why would you ever want something that could plunge 30% in a day? even if it went up 5 billion percent, then what? everyone sells and it goes down? what's the point?
it's like the most zero-sum activity imaginable.
edit: I'm sincerely wondering what the value of bitcoin is, other than things surrounding preserving its value
https://www.nasdaq.com/articles/why-bitcoin-may-actually-spe...
All the power funneled into BTC would be far better spent doing anything useful. From electrolysis to protein folding.
Also, it should be noted that shiny rocks have intrinsic value beyond their aesthetics. BTC is literally just a number with no value.
Bitcoin is a censorship resistant, neutral money and payment network. Banks don't do that. Banks don't consume "kWh of power" by the way. From the endless wars to protect the US (dollar) hegemony to 50 floor buildings draped in marble. Thats all cost + energy.
That's why it's a bad faith argument. The only thing bitcoiners want to compare is the power cost of running the mining rigs. Why don't they include the cost to manufacture said rigs? To mine minerals to build the silicon needed to power their currency? Why don't they include the governments needed to make sure the equipment supply chains are properly maintained? Why don't they include the amount of power needed to run the servers and switches needed to power the internet needed to run btc? Why aren't you looking at the construction costs for the buildings housing the mining rigs?
I'll tell you why, because they aren't making a good faith argument. They are trying to come up with ways to make BTC good and banking bad. That's it.
Lots of things cost energy. The question has to be "what are we accomplishing with that spent energy". When two algorithms do the same thing and one burns TWh while the other burns kwh.. guess which one I'm going to favor?
There's your problem, you don't understand that bitcoin is trustless and the worlds first implementation of it's kind. If you can't understand why that's important I don't have the time to convince you.
Just because someone does something first, doesn't mean that thing is useful or good.
Don't use it then, but why would you also disparage the millions of people who are happily finding value in it?
>Just because someone does something first, doesn't mean that thing is useful or good.
Well done creating your amazing straw man.
Because it's an environmental disaster causing a bunch of modern issues and the defenders are being annoyingly naive about.
BTC uses a ton of power, requires a ton of equipment. They solve a problem with TWh of power that is simply solved globally with kwh of power. It is beyond wasteful.
> Well done creating your amazing straw man.
Nah, BTC is just beyond pointless. You are arguing that it's special, but have a hard time actually articulating WHY it's special "If you can't see this, then I don't have time to explain".
That's the same line cult members use defending their faith. It's a mental shortcut to avoid critically analyzing something you've bought into.
BTC isn't bad for the environment carbon poluting energy is. Energy from non-carbon freeing sources makes bitcoin a greencoin. We need to fix where we get energy from and price it accordingly. BTC exposes this.
Remember "of course it's not a currency - it's a store of value, like gold"?
Every Bitcoin defender repeats this line, but I never see any numbers. Whatever the energy use is, it's provably less than Bitcoin by any metric like transaction volume or market cap, by the simple fact that if you were to scale up Bitcoin's energy use for comparison to the world financial system, it would use magnitudes more energy than humans produce.
https://docsend.com/view/adwmdeeyfvqwecj2
However, it's a terribly bad faith argument.
Essentially, they wrap up everything that isn't involved with ledger maintenance (ATM power, data center power for running the website, Air conditioning at branches power usage) and compare that to Bitcoin, which is only doing ledger maintenance. They do that, because if you had a true apples to apples comparison, you'd end up with kwh of power usage. That's because a ledger is computationally cheap to maintain over a trust network. We were able to do that in the 70s with servers that had no more power than today's raspberry pis.
And how do we know it's garbage? Because if banks stopped doing their own ledgers and instead did everything through bitcoin, would their power usage drop? Absolutely not. They'd still have branches, ATMs, and data centers running their websites. In fact, some banks do manage BTC. Do those banks have lower power footprints compared to like banks without BTC? Absolutely not.
You weren't able to send value from one part of the world to another in minutes without an intermediary for a tiny fraction of the transaction amount in the 70's and you still can't do it today without crypto.
You go through two intermediaries with crypto. One to turn your chinese currency into crypto, then another to turn the crypto into us currency.
It's like somebody at the bottom of the Ponzi scheme defending it to death because someday, maybe, just maybe, he'll rise to the top...
There are people living under governments that don't allow their citizens access to the global financial system (i.e. capital controls) and are often living in high inflation environments. Storing their wealth in an unseizable asset, even $100 worth, means that they are decoupled from their government financially and can escape their hell hole with their wealth in tact.
Inflation is theft. Crypto prevents this theft.
You mean the crypto that just lost 30% of it's value? Literally the topic of the article. THAT crypto is an inflation defense?
This persistent idea that people who care about the carbon footprint of Bitcoin somehow single it out is silly. I dislike unnecessarily large SUVs, cruise ships, American suburb culture, and diamond mining too. Bitcoin just happens to be the topic of this thread.
That's always been the point of bitcoin. It's used for speculation.
That's about it.
I would argue it’s actually a sub-zero-sum game because the “game master” (bitcoin miners) withdraw 12.5 coins from the pool every 10th minute.
I think OP is saying “why would you want a currency that could lose 30% of its value in a day”
Which I agree with wholeheartedly.
Cryptocurrency will simply have to compete with currency issued by sovereign governments, similar to how government-issued currencies compete with each other now.
I think an issue for many people is that crypto is looked at categorically as a currency, but it could be much more. It could be a crappy currency, but a good store of value (a better version of gold in most respects, though gold retains an intrinsic value), it could also be a great currency - transiting government borders with impunity and anonymity, which may be very valuable to some.
Historically, we've used gold, up until the last 150 years or so (don't quote me on exact timeline here) and even then the U.S. finally went off the gold standard in the 1970s. For most people, cash was still thought of as a store of value - they'd throw it in the bank or under a mattress. Or they thought gold was, but since it's heavy they just trade cash instead that's backed by gold. It'll take a while for the global paradigm shift to occur that pits currencies (sovereign issued and otherwise) against each other as a separate theory to assets in general. Cryptocurrency (which is now a bad name IMO) straddles the borders here, so it tends to be confusing.
Personally I view cash as good for liquidity, but that's mostly it. I want the cash I receive to be turned into productive assets, so I hold a much smaller amount compared to assets.
you've said a bunch of things but haven't explained the value.
It can also spectacularly crash overnight.
Everyone with a computer or even a phone has access to BTC.
Again, not my arguments, but arguments I have heard.
They'd run out eventually, but you'd still have lost out
You help enrich the Bitcoin speculators. Spending in USD doesn't do that.
It’s highly volatile yes, and has lost >= 80% of its value four times in those ten years (so this little 30% dip is nothing by comparison). But not zero sum.
It originally mainly appealed to two factions: techies who like disrupting big things from first principles, and people who were long concerned with the mechanics of government fiat money and central banks [1]. There was some overlap between those two groups, and they were the innovators and early adopters.
Interest has since expanded to investors of all kinds due to its, so far, non-zero-sum aspect.
But if you’re not interested in the mechanics of how money works, it’s not surprising Bitcoin or cryptocurrency won’t be of interest to you.
Also, Bitcoin has aspects of both currency and commodity (and possibly security, though the US SEC has said they don’t consider it that). It’s impossible to categorize based on previous definitions for this reason. Try not to get caught up in debating whether it’s one of these things, because it’s a mix of both (or maybe all three). So many people drive themselves crazy trying to define it as a currency, or arguing against it as a currency, but that’s just a mental tar pit.
[1]:One well-researched take: https://en.wikipedia.org/wiki/Princes_of_the_Yen
Does putting your money in something that can devaluate 30% in a day sound like a better solution?
If asset A reliably loses 4% of its value per year, in a totally-predictable straight-line, and asset B has wild up- and down-swings, but over years reliably delivers 25% appreciation per year - asset B is better, unless you'll be forced to urgently sell at unpredictable times. (And if you can find a basket of uncorrelated B-like assets, all the better!)
Mt. Gox proved that you can't just trust random exchanges. Even in the best of times, the exchange can get hacked and all the holdings disappear.
The main value propositions behind bitcoin are:
- stable store of value in its end state (minimal inflation)(note: you'll see wild fluctuations during the interim period where its future is uncertain)
- not under the control of any government or central authority (no risk of hyperinflation)
- easy to store in large quantities (you don't need to buy a large vault just to store all your bitcoin)
- easy to trade in large quantities (you don't need to hire trucks to transport your bitcoin)
- easy to hide from a predatory tax regime (ie, communist takeovers)
- may one day be accepted as a common currency for the above reasons, just like gold 100 years ago
Investing in bitcoin is like investing in a startup. There are no guarantees, its value proposition is contentious, and it requires a leap of faith. I personally refuse to speculate on its success. But I don't see anything innately nonsensical or zero-sum about it
- People will want to adopt BTC as a mainstream currency in future, for all the reasons I listed earlier
- When BTC is adopted as a mainstream currency, the value of each BTC will be X (in relation to raw materials, manufactured goods, etc)
- Because today's price of BTC is much smaller than X, you stand to make a huge profit if you buy BTC, and it later becomes a mainstream currency
Ie, BTC is a startup that if successful, everyone will want to use in the future. And that makes it a very valuable investment for angels/VCs today
How can this happen if the price never stabilizes (because no one wants to spend what they have)?
> - When BTC is adopted as a mainstream currency
How can this happen if the transaction costs are $10+? To pay for a Starbucks coffee, it would cost $5 for the drink and $15 for the transaction fee.
> - Because today's price of BTC is much smaller than X, you stand to make a huge profit if you buy BTC, and it later becomes a mainstream currency
How can it become a mainstream currency if everyone treats it like a speculative investment and the transaction costs prevent it from used in "micro" transactions?
The entire system disincentivises use as a "mainstream currency"
I am a Vietnamese living in Vietnam, and I would have absolutely no way to wire $2000 to a bank in Singapore (I tried). I do wish bitcoin stay alive (along with the US financial system too)
If you want to promote others beliefs that Bitcoin has become a religious cult and MLM scheme, your attitude is perfect.
But if you look at it against the backdrop of sanctions, civil asset forfeiture, erosion of civil liberties, and monetary debasement, things look different.
People forget about this. Bitcoin came up in the context of crypto-anarchism, and was meant to serve the needs of that community.
The government already tracks who buys Bitcoin by having all points of purchase of USD<->Bitcoin require proof of identity, and they can obviously look at the blockchain to get all the transaction made by each individual.
Let's be realistic for a second. All it would take for the government to forfeit your bitcoins is a $5 wrench [1]. I don't like that it's that way, and I don't know what the solution is, but I know it's not as simple as "make Bitcoin happen".
Well-regulated exchanges are part of an effort by (usually VC-backed) startups to legitimise making money off of cryptocurrencies, rather than a core part of the original ethos behind Bitcoin.
Cash is already anonymous - the act of transferring cash from one person to the other is anonymous. While bills have serial numbers, it is impossible to see who owns all the bills at any moment in time. One can only trace specific bills if they've been marked and then found.
Bitcoin transactions are not only recorded, but linked to each other uniquely. It's a government's dream to be able to track all your payments everywhere. It's the opposite of anonymity. Even if you manage to buy bitcoins from someone anonymously, if you _ever_ make a transaction that identifies you (such as paying with Bitcoin at Starbucks where a security camera can run facial recognition) they can trace where your bitcoins came from and then look at all other transactions you've ever made.
That situation is not better than fiat. It's an objectively worse situation for preserving your anonymity.
This. I like to think it as a monopoly game where a player has a cheat code to practically print infinite amount of money.
Bitcoin solves this problem; unfortunately the volatility (due to massive speculation game), transaction bottleneck, energy costs, etc. affects its function as a currency.
There are other cryptocurrencies trying to tackle these problems (e.g. eth2), but I believe the ultimate goal is that it replaces government controlled currencies.
However, because it is also used so heavily for speculation, it is very volatile and therefore not an optimal store of value / means of exchange.
It's better than gold in every way, including energy use.
We'll be back here in four years when bitcoin is well above 100k being used happily as a store of value by millions of people and someone like you will say the exact same thing again. How long will it take you to realise that it's already a success?
at $DAY $COIN is at $MAX_PRICE. it never reaches $MAX_PRICE ever again. for someone who bought at $MAX_PRICE, what is the value they received?
It's ironic, the same thing that makes these coins valuable to people (volatility, and mostly in the upwards direction) is a major reason why they are hard to use for mass transactions.
However, there is some good here. People are getting familiar with crypto by participating in this investment strategy. A relatively stable coin capable of high transaction throughput and low fees - one that can actually be used as a currency instead of an investment - will benefit from this in the future.
I'm far from a Bitcoin maxi, but I own a small % in my portfolio. Here's my take:
We are entering a world of abundant cyber-terrorism. If my bank and/or brokerage gets hacked, why do I own? I have nothing except that entry in their book keeping. And if you think, "It's backed up, they'll have you up and running in no time", I'm skeptical. I think anything like this would be chaotic.
This is much harder to do to whatever wealth I have tied up in Bitcoin. As long as the internet is running, there's a permanent record of what I own.
I think if my bank had a castrophihic record failure I'm going to get the money back eventually. I have far less hope about recovering stolen bitcoin.