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Bitcoin is a digital currency that has no intrinsic value and its price is determined solely by supply and demand. It is not backed by any government, which means that it can be used to finance terrorism or other illegal activities.
As the price of Bitcoin increases, more people are attracted to it, which then drives its price even higher - creating a self-reinforcing upward spiral that is unsustainable and will eventually collapse.
Bitcoin is actually pretty unfriendly to terrorist groups because it's a public ledger, making it relatively easy for law enforcement to track. By contrast, being backed by a government doesn't actually make, say, the dollar immune to nefarious uses.
Value is in the eye of the beholder. If Bitcoins sell for $38k then they're worth $38k... right now. As the payment network related to Bitcoin spreads wider, its utility goes up, and the value to holders increases. This is similar to how a fiat currency's value largely comes from the ability / obligation to pay taxes in that currency, but rather than being created by governmental mandate, it is developing organically, bootstrapping.
If the Internet had had a payment system built into it from the beginning, spam may never have become a problem. Advertising would not have been the only effective way to monetize. And so on. Getting to a micropayments world with the Lightning Network or whatever comes after it is a technological revolution that will likely have wide-ranging consequences.
Some of my reasons.
With a pure linear emission, Bitcoin would now, after 13 years, still have a yearly supply inflation of 7.7%, and remain more suitable as a means of exchange than a store of value. Its price would be way lower, and its environmental impact much less.
Bitcoin is a means of transferring value peer-to-peer across the internet. I believe in that. I also am interested in the predictable inflation schedule and limit on issuance---I think it's a nice option to have. Bitcoin is actually pretty unfriendly to terrorist groups because it's a public ledger, making it relatively easy for law enforcement to track. By contrast, being backed by a government doesn't actually make…
That's quite an ask. HTTPS only arrived half way through its existence.
This is a part where I can't agree. A scam assumes someone is profiting on purpose. Bitcoin supply is largely diluted now though some early adopters made big, this was mostly by chance. That is, unless you think Nakamoto is still hiding for the big pay-off.
> Bitcoin is a digital currency that has no intrinsic value
There is no such thing as "intrinsic value". The value gets assigned by people and market participants.
> and its price is determined solely by supply and demand
Everything is.
> It is not backed by any government
Hardly anything is backed by governments. Also, outside of the Western bubble, many governments defaults on stuff they back...
> which means that it can be used to finance terrorism or other illegal activities
Most terrorism is financed by governments (big surprise!) and most illegal activities will prefer cash/banks/real estate because of the easier on-off ramps to the real economy. You can't launder money with Bitcoin.
> As the price of Bitcoin increases, more people are attracted to it, which then drives its price even higher - creating a self-reinforcing upward spiral that is unsustainable and will eventually collapse.
Okay. Not sure what the issue here is. Bitcoin doesn't have a regulatory body for "market stability". It's anything but stable.
I don't "believe" in Bitcoin. Bitcoin is there whether you believe in it or not. It has shown itself to be quite resilient to governments and censorship (if you follow the China bans) and unlikely to go away any time soon.
I believe in Bitcoin as a peer-to-peer currency, but it failed to become that due to the poor choice of emission. The capped emission that was heavily tilted toward the first few years is responsible for the fear of missing out, wealth concentration on early adopters, and use as a speculative vehicle. With a pure linear emission, Bitcoin would now, after 13 years, still have a yearly supply inflation of 7.7%, and rem…
Advanced cryptocurrencies such as Ethereum and Algorand are more suitable for commerce.
The basic concept of cryptocurrency, which sadly is generally missed because many people have turned it into a get-rich-scheme like everything else, is to *use math and computer science to reduce or eliminate cheating in databases that record monetary balances*. The techniques are far superior to the legacy (secret) databases used by banks.
> I don't believe in Bitcoin because it is a scam. This is a part where I can't agree. A scam assumes someone is profiting on purpose. Bitcoin supply is largely diluted now though some early adopters made big, this was mostly by chance. That is, unless you think Nakamoto is still hiding for the big pay-off. > Bitcoin is a digital currency that has no intrinsic value There is no such thing as "intrinsic value". The va…
> There is no such thing as "intrinsic value". The value gets assigned by people and market participants.
I'll leave out the discussion of the value of a company and fundamental analysis as off-topic here. Let's focus on currencies instead. The value of a currency is not its exchange rate. Just because Bitcoin is worth 38910.69 USD, does not mean it's more valuable as a currency than a dollar. 1 GBP being worth 1.25 USD doesn't push people to use GBP in place of USD. The value of a currency stems from two factors: liquidity and stability. The reason for the dominance of USD in international trade is the stability people around the world expect from it, compared to other currencies, as well as its liquidity (almost everyone accepts dollars, sometimes even more eagerly than their local currency). Bitcoin fails on both fronts. There are still loads of things I can't buy with Bitcoin (admittedly this aspect is changing). Stability^W volatility of Bitcoin is a meme since its inception. A currency whose value changes so dynamically is a shitty currency. It is more similar to a gambling game than to a currency (and has similar psychological effects on the players). Notice that noone ever "invests in a currency" (other than as a shorthand for investing in something that's sold in that currency), that would be nonsensical, given that the whole point of a currency is so that its value changes as little as possible. So... I guess saying that "Bitcoin is a digital currency that has no intrinsic value" is wrong mainly due to the first part of this sentence. Instead I'd say: Bitcoin is not a currency, but a speculative financial asset.
If you think it's a scam and going to collapse then don't hold any of it.
"It is not backed by any government, which means that it can be used to finance terrorism or other illegal activities."
Besides that fact that this statement is simply untrue because the government of El Salvador has backed Bitcoin, it is not logical. The endorsement or support or lack of endorsement/support of any currency or money doesn't determine or even influence whether or not it can be used to finance terrorism or other illegal activities. Government backed money funds such things all the time, and will continue to do so regardless of what happens with Bitcoin.
I suspect that because you don't like Bitcoin you associate it with bad things, rather than the other way around, though I could be wrong... it is a popular opinion that governments should have direct control over the money of every individual, and Bitcoin is designed to make that difficult. I suspect this is also true of most who oppose Bitcoin because of environmental concerns. No doubt there are those who really are concerned about the energy use, but most are just dismayed that they were wrong and these reasons are just coping mechanisms to avoid having to admit it.