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Comment by cs702 | Hacker News Reader

Three highly speculative predictions:

1. The courts are more likely than not to rule that many crypto-assets -- but not all -- should be regulated as investments. It won't be fun for a lot of crypto traders.

2. Over time, the usual giant financial institutions are bound to become the dominant market makers in crypto-assets. In all likelihood, one of them will end up buying Coinbase. Those giant financial institutions already know how to comply with regulatory bureaucracies worldwide, efficiently, at scale. Rinky-dink exchanges lacking the machinery for large-scale efficient compliance will not be able to compete and go out of business.

3. Bitcoin, which the SEC considers a commodity (it's explicitly excluded from the lawsuits), is bound to become even more dominant in terms of market capitalization. The longer Bitcoin survives, the more it will get adopted and integrated into the world's financial fabric, e.g., as a store of value. If this sounds far-fetched, consider that many smart and smart-sounding people have predicted Bitcoin's demise, and so far their arguments have been proven wrong: https://99bitcoins.com/bitcoin-obituaries/ .

We sure live in interesting times!

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>>If this sounds far-fetched, consider that many smart and smart-sounding people have predicted Bitcoin's demise, and so far all have been utterly wrong

Bernie Madoff pulled off one of the largest (literal Ponzi) scams and evidently stated that he started in the 1990s for a run of just over 15 years until being arrested in 2008, although some investigators thought that his fraudulent activities started as far back as the 1970s (!!).[1]

The Lindy effect[2] works until it doesn't. Taleb popularized the theory in pop-culture with his books, but the problem is that it's seemingly impossible to know when/if something will collapse/fail to the point that this "effect" doesn't seem all that useful as a predictive indicator.

[1] https://en.wikipedia.org/wiki/Madoff_investment_scandal

[2] https://en.wikipedia.org/wiki/Lindy_effect

The comparison to Madoff is not apt. Madoff hid losses by committing accounting fraud, whereas every single transaction in the Bitcoin network is visible to everyone and, moreover, cryptographically verifiable by everyone. As long as the distributed consensus algorithm continues to function, Bitcoin will continue to exist. Period. (Government regulations cannot kill it; they can only drive it underground, as with gold.)

Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning.

No, this is an absolutely ass-backwards argument. To be a currency or a store of value or money (read: to be of any use) it has to be exchangeable for goods and services. Now we can see transactions on the blockchain but we have no idea what that transaction was for. *Nobody* can tell you what a bitcoins worth of wheat is without resorting to exchange rates of bitcoin to actual currencies. But because the entire exchange ecosystem is so illiquid, intransparent, unaudited and rife with fraud there is no way to know how many bushels of wheat you could get for something like 13 BTC.

Isn't this counter-argument equally applicable to silver or gold?

Well, the problem is you can easily trade gold for cash because it is socially acceptable to do so. If Bitcoin became outlawed, it would be very hard to exchange Bitcoin for cash, since it has no extrinsic value outside of being a financial asset (as compared to, for example, barrels of crude oil). That being said, I doubt Bitcoin will be outlawed in the West, and generally agree that it will be around for the long term.

> That being said, I doubt Bitcoin will be outlawed in the West, and generally agree that it will be around for the long term.

Well, not entirely without precedent, since private ownership of gold was outlawed nationwide in the US during the Great Depression. It wasn't fully legalized until 1974.

https://en.m.wikipedia.org/wiki/Executive_Order_6102

This is an entirely new fact for me. It’s surprising to me that I’d never heard of this. Thanks for sharing!

Wait till you hear that the first chairman of the SEC was a notorious market manipulator who was hired by his friend FDR to prevent anyone else from doing the things that made him rich. He also happened to be JFK's dad.

https://en.wikipedia.org/wiki/Joseph_P._Kennedy_Sr.#Wall_Str...

That's why history repeats. Most people have no idea what happened a 100 years ago.

Yes.

Nobody can tell you what a gold oz. worth of wheat is without resorting to exchange rates of gold to actual currencies.

I'll give you 1kg of wheat for an ounce of gold right now.

I'll see your 1kg and raise to 100kg.

Congrats boys! We just created a market using gold as the unit of account!

Gold has intrinsic value as a commodity though. It's scarce, has industrial uses, and has aesthetic value to a lot of people. Bitcoin doesn't have that. Bitcoin has value entirely because people think it has value. As an inflation hedge it fuckin sucks because it follows the market. When the fed increased rates, bitcoin crashed. As a store of value, it's too volatile to really work well for that and small mistakes can leave you with nothing. As a currency, the transactions per second is way way too low to be useful.

> Gold has intrinsic value as a commodity though. It's scarce, has industrial uses, and has aesthetic value to a lot of people.

Yet this value is a small fraction of gold's trading price. How do you explain the current price of gold?

Gold, like stocks and real estate, trades at some multiple of book (with metals this ratio is generally between 0 and 1, with stocks it's generally greater than 1). In fact, looking at the P/B ratio is often one of the first things someone does when evaluating an investment. That ratio for bitcoin is infinite which is why it's not an "investment" in the usual sense of the word.

why is BTC ratio infinite, but not gold?

Gold has industrial uses; the gold traces on a PCB add $X value to it which is a floor for the value of the gold itself

That ratio is a somewhat arbitrary thing. Who says it's a good measure?

For gold, perhaps 20% of its value is its actual use and 80% is for the scarcity. For bitcoin it's 0% for actual use and 100% of the price is its scarcity.

When you look at it like this, the difference between gold and bitcoin is not nearly as dramatic.

We almost had that with oil, but then they killed the guy trying to make it happen.

Unrelated to the killing, tying you medium of exchange to a physical commodity was ill-suited to a time where the global productivity growth was double-digits for 50 years. Limiting the growth of your exchange medium to the rate at which a commodity can be extracted is almost as bad as going full command economy.

I'm not sure what point you think you're making here, because this is in fact entirely correct for gold and why gold isn't some magic "better money" alternative.

This is a very valid point. However, the gold:<random currency> markets have been extremely liquid and somewhat transparent for the past thousand years. In the dark ages there was no way for someone to move the *global* gold:wheat chart by 50% just by executing shadowy trades at a single marketplace. Of course this is because medieval markets lacked a great deal of information synchronization, but it was also because medieval markets were actually decentralized.

You do need to separate medium of exchange from store of value. Real estate is useless as a currency while being the primary store of value for most people. Most of your objections also apply to real estate: can't know how much wheat a house is worth, houses are notoriously illiquid, price discovery is difficult and quite opaque, the sector is rife with misrepresentations. I wouldn't go so far as to say fraud, but where does "real estate agent" sit on those polls of "most trusted professions"? Houses aren't even fungible!

And if anyone thinks BTC/ETH transactions are slow and expensive (me!), around here the gas fee on real estate transactions is ~5% with a 6-month processing time...

I guess the difference is that you can live in a house. For the majority of people that's the real value.

Real estate market is also heavily (heavily) regulated, to the point that buying and selling houses require so much paperwork that it's not really convenient for scammers.

It's also quite stable, loans are secured by mortgages on the properties, I'm not sure anyone would accept bitcoins for the same purpose.

You sort of tipped around the main difference: Real estate is illiquid and intransparent sure, but it is a non-fungible productive asset, you can get people to pay you rents because they need precisely your building. There are no comparable income streams for bitcoin (outside of Ponzi "yield farming") so it is illiquid without any of the benefits of traditional illiquid assets.

rent is due after you bought the property.

which entails a lot of the aforementioned paperwork and checks and law abidings.

if bitcoin could provide the exact same level of security, it could be used as an asset, granted it failed as a currency.

the problem is it was designed precisely to not adhere to the standards everyone expects from "old-school" transactions, hence its main purpose is speculation, and it's barely good at that right now.

You can live in a real estate investment or grow food on it or run a business in it. Bitcoin is a bunch of 1s and 0s that is same as a blank canvas hung in museum and is priced at $20M. It is essentially useless, but people believe it’s worth something, so it keeps holding value. Until one day, it doesn’t.

I'm not a bitcoin maximalist, but you have to acknowledge that in this day and age that your definition pretty much applies to USD as well. People believe it's worth something. And so it is.

USD holds value because the government says it does. The government holds authority because they have a monopoly on violence. Or, if your less pessimistic, it's because people believe in the government.

Exactly

To paraphrase a quote attributed to Stalin - how many divisions does Satoshi have?

But then you have to explain why gift cards are worth something. The answer is, because someone will give you something for them.

Meanwhile there are a large number of entities that have already entered into long-term contracts denominated in cryptocurrencies and any of them would pay you something for it when they need to satisfy their obligations.

That doesn't mean the value never changes, but that's also true of government-issued currencies. That's what inflation is.

> But then you have to explain why gift cards are worth something

gift cards are vouchers

You pay $30 to the store so that someone else can spend the $30 in that store.

It's a certificate, not a currency, not a store of value.

It’s “buying power”

  gift card
  noun [ C ]
  uk /ˈɡɪft ˌkɑːd/ us /ˈɡɪft ˌkɑːrd/

  a card that can be exchanged in a shop or on a website for goods or services of the value that is printed on it

it's literally the same thing as cash, a check or a voucher.

it is also entirely dependent on the same external factors of cash, vouchers and checks: inflation, exchange rates, etc.

because it's simply a certification that you can spend that amount of money, in that currency, in that shop and that's it.

Also: a Patek Philippe is buying power as well

everything that can be exhchanged for something else can be defined as "buying power"

but an American Express or a gallon of water in the desert are buying power too.

the definition is too broad to be useful.

I’d counter that buying power is the only metric that matters. All these abstractions of buying power may distract and distance you from this most important metric - often to the benefit of companies and nation states.

> I’d counter that buying power is the only metric that matters

I'd counter that protection of buying power over long periods is what really matters.

My CD collection had an enormous buying power in the 90s, now it's almost worthless.

I reckon one cannot rely on buying power of CD or DVD or VHS.

> often to the benefit of companies and nation states.

In this regards people, companies and nation states interests are usually aligned, i.e a stable currency that provides protection against wild fluctuations and retains its buying power and its usefulness.

Unless you are an enemy of the people, I don't see why someone should not like it.

Good points. Consider all the different investment instruments out there. Abstractions on top of abstractions on top of abstractions of buying power. Yes, a stable currency is desirable. But volatile abstractions are also beneficial to powerful entities.

its a loan to the card issuer

an interest free loan, that's why it has "gift" in the name.

It works the same way as lending the money directly to a person, gift cards are simply more convenient to handle and are safer than cash, but other than that it's just a gift in the form of cash, no matter how many intermediaries are between the sender and the receiver, the input and the output will always match exactly.

If, for example, I give my friend Alex $20 to buy something for his little daughter but Alex uses it to bet on a football match and loses it, Alex has to take some money from his pocket and then buy the gift with his own money. Which is not different than saying he spent his money on the bet and bought the gift with the money I gave him.

If otherwise Alex wins, he will still buy the gift, but he will also have increased the initial sum by an x% which he can keep (or maybe try his luck again)

Buying a gift card is the same process, the company holding the money at one point has to give back something of the same exact value, it doesn't matter what they do with the money in between, what matters to the sender and the receiver is that the amount printed on the card is fully available at the check out (which is just lik getting the amount in cash and then paying with that)

Do gift cards go up & down 50% in a year and have large transaction costs?

Some of them do. Suppose the issuing company gets into some trouble and people fear they won't be able to make good, but then later they take care of it.

For that matter some government-issued currencies do that too.

when you say up and down you are referring to buying power. And yes, the buying power of a $20 grocery store gift card has gone way down the last few years. Consider how much milk and eggs you could buy in 2018 compared to today.

Gift cards are tethered to the dollar, with a discount, because they are essentialy unsecured loans to the gift card issuer.

I also would point out that very few if any people would point to gift cards as a durable store of value and new world currency.

Totally agree. I only meant to illustrate that all abstractions of buying power fluctuate in their ability to secure basic needs - food, water, shelter, supplies.

And the "tethered to the dollar" part is important. They are basically liquidity/risk discounted dollars, as are many of these examples of "buying power".

No one is tethering their Rolex price to BTC. No one is tethering their home purchase budget to BTC.

Why? It's all tethered to your income, in dollars, and your savings presumably mostly in dollars as well.

Even "jug of water in the desert" is tethered more to dollars than BTC because what are you more likely to have in your pocket, and why?

Dollars are tethered to the government taxing us in dollars, so we get paid in dollars, and our government has nukes & aircraft carriers and such. Everything then gets tethered to it because thats what we get paid & save in.

BTC is tethered to nothing, and there is no natural value you can back into such that you can justify any price level of it.

Other than its usefulness as "untraceable" (what people think, but not what is true.. it is more like "unblockable") cash, and for money laundering/drugs.. it is a trading instrument for punters.

> No one is tethering their home purchase budget to BTC.

Whether you tether the purchase of a home to bitcoin or the US dollar is more a state of mind, tribalism, etc. Both the US dollar and bitcoin have no intrinsic value. They both derive value from a human belief system - I believe they have value and that others believe the same. They are both just networks in that sense.

> Even "jug of water in the desert" is tethered more to dollars than BTC because what are you more likely to have in your pocket, and why?

This is silly. But to add to the silliness - you could have bitcoin in your brain. Just memorize your words.

> Dollars are tethered to the government taxing us in dollars, so we get paid in dollars, and our government has nukes & aircraft carriers and such

Now THIS is truly different. The US dollar has violence on its side. I concede that bitcoin is a peaceful currency - at least thus far. Hopefully it stays that way.

> Other than its usefulness as "untraceable" (what people think, but not what is true.. it is more like "unblockable") cash, and for money laundering/drugs.. it is a trading instrument for punters.

This is political bias and parroting talking points of anti-bitcoiners. While your other points are thoughtful, this is not. Why not just call bitcoin a butthead?

> USD holds value because the government says it does.

so how do you explain dollarization of failed economies? Such as lebanon, or venezuela etc?

Surely, you're not saying that the US gov't somehow is exerting violence on another country to make the dollarization happen.

The people in Lebanon and Venezuela trust that the US government will continue to exist and that they will either meet with people who want to do business with it, or will meet people who assume they will meet people who will, etc. So they have value.

So if people trust that Bitcoin will continue to exist and they will meet people who want to do business with it etc...

except bitcoin is one of the worst choices for that purpose

even the Iranian Rial is more reliable

can't edit anymore, the point is Iranian Rial is accepted by 90 million people in Iran, all the Iranian businesses and the Iranian government, there are much less bitcoin users, technically there are a lot more accounts, but that doesn't mean real people or real businesses.

Not surprisingly Iran and Russia are teaming up to create a new stablecoin and not adopting BTC, because using BTC right now is literally the best way to get caught (for example infringing sanctions).

The people that can afford to trust and use bitcoins for exchanges are the people who do not have to fear the surveillance of State actors/secret services/national agencies(NSA,FBI,Europol,China's central bank,...)/etc and that would be much better off using another FIAT currency (USD, EUR, etc.)

That's the only thing that gives Bitcoin value. So, in a crisis it can become false for some people, then spread to the people they know, etc.

With dollars, all Americans need them. So do international companies that transact with Americans. If you think the US government will hold, then that belief will be true, it's only a question of the number of steps.

> in a crisis it can become false for some people

it depends on what the crisis is, and whether this same crisis also makes people believe that the US gov't will not hold.

In general yes, but with the difference that the dollar (or other "real" currencies) are encoded in law to have a value with the whole state backing it.

US Dollar has value largely because the United States government is legally obligated to accept it to settle debts.

Also, any debt in the US can be paid with dollars. They even printed "for all debts, public and private" on the bills.

Yes that is one small dimension of why the dollar is valuable. But a far bigger part is the fact that using dollars enters you into the US financial (and by extension legal) systems which has been far more stable, reliable and predictable than other systems over the last century. For a point of reference consider Switzerland, whose currency is a minor reserve currency and whose banking and legal systems are globally appreciated, despite the fact that they have no power projection and a tiny population in comparison to their financial markets. The Swiss central bank has even deviated from their usual stable policy since 2008 and yet still they see inflows.

I have to agree, fiat currency seems very similar to bitcoin. Its a manmade currency essentially that is backed by nothing.

Bitcoin appears to be the next phase of that manmade currency.

Also the US government threatens (and occasionally delivers) military and financial harm on entities that refuse to use USD for certain transactions.

Yes, this is the key dimension of the "currency" front. But bitcoin "advocates" (a term I'll use for diplomatic purposes) say that within a context that implies that is somehow a low bar to clear or just a consquence of the monopoly of force or somehow morally questionable. But becoming something people trust (or at least have some amount of confidence in multiple dimensions in) is one of the most difficult things for any new asset class or medium of exchange.

Some of the main ways currencies and commodities get there are value stability (sticking within a certain band with <100% annual swings), wide acceptance and utility. After 10 years of many techno-smart people trying to engineer cryptos to become that we are nowhere near any of these promises being fulfilled.

Now do the US dollar!

I don’t think any of this is accurate. My house is a store of value but not easily traded for goods and services, but can be sold for local currency to facilitate that exchange. There are many crypto exchanges with conversion to many currencies, including fiat currencies, but also between other crypto currencies. This is how price discovery is accomplished. If it were illiquid as you claim then there would be a ton of arbitrage opportunity in the inefficiencies and mispricings of crypto currencies. However in recent times prices are fairly rational across exchanges and conversion to fiat. The fraud claims you have seen overblown, FTX not withstanding. But I’d note that all financial markets are rife with fraud, hence the regulation.

I don’t think regulation is a bad thing in crypto exchanges specifically. I think any rational crypto exchange would welcome it. Despite claims to the contrary compliant exchanges in many markets not aligned to big players start up all the time. That’s great, and I think a lot of crypto exchange operators have been hoping for a clear regulatory regime from regulators in the US. The current “you better comply with unwritten regulations or we sue you” regime is absurd.

> why its network would stop functioning

If it fails, it's most likely because block subsidy will become negligible in a few decades and transaction fees alone won't always provide sufficient security against re-org attacks.

Maybe. Others have made that argument before. So far, it's been proven wrong. The rewards are already pretty small, and things are still working. Maybe it could happen after block rewards go to zero? I don't know. But we'll find out if you're right over the next six years!

> So far, it's been proven wrong.

How can a prediction of what happens after 2050 (i.e. after a total of 10 halvings to make subsidy negligible) have been proven wrong "so far" ??

there is set amount of bitcoins to mint

transaction fees were intended to keep miners active

The "transaction fees won't protect against reorgs" argument assumes that miners count the value of future block rewards at 0. This is poor logic that models mining as a single game of the prisoner's dilemma. Modeling it as a repeated game arrives at the opposite conclusion: that most miners will cooperate to some degree, because the future value of their rewards depends on it.

I say this as someone very much opposed to the "deflationary" model, because I think it's bullshit that generates a "landed gentry" (thanks, spez) that can forever dominate the distribution of a currency. If you're going to make a currency, inflation of some degree is required to ensure fair(er) distribution over time.

I just think the idea that, when block rewards dissipate, miners will suddenly lose the ability to think more than one block into the future should be called for what it is: bad logic. It's also readily disproved by the most trivial glance at their history of long-term, forward-looking investment.

Except ~99.99% of BTC transactions happen in exchanges off chain and aren't visible to anyone, and have a history of being fraudulent at many exchanges that have failed through the years...

That's true for gold too: Most gold transactions happen in exchanges. But the fact that there are successful intermediaries in the gold market is not an argument against gold's viability as a store of value. Ditto for Bitcoin.

This is whataboutism.

The claim is that BTC surely isn't fraud because the chain is public knowledge.

This is irrelevant, because the vast majority of data is bullshit.

The gold market has been manipulated to and fro, even with regulations.

The idea that BTC isn't manipulated to oblivion JUST BECAUSE there's a public ledger (missing 99.99% of the data) is naive.

Whataboutism is a method of responding to an accusation by making a counter-accusation against an opponent. (What about her e-mails?)

I don't think gold is a good investment vehicle nor means of exchanging value either.

Tell that to people who lost their entire life savings when their fiat currency hyper-inflated to zero value (Hungary, Zimbabwe, Yugoslavia, Germany, Argentina)

When people talk about Bitcoin's potential demise, they are referring to its price and perceived value, not whether it will cease to exist necessarily.

Madoff also was not ultimately caught and his scheme ended because of the accounting fraud being revealed (i.e. the fraud was not that important). That happened later. He was caught because a market downturn resulted in him being unable to acquire new victims for the Ponzi scheme, which would have otherwise perpetuated it by taking new money in and using that to pay out existing investors.

The longer Bitcoin's network continues to function, more and more people will become aware of its resiliency. Governments may topple; banks may fail; exchanges may go bust; Bitcoin keeps on ticking. As long as the network continues to function, Bitcoin will have a price.

It's possible that more people are aware of Bitcoin than 18 months ago, but I doubt many think it's more resilient.

Since Bitcoin depends on a functioning network it seems more likely than something physical like Beanie Babies or baseball cards to one day become effectively worthless.

The US government has been around for quite some time. The British pound, longer. It will take hundreds of years to compare to that level of resiliency.

The British government has completed repayments on historically held debt which dates back to the 18th century[1] as recently as 2015 (they were related to the South Sea Bubble).

That's a 162 contiguous years of financial records.

[1] https://www.gov.uk/government/news/repayment-of-26-billion-h...

Well, I think what you’re talking about is perception of risk. The perception of the risk that it goes to 0 is probably decreasing over time. But the expectation of future gains based on past performance is also decreasing over time. Most of the investors I feel are worth listening to see this and conclude two things: it’s here to stay but probably can’t go much higher without the broad market also going higher.

I mean, maybe, but if you pick an arbitrary currency, weighted by "market cap", btc has an extremely long way to go before being an unusually long lived one.

I could understand the allure of the (ahem) "stability" of BTC if you lived in say, Argentina.

If you live in America with this viewpoint, its pure doomerism.

Someone with your mindset was probably saying something similar while living in Argentina in the 1920s, when it was among the top 10 wealthiest countries on the planet.

Hopefully there is no military overthrow of the US government concurrent with the largest economic slowdown in world history.

When did Argentina have the worlds reserve currency and nearly a century of economic dominance?

Doesn't the Bitcoin network continually require increasing power, storage, and bandwidth?

Isn't there a value of Bitcoin that if it falls below all mining is unprofitable?

Are these incorrect assumptions?

Bitcoin doesnt use much storage or bandwidth.

Power is more complicated. By design, Bitcoin has one block created by one miner every 10 minutes on average. All other work by all other miners is discarded and unused. So no, only a single miner is required to sustain the network. But, there is a economic incentive to add miners to the network when the price goes up, because even though only one miner gets rewarded per block, that reward is worth quite a bit. Currently approximately $1M of bitcoin are mined per hour.

There is no specific value at which all mining is unprofitable because mining difficulty is dynamically adjusted to maintain a 10 minute block generation rate regardless of the number of miners.

> When people talk about Bitcoin's potential demise, they are referring to its price and perceived value

And arguably, Madoff-style Ponzi schemes are more prevalent than ever.

Its network could stop functioning simply because it would no longer be profitable to mine it. Sure - a few hardcore believers would continue mining at a loss, but I doubt that they'd have enough computing power to secure the network properly.

Isn't difficulty set based on the previous block time?

No, the difficulty is updated every 2016 blocks. This should be once every two weeks, but if the worldwide hash power halves it'll of course take four weeks until it can update. The difficulty adjustment is capped to +300% / -75%.

The issue here is that the Bitcoin reward has to pay for the mining cost, but there is nothing preventing the Bitcoin price from dropping lower. So miners will either have to mine at a loss for (on average) a week until a difficulty adjustment, or turn off their equipment. Turning it off will make the wait even longer and the mining price per block will increase even more for the remaining miners - leading to more of them operating at a loss or shutting down which makes the problem even worse.

If the difficulty is too low then the network becomes vulnerable to a 51% attack. If it's too high then it becomes less profitable to mine and transaction processing speed slows down. So it has to be high enough to prevent attacks, but low enough for mining to be profitable.

> Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning.

I've been saying for years that Bitcoin will go down like Second Life. Remember when there were news stories about Sony or whoever buys an island for X million dollars? And now... I mean it's still there (presumably), I don't think they've turned off the servers or anything, but no-one cares and it's obviously not a good investment (and that's with it being propped up by a few people who actually enjoy the game, which Bitcoin won't have).

The ability to actually buy stuff with Bitcoin is already past its peak (more places are removing Bitcoin payment options than adding them). It's less in the news than it was. There probably won't be a specific collapse moment (when Tether's reserves get exposed as fraudulent and they stop withdrawals I expect Bitcoin's price will crash, but it's crashed before and there are still true believers left over). I mean eventually the last miner will turn off their rig, but it will be irrelevant long before that happens.

Presumably you have been saying this for a while and been wrong so far. At what point would you change your mind?

Are you saying the islands in SecondLife are still retaining their 7-figure US dollar value today?

I don't think I have been wrong? Like I said, the ability to actually buy stuff with Bitcoin is in decline. I'd change my mind if I saw evidence of increasing Bitcoin adoption in the real economy.

> I don't think I have been wrong? Like I said, the ability to actually buy stuff with Bitcoin is in decline. I'd change my mind if I saw evidence of increasing Bitcoin adoption in the real economy.

Based on what evidence exactly? Consider that an entire nation state has since adopted it as its national currency, along the USD in the last 3 years; that means it works in parallel with the USD. Not to mention that merchant adoption, while as you said may be in decline (citation needed), what you have instead is more and more commerce being dealt with on LN: as was always intended due to network bloat.

Listen, I get HN is entirely averse to BItcoin at this point (look at my post histpory, I prove it time and time again it's based on stuborness rather than fact), what I fail to understand is why you persist in this folly in thiking becasue it doesn't work for YOU, you assume no one else has any use for it.

Again, most here who work in tech are not c-level corps or founders so you don't understand very much about the narrow mechanics of day to day because you are not rewarded for doing so, and quite frankly are paid very well for your ignorance on these matters.

But try to understand that if even China has backed off with Hong Kong dealing with BTC, you have to come to terms with the fact that adoption in trackable and metric based analytics are out the window at this point. Exchanges are one way to track transaction volume and that has been as healthy (perhaps more so, I don't know I'm not a trader) than it was 5-6 years ago. I know this because I was there, helping scale this tech and giving it more usecases that even it's most ardent proponents couldn't see and used similar points of view as you are making now (hence USAF and it's MANY forks before that).

You are wrong, and the fact that you can't even admit that possibility is what makes your point even more invalid because you refuse to see a contrary POV.

You’re doing the ignorant a favor for no real gain. Bitcoin adoption will continue. Bitcoin’s progress remains unstoppable. No amount of downvotes can stop it. And the next giant leap in buying power will just make the anger and denial stronger here - a classic case of cognitive dissonance.

Pretty strong cult vibes :/

If wanting an immutable currency that is not controlled by a central government means I’m in a cult of like-minded, then guilty as charged.

Predicting the demise of something does not mean you are incorrect until the day it collapses.

People have criticised Oceangate’s approach to security for years. By your logic I could have turned around to all of them and said “you’re wrong”, up until a few days ago when the CEO got trapped inside a submarine to die. The people who said their safety approach was a ticking time bomb were right all along, it just took time to be proven out.

There's no right or wrong answer to this since failure predictions are logically flawed.

Doomsday cult leaders no longer insist the world will end on a specific day; they insist it will end imminently after a series of vague events. Your skeptics will die of old age before you can ever be proven wrong.

Well, no, failure predictions can either be based on evidence or they can be based on nothing. The doomsday cult is based on nothing, the submarine safety prediction is based on looking at which precautions the company is and is not taking.

If something -- anything -- other than meth and murder-for-hire contracts gets priced in Bitcoin I would stop saying it's a dead end.

Meth/other drugs in general being purchasable via Bitcoin has value though. You and I might not find that useful or moral, but we shouldn’t pretend the drug market is a small or insignificant one either.

Right but if that's all it can be used for, it will eventually settle into a value below its equivalent dollar amount. That is, the amount of bitcoin you'll get for $100 will buy some fraction of the meth that $100 will buy. It will probably be close to 1:1 but that discount rate will be the only actually important question. The limited utility will function as a capital control, so it will be like Bahamian dollars.

> Right but if that's all it can be used for, it will eventually settle into a value below its equivalent dollar amount

That I agree with actually! Part of its utility in being used for drug purchases comes from the other uses for BTC meaning that theres liquidity. Without that, it's still useful for black market transcations, but less useful than it is today.

I've been saying for years that the sun will eventually turn into a red giant and consume the earth. But every day a same-sized yellow disk rises in the Eastern sky. At what point should I change my mind?

Second Life is still around, and appears fairly stable with a modest-sized user base: https://www.theguardian.com/technology/2023/jun/10/who-needs...

Roughly speaking, the folks "living" in Second Life are part of a strong online community, and don't much care about the "investment".

The sociology and economics of Bitcoin are very, very different from Second Life.

I think you missed their point. Ironically you kind of illustrated it quite well though.

We need source it is being removed.

Ransomware will keep it going for quite some time after the last pump and dump fizzles out, but it only needs a price of ~$1000 or so to facilitate that.

The fraud is likely in stable coins such as USDT, when it goes Ponzi up, everything comes down with it.

>(Government regulations cannot kill it; they can only drive it underground, as with gold.)

>Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning.

This can be done pretty easily, once enough countries ban and condemn it for its contribution to the climate crisis and to crime. There's no need to catch every transaction, just to ban it enough to shrink the mining pool. Once the active network has shrunk enough, the transparent permissionless structure ensures we can ran the obvious attacks on it.

Since it's now underground and these actors aren't the nicest of people, coordinating the forks to resist the attacks will be difficult and costly. People give up after each attack, which makes running another attack easier and so on. Eventually maintaining the network as is won't be worth it to anyone.

Very easy.

Only a small number of people can participate in new block chain entries, assuming demand is high.

These happen every ten minutes, and well under a hundred thousand transactions are allowed.

Get in line to spend your money; it may be years.

This would never work!

https://en.wikipedia.org/wiki/Bitcoin_scalability_problem

> whereas every single transaction in the Bitcoin network is visible to everyone and, moreover, cryptographically verifiable by everyone.

It’s pretty easy to hide wash trading in the ledger to manipulate the price of bitcoin to artificial levels.

Just because transactions are public doesn’t mean that there isn’t associated data hidden (eg, identities, if dead wallets are really dead, etc etc).

Bitcoin may be great, but to say it must succeed because it’s transparent doesn’t address the risk that there is no basis for value and it’s only purpose is speculation and tricking a greater fool to keep the price up.

Tell that to Gus Farber, who was arrested for selling gold after Roosevelt banned private ownership of gold (with certain exceptions): https://en.m.wikipedia.org/wiki/Executive_Order_6102

> Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning.

No, they don’t. There are a variety of scenarios that do not require the government to eliminate the ecosystem.

For starters, they could make if very, very difficult to use for large capital purchases (houses, cars, etc.)

They could impose fines on businesses for accepting crypto — or specific types of crypto — as payment for goods and services.

Can they completely eliminate your ability to trade a bitcoin with your friend? No, of course not, any more than the federal government retrieved every ounce of gold back when that was illegal. But they can make it so painful to use that most people simply won’t.

The issue I have with the argument is that you can apply it to anything. The fact that Bernie Madoff pulled off a ponzi scheme for years and the fact that "The Lindy effect works until it doesn't" isn't a specific critique of Bitcoin.

Exactly my point. The Lindy effect probably shouldn't be used as an argument for either side of this debate (or any, for that matter). But that's a specific (partial) statement that I saw in the parent comment.

Ah, I see what you mean now. I agree with you on the Lindy effect.

What I meant is that the arguments used by many past predictions of Bitcoin's demise have been proven wrong. Anyone making new predictions of Bitcoin's demise must explain precisely how and why its distributed network would fail. Sorry if that wasn't clear in my comment above!

I think it's unlikely that, as a technology, Bitcoin will ever go away due to its decentralized nature. I think what most people refer to when they say "Bitcoin will fail" is a price drop so significant it makes the coin worthless (99% drop). This may also never happen, and the reality will likely be somewhere in between.

Why should a prediction of demise (for whatever meaning of "demise" we care to choose, but we can start with the one you first mentioned, market capitalization) be required to be more precisely detailed about how and why than a prediction of thriving?

Someone could say "Many past novel currencies and securities have failed; any prediction of Bitcoin's success must explain precisely how and why it will still have worth in 50 years." To me this seems like the same argument you're making - belief that a trend will continue until proven otherwise - but I don't find either of them very convincing.

I think any argument either way should have more details than "it's worked so far!" or "it'll eventually fall over like Madoff!" but you seem to only be pushing the burden of proof in one direction.

> To me this seems like the same argument you're making - belief that a trend will continue until proven otherwise - but I don't find either of them very convincing.

Barring a reasonable, coherent, and factually-supported explanation for why an existing trend might not continue, the existing trend continuing tends to be a reasonable default prediction.

> Anyone making new predictions of Bitcoin's demise must explain precisely how and why its distributed network would fail.

A systemic banking panic.

Everyone becomes worried about being able to extract money/value from the crypto ecosystem as a whole due to the failure of some exceptionally large entity (Coinbase or Binance or Tether failing).

They all run for the exits at the same time trying to cash whatever crypto they can into currency. With no sort of backstop, no FDIC, no government intervention, no failsafes, etc there's nothing to stop it from all unwinding to effectively zero in a panic. And panics aren't concerned about market efficiencies or intrinsic value or network effects or anything other than the ability to flee into some other unaffected liquid asset. The contagion would spread throughout the network with people trying to take any exit they could find until that exit was shut down.

Given that the crypto ecosystem in general doesn't believe in government regulations to prevent panics it is nearly certain that one will happen, which will bring crypto to a very sudden halt. The probability over time reaches 100%, but it will likely take some kind of precipitous drop from a sufficient height that no individual Billionaire will be willing to step in and buy it all up cheap (previously crypto has likely been "small enough" that a billion here and there was able to stop the crash in e.g. 2018).

It is impossible to predict when it will happen since it requires knowing how much systemic cash is available for withdrawals and how much can be raised, and the timing of financial entities failing, and the appetite for risk of anyone with deep enough pockets to try to bail it out.

And Bitcoin has never really been tested by a recession that would cause it any kind of problems. The V-shaped pandemic recession was cushioned by a lot of injected liquidity in the markets and people switched to greed almost right away after the first bit of panic waned. It has never been stress tested by something like 2001 or 2008 in the broader economy.

Systemic banking panic. Or systemic crypto panic. But there could be lots of causes for it.

Mining made illegal by locales, states, or countries -- because of energy pricing.

BTC transfers made illegal through law or made undesirable in some way (say KYC but with like actual teeth)

And then there's the long shot chance that a nation-state (China perhaps) figures how to program their quantum computers to break BTC algorithms, snatching away value, before investors even realize what even happened.

For the record, I don't think it would happen. But also I didn't think that AI would be a thing in my lifetime.

Most of those concerns though are covered by "failure of an entity" -- which could be inherent through bad business practices, or it could be regulatory.

A quantum computer breakthrough that destroys BTC does really fundamentally cause BTC to fail as an algorithm, which is a bit higher level.

I don't think that is likely, and we don't really have AGI, although LLMs are great for certain kinds of queries and polishing language or doing boilerplate coding.

You don't need a "nation-state", any old sovereign state will do fine.

I've read that various cryptocurrencies (including Bitcoin) are/have worked on quantum-proof verification algorithms. Not sure what it entails, but people are working on it.

> Everyone becomes worried about being able to extract money/value from the crypto ecosystem as a whole due

Some of those "everyone" are people who live in countries with both currency controls (so they can basically only buy their national currency, or cryptocurrencies), and a horribly inflating national currency. Even a non-exchangeable-for-fiat Bitcoin is better in their eyes than the only other alternative they have. No one wants to spend 100 trillion Zimbabwean dollars on a loaf of bread.

In the more stable world you'd need the failure/shutdown of exchanges approximately simultaneous with the strengthening of those national currencies. It might happen, but it'll be a while.

I'm anti-crypto, I just don't see it happening in the near term.

> Some of those "everyone" are people who live in countries with both currency controls

A minority of people flooding to the exits can easily remove all the liquid cash from the system and cause it to collapse. There's probably no more than around ten billion in cash at any one time supporting a nominally trillion dollar financial system. A 1% stampede for the exit can produce a crash by draining that liquidity to zero.

And when the dust settles it will all have been a transfer of wealth from the poor to the rich.

If you actually are using it as a currency, you don't need it to have any liquidity (with respect to exchanging it for another currency). You just need the person you're dealing with to prefer it to the alternative.

That would just re-price Bitcoin. The price could crash, a lot, but that won't necessarily reduce adoption. I know I've got a lot of $0.01 limit orders that'll have me hoovering up Bitcoin if it ever reaches that price.

The Lindy Effect is meant to describe things like buildings and cities, that generally you don't have an outside risk to consider that the whole time they might've been a fraud or illegal.

We don't really need to worry that The Great Pyramids have been a hologram all this time. We don't need to worry that the US is going to make The Great Pyramids illegal (I mean, anything can happen, but it's a much smaller chance than w/ Crypto).

I mean the US has several pyramid-like structures doesn't it?

The Lindy Effect literally addresses a social fad and craze for a specific form of dance.

It's not seemingly impossible, it's scientifically proven that the general public can't know when the price of Bitcoin will collapse. And it has nothing to do with the general public being stupid and any of that bullshit.

It's called the efficient market hypothesis.

If it was known that the price of Bitcoin will collapse on the 7th of June 2025, every owner would have sold their Bitcoins on the 6th of June. But then the price would collapse on the 6th, not on the 7th. But of course, the definite knowledge the price will collapse on the 6th would mean the price would collapse on the 5th and so forth.

Hence why accurate, definite and widely believed predictions are impossible.

Markets are not efficient much of the time. And Bitcoin even less so.

Source; I make a living exploiting market inefficiencies.

His point stands though. The general public can't know exactly when Bitcoin will collapse, because if they could, it already would have collapsed.

"A strange game. The only winning move is not to play."

Just saw it for the first time last night

It was so cool, especially after reading ready player one and discovering that one of my favorite Sega games as a kid was Galaga, but didn’t know the name until I saw it in an arcade a few weeks ago

80s movies about smart kids are awesome

His point is built on a theory with as much scientific rigor as Freud's penis envy work.

If economics was a functioning field of scientific study, The list of top 100 richest people would all be economists withholding scientific findings for their own gain, not a bunch of rich kids swinging their money dicks around.

I wrote a long response but realized I don't want to enter a discussion with someone being as exceptionally uncharitable you are.

You are what makes the market slightly more efficient.

The efficient market "Hypothesis" (is it even testable?) presupposes a rational market, doesn't it? Real life markets are not rational, by definition. Humans are not rational actors.

Careful mentioning any actual economic theory here lol.

I remember being annoyed on the 2nd day of Econ class when the prof mentioned that empirically we know human preference graphs can be cyclic but we have to pretend that's not true for any micro to work at all.

That's succinctly phrased. I don't know why it would bother you. It seems like it's admitting a limitation of the model he's about to teach.

It's a fundamental premise of the entire discipline and it's known to be empirically false

Does it also bother you that engineers designing bridges use Newtonian physics and discount relativistic effects?

There's not a scale at which acyclic preferences is a good approximation of what actually happens, so that's not really a good comparison. But even given that, structural engineers use nonlinear models that are more complicated than Newtonian physics, whereas economists say "math is too difficult so we'll use a simplifying but false set of assumptions"

Apparently I choose a great example then!

There are a lot of examples where the assumptions, especially this one, of microeconomics hold. Profit-maximizing corporations don't have cyclic desires. In many cases, people don't have cyclic desires (e.g. in the flavor of the soda they want). Microeconomics starts with those, much as becoming a structural engineer requires understanding the basics of Newtonian physics.

They get into more complicated math in more advanced courses, but they don't start there. All of engineering, science, etc, is "the math at a deeper level is too complex, here's a simplifying but false set of assumptions". And then a subset of people who learn about that care about cases when the assumptions break down and studies the next level.

Right, but Newtonian physics can fairly accurately predict gross body mechanics whereas economics can't even predict the large-scale wage or price level. They'll simultaneously model the income effect and the replacement effect of taxes and then shrug and say "of course we can't say in advance which one will dominate".

"Wrong" isn't a boolean. There is a vast spectrum of wrong, and Newtonian physics is so unwrong that you can go to the moon with it. Economics is so wrong it has never worked.

Markets can remain irrational a lot longer than you and I can remain solvent.

bernie == bernard fwiw

The year is 2023 and we still have people arguing this. Can you at least try to be creative with your critique of bitcoin instead of this lame one?

Wow. Both parent and grand-parent seem wrong.

GP: Bitcoiner, dooming everything else.

Parent: Anti-crypto (the majority here), up to the point on comparing Bitcoin (which might be a bubble, that's not the point here) to a Ponzi (that it is not: Supply is fixed, there is no new deposits paying previous depositors).

What's the difference if you are getting payout from a bigger fool?

There's no such thing as "payout" in free markets—someone buys your thing for money (sometimes less money than you paid for it, sometimes more money than you paid for it). So, while it might be a speculative bubble (like Beanie Babies, or Tulips, or whatever), it's certainly not a Ponzi. Also, the bigger fool theory (which is what you're conflating it with) is also not a Ponzi.

This might be confusing, because many other crypto products are very Ponzi-like. For example, Voyager literally paid new "stakers/depositors" (a.k.a. investors) with old "stakers'/depositors'" (a.k.a. investors') money to reach the insane return rates they were advertising.

Who the hell cares. If it's a pump and dump of fundamentally worthless stuff relying on bigger fools, it's all the same.

I care. You made a claim, were given a thoughtful explanation why your claim was wrong, and you don't care. Not cool.

I made no claim. I asked whats the difference and got a pedantic explanation of what a ponzi scheme technically is, like anyone whose been in one of these threads hasn't already heard that same pedantic explanation. Who cares? It really doesn't matter if its a ponzi scheme or a pyramid scheme or some other scheme. What is transparently obvious is there is nothing there there and eventually the music stops and leaves the bigger fools holding the bag.

Fair enough. My bad.

> there is no new deposits paying previous depositors

Huh? Every time somebody buys a coin with fiat that's a new deposit paying a previous depositor.

A ponzi is any system in which the only way for older buyers to cash out is at the expense of later investors. How is 'supply is fixed' relevant?

Something collapsing isn’t an example of the Lindy effect not working. It literally predicts when things will collapse. It’s just a life expectancy for things with a power law distribution.

A healthy 20-year-old can fall over dead from a brain aneurysm. Doesn’t mean actuarial tables aren’t useful.

Think of Bitcoin like the martingale betting method.

In theory, it does win. In practice, few people have enough liquidity to keep up and even then, they need to know when to quit.

I fail to see any kind of equivalence or similarity. Mind elaborating?

Few people have enough liquidity to keep up with bitcoin... what does that mean?

There's no promises of future gains or profits made explicitly by the protocol, nor is there any central party pushing/benefiting from its adoption. There are plenty of other crypto coins you could accurately label as Ponzis. It's unfortunate that bad actors have tarnished the Bitcoin name...

I think it's pretty clear that most crypto currencies a Ponzi schemes.

But... There's enough demand for an international unregulated currency that I think it'll be around for awhile. There are plenty of people that tolerate its flaws. (Specifically, the volatile value.)

I personally think once the scammers and "true believers" move on, Bitcoin will stay around until some other international "unregulated" internet money comes around.

3 - The “value” is higher, but can you actually do more with it now than you could five years ago? Hasn’t the entire community given up on buying things such that they know pretend that was never the goal?

Without any real way to convert back and forth into real money, what reassurance is there that the price even means anything when every single holder is incentivised to lie and transact with themselves just to keep the numbers up?

How can a global system capable of five transactions a second ever be integrated into “the world’s financial fabric”? Side-chains seem to just be a great way to centralise around more unknown entities who may or may not run off with your cash.

> ...can you actually do more with it [I assume you mean Bitcoin] now than you could five years ago?

Not really. To date, Bitcoin has been used successfully only as an alternate store of value -- one which, like gold, doesn't depend on the financial credibility of a particular government or country. Bitcoin's continued existence depends only on the integrity of its distributed consensus algorithm, which so far has withstood all attempts at hacking it. The "alternate store of value" opportunity is not small. Gold alone has a current market capitalization of $12.9 trillion.[a]

---

[a] https://companiesmarketcap.com/gold/marketcap/

Bitcoin is a horrible store of value. It's incredibly volatile.

Gold is pretty volatile too. Its price has gone up and down between 5x and 10x a few times in just the past century: https://www.macrotrends.net/1333/historical-gold-prices-100-... -- no one sane would call it stable. And yet, despite its volatility, gold has been used as a store of value for millennia.

In the last 5 fives, gold's highest price was 60% higher than its lowest point. That is indeed pretty volatile.

Let's see if Bitcoin is comparably volatile…

Oh, it's highest point was only 1920% higher than its lowest point. That's definitely the exact same as gold. /s

Also, that ignores that gold has been a store of value for millennia. It's almost synonymous with wealth. In a total financial collapse, if all modern technology dies, you can be sure gold will still have value. 99.9% of people have no idea what Bitcoin is besides funny computer money.

Even if people WANTED bitcoin in a total financial collapse, what scenario collapses all normal fiat currencies and doesn't touch a system that requires cheap power and niche hardware and internet connections?

Gold has a perception of wealth but history makes clear what it actually is. For example, the hordes of gold the Spanish plundered from the Americas directly contributed to the bankruptcy of the monarchy.[1] Because they hadn't actually seized/mined "wealth" - they'd simply inflated their currency away without any commensurate expansion in productivity.

People who believe that it would be "easy" to trade gold for other goods have also clearly never tried - since the entire modern banking system came into existence on the basis of the sheer difficulty of directly trading gold for other goods. No one knows how to value gold, they don't know what it's worth other then a brick is probably a lot. If they could, then the fake jewellery scam wouldn't be as successful as it is[2].

[1] https://en.wikipedia.org/wiki/Price_revolution

[2] https://www.kiro7.com/news/local/just-say-no-walk-away-fake-...

Even better, the influx of gold from the New World was preceded by the period called the Great Bullion Famine where Europe-wide shortages of silver and gold led to long periods of deflation across the continent!

https://en.wikipedia.org/wiki/Great_Bullion_Famine

That is exactly why most people no longer use gold as a store of value and are instead using currencies that are much more less volatile. Meanwhile, Bitcoin alone has an annual volatility that is about an order of magnitude larger than gold's, and it's even worse in every other crypto token. None of these things come even close to qualifying for being a store of value.

I think you're confusing store of value with medium of exchange... most people don't really store value in currencies long term - usually they just keep enough to pay near term bills.

Stores of value are things like stocks, bonds, treasuries, real estate... and yeah commodities like gold and bitcoin. People don't care so much about volatility if they're planning to park their value there for a long time.

Sounds like you are confused about what and why something is a store of value.

https://en.m.wikipedia.org/wiki/Store_of_value#Money_as_a_st...

I’m not saying fiat currency doesn’t store value… just that, of the functions of money, it’s better as a medium of exchange + unit of account where you care way more about price stability and liquidity.

A good store of value is scarce, durable, transferable and divisible - and I think most people agree that you compromise scarcity to get price stability.

We don’t have to take anyone’s word on this though you can just look at what endowments and wealth funds hold to see what people believe are the best stores of value: https://www.nbim.no/en/the-fund/investments/#/

"Most people no longer use gold as a store of value" may be true wherever you are, but not universally. The Times of India, for example, estimates than Indian households hold gold estimated at about 40% of annual GDP, and half of all households have purchased gold in the last two years.

Increase timeline to account for scaled adoption and project volatility for those variables.

In many places Btc is one of the safest ways to store value. The scenarios it could collapse under are dark. It's biggest enemy is soveriegn currency issuers and banks. They would need to attack it such that holders lose faith in it en masse and collapse it. The successful attack they need to make is dystopian in nature. It would require a global digital identity that was attached to all internet access and an alternative (CBDC) crypto that they forced everyone to use.

Nowhere is BTC the safest way to store value, it’s got far to many risks in normal use to be particularly safe.

A double speed attack doesn’t need anything particularly dystopian to happen. It doesn’t even need to result in a large transaction just someone deciding to short BTC and briefly having the computing power to destroy it. Even just a creditable attempt that fails could completely undermine it.

A double spend attack requires a specific unsafe action by the receiving end of the transaction. As long as the receiver does not accept an unconfirmed transaction they cannot be a victim to it.

Even confirmed transactions aren't safe. The blockchain can be retroactively edited by anyone with enough hashing power: the only thing they need to do is to generate a longer alternative chain than the current public one.

There’s also plenty of fun things you can do like exclude some particular exchange from being able to commit to the blockchain. As in sorry Coinbase your transactions are no longer welcome and there’s effectively no way for them to directly fight back.

The only way around that is to constantly spend more money on hashing power than any attacker, but that cost is effectively unbound. Trying to stop some random billionaire doing it for the lulz means sky high transaction fees forever. No problem for an actual currency in widespread use, but a serious issue for a hypothetical store of value which needs constant investment just to break even.

Partially disagree: the Lightning Network [1] facilitates almost instantaneous micro and small transactions which can later settle in aggregate to the Bitcoin base layer.

I've used this to purchase goods both online and in person seamlessly. Custodial solutions (trust another party to hold your funds, like a bank) are turnkey. Right now the truly non-custodial solutions (i.e., run your own lightning node) are definitely in the realm of hacker/tinkerer, but continue to improve in terms of accessibility.

[1] https://en.wikipedia.org/wiki/Lightning_Network

Ah yes, the lightning network will save bitcoin. How many years will we hear the same song and dance before we can finally conclude this is a pipe dream?

What do you buy with the lighting network? I've always wanted to try it.

You can use it as currency on stacker.news

You can tip people on the nostr protocol. stats are on zaplife.lol

you can tip musicians on wavlake

there's a Minecraft server called satlantis where it is used as a currency

there's a lot of plugins you can use to build your own lightning enabled apps on lnbits

the space is still young so a lot of software is beta, but there's plenty to play with

check out the plebdev course on udemy if you want to dive into lightning development

You can also go to the entire nation state of El Salvador where it is a legal currency and many shops have integrated lightning payments.

Can you? I've read a few articles from journalists who went there only to find that vendors refused their payments, or asked for Visa instead.

The one from Bloomberg comes to mind: "He tells me surfers sometimes ask if he’ll take Bitcoin. He’s taken it on a few occasions, but the dips in price burned him. “Now I tell them it’s $25 if they want to pay in Bitcoin,” he tells me. “You don’t know when it’s going to go down.” " [1].

That's also to say nothing of the leader of the nation potentially losing millions of public funds day-trading crypto on his phone, the Bitcoin Bonds that no one bought, or the IMF refusing to offer funding to the impoverished nation as a result of this callous fiscal policy.

[1]: https://www.bloomberg.com/news/features/2021-06-17/world-s-b...

I pay for flights&hotels in travala.com using lightning. I also refill my phone credit or buy gift cards (e.g. for Uber and whatnot) on BitRefill.com. And I buy cheap stuff in Amazon thanks to Purse.io

"The longer Bitcoin survives, the more it will get adopted and integrated into the world's financial fabric,"

How long do we need to give Bitcoin a chance to gain mainstream adoption as its been 15 years already ? So far I don't see much real use except speculation, extortions, get rich quick scams and websites where you want to be anonymous. For the most part.

They follow it on CNBC and have for a while. It's as mainstream as any stock.

A presence on CNBC is very obviously not the "mainstream adoption" that was meant. Adoption as in, I can spend this token in legitimate and common means, not just to buy a battery operated car for a short while or on small subset of non-nefarious online market places.

It's mainstream for trading. It's not mainstream for conducting transactions.

Do you typically conduct transactions using gold and silver? Bitcoin is closer to a commodity than a currency.

> How long do we need to give Bitcoin a chance to gain mainstream adoption as its been 15 years already?

"We" don't need to give it a chance. Time is giving it a chance, every new day, indefinitely. For all I know, it could take decades, not years, for Bitcoin to gain as much credibility as, say, gold, which has been around since the advent of ancient human civilizations. I don't know. Maybe it will happen much faster, like everything else online?

> So far I don't see much real use except speculation, extortions, get rich quick scams and websites where you want to be anonymous. For the most part.

The biggest use of Bitcoin today is as an alternate store of value, by a large mass of "HODLers" who, as their name suggests, will hold on to it for dear life.

Bitcoin is not the main asset used for speculation, extortion, scams, ransoms, drug deals, etc., today. The main asset used for illegal activities today, worldwide, is the US dollar. It's not a coincidence that the briefcase full of $100 bills is a prop in so many movies/TV series depicting illegal shenanigans. I suspect that more money is stolen in USD via hacked bank accounts, hacked credit cards, hacked online accounts, hacked SIMs, etc. than in BTC via difficult-and-dangerous-to-execute online ransoms.

> The longer Bitcoin survives, the more it will get adopted and integrated into the world's financial fabric, e.g., as a store of value.

> We sure live in interesting times!

I'm not really sure it's that interesting, or new at least. Since ancient times people have valued things as a store of value that have have been valued by other people as a store of value for a long time. Some of the best material examples are gold, silver, natural gemstones and works of art. These things are overpriced by orders of magnitude compared to their material economic value.

Bitcoin just takes it to the extreme in having negative objective physical value, i.e., in being immaterial and physically completely worthless, while taking up resources to even exist as a concept or meme.

So sure, it very well might be here to stay as a store of value for a long time. If history is any guide on these matters, it will be a store of value (and a profitable area of speculation) for the rich and big powerful institutions while the enduring and persistent meme in the heads of the common people keeps its value alive.

Oh please, again with the "store of value" BS. I made an effort to look at the actual volume of bitcoin being traded in and out of the system (aka actual entries and exits, not just fraud-prone exchange swaps) in 2020 and I concluded that it's probably worse than most scam penny stocks in terms of liquidity. It's really hard to find any kind of reliable data though, but in the absence of that I had to conclude it was just a gigantic scam.

> It's really hard to find any kind of reliable data though, but in the absence of that I had to conclude it was just a gigantic scam.

Interesting! If I couldn't find reliable data, I'd have concluded that I didn't know.

Bitcoin is puzzling to me, in that a commodity usually has some value outside of a trading market per se. That is, it is usually consumable in some abstract sense. I'm not sure what you would "do" with Bitcoin other than as some form of currency.

In this regard, ETH always seemed a bit more on track, in the sense that there have been attempts to use the ETH blockchain from the beginning for the purposes of computation, other than "just" as a currency.

I'm not disputing what you're saying about the SEC position regarding Bitcoin, it just seems to highlight for me something a bit off about the SEC position, even if it is favorable in certain ways toward Bitcoin. I come away from all of this feeling a little like neither the SEC nor the crypto community at large are quite being honest or accurate about what's going on with crypto or how it should be regulated.

My inner conspiracy theorist would say that given the crypto market situation and state of ETH and Bitcoin as platforms SEC actions indicate that Bitcoin might have something in its design that US government wants vs ETH.

Market dominance?

I'll bite: Bitcoin transaction networks are fully transparent to analysis.

So do ETH. It must be more obscure than that.

In theory, you could think of bitcoin as electricity that has already been consumed. To replace it, you would have to burn more electricity. The bitcoin concept is to manifest that burned electricity as a tradeable value.

That is the sense in which it's commodity-like. It's the underlying electricity which is consumed.

It's far from clear that this is really valid, but that's the sense of it.

That is a sunk cost without value. Actual commodities can be redeemed for something valuable, for example you can eat an orange. You can't turn the BTC back into electricity or anything else of tangible value.

I think of bitcoin as THE null commodity.

No intrinsic use. No mass. No degradation. Transports at the speed of light. Perfectly scarce and not debaseable.

All other commodities exist at various vectors outside of this null point. They have various usefulness in and of themselves. They have mass and volume. They degrade at different rates. They take a lot of time and energy to transport. They aren't perfectly scarce and some are absurdly abundant.

Humans have overloaded various commodities throughout history with the memetic concept of "moneyness". Mostly gold and other precious metals because they have properties close to the null point that we find most important (primarily scarcity and close to zero degradation). We hoard these non null commodities because we came to collective consensus to imbue them as the database of our debt to each other, otherwise known as money. However, this had the negative effect of tying up otherwise useful commodities that we might have been able to put to productive work. This money also had the negative effect of being difficult to transport, store securely, and fractionalize.

Then came government backed, faith based currency. It's a near null point commodity and we really like that when choosing something to imbue our collective moneyness concept in. No intrinsic use. Low mass (paper) to no mass (digital). Limited degradation (paper with replacement service) to no degradation (digital). Easy transport (paper with high denominations) to light speed transport (digital). However, it's scarcity is highly questionable. To quote Satoshi, "The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust."

Bitcoin is the null commodity because it solved the final piece of the puzzle that we tried to solve with fiat currencies. Eliminating trust in central authorities and perfect scarcity.

> 3. Bitcoin, which the SEC considers a commodity (it's explicitly excluded from the lawsuits), is bound to become even more dominant in terms of market capitalization. The longer Bitcoin survives, the more it will get adopted and integrated into the world's financial fabric, e.g., as a store of value. If this sounds far-fetched, consider that many smart and smart-sounding people have predicted Bitcoin's demise, and so far their arguments have been proven wrong: https://99bitcoins.com/bitcoin-obituaries/ .

I have not seen a single of use Bitcoin within 50km of me _and_ online outside of uses in degenerate countries and trading them for the sole purpose of trading them.

This feels like flat-earth theory, which will never go away, but their "science" if you call it that, is so flawed that they can't be used for anything outside of small terrestrial physics.

Similarly, Bitcoin itself will never go away. But there is no way the average folk will be able to wield them given how many times they have been scammed out of their fortune.

Maybe. I don't see people using gold for finances within 50km of me, but it's going to be around forever.

And? I am not advocating for gold either. Gold hinges on the fact that its yellow and nice to look at or whatever. It is entirely feasible for the world to be possessed by zeitgeist such that gold or anything yellow doesn't mean particularly much. This could happen, for example, if gold and diamonds can be manufactured artificially. What then?

Then it wouldn't be worth as much and its 10,000+ year run would be over.

PS https://en.wikipedia.org/wiki/The_Rip_Van_Winkle_Caper

Wait... Is it not that within our current understanding of physics gold can only be manufactured artificially from an already heavier metal? (which are already more expensive than gold I think).

I don't know the details but, basically, it's not because we can manufacture synthetic diamonds that we'll one day be able to manufacture non-radioactive synthetic gold.

Gold can be created from heavier elements via fission or lighter elements via fusion.

Either way, there's no foreseeable way either would ever be cost -effective

The value of gold is related to the amount of labor necessary to produce it as a commodity. Contrast with aluminum and iron -- because they are relatively plentiful, they take significantly less labor to produce as commodities.

OTOH there's a big and growing problem with gold exchanges, too, who often don't actually have possession of the metal they notionally sell. It's estimated total gold "holdings" by investors exceed the world gold supply by about 50%.

If you wait until you start to notice it immediately around you, you'll already be a late adopter.

That's ok though. Playing with new paradigms is a young person's game.

I have no idea about bitcoin’s demise, but I don’t understand how anyone can call it a store of value with a straight face.

Or do they mean conceptually it is, even if it’s a terribly volatile one?

1. Agree

2. Err, I can't see any big banks or other entities touching COIN, and the CRIMINAL proceedings that it will likely be embroiled in with a 10-ft pole!

3. Maybe BTC will come to 'dominate' the 'crypto' space, but that space will be a smaller and smaller part of the US (and global) economy. Although it never got very big to start with. BTC is used for approximately 0.0% of US transactions right now (rounded to nearest decimal place).

> The longer Bitcoin survives, the more it will get adopted and integrated into the world's financial fabric, e.g., as a store of value. If this sounds far-fetched, consider that many smart and smart-sounding people have predicted Bitcoin's demise, and so far their arguments have been proven wrong:

You're arguing that because Bitcoin hasn't met its demise, it will therefore be widely adopted as a "store of value"?

As if there are only two possible outcomes: Complete failure or complete dominance as a store of value. This is where your argument doesn't make any sense.

I suspect we'll discover that all of these altcoins and weird financial instruments didn't actually detract from Bitcoin at all. Rather, they contributed to its rise by juicing demand and pumping huge amounts of leverage and pseudo-liquidity into the cryptocurrency ecosystem.

If crypto becomes boring, I don't think the natural conclusion is that adoption will increase.

The longer Bitcoin's network continues to function, the more people will become aware of its resiliency. Governments may topple; banks may fail; exchanges may go bust; Bitcoin keeps on ticking. Difficult-to-forge assets that can survive the failures of governments, banks, exchanges, etc. tend to gain adoption as stores of value. There aren't a lot of assets like that. Gold is one. Bitcoin appears to be one too.

Why would anyone adopt Bitcoin into the financial fabric? That would be paying for something you can spin up for free.

> as a store of value

Bitcoin is fundamentally a terrible store of value thanks to how fuckin volatile it is.

It’s bigger than the US. People are starting to get it.

> > as a store of value

Bitcoin failed as a store of value, it's up some 20,000% since 2010 and basically infinty since the day of its first trade (back when the first bitcoin was traded for some trivial amount of electricity)

Store of value is a very specific term

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