Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning.
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.
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.
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.
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.
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.
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.
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.wikipedia.org/wiki/Joseph_P._Kennedy_Sr.#Wall_Str...
Yet this value is a small fraction of gold's trading price. How do you explain the current price of gold?
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.
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...
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.
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.
To paraphrase a quote attributed to Stalin - how many divisions does Satoshi have?
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.
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.
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 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.
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)
For that matter some government-issued currencies do that too.
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.
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.
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?
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.
even the Iranian Rial is more reliable
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.)
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.
it depends on what the crisis is, and whether this same crisis also makes people believe that the US gov't will not hold.
Bitcoin appears to be the next phase of that manmade currency.
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.
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.
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.
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.
That's a 162 contiguous years of financial records.
[1] https://www.gov.uk/government/news/repayment-of-26-billion-h...
If you live in America with this viewpoint, its pure doomerism.
Isn't there a value of Bitcoin that if it falls below all mining is unprofitable?
Are these incorrect assumptions?
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.
And arguably, Madoff-style Ponzi schemes are more prevalent than ever.
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.
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 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.
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" ??
transaction fees were intended to keep miners active
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.
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.
>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.
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.
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!