Why Is Bitcoin Valuable?
taylorpearson.me
Why Is Bitcoin Valuable?
1–10 of 79 posts
Re: Why Is Bitcoin Valuable?
#2Bitcoin and other cryptocurrencies are currently the perfect products to sell to people who want to get rich, preferably quickly. That will always be a huge market in our economic system.
Re: Why Is Bitcoin Valuable?
#3The most interesting part of the cryptocurrency phenomenon has been the rise of pseudo-academic writing to support individual coins or the concept itself. Every time a new coin emerges, there's a detailed advertisement that's styled like an economics journal article. At the same time, there's low-level sophistry like this article to assert that cryptocurrency is going to solve social problem X.
People who believe cryptocurrency is going to prevent autocracy have lost all grasp on reality.
Re: Why Is Bitcoin Valuable?
#4OK, so Bitcoin is censorship-resistant. Good. But a practical alternative that would allow high-volume, cheap transactions could blow it off the water. This is weird; I keep seeing 'justifications' of Bitcoin's current value and future success that, to me, can simply be reduced to a sunk-cost fallacy. I have read for instance that Bitcoin's worth 'is the area under curve of the energy expense of the miners' (sunk-cost fallacy) or that it has a "pareto-like" quality, being the first largely capitalized cryptocurrency, that would make it immune from failure.
Are there any justifications for Bitcoin that cannot be explained by a cognitive bias?
Re: Why Is Bitcoin Valuable?
#5Why do all crypto currency enthusiasts assume that when a government cannot guarantee monetary stability there will still be reliable, always on, high bandwidth internet connections to sync distributed ledgers across the globe?
Also: Does any crypto currency have anything in store to protect itself against bad nodes? I don't mean nodes that send invalid packages but nodes that act like real nodes but just eat transactions and blocks without relaying them. Flood a network with a few million of these nodes, don't relay addresses of valid nodes and the network will split eventually.
Re: Why Is Bitcoin Valuable?
#6Supply and demand curves are what make things valuable or not. Bitcoin has a finite set of coins in its network. Most people only buy fractions of a bitcoin because one full bitcoin is too pricy for them.
People used to earn Bitcoins using GPU mining rigs. ASIC miners made that obsolete. GPU mining is no longer profitable but the average person does not know or understand that.
I've seen stores like Microcenter sell out of expensive GPUs and expensive power supplies to power them. My son last year had to build a new gaming PC after his old one blew out. His GTX video card was $240 last year, but now sells for $640.
If Bitcoin is the new gold rush, the people selling shovels and supplies to miners at higher than normal prices will sell GPUs power supplies and high end Clubs and motherboards.
I am using Coinbase since the new year. I invested $1 in Bitcoin and $1 in Litecoin. They are only worth 75% as much now. It was just dipping my toe in the waters before jumping in. I am not going to jump in until I learn more about it. Buy low and sell high and don't invest any money you can't afford to lose or do without before it raises back up to sell for a profit.
Re: Why Is Bitcoin Valuable?
#7Back in 2004, I lived in shithole country called Uzbekistan, I wanted to buy some US stocks but my bank refused to transfer MY money because of strict currency control in Uzbekistan. This was probably the first time in my life I realized that I don't actually own money stored at bank, it's just bank temporarily allows me to use my money and at any whim bank would reject to do so.
In 2010, I lived in a little bit better but still crappy country called Russia, I returned to my old idea to buy US stocks. This time is was possible but I had to make high-quality translation of agreement with US broker (i.e. Google translate wouldn't be accepted) and wait for a week to get permission to wire transfer my money to US brokerage account.
In 2012, I wanted to do some small business and I wanted to do everything legally (I was still naive at that time) so I approached my bank in Russia and said that I want to setup website which accepts credit card payments from US. My bank said they wouldn't allow me to do this.
Then I thought I can open foreign bank account. I tried to open bank account at HSBC in Hong Kong and was rejected for being Russian citizen (that's literally was a reason!). I also was rejected at every single bank in Europe.
And even if I succeed to create shell company in some offshore islands and some account at some not very much reputable bank, I would still have great problems to legalize this money in Russia as I understood from talking to lawyers (again, I naively wanted to do everything legally).
So being citizen of two wrong countries, I quickly realized how tightly government and banks control my money. At one hand Russia and Uzbekistan restrict me to move my capital abroad. On the other hand, even if you manage to move your capital abroad, western countries refuse your money. I could call this the Great Western Wall.
So now, I highly appreciate cryptocurrencies. If you have BTC, ETH, XRP nobody would stop you to send money anywhere. It's so much valuable! The only drawback is extreme volatility of these currencies. But with creation decentralized stable cryptocurrency DAI, this changing game even more.
I think the only people who hate cryptocurrencies are those bloody conformists, big brother lovers who never experienced first hand how shitty traditional financial system is.
Re: Why Is Bitcoin Valuable?
#8Back in 2004, I lived in shithole country called Uzbekistan, I wanted to buy some US stocks but my bank refused to transfer MY money because of strict currency control in Uzbekistan. This was probably the first time in my life I realized that I don't actually own money stored at bank, it's just bank temporarily allows me to use my money and at any whim bank would reject to do so. In 2010, I lived in a little bit bett…
> I think the only people who hate cryptocurrencies are those bloody conformists, big brother lovers who never experienced first hand how shitty traditional financial system is.
And the people who profit from the traditional system. Don't underestimate that group.
And in some regards the group you talk about and the group I talk about are overlapping. In first world countries you are really rarely screwed by your bank (when it comes to international transactions at least). But that these countries populace is allowed to live so freely might be the reason of the banks being able to screw people from shithole countries even more than them. So a change for first world country citizens might very well go the negative way and it's reasonable for them not wanting to change as it is.
Re: Why Is Bitcoin Valuable?
#9Back in 2004, I lived in shithole country called Uzbekistan, I wanted to buy some US stocks but my bank refused to transfer MY money because of strict currency control in Uzbekistan. This was probably the first time in my life I realized that I don't actually own money stored at bank, it's just bank temporarily allows me to use my money and at any whim bank would reject to do so. In 2010, I lived in a little bit bett…
There's no such thing as a trustless stable currency. If you want a proof of it in the fiat world, you can just read how Soros shorted GBP [1]. At the same time the volatility (especially the negative volatility) of BTC already gone down tremendously compared to just a few years ago, and new technologies are coming that make it even more useful as money, which decreases the volatility.
[1] https://priceonomics.com/the-trade-of-the-century-when-georg...
Re: Why Is Bitcoin Valuable?
#10Why do all crypto currency enthusiasts assume that when a government cannot guarantee monetary stability there will still be reliable, always on, high bandwidth internet connections to sync distributed ledgers across the globe? Also: Does any crypto currency have anything in store to protect itself against bad nodes? I don't mean nodes that send invalid packages but nodes that act like real nodes but just eat transac…
The internet you're talking about doesn't exist (have you been to rural Africa?), but Blockstream satellites do ( https://blockstream.com/satellite/ )