I’ve changed my mind on Bitcoin

Might as well through TSLA into the absurd valuation sphere...PE ratio north of 1000 and projected to be >100 for at least the next 3-4 years. Competitors with PE ratios of 10-40 that produce 50X the vehicles...TSLA market cap higher than the top 9 car makers combined. Musk went from being worth 27B to 185B in a year. The valuation makes no sense...sure long term they could be a giant, but so many other car companies are producing electric vehicles and new battery technology now their competitive edge in the space may not last long.

https://www.cnbc.com/2020/12/14/tesla-valuation-more-than-ni...

> Money is a complete fiction now

It always has been:

http://www.arnoldkling.com/blog/steven-pinker-on-money-as-a-...

https://blogs.lse.ac.uk/politicsandpolicy/money-as-a-social-...

Yes. The economy is broken. Democracy is broken. Journalism is sort of broken. Healthcare is broken. What a world we live in.

EDIT: I even forgot about the climate.

Yeah pretty much. In a world where the following scenario is actively working all bets are off really.

Buy BTC convert to renBTC (skip this by just buying renBTC on an exchange if you can) Put in keeperdao and earn ~19-30% APY. Claim profits as ROOK convert to renBTC put them back into keeperdao and compound keep your exposure to BTC.

On a personal note I was a doubter for a long time. Now not so much given the money printing of the past year. The past year every time I read about NFTs I think they are stupid. This is why I’m forcing myself to research and experiment with them as I don’t want to let my doubts about things get in my way again.

You're conflating financial value and the abstract concept of value. Financial value is really just a function of supply and demand. Food and clean water may be a lot more important than megayachts, but they're also also far more abundant than megayachts.

It happens that maximizing financial value also does a good job of improving people's lives, so we treat as truth. Right now, we're starting to see this fall apart as certain valuations stop making sense and certain negative externalities start coming to light. That said, I still think in general, valuations tend to be more right than they are wrong.

This has always been the case for all items of value. You might just consider some of those things "meaningful" if people have been valuing them for a very long time (like coins or other physical items which represent a standardized currency) or if the reason people value them is closely tied to features of nature which we aren't likely to change in the imminent future (like requiring scarce things such as food and shelter to survive). But at the end of the day, people are still choosing to value those things and that is all there is to it.

From the article: If Bitcoin's market capitalization were to match that of gold, it would be worth over $500,000 a coin. This is why some investors are so bullish on Bitcoin.

Perhaps it's more accurate to say that investors are increasingly bearish on the dollar.

These are all inevitable consequences of artificially cheap debt due to USD "printing". The Cantillon Effect has weird consequences. Bullshit companies can be worth billions, and people will rationally flee the dollar (into e.g. BTC).

Bitcoin has a much more plausible value proposition than most of these bullshit companies. Conflating the anomalously high value of BTC with the anomalously high value of companies is a category error. http://jpkoning.blogspot.com/2018/10/bitcoin-and-bubble-theo... https://www.unqualified-reservations.org/2013/04/bitcoin-is-...

When and how was this ever different?

Isn’t it how trade works since the early days of humanity? We value things, whether it’s sea shells, sheep or a legal entity in 2021 with 10,000 staff and exchange it for what we think it’s worth?

Always has been.

Illusion of wealth

Same boat here. I remember all the enthusiasm users had when they were able to spend bitcoins to buy something. The excitement when a new vendor added it as a payment method. Now it seems that the space is occupied by those who would sneer at those who spent thousands of bitcoins to buy a pizza. It seems the only thing that there is to do with bitcoin is to hodl and hope you become a millionaire.

This is a rehash of a previous post of mine regarding electricity consumption:

Back in the days where all our electricity came from fossil fuels, I completely agree that marginal electricity usage was bad for the environment. However I think that thought has persisted with us even though it is no longer true 100% of the time. With renewables sometimes the marginal cost of electricity to our environment is near 0 or even negative (eg, during periods of higher winds and lower demand.)

I predict that in the future as bitcoin mining becomes more and more of an efficiency game that you will see bitcoin mining be kind of a load balancer the grid, effectively turning off during peak demand (or low supply) times and contributing to the base load during regular times.

For example, it may even help the economics of building new wind plants. Eg, currently it may not be profitable to build a new wind plant because base load is too low that the excess power generated would need to be sold off at 0 or even negative prices. However if bitcoin mining could be turned on during these times and off during periods of high demand, there will need to be fewer peaker plants in operation and it would positively affect the economics of opening a new wind plant.

Bitcoin mining only cares about the cost of electricity at a given time, it is not like most other electricity demands that are very time based. With the large variance of electricity generation by renewables, I think bitcoin can in the future help smooth demand according to the real supply/demand curve.

It's kind of like a different implementation of the Tesla utility grid batteries. Instead of deploying power, you force the grid to build more renewable capacity (that the miners are paying for) that you use except in peak periods, where you turn off and effectively provide the grid with more power.

What about a crypto that is working to change from PoW to PoS like Ethereum is attempting to do. I agree Bitcoin is wasting country like amounts of energy right now...

Sometimes spending more energy is a net win even though it's more energy expensive (cars vs horses).

Energy consumed is security in the network. Like a giant force field.

This so much. I absolutely believe in digital currency and blockchain (albeit not current implementations). However, they need to tie it to something tangible and it needs to be completely detached from USD.

This was recently discussed on bitcointalk [1]. Some quotes from that thread:

> Because when you have mined a full block and there is a backlog, the difference in income between mining the next block (all full of pending transactions) and going backwards and remining the prior block to take its fees is small (and comes at a cost of decreased chance of eventually being in the longest chain). This is particularly true because new transactions that are arriving cannot be included in the prior block if it is remined.

> A supply cap requires a block reward dwindling to insignificance (long before it reaches 0). So the significant mining reward must come from large fees. Mining stability requires a steady backlog of fee paying transactions, which in turn requires a highly constrained block size.

[1] https://bitcointalk.org/index.php?topic=5306354.0

I was curious, here's what the abstract says:

> Bitcoin provides two incentives for miners: block rewards and transaction fees. The former accounts for the vast majority of miner revenues at the beginning of the system, but it is expected to transition to the latter as the block rewards dwindle. There has been an implicit belief that whether miners are paid by block rewards or transaction fees does not affect the security of the block chain.

> We show that this is not the case. Our key insight is that with only transaction fees, the variance of the block reward is very high due to the exponentially distributed block arrival time, and it becomes attractive to fork a “wealthy” block to “steal” the rewards therein. We show that this results in an equilibrium with undesirable properties for Bitcoin’s security and performance, and even non-equilibria in some circumstances.

What portion of gold's value comes from non-monetary demand (e.g. electronics, jewelry, etc.)?

A few years ago I tried to answer that question and I remember getting a pretty low value, something like 10% or 20%.

what's the value in holding bitcoin versus any other cryptocurrency? genuine question here.

i've never understood the value of bitcoin because while bitcoins themselves are scarce, cryptocurrencies aren't.

The only problem is that the value of said money fluctuates drastically over time. If Bitcoin were stable in value it would be immensely useful as a currency... alas it is not.

There's multiple theories of value.

Labour theory of value contends that the value of an object depends on the "congealed human labour" in that object (e.g. a chair is worth more than its constituent timber because the chair requires you exert additional labour on that timber).

Intrinsic theory of value says that some objects have some objective value, inherent in the object (or as a property of that object, like mass).

Subjective theory of value basically says "value is in the eye of the beholder".

There is also exchange theory of value, which is similar to subjective value. An object has a value decided by what it can be exchanged with (e.g. 2 square metres of linen might be worth the same as 1 coat, even though the coat only has 1 square metre of linen in it)

That's a feature not a bug (of BTC anyway). A deflationary store of value....has value.

Why is that an issue? That's exactly why people buy shares.

Tell that to the institutions that are starting to pour 100s of millions of dollars into it.