Bitcoin could become ‘worthless’, Bank of England warns
theguardian.com
theguardian.com
I'm in many ways an art fan, but art pricing is totally irrational:
1. Prints cost substantially less than paintings since they're less limited
2. Prints price based on lots of intangibles (how limited the series is, what series it was, what the artist's role was in it, etc)
3. Fundamentally, I don't think buyers get that much more pleasure from an original than from a print or authorized reproduction
4. Many buyers loan their purchases to a museum (which has tax advantages) or keep them in free ports or similar, where they can't visit them in person
The really high end market (i.e. million dollar+ art market) is really clearly speculative a lot of the time. Or the pleasure is "I like owning this", not "I like looking at this', which is itself hard to sever from the speculative value.
A stranger across the world can't track your physical currency in real time. Whenever serial numbers are checked (if it ever is), the tracker just knows that bill was at that spot at that time, they don't know how many times it was exchanged or where it was since it was last tracked.
With BTC, anyone can track it in real time, anywhere. The same cannot be said about physical currency.
I suppose it's not a stretch to imagine banks have a machine that scans serial numbers (eg to catch DB Cooper's cash), but I've never heard of any evidence of such machines.
The art market is not buying and selling pieces of artwork. It is for obfuscating money. Where the money came from, where and who the money is going to, how much is owed to or hidden from governments.
Art is expensive because it makes it easier to obfuscate large amounts of money.
maybe a better analogy would be a famous photograph like the rhein 2
https://www.designtoscano.com/products/mona-lisa-classic-art...
But either way, this doesn't distract from the main thrust of my point. Art is expensive for Money reasons, not art reasons.
https://www.youtube.com/watch?v=ZZ3F3zWiEmc https://www.youtube.com/watch?v=V5sOuET8UWA
Why is the first production car worth more? A buyer won't know the difference between the 1st and the 5th past that tag. IMO the cost is driven mostly by rarity.
Of course what you pointed out is definitely a role in art, but I don't think it's the primary driving force
I guess you never came across modern art junk
A market downturn or economic crisis can turn a lot of Bitcoin owners to liquidate, potentially annihilating its value. You just don't see that with people who have money to collect art.
Good reminder that the growth in Bitcoin has almost entirely happened since the last real bear market.
https://en.wikipedia.org/wiki/Gold_Reserve_Act
Hillary Clinton talks about how crypto is a threat to currencies and especially to the dollar as a reserve currency (minute 29:30):
https://www.bloomberg.com/news/videos/2021-11-19/great-power...
Like, if you want to post about BTC more than five times an hour, you first have to take an undergraduate class in cryptography and economics.
Ten times an hour? You can't use "crypto" to mean "cryptocurrency."
As a philosophical idea, can we at least agree that the inherent value of Bitcoin and the fundamental reason some people invest in it is... the beauty of mathematics?
Bitcoin is full of ugly warts though. While some other coins featuring much more beauty (simplicity and elegance) are near worthless.
Furthermore, most people speculating on bitcoin have a very limited understanding of the mathematics underlying bitcoin...
Those who value it for mathematics, would likely value the state of the art cryptocurrencies more. As BTC really isn't any way special outside being the first one.
These people will hold and buy Bitcoin for the rest of their lives.
Half of all Bitcoin hasn't been moved in 2+ years, despite multiple -50% moves.
The price went from 20k to 2k and most wallets didn't even have a coin move from it.
I dunno, there are feedback mechanisms that could keep this thing alive for a long time. And if not BTC then certainly some crypto based on the concepts.
You could always try to find the bigger fool unless you block the conversion between crypto and real money.
Anyway, this kind of schemes always come crashing down. There will be not a lot of people willing to catch a falling knife after some point.
At some point you have to round something to zero.
That's 1/2 pow 52*5! There are not enough atoms in the universe to sustain such a fall.
Presumably a big chunk of this is permanently lost due to lost keys, etc.
>rekt coiners have to get a job
So the fact that the mining hardware can't be used for anything else is a feature which makes bitcoin more secure against attack.
I'm honestly curious because I don't see how Bitcoin could be useful.
it has its shitshow of its own - see $actual_crypto_exchange_busted
This is by no means exhaustive, there are a myriad of differences
Bitcoin has it own culture and history, but it is still a baby. I do think bitcoin is a bit more like Gold, although Gold has real uses so that is still a bit of a rough comparison.
While these risks clearly _do_ apply to traditional currencies, I do think, as an investor, it's worth considering market cap (as a proxy for "social belief in") and history of stability.
Bitcoin's market cap is probably (factoring in permanently lost coins) something like $750B, which makes it a bit smaller than, say, the Swiss franc, and its history of stability is much, much shorter.
That's where I land I guess.
Magicism?
I know people hate hearing that, but it is the truth. I am frustrated with how high they are on some things, bad spending, etc. But at the end of the day look around at what we have built as a civilization. That is from the collective pooling of money to build the entire system.
I agree with everything except that last part is understated. Bitcoin is like gold with the only difference that gold has functional uses, whereas Bitcoin is entirely replaceable and can be forked and duplicated.
So if you create another cryptocurrency which could use the same ASICS as bitcoin and you convince a lot of miners to switch then maybe.. it could be replaced but that is a tall ask.
No it's not. That's just another reduction missing the point.
If the dollar was to be replaced, a new currency would be issued, there would be a period of trade-in for old currency, all systems of governance, regulation, etc would recognize it and issues could be handled.
Gold would still be used for everything from electronics to satellite coating to who-knows-what.
In the case of Bitcoin it would just disappear. You're arguing it's hard to replace because of its participants, which may be true, but is far less likely than the participants in the dollar.
Some businesses dependent on it and a lot of individual participants would lose their value in their wallets, and that's it. Believing in Bitcoin is betting on that being enough to prop it up. Gamble accordingly.
You gamble your property tax won't jump 50% or that police will stop rioters from stealing from it. I admit it is a much smaller gamble than bitcoin but it is still a gamble.
Holding your savings in $ is a bigger gamble than buying a house and some would argue it is a bigger gamble than holding bitcoin.
The degrees are what separates milk from butter, or a paper box from a house. That is the entire point. If you ignore the degrees to which something is different from another, then sure, everything is everything else.
> Holding your savings in $ is a bigger gamble than buying a house and some would argue it is a bigger gamble than holding bitcoin.
Perhaps, I'm not one of them. Time will tell.
I think if anything all that give me less faith overall than something maintained by people who operate a currency for the love of it.
The value of my past work being tied to the success of something I have no control over, a machine that murders innocent people in drone strikes across the world?
That's not something I want to have faith in.
Yes, it rests largely on the trust and faith you have in the currency. At a basic level, you at least need to trust that your money won’t lose half its value overnight. Otherwise, you’d just use another currency; there are a couple of examples in recent history. Now, whether your faith is justified or not is another question. Then you can look at the size of the economy or the power of whatever is backing the currency.
> The value of my past work being tied to the success of something I have no control over, a machine that murders innocent people in drone strikes across the world?
Such is the world we live in, whether we like it or not. As a side note, a lot of the drone murdering is done more or less transparently for economic reasons. Yes, a government powerful enough to project power on the other side of the planet to secure a good supply of cheap oil or to ensure some form of hegemony does inspire confidence in its currency. I wish it weren’t so, but here we are.
It operates more like a stock than a currency and can be moved by any person/firm/entity that has a few billion dollars. I would venture a guess that the number of individuals using bitcoin to purchase goods/services is less than a couple percent of the total number of people that have bitcoin.
That's like saying any new social media website you create isn't really a social media website because it has only 10 users.
I'm not saying bitcoin can't get there, its certainly possible, but when the majority of use cases use terminology like "holding", "investing", "trading" its treated by users as more of a security/equity than a currency.
It's a currency. I've paid for many things with crypto.
https://www.paypal.com/us/smarthelp/article/how-to-use-crypt...