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Comment by random28345 | Hacker News Reader

> Its decentralized nature, alone, is its most important attribute. Bitcoin cannot be stopped. Period.

It's just as decentralized as tulip bulbs (http://en.wikipedia.org/wiki/Tulip_mania), and Bitcoin will be "stopped" when a) it is illegal to transmit or receive a blockchain (unlikely), or b) when people realize the only value Bitcoin has is in the belief that Bitcoin has value.

All it takes for Bitcoin to be worthless is the belief that Bitcoin is worthless. Therefore, if you hold any Bitcoin, you are incentivized to be a Bitcoin evangelist. Bitcoin isn't a currency, it's a religion; you need to create "converts" to make your investment of time and belief worthwhile.

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> All it takes for Bitcoin to be worthless is the belief that Bitcoin is worthless.

Isn't this true for every currency that isn't literally a physically scarce and useful resource (gold, grain, uranium, gold-pressed latinum?)

No, it's not necessarily true for a currency backed by a state, since the state can force you to pay taxes in that currency, thus creating demand for the currency and underpinning its value.

Tell that to Zimbabwe, who still doesn't have a national currency because of exactly this:

http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe

Its also true for every currency that is a physically scarce and useful resource, though being such a resource (or, alternatively, being designated legal tender and demanded for tax and other payments by a large and significant government) substantially reduces the probability that belief that the currency is worthless will become widespread.

>All it takes for Bitcoin to be worthless is the belief that Bitcoin is worthless.

But that's true for almost any modern currency. If everyone believed that the US dollar is worthless it would become near worthless. There will always be some demand because US citizens have to pay their taxes in US dollars but that wouldn't be enough to keep the dollar at anywhere near it's current value.

Not at all. The US dollar has the economic and military might of the world's most powerful country behind it. What exactly does bitcoin have behind it again?

This is silly. He says that IF the belief the dollar will be worthless is ubiquitous, then it will become worthless. That's a function of the market, a true fact.

The economic power and military are already calculated into that. It makes it very unlikely that people will think the US dollar will become worthless. But he wasn't talking about whether that belief is likely, but simply stating the true fact that IF everyone starts believing that, then demand crashes and supply skyrockets accordingly and it'll become worthless.

In other words, no different from any currency or any good on the market for that matter, including bitcoin.

> when people realize the only value Bitcoin has is in the belief that Bitcoin has value

For the record, people said the same thing about paper currency. And again when paper currency stopped being backed by gold.

And this periodically actually happens to real government-backed currencies in the world, especially during times of hyperinflation (e.g. Germany in the 1920s, Zimbabwe in 2008, etc)

> And this periodically actually happens to real government-backed currencies in the world, especially during times of hyperinflation

Right, but that happens sometimes, and never with proper governance. (but what is "proper governance" you ask? It's a tautology that says that governments that never allow hyperinflation never suffer from hyperinflation)

ALL asset bubbles collapse. The magnitude of the collapse is determined by the non-monetary value of the asset. (e.g. tulip bulbs collapse harder than real-estate). Because the non-monetary value of Bitcoin is negative (you need to burn electricity to use Bitcoin), this implies the eventual collapse of Bitcoin will be absolute.

You realize that while your criticism of Bitcoin is factually accurate, your criticism could apply to just about any fiat currency.

Dollars, Euros, Yen, aren't backed by anything other than the belief that it is money.

However, I do acknowledge that states invest a lot of resources into indoctrination, so the belief in fiat currency might be stronger than the belief in cryptocurrency.

Aren't dollars are backed by the American economy and military? Unless you are speaking in a "Our reality is only our perception" type of way, at which point I'm not sure I buy the argument.

However, I do acknowledge that states invest a lot of resources into indoctrination, so the belief in fiat currency might be stronger than the belief in cryptocurrency.

I'm not sure how you think this will help anyone take you seriously?

> when people realize the only value Bitcoin has is in the belief that Bitcoin has value.

We aren't on the gold standard anymore, that's how all currency works now.

That's how currency worked when we were on the gold standard, too.

> All it takes for Bitcoin to be worthless is the belief that Bitcoin is worthless.

All it takes for Bitcoin to be worth something is the belief that Bitcoin is worth something.

We are arguing two sides of the same coin. [0]

The difference is how we define "worthless" and "worth something." Step back into reality for a second. Realize that most economic transactions take place between two entities. Generally two entities exist within the same social structure or community groups. e.g. I transact with my good friends (see your venmo newsfeed for example), accountants transact with local clients, etc. Payment networks and social networks are inextricably linked. Realizing this, "worthless" and "worth something" become only relative terms. Bitcoin does not need to be "worth something" to every person in existence in order to be viable. It simply needs to be "worth something" within confined payment networks, which tend to correlate with social networks. As long as a single comminity agrees to transact with Bitcoin, it becomes acceptable as a currency, within that community. Similarly, Bitcoin could be worthless to an entire community, and they could avoid it altogether.

The viability of the Bitcoin is moot, within a network of a community that sees it as worthless. But outside that community, other communities might see it as worth something. As long as transactions occur within clusters, it therefore holds true that Bitcoin is worth something, somewhere.

Do you see the difference in our arguments? We are both saying the viability of Bitcoin depends on either people seeing it as viable, or nobody seeing it as viable. But my argument is that as long as one community sees Bitcoin as viable, they can transact in it. Your argument is that Bitcoin is worthless to everybody, if everybody belives Bitcoin is worthless. This is true by default -- nobody was using Bitcoin before it existed. However you must consider that as long as some communities are using Bitcoin, it exists by definition, and therefore is also valuable, by definition.

> Therefore, if you hold any Bitcoin, you are incentivized to be a Bitcoin evangelist.

If you have a [myspace/friendster/facebook], you are incentivized to tell your friends to get a [myspace/friendster/facebook]. Community based programs, the ones that depend on "network effects," are obviously useless if you are the only one using them. I fail to see how this is a weak point for Bitcoin. It seems like a strength. As people buy Bitcoin, they invest in the ecosystem and join the community. As the community grows, it becomes the single community that supports Bitcoin, and the network is viable because of its momentum alone.

> It's just as decentralized as tulip bulbs (http://en.wikipedia.org/wiki/Tulip_mania)

This is a fair economic comparison, but completely ignores the fact that Bitcoin is a decentralized, digital currency, and Tulips are flowers. One is specifically designed for transacting in the age of the internet. The other grows in the ground and people went crazy over it 350 years ago. Therefore we must take the tulip mania comparison to Bitcoin only within the context of Bitoin's economic repercussions. The lesson is that humans are irrational creatures living in a world of scarcity. As a species we need methods of transacting with each other, and we use whatever happens to be en vogue at the time. Ultimately all currencies will be flawed, so long as they are created and used by humans, directly or indirectly.

[0] That seriously was not a pun. I didn't even notice it for a couple minutes.

And thanks to their decentralized nature tulip bulbs still exist and people still pay for them. You cannot stop tulip bulbs.

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