?

I'm not sure that's true. What makes a currency is it's usage. If enough people agree to the value of something, it's irrelevant whether a government sponsors it. You see this all the time with small towns using local "currencies" for specific usages [0]. It's the same idea.

[0] https://en.wikipedia.org/wiki/List_of_community_currencies_i...

I clicked a bunch of links from that list but couldn't find a single example that backs your point. Most of the local scrips seem to either be defunct/broken links or backed by a trusted institution who promises conversion back to the US dollar (BerkShares, Detroit Cheers).

That's only the positive side of it.

For all this talk of inequality, why don't poor all over the world just throw their national fiat currencies under the bus and start all over from scratch? Sure doing this every few decades should ideally reset the wealth counter to 0 for most of the top 1%.

That is where fiat currencies come in. Because you don't want extreme situations in either case. Do you seriously want a certain large section of world population holding the entire global financial ecosystem at gunpoint and dictate its terms?

Pay x% taxes as we demand or we fork the blockchain and reset it all to 0.

Currency is currency because it transfers value efficiently. Outlawed currencies are not very efficient at transferring value. Fiat (lawful) currencies are more efficient by default. The digitization and decentralization of currency allows for the introduction of a non-fiat, hard-to-outlaw competitor which is more efficient than fiat in many contexts. Maybe not all contexts, but enough to give it value.

I wish Bitcoin was as decentralized as everyone says it is.

Unlike fiat cash or gold, you can't spend it without an internet connection (in order to sync up the public ledger and submit the transaction).

You're subject to miners to approve your transactions, which in theory should be democratized, but isn't really since it's based on computing power, which in turn can be bought or centralized in mining pools.

You're subject to a small cabal of developers' whims in having to use the reference client and hardforks to patch up bugs in the protocol. In theory that should also be democratized, with people free to use whatever forks they want, but in practice it's centralized with everyone fleeing to whichever fork all the mining pools go with.

> I wish Bitcoin was as decentralized as everyone says it is.

I'm trying to cash out some of mine and I've been downloading the blockchain for four days now. I had to buy a new hard drive before I could even start. I've read that it takes over an hour to do a transaction now, although I'm not yet in a position to verify that. If you look on the btc related subreddits nobody recommends using a proper client as Satoshi intended, it's all about accounts on websites offering a service that could reasonably be described as "banking".

Took me a few hours. Use `-dbcache=n` where n = bytes of memory... will make sync super fast if you have +8GB of RAM. I think default is pretty low.

Ah cool, I set it to 4000 and it looks to have sped it up a bit (currently saying 16 hours to go, down from "two days"). I'm still not convinced it's a very practical decentralized currency though.

Check out https://electrum.org/#home -- doesn't require clients to download the full blockchain.

(Actually it's back up to two days now, I think it might just be that the break in downloading made my ISP unthrottle my connection).

Gold's market cap in US dollars is currently $7.1 trillion; Bitcoin's is under $0.2 trillion:

            Current market capitalization in US dollars
  
  Global money supply (broad)              over $90.0 trillion [a]
  US dollar money supply (M2)                   $13.8 trillion [b]
  Euro money supply (M2)                        $13.2 trillion [c]
  All coins and banknotes in circulation         $7.6 trillion [d]
  All gold ever mined                            $7.1 trillion [e]
  Bitcoin                                  under $0.2 trillion [f]

Sources: [a] http://money.visualcapitalist.com/worlds-money-markets-one-v... [b] https://fred.stlouisfed.org/series/M2 [c] http://sdw.ecb.europa.eu/reports.do?node=1000003501 [d] http://money.visualcapitalist.com/worlds-money-markets-one-v... [e] https://www.fool.com/investing/2017/08/17/how-does-bitcoins-... [f] https://coinmarketcap.com/currencies/bitcoin/

However, if you try to liquidate those assets, they fall in price. But some more than others.

E.g. there's no even $100 billion in Bitcoin invested. If someone tries to sell, say, $1 billion worth (1%) of Bitcoin, the price falls down rapidly and they never going to get anything close to the billion $.

Not so with gold. The price will fall down too, but not so much. One can easily sell 1% of the world gold reserves, for price close (lower, but close) to it's market value.

Maybe one day Bitcoin will behave like gold, but certainly not today.

I'm inclined to agree that bitcoin markets are far less robust than gold markets on the whole because of the long history and entrenched social position of gold. I do think you underestimate the effect on gold markets if they were flooded with someone trying to offload $70b of gold.

That's about 7 times more gold than the entire contents of the U.S. gold reserve of 8,134 metric tons of gold. I really don't understand why you think it would be easy to sell that much gold at the prevailing price.

Some random googling turned up about $100b/day of all gold changing hands worldwide, so you would have to sell it over a long period of time to avoid moving the price. If you were to try to keep your trades under say 0.5% of daily volume, or $500M, this would be the equivalent of trying to sell 1/14,000 of the total market cap each day, which would work out to about $12.5M/day if applied to bitcoin's market cap. Selling 0.5% of the daily volume of bitcoin would be more like $36.7M/day.

The reason for the difference in those numbers is that bitcoin turns over more of its market cap daily than gold, proportionally. So dollar for dollar, of course $1B affects bitcoin more than gold, but in terms of turning over 1% of the market cap the data suggests this might actually be easier in bitcoin.

The thing is, bitcoin in its current state isn't exactly decentralized - a small amount of miners control a fairly large % of bitcoin's hashrate. Not to mention most of those miners are located in China, which is also where most of the ASICs (mining equipment) are produced. These miners could easily support an alternate fork of bitcoin by moving their hashrate over, thus crippling the bitcoin chain. This was the whole drama with Segwit2x

Errrrr.... Bitcoin is a fiat currency, so be careful with your generalization.

And whose job is it to investigate bitcoin fraud and theft? No one.

Any police organization that investigates ordinary theft would absolutely investigate a theft of Bitcoin.

See: Mt. Gox.

Yes, the Japanese police investigated and the CEO Mark Karpeles went to jail for a couple years.

And never found 90% of the loot.

By bitcoin fraud do you mean frauds that are 'settled' in bitcoin or counterfeiting?

The protocol stops counterfeiting, the miners stop individuals from failing to fulfill a payment (i.e. stops double spends) and theft is governed by whatever jurisdiction the crime happens in.

The US government does not prosecute thefts of USD in other countries.

Bitcoin might turn out to be one of the markets where free market dynamics work well.

Whose job is it? Anyone who has a stake in trusting and maintaining bitcoin's value. So the rich are incentivized to safeguard the poor in some sense here.

Rubbish

Well so far it has none of the taxpayer-subsidized funding as the US currency and banks have--which are very expensive to fund. The 2008 crisis was estimated to cost around $9,000-35,000 per US citizen, even by the Fed itself! For just that one incident...

Exactly. Who is going to bail out the first big BTC crisis? No one.

Think about what bailing out means. It was a transfer of wealth from taxpayers and money-balance holders to Wall St banks, the US gov't and a few select private corporations.

Now I don't mean to be patronizing, but it is useful for us to ask ourselves, "how were we convinced that this was desirable?"

No amount of debate over the validity of the 2008-2009 financial crisis and resolution makes bitcoin any less of a fiat currency.

Fiat means by decree, or order. Typically we mean by government when we use this word.

Essentially, the government creates it by law and then forces you to use it.

I'm struggling to see how this applies to bitcoin.

What? It seems like you are just changing the subject here? I thought you disagreed with the idea of my grandparent post, but it seems that now you want to say that bitcoin is a fiat currency?

Let me make it easy: I disagree with everything you posted.

> Bitcoin is a fiat currency

Please expand. Which state is forcing people to pay their taxes in Bitcoin, and/or authorizing it as legal tender?

The key quality of a fiat currency is that it is spun out of air without intrinsic value.

I guess I think about it differently. Fiat means "by decree", or by force. Fiat currencies have historically been associated with a military. Bitcoin doesn't share that property.

Honest question: why does gold have intrinsic value?

My understanding is that it's scarcity is the prime driver of its value, at least in monetary terms, and bitcoin shares that quality. Of course gold does have physical qualities that are useful, but so do many other metals that are not used as stores of value.

Gold is used to make physical things, like jewelry and electronics.

I am aware of that of course, but gold jewelry itself generally has very little intrinsic value (it's only valuable because people agree it is, just like bitcoin), and most elements (such as silicon) in electric components are much cheaper than gold.

The prime driver of gold's value is clearly its historical role as a commodity and its scarcity, neither of which are related to any kind of intrinsic qualities.

My point is that the two things gold has going for it (scarcity and the fact that people believe it is a good place to store value) can now be said about bitcoin as well from what I can see.

Full disclosure: I do not own any cryptocoins. Too volatile for my tastes.

many other metals are used as stores of value, but gold is probably the most iconic. From a historical standpoint, It's easy to identify, it's easy to break up into smaller units or consolidate into larger ones, easy to form into coins. It has a global distribution, it's relatively inert so you don't need to worry about degradation.

scarcity is only one factor to consider - demand and fungibility are also important factors among others.

> It's easy to identify, it's easy to break up into smaller units or consolidate into larger ones, easy to form into coins. It has a global distribution,it's relatively inert so you don't need to worry about degradation

Everything in that sentence also applies to bitcoin. Probably the one difference I can see is that if someone loses their private key, the bitcoins associated with that key become useless. Gold does not have that problem.

EDIT: Okay, another huge con with bitcoins is that people don't understand them. Most people at least think they understand why gold is valuable. The confusion a "cryptocurrency" creates is a notable negative.

Currency is a medium to exchange value(Work or outcome of work). Value can be created/destroyed from/to something(Generally work), currency is just a 'medium' to trade the value.

Currency itself has to be created out of thin air.

> The key quality of a fiat currency is that it is spun out of air without intrinsic value.

... as imposed (that is, "by fiat") by some governmental organization.

Bitcoin's "true" value may be dubious, but it's most definitely not a fiat currency.

The type of organization that created it doesn't matter.

It absolutely matters, because fiat currency, by definition, has the full power of the state (i.e. legal authority, taxing authority, police/military authority) backing it. The same is not true of Bitcoin.

It's legally recognized, in some places, as a currency and is not backed by anything physical. What more do you need?

> they like to demonize bitcoin which actually does something gold could never do

The practical utility of Bitcoin represents only a very small fraction of its price.

The price of bitcoin has climbed more than tenfold in a year - so what is causing this huge increase in demand? Compared to a year ago, are there 10 times as many drugs being purchased on the darknet with bitcoin? No. Are there 10 times as many Chinese people trying to get their money out of China? No. If anything, the utility of bitcoin has diminished as the transaction cost has risen.

The only reasonable explanation is that most people are buying bitcoin simply to sell at a higher price later. In that regard it's the same as gold, but also the same as every bubble asset in history.

I've seen comments saying "unlike bitcoin, gold has intrinsic value!" on HN for years. It never made sense to me. Like Bitcoin, gold is only valuable because we think it is and we want it to be (and because it's relatively scarce, too, just like Bitcoin is). Same with diamonds. Their functional value is relatively small in comparison to their "beauty" and scarcity values.

That is not correct. Gold actually has uses in manufacturing all kind of goods. In many manufacturing processes its irreplaceable. It has historical significance that is ingrained in virtually every culture (i.e. everyone grows up thinking gold as valuable thing due to stories you hear as kid). Jewelry made out of gold looks great, doesn't get rusty and you can keep it for centuries without needing any technology. Even if humankind is driven back to stone age, you can probably still count on gold to barter for other valuable goods. Most importantly, despite the humongous efforts over centuries, gold is still as rare as it was thousands of years ago. This inability to produce it out of thin air (unlike dollars or even bitcoins) what makes its usage as currency possible. None of these things you can say for bitcoin or any other currencies. They are just bits floating around in cyberspace.

A long time ago, when Aluminium was more precious than gold, people made what was considered good looking jewelry out of it: http://www.todayifoundout.com/index.php/2014/05/aluminium-co... "Its shininess combined with its almost ghostly lightness compared to other metals made it an ideal metal for jewellery and it wasn’t long until the French elite were wearing broaches and buttons made of the aluminium." Aluminium also doesn't get rusty and can be kept for centuries, but nobody makes jewelry out of it any more. Reason: It's not scarce (any more).

The only real thing that makes gold valuable is it's scarcity. If it stopped being scarce because an asteroid containing a lot of gold was brought back to Earth, people would stop valuing gold and stop making jewelry out of it.

Bitcoin has the same important property of scarcity as gold.

Yes, but scarcity of bitcoin is not time tested. Most people seem to downplay this requirement for being "time tested" along with "scarce". However this is the requirement that drives your decision about how much % of your assets would be in certain form over long run. Would bitcoin still be scarce 20 years down the line? Not sure. Gold? Almost certainly. Also bitcoin is at mercy of technology. Few people knows how system works and where are the security gaps. One doesn't have to be even literate, let alone own a computer, to store and transact in gold.

That's not true at all. If someone gives you a gold bar right now, would you be able to tell if it's real or not? What if, for example, it's steel on the inside coated with a thin layer of gold. Or the gold has a low purity, etc. This is why there are specialists (who are very expensive) who can use special tests to check if it's real (and even then it's not 100%).

It's easy to tell if the Bitcoin that you just received is real or not. (Definitely much easier and cheaper than with gold).

This is not accurate. The once useful properties of gold have now been replicated using other (cheaper, alternative, and even synthetic) materials that perform better.

Gold industrial demand has virtually remained unchanged (probably because there is higher volume of goods produced even though lower usage per item)[1].

Gold usage %:

- Jewelry: 52%

- Govt holdings: 18%

- Investment: 16%

- Industrial: 12%

- Unaccounted: 2%

[1] https://blogs.thomsonreuters.com/answerson/gold-industry-dev...

Totally. We can add things like million dollar paintings such as this one https://en.m.wikipedia.org/wiki/Barnett_Newman#/media/File%3... and expensive old postal stamps to that list.

I like your username, lol.

You are right though and I am being a little sarcastic on purpose. People have argued that Gold has real intrinsic value which it does have its uses but no more or no less than any other important precious metal we use.

Where's the "alternative to diamonds" guy?

Here: https://en.m.wikipedia.org/wiki/Moissanite

I too have been trying to interpret this statement. It reads as a hedge against complete debasement in that it is perceived as a non-zero lower bound on value.

I have theory regarding "underestimated the populist movement" - Anything which is highly publicized and talked about whole day gets stuck in people's mind. And if that something is portrayed as taboo people get more attracted to it.

I think it is in everyone's favor to ignore and not give credence to things like these. There is an article on how Finland has been able to achieve this:

http://foreignpolicy.com/2017/03/01/why-is-finland-able-to-f...

For people wanting to see a video:

https://www.youtube.com/watch?v=wwAzU5ji-CM

Everything you say can be true but if this is not just the new tulip mania there must be some number at which it stops. You predict 100k but why not a million? why not a billion?

I’m waiting to buy at a million and sell at a trillion.

Gold is used in electronics. It's actually a good conductor. Bitcoin is not even good for transactions, its supposed primary purpose, right now.

If bitcoin wasn't good for transactions, then each block wouldn't be full of them. Maybe it's not so great for processing a country's volume of transactions because it hasn't scaled. Maybe it's not so great for small-fry transactions but those happen too... Online merchants often give you 24 hours to get your first verification. Your fees can be very low if you don't need your confirmation in the next ~10 minutes. (It will appear unconfirmed in the pool almost immediately.)

I think you might have it the wrong way around. Gold is valuable despite being used in electronics.

Unlike most other metals, gold is suitable as a currency partly because it doesn't get 'used up' in industrial processes in any significant way (where it is used its malleability ensures only tiny amounts are necessary - one gram of gold is enough for a square metre of gold leaf). Similarly, its use as jewellery is not so much to create beautiful objects, but as small portable stores of wealth[1] - in the world's biggest gold jewellery market (India) the price of jewellery is pretty much the same as the price of the raw materials (i.e. gold).

[1] Funny story. I once had a colleague who married an Indian woman in India. He came back to work wearing a lot of gold jewellery (watch, bracelets, rings, necklace or two, etc). Even he thought it was ridiculous, but he felt obliged to wear it. I had to explain to him that he wasn't given all of it with the expectation that he'd actually wear it - it was basically his wife's family's way of giving them money.

That's the part that gets me. Bitcoin has scaling issues, is slow and transaction fees are outrageous. Still, I have no doubt some form of crypto-currency will eventually win out.

Blockchain tech will be to the next three decades what the internet was to the last. Crypto is one facet of a very interesting geometry.

We may be in the dot com era but with Crypto.

The ICO's are like the Webvan and Amazons - similar to how businesses used the Internet to serve their respective industries, we are now using ICO's to serve specific markets.

Rentberry for Rentals, Enjincoin for Games.

With so many new ICOs, it feels like the early Startup Scene but now it's with a focus in Cryptocurrency.

I connected to the internet with a 14.4k modem and I'm connected to fiber today. Bitcoin is in its infancy. It's a matter of time until it reaches the levels we require for handling all the transactions that we want to happen.

I have no doubt the block chain is the future and one backed by governments. I think Bitcoin and Ethereum are the MySpace before something better came along. They have so many issues that better technology will win out. Being first doesn't guarantee anything nor better technology for that matter but in this case crypto is all about technology not just an experience.

Yes, and you connected with AOL and used Netscape to search with Yahoo to buy music from CD-Now.

But how much of the code that used to support your 14.4k modem is still used to support your fiber connection today?

It seems likely that the dominant currency of the future will be heavily inspired by Bitcoin--but will it be the same blockchain Bitcoin uses today?

Seems unlikely to me.

We'll assume he was using PPP or SLIP when he had a 14.4k modem. TCP/IP has been around for 30+ years. So, yes, a lot of that code is still "supporting" his fiber connection.

> Bitcoin is not even good for transactions, its supposed primary purpose, right now.

How so? I buy lunch with Bitcoin and a few weeks ago I paid for a car repair with it. If I need more, I just go to a bitcoin vending machine near by.

Aren't the transaction fees now measured in dollars?* You're paying $10 for lunch and $5 in miner fees. That's not practical.

* https://bitinfocharts.com/comparison/bitcoin-transactionfees...

Isn't each transaction costing you a few dollars?

Not if you use an economic fee and an accelerator.

Where did you do this? None of the local businesses (Bellevue WA) take bitcoin that I can tell, and it is populated by lots of techies.

Go to Cap Hill if you want to spend BTC, the east side is pretty well devoid of establishments that take bitcoin.

What places take BTC in caphill?

I'm curious - do you report your capital gains on the bitcoin you transact in?

(Assuming you bought it for cheaper than the price you transact at)

It’s good for anonymous worldwide transactions. It has proven itself there and there will always be some demand for that.

It's good for pseudonymous worldwide transactions. Blockchain analysis software is now a thing, and while costs are high, there are companies that specialize in tracing BTC transactions. [1] It is possible to launder/mix BTC or play a shell game to/from other currencies and wallets and raise analysis costs enough to make it not worthwhile for many adversaries and many targets.

While this may seem pedantic, it is important that people do not rely on BTC transactions for anonymity. Perpetuating this myth may become dangerous for some Bitcoin users.

[1] https://www.chainalysis.com/

For stuff like cocaine and porn maybe. I can't buy a cheeseburger or pay my rent with it.

not really. transparent blockchain

Lots of stuff is used in electronics but it is not worth as much as gold.

Gold is used in electronics in free market economies, meaning marginal price <= marginal utility.

This does away with the idea that gold has no relevant value outside jewlery.

There is no such implication. Yes, if golf were cheaper, it would be used more often in electronics, and because not much of it is essential, users of gold for productive purposes can get by with higher prices. However, gold’s price is driven 100% by its use as a speculative fiat store of value, not for its utility or even for its ornamental use.

You wrote and I quote "other than looking good as jewelry it has no other real intrinsic value."

It's considered to be beautiful because it's expensive and valued. The causation is in the other direction than most people think when it comes to gold and beauty.

It's the same with expensive paintings. A painting is considered to be beautiful (some are actually ugly) and have some deep meaning only after it's sold for a lot of money.

This is an interesting topic.

I too thought most of this "throw paint onto a canvas and charge rich suckers thousands of dollars" is bullshit. But after seeing some Picassos IIRC, I realized, yes there is a method to the madness.

Even if the painting wasn't displayed in a fancy museum, I think I would still have thought it was "special".

But those "artists" that pour paint onto the canvas - complete bullshit.

If a five year old can do it - it's not art except to the parents of those "artists"

This painting sold for millions: https://nypost.com/2013/05/15/43-8-million-for-this/

Reason: it's complicated. But something that's DEFINITELY required for this to be possible is scarcity. The artist is not alive any more. It would never sell for that much if he were still alive.

True digital scarcity is a hard problem to solve (because computers are good at copying things). Bitcoin was the first system that was able to solve this problem.

Is that the right way to value Bitcoin? What explains the difference in price between Bitcoin and other coins?

10x return isn't worth the downside

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