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Comment by psyc | Hacker News Reader

I count six times you used the word "currency". Yes, some people thought it would be that, but it isn't. It's Bitcoin. "Digital gold" isn't a perfect description, but it's close. Thus, you're flogging a straw horse.

It is not limited to 21M "units", and it never was. It's arbitrarily divisible into whatever units you like. Again, since it is not a national currency, it doesn't matter. It isn't "deflation" when the price of gold goes up.

I guess some people can't let go of the idea that Bitcoin is "supposed" to be like a dollar-denominated debit card.

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Actually it is limited to units. You can still divide a Bitcoin into satoshis, and these satoshis are limited in their printing. He used 21 million units of Bitcoin, but since you want to get technical, it's actually 21,000,000,000,000,000 satoshi. I don't know what possible source gave you the idea that divisibility == unlimited, but sadly, it's wrong.

Also, please take your "digital gold" meme and use it on r/Bitcoin. Not only does Bitcoin's price contain the speculative valuation of a million people who call it a currency (regardless of your particular vision) but that vision also has a million flaws. It's rather funny, when someone points out its flaws as "digital gold" then the Bitcoin troglodites come out and call it a currency. When you point out its flaws as a currency, they correct you that it is, in fact, digital gold. When in fact, it's just a technology medium for transmitting value without the economic mechanisms to be a currency, nor the historical/economic/political/social mechanisms to be a 'digital gold'.

Well said.

I've moved to altcoins for sending money, the transaction fees of bitcoin finally pushed me to another one.

I wish I'd buy a little extra to speculate myself, but I'm pretty impatient so I'd better not.

> I don't know what possible source gave you the idea that divisibility == unlimited, but sadly, it's wrong.

It would require a hard fork, but it is technically possible to increase the divisibility of the base satoshi unit. And it should be an uncontroversial change if needed, since it will not require any redistribution of money.

With that said, it doesn't seem likely that the value of a bitcoin will increase in the near future to the point where we will actually need more than 21 quadrillion units of precision.

What are there flaws in the Bitcoin as digital gold analogy? I don't follow r/Bitcoin and would appreciate a summary.

From my limited level of understanding, it seems that the only differences are that you know that Bitcoin has no inherent value at all (gold has some since it can be used to make jewelery and gold-plated audio connectors, among other things) and you know exactly how much Bitcoin can ever be mined.

It's marketing.

Instead of explaining what Bitcoin actually is you compare it to something very simple that everybody knows and derive "digital gold" ...

Gold is also marketing. No one is going yaya over other, similarly rare elements [1]. Tantalum is significantly less common then gold, for example, and doesn't tarnish! And yet gold is 320x more expensive than tantalum [2] [3]!

[1] https://en.wikipedia.org/wiki/Abundance_of_the_chemical_elem...

[2] https://www.metalary.com/tantalum-price/ [3] https://www.bullionbypost.co.uk/gold-price/today/kilograms/u...

> I count six times you used the word "currency". Yes, some people thought it would be that, but it isn't. It's Bitcoin.

Presumably "some people" includes its creators, given that "coin" is in the name. If that isn't meant to evoke currency, that's quite an oversight.

> It is not limited to 21M "units", and it never was. It's arbitrarily divisible into whatever units you like.

This response doesn't seem to address the parent's related point: that bitcoin as implemented seems to have inflation and deflation built in.

> Again, since it is not a national currency, it doesn't matter. It isn't "deflation" when the price of gold goes up.

It's certainly the giant problem it would be if it were a national currency, but that doesn't mean it doesn't matter. Speculation in anything can have consequences that are undesirable, and for that reason, it's often regulated.

I've been wrong about the use cases of half a dozen things I've created. Satoshi was a programmer, not a pope. I doubt that people using the word "deflation" in this context understand what deflation is. Deflation in currency follows from the economy going bad, not the other way around. This is why we don't call gold and real estate appreciation "deflation".

Standard monetary deflation happens exactly when the growth of the economy outpaces the growth of the money supply. Things become cheaper, money will be worth more.

When money was made from gold you got deflation every time the economy expanded. Deflation only recently became a sign of economic contraction.

Satoshi was a visionary, not just a programmer. It takes a whole lot more to come up with a brilliant idea such as Bitcoin.

The idea of a distributed electronic currency predated bitcoin. What Satoshi did was solve a couple of remaining problems with the predecessors. Thinking of him as a "visionary" is a mistake.

Vision without execution is simply hallucination. I will always see Satoshi as a visionary. Too bad we dont know him as a person.

That is arguably one of Satoshi's biggest victories.

By removing himself from the picture Bitcoin stands alone, controlled by the masses - which is exactly how it ought be. If instead Al Gore created Bitcoin, it will be intrinsically tied with his name as some sort of central person which is contrary to the entire idea. The reason I think this is particularly important is because decentralization is generally going to be seen as intuitively impossible to laymen.

And the possibility of a person is always greater than the reality. Fischer is still the greatest chess champion to ever live in the minds of many, even though he only played in one world championship - and against a champion who was on his way out in any case. Him disappearing after a meteoric rise paradoxically cemented his legacy. Satoshi is a much more meaningful creator than John Doe could ever be.

Well put!

Bitcoin. I mean, it's in the name.

I think you'll excuse us as thinking that the original intent was to make, I dunno, coins, like a currency.

Yes, it may have evolved past that now, but the intent and the use of bitcoins up until maybe 13 months ago was that bitcoin was a currency. Now it's millennial gold or something. What will it be in another 13 months? Who knows.

The internet was designed to route around damaged caused by nuclear war.

If it's not a currency it's simply a pump and dump scheme looking for a greater fool. The problem is when it's peak value is reached there is only risk without upside. So, eventually this creates a death spiral as nobody wants to buy in and everyone wants to get out.

Sure, I will buy a novilty bitcoin when it's once again worth a penny. But, novelty does not create enduring value.

Well there is a cap on how much will exist so with even a small amount of additional demand for it each year it should continue to go up in value. Thats not to say the value can't go up so much that it would take approximately forever to get back there once it crashed.

I am not sure why you think the demand should increase year over year. Also, at some point people are not going to run full nodes and it just dies.

The current peak in bitcoin also looks exactly like an exponential blow off peak as people invest entirely on the expectation of future price rises. The way people are talking about it and the behavior of the price on the chart looks exactly like NASDAQ pre-2000. I'd almost suggest shorting it, but "markets can remain irrational longer than you can remain solvent". Since there's nothing tangable at all about BTC (it's not like its a corporate stock with an actual cashflow and capital behind it) I don't see where the floor is. And since BTC mining is starting to use s noticeable fraction of the world's power consumption at some point the music is going to stop and all the miners will head for the exits because the marginal profit isn't there.

I'm not sure I agree with Stiglitz that it should be outlawed since I'm uncomfortable with protecting people from their own stupidity, but I understand the analysis he's doing to conclude that.

Cryptocommodity? Cryptoasset?

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