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Comment by acdha | Hacker News Reader

Investments need to have intrinsic value. Under the new spin that bitcoin isn’t intended to be a currency, it makes little sense as an investment because there’s no value in any particular set of random numbers. If nobody is using it except for speculation, where’s the incentive to pay to keep that network running?

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If contracts are written and priced in BTC, then it will behave like a commodity. Since supply is limited, it's value will fluctuate based on demand (e.g. the need to acquire bitcoin to satisfy the contract).

I'm not saying this is actually happening, but when/if it does, it will work no differently than other currencies.

Why would anyone choose to do that without some huge advantage to make up for the risks? The only reason seems to be ideological commitment and that doesn’t seem like an especially large market.

I would agree that for the general public there appears to be little upside (currently). For the fantastically wealthy that want to move large amounts of capital outside the purview of the tax man or regulators, it has tremendous upside. The same holds for illicit markets. Because those markets do not exist in isolation, the demand effect will spill over into the broader market (because arbitrage).

I'm not a fan of BTC or cryptocurrency, but I think there is definitely a case that nefarious use could bootstrap it into a real asset.

If you’re looking to evade taxes or otherwise commit serious crimes, why on earth would you do so using an immutable public ledger? Any mistake and you’ve gift-wrapped the case for the prosecution.

Probably because you can do the laundering step through a web of anonymous servers sitting on the darknet rather than through fraudulent incorporations which have a lot more surface area for detection and also leave immutable paper trails.

You can have the contract in local currency, eg $, convert at the moment of payment and reduce the risk considerably.

From a business perspective, what value does using Bitcoin add at that point other than the time delay, exchange and transaction fees?

It's the same as the benefits normally, the buyer didn't have to convert at that point, they just have to pay the pegged rate.

I'm not disagreeing with you on the distinction between an investment and a speculative position, but know that the value is in the confirmations of old transactions piled up which make it extremely difficult to retroactively mutate the ledger. Lots of people don't understand that well yet.

i think the value is also the ability to transfer value relatively quickly without having to sit at a bank for 30 minutes to do so.

Bitcoin transaction times aren’t much better - I see recent times in the 15-80 minute range on average, well in the thousands range earlier this year.

It’s also odd not to acknowledge that banks have had electronic transfers for decades. You wait seconds for a card transaction and almost every financial institution allows you to do transfers without visiting a physical office.

I can transfer value within seconds using Zelle, Venmo, Paypal, Square, etc., for free right where I'm sitting now. Nowhere near a bank.

AFAIK, Bitcoin takes a minimum of 10 minutes assuming that I wish to pay the going transaction fee, or as long as 3 days (or even never!!!) if I use a de minimis fee. And that's assuming a significant risk that the value of the value transferred will not have the same value by the time the transaction actually goes through.

I should have warned you people will try to downvote you for trying to help me

How much value does that really add? Traditional banking doesn’t have many problems with that and it’s moot for most people because the bank has to honor commitments even if they make an error.

I guess if you don't understand the problem behind decentralization you can say stuff like that...

Why don’t you demonstrate some of that alleged understanding to answer the question? Start by producing evidence supporting your belief that there is some significant problem with transaction history modification and move on to why that problem cannot be more efficiently addressed using proven cost-effective techniques.

Maybe try Googling for once

This is not an effective way to convince someone you know what you’re talking about.

I'm not interested in you right now. Why do you keep replying to me? Is this really appropriate for HN? I have to use these replies preciously.

> Investments need to have intrinsic value.

> there’s no value in any particular set of random numbers

What is the "intrinsic value" in e.g. an iPhone? Would that value exist without humans? I would say no, it only has value because people are willing to pay for it. So I'm left wondering what principled distinction you can draw between a particular set of random numbers and a particular arrangement of metal and glass, both of which people want, to determine that one has intrinsic value and one does not.

iPhones do useful things which aren’t dependent on you selling them. There’s nothing which you can do with bitcoin other than buy things so it’s only valuable to the extent that it does that better than the alternatives.

Intrinsic value is a value that derives from the use of properties of the thing. It's not a derived value that requires the imposition of an additional layer of context to make the property valuable.

The iPhone, or any other phone, has the intrinsic value of being usable as a computing device, entertainment device, communications device, camera, thrown weapon, etc. If you want to be pedantic about it, the components that make up the iPhone have the intrinsic values of being usable for one or more of the above functions, and the materials that go into those components have the intrinsic value of being usable in industrial/commercial products or processes.

A bitcoin literally has no use inherent use on its own. It's simply a number. The exchange of these numbers has no intrinsic value, it would be like me and Adam exchanging a 2 and a 3 (not dollars or anything other units, literally just the numbers). Any value from the exchange is an additional layer of context imposed by me and Adam on the transaction--it's not intrinsic to the bitcoin itself.

> The iPhone, or any other phone, has the intrinsic value of being usable as a computing device, entertainment device, communications device, camera

Okay, but you're just shifting the value down the line. What makes computing or entertainment valuable, other than the fact that they are things humans want?

You're comparing things that have no relation.

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