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Comment by scottnyc | Hacker News Reader

I agree that this might be a wealth transfer to China. Bitcoin inherently does not hold any value, it is a ledger. When someone buys bitcoin, someone else sells it and takes the cash out of the system.

Right now, a lot of mining is still taking place in China since energy is cheap. These miners sell their coins outside of China and bring cash back into the mainland to pay for the energy and hardware used for mining. So in it's most simplistic form, when you buy a bitcoin, you are adding to the earnings of Chinese energy companies and hardware companies (and some naturally goes to speculators and miner margins).

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That's an interesting statement. I've never thought of it that way. In essence, Chinese miners are exporting subsidized Chinese energy (via mined coins) for foreign currencies. Sounds very much the M.O of Chinese trade practices (not meant to be overly negative, I'm just saying).

Other communist states were/are doing the same: exporting a product of their captive workforce for foreign hard currency. For instance Uzbekistan is exporting cotton picked up by school students which are essentialy a slave work force. China is just a bit more "liberal" in this regard.

No, bitcoin is not subsidizing Chinese energy. They're paying for the energy being used at the price it costs to use it. I imagine the amount of energy used to mine in China is not a significant fraction of the overall energy production of China.

I think you got the causality backwards in the parent comment. China is subsidizing energy and, indirectly, Bitcoin. The parent assumes the price of energy in China is below cost. I'm not sure, but I wouldn't be surprised to learn this was true.

It's certainly below cost when you include the externalities of burning coal.

> Bitcoin inherently does not hold any value, it is a ledger.

I just want you to be aware that those 2 sentiments are directly contradictory. A ledger has value -- an online, world-wide, decentralized, distributed, peer-to-peer ledger moreso. Estimate the value of the ledger (this is a significantly different endeavour than estimating market cap), divide that value by the total number of BTC in circulation, and you have estimated the value of a BTC.

> A ledger has value

Why? Based on what? That's like saying "a state machine has value". That might be true in some contexts, but an arbitrary implementation of a concept is not necessarily valuable. Certainly, the value prospect of the ledger has no relationship to how many cryptotokens the ledger accounts to one's balance (that is to say, buying up cryptotokens is purely speculative because owning more does not make the ledger more useful)

A ledger that me and another entity (such as a friend I owe money to or a retailer I want to buy from) can both agree on to use to accomplish transactions is pretty handy.

Banks are just giant ledgers as well and theyre worth trillions. Seems like ledgers are valuable indeed.

Banks also have money, I think that helps a bit...

their direct possessions (money, real estate, license, ...) are much smaller then their total value. fractional reserve banking and all that. A significant fraction of their value comes from their reputation (to have an incorruptible ledger), ability to transact and Branding. bitcoin has those as well.

I see what you're saying, and that's an interesting way of thinking about the intrinsic value of Bitcoin. I suppose in estimating the value of the ledger you should also consider the negative value contributions to having this particular ledger, such as environmental impact, potential to destabilize governments, expected loss from hacking/user error, etc and see whether that outweighs the benefits of what some may perceive to be positive value.

I suppose what I meant to say is there is technically no money sitting somewhere held for owners of bitcoin to lay claim to.

Unless it is good at ledging things other than Bitcoin itself, your argument that the Bitcoin ledger has inherent value is completely circular.

The dollar just ledges itself, since it's not backed by gold anymore. Most dollars are just entries in a database somewhere (and I would argue that paper dollars are really a distributed kind of ledger too).

Some people claim the dollar has value because the government accepts it for taxes, but the IMF's SDRs function as currency (within an exclusive population), aren't backed by anything, aren't accepted for taxes by anyone, and are worth $300 billion.

So if you buy a bitcoin for $15K, and sell it for $16K, you are taking wealth away from the Chinese?

No because you buy for 15k from them and sell for 16k to someone somewhere else in the world

Can we filter out sellers/buyers by country, to make sure?

No and by design. Global trade is global, man.

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