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Bitcoin still makes no sense

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Re: Bitcoin still makes no sense

#91
post #49

Bitcoin is just a part of a larger problem disucssed in these two articles fro m3 years ago. They are still as true as three years ago: "Ten years in, nobody has come up with a use for blockchain": https://hackernoon.com/ten-years-in-nobody-has-come-up-with-... Follow up, "Blockchain is not only crappy technology but a bad vision for the future": https://medium.com/@kaistinchcombe/decentralized-and-trustle...

It is pretty useful for cross-border payments

It's pretty useful for exactly one case of cross-border payments: into countries that are under international sanctions.

For every other country literally anything else is more useful and convenient.

Re: Bitcoin still makes no sense

#92
post #12

Earlier quoted context omitted.

Money is a self-organizing system of resource management. Bitcoin is better money, because it allows for more pure self-organization, as a result of its money supply being predetermined by hard-coded algorithm, rather than by fiat decree. This single benefit far outweighs the mentioned negatives. It has the potential to completely eliminate the boom/bust cycle, eliminate currency manipulation that facilitates interna…

> Bitcoin is better money, because it allows for more pure self-organization, as a result of its money supply being predetermined by hard-coded algorithm, rather than by fiat decree. Because bitcoin requires substantial inputs (hardware, energy), if it actually has legs, it will end up being controlled by whoever controls the most capital. That's not self-organization, that's just replicating the same broken economic…

> Because bitcoin requires substatial inputs... it will end up being controlled by whoever controls the most capital

Huh? Whoever has the most capital has the most capital? I don't get it.

> Citation needed

The boom/bust cycle is caused by what we declare to be the solution: active management and printing of the money supply as desired to achieve short-term economic or political goals.

> an anonymous market manipulator caused bitcoin to top $20k

I was speaking about the money supply, not the price. Dunno if you meant to misinterpret or not. But regardless, even that criticism isn't really doable at the scale Bitcoin will achieve.

> I'm sure that'll work...

I don't consider this to be a real criticism. I don't consider any scaling criticism to be valid, because they all come from the perspective of "Bitcoin hasn't scaled already, therefore it will never scale." 80% of software engineering is scaling. It's what we do, it's what's being done. It's a lazy argument. For it to be interesting, you have to tell me why Bitcoin can't scale, ever, in principle.

Re: Bitcoin still makes no sense

#93

Earlier quoted context omitted.

"with little positive effects to show for it" It's an efficient store of value. Here is a dilemma - you have 10 million dollars. You need somewhere to park your money. Do you follow the Chinese businessman pattern and buy real estate in Toronto? That seems complicated - picking a property, being subject to the real estate market, etc. Often these houses sit empty, since you are on the topic of wasted resources. Do yo…

I disagree with the 'store of value' argument. I got into a similar argument with someone on here before, and I believe it is an insufficient economic principle to justify a currency. A good currency serves as a medium of exchange or a standard of value. Are people using bitcoin to replace USD in general? No, not really. It's not a very good medium of exchange not because of the illegal stuff but because no one knows…

First of all, thank you for the coherent argument. Going to start with what I think your central argument is at first.

"why do I want people not to invest their money"

You don't - you absolutely don't want someone to park their money in BTC and avoid spending it. It's an economic inefficiency. It's also the nature of people to hoard wealth - that's why they buy land to "sit on" and why they buy gold. Both do not have the world OR wealth distribution. That's also why in the US, we have a property tax - to keep the wealthy from hoarding all the land without generating a profit on it (assuming they aren't living on the property.

Conclusion - we need, or at the very least have used stores of value throughout history that are not "investments" in the sense of efficient use of resources.

"What are the benefits of BTC over existing stores of value?" ("USD" in a bank account, USD (cash), gold, and property).

The ones I listed above - USD depreciates. It's trite but it's also true - you cannot hold USD without losing wealth. Gold has no intrinsic value, you have less control over the asset unless you store it in your basement (managed by third party), you cannot easily move it or transact in it.

Real estate is entirely too complicated for a non-professional to invest in. Same with land.

BTC does what cash was supposed to - you buy it, it sits there, it doesn't depreciate.

Now, you will correctly say "No, I buy BTC at $20,000 and tomorrow it's $3,000". Completely correct and true, but the bet is that as it becomes more established it will become a more reliable store of value than a nationally backed currency, kind of like currency was when it was backed by the gold standard.

Hopefully that helps you understand my viewpoint without thinking I am trying to shove my opinion down your throat, as most crypto debates go that way, and it's definitely not my intent. I don't even hold crypto, nor do I necessarily think it's "changing the world".

Re: Bitcoin still makes no sense

#95
BTC as a currency has some merit. But people are treating it as an asset class.

Crypto as a major asset class is a Brave New World. Its the first major asset class whose value is entirely inferred.

Bonds are tethered to a future income stream, typically valued from a present income stream + future expectations.

Stocks are tethered to real work, company assets and profits.

Precious metals are tethered to something that is either impossible or uneconomical to produce, far beyond the challenges of crypto mining. The world still cannot produce or practically destroy gold. Bitcoins can be completely destroyed - doing so isn't even difficult.

Bitcoin is a string of characters. If Bitcoin is never used as a currency, only a tradeable asset, we run the real risk of people suddenly and simultaneously questioning what it is they own. There is no floor underneath that price. Even a bankrupt corporation has a price floor - the used office furniture sold at auction. Bitcoin can trade for 0. And might yet.

Re: Bitcoin still makes no sense

#96
post #15

some hobbyist observations, please correct me if I'm wrong: >I’m still trying to piece together what exactly how much control governments really lose under Bitcoin, whether I can see that as a positive or a negative, and whether I agree with Dalio that governments would (or could) take action to prevent it. I don't think they could control it at all, as I will get into in the next post >The enforcement of debt and th…

> And you can today exchange btc for monero, ethereum or whatever and back again and it's virtually untrackable who owns it or where it came from.

This doesn't sound any different from cash. Which is why existing systems of taxation don't rely exclusively on the banking system. When you buy a television, you don't self-report the purchase and pay sales tax at the end of the year, the vendor charges it up front. When you're paid a salary, the employer withholds income tax. The businesses, in turn, have their own income tax, and want to report the employee's wages to be able to deduct them from their own taxes. They want to report sales in order to be able to legally deliver those profits to shareholders. So what's different about cryptocurrency here?

Re: Bitcoin still makes no sense

#97
There are no new inventions in finance. Be it tulips, joint stock enterprises, junk bonds, or good ol debt, it's all been done before and will all come crashing down yet again, taking the speculative euphoria with it.

Re: Bitcoin still makes no sense

#98
post #48

This seems more like it's questioning cryptocurrency itself, and putting it at odds with fiat currencies and states. As for states, they're rolling out their own cryptos. The Chinese have CryptoYuan, the EU central bank is releasing a currency likely by late 2021, and the Federal Reserve is also planning to create a new currency. That's how they beat Bitcoin. Fiat currency is likely going to be slowly phased out as c…

The whole point of Bitcoin is that it isn't controlled by any one country and that more can't be printed whenever the country wants.

Any new currency or "coin" that a country develops completely misses the mark, and is literally no better vs Bitcoin than their standard currency.

Re: Bitcoin still makes no sense

#99
post #4

The problem with Bitcoin and is that it creates real negative effects, with little positive effects to show for it. The most prominent negative effect is the huge energy waste, which doesn't help when we are trying to cut on our carbon footprint The second one is that it makes illegal activities easier, and at a larger scale. It's quite common right now for companies to be coerced pay millions of dollars to anonymous…

Making (certain) illegal activities easier is one of the primary positive effects.

Ah yes, nothing more positive than making the exchange of child pornography easier and safer for the peddlers involved.

Re: Bitcoin still makes no sense

#100
post #21

Earlier quoted context omitted.

Making (certain) illegal activities easier is one of the primary positive effects.

I'll assume you're referring to obtaining drugs which many consider to be something that at the very least should not be punished by prison time (myself included), as opposed to say... the distribution of child pornography, ordering hit men, arms trafficking, or the selling of hacked credit card numbers, passwords, and zero days. If that was your idea, wouldn't we be better served by lobbying our politicians to move…

> If that was your idea, wouldn't we be better served by lobbying our politicians to move the needle on the drug war (seems to be happening) instead of creating volatile whale controlled crypto "currencies" which use huge amounts of electricity as our planet faces a climate change crises and which also enables all of the other really terrible illegal things listed?

What would really be better is to push politicians to stop using the banking system as a mass surveillance apparatus and allow there to be above-board systems for the anonymous digital transfer of modest amounts of cash. Then you destroy the demand for cryptocurrency by out-competing it, and eliminate the energy waste problem.

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