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Bitcoin could become ‘worthless’, Bank of England warns

theguardian.com

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Re: Bitcoin could become ‘worthless’, Bank of England warns

#11

Post by lvl100 »

meltedcapacitor wrote: post #4
Synaesthesia wrote: post #3

Bitcoin is a huge bubble, being driven up by speculation and some rather dodgy stablecoins. It's hard to say how long it will be able to sustain it's price, but if that bubble pops it could bring down the entire economy.

Or it could act as economic stimulus, as the exit dollars get invested in productive endeavours, rekt coiners have to get a job, and electricity and electronics become cheaper due to the capacity being freed from cryptomining.

You are assuming everyone can get out at the same time at price X. That’s not going to happen. Generally in crashes/drawdowns, 2/3 will see 1/3 of the price in liquidation.

Re: Bitcoin could become ‘worthless’, Bank of England warns

#12

Post by bwb »

donatj wrote: post #6

Bitcoin just like any other currency, is worth exactly what people think it is worth. The entire financial system is basically a collective delusion of sorts. Any currency can become worthless as faith in it drops out.

Caveat, national currencies are secured with economic power, a system of law, culture, military power, etc etc. It is a bit different. They aren't perfect either but there is more supporting what people "think" they are worth here.

Bitcoin has it own culture and history, but it is still a baby. I do think bitcoin is a bit more like Gold, although Gold has real uses so that is still a bit of a rough comparison.

Re: Bitcoin could become ‘worthless’, Bank of England warns

#14

Post by hoseja »

bwb wrote: post #12
donatj wrote: post #6

Bitcoin just like any other currency, is worth exactly what people think it is worth. The entire financial system is basically a collective delusion of sorts. Any currency can become worthless as faith in it drops out.

Caveat, national currencies are secured with economic power, a system of law, culture, military power, etc etc. It is a bit different. They aren't perfect either but there is more supporting what people "think" they are worth here. Bitcoin has it own culture and history, but it is still a baby. I do think bitcoin is a bit more like Gold, although Gold has real uses so that is still a bit of a rough comparison.

All of those are memes too.

Re: Bitcoin could become ‘worthless’, Bank of England warns

#15

Post by rjbwork »

bwb wrote: post #12
donatj wrote: post #6

Bitcoin just like any other currency, is worth exactly what people think it is worth. The entire financial system is basically a collective delusion of sorts. Any currency can become worthless as faith in it drops out.

Caveat, national currencies are secured with economic power, a system of law, culture, military power, etc etc. It is a bit different. They aren't perfect either but there is more supporting what people "think" they are worth here. Bitcoin has it own culture and history, but it is still a baby. I do think bitcoin is a bit more like Gold, although Gold has real uses so that is still a bit of a rough comparison.

Don't forget that whole pesky "have to pay taxes to the state in their chosen currency under threat of the state monopoly on violence" thing. It is somewhat touched on in your first sentence, but at the end of the day, if you want to engage in productive economic activity in a particular jurisdiction, you must render what is Caesar's unto Caesar - and Caesar demands his preferred fiat.

Re: Bitcoin could become ‘worthless’, Bank of England warns

#17

Post by imaginator »

zwirbl wrote: post #9
donatj wrote: post #6

Bitcoin just like any other currency, is worth exactly what people think it is worth. The entire financial system is basically a collective delusion of sorts. Any currency can become worthless as faith in it drops out.

This is often repeated, but it always ignores that there are state-level actors (often called a "state") propping up currencies, often supported by central banks. In this regard Bitcoin is definitely not "like any other currency". This is by no means exhaustive, there are a myriad of differences

Zimbabwe has entered the room. Also had a central bank before the last round of hyperinflation/reset. One could argue that the lack of a central bank is a feature. What other differences would would you imagine distinguish bitcoin from central bank currencies?

Re: Bitcoin could become ‘worthless’, Bank of England warns

#19

Post by croon »

bwb wrote: post #12
donatj wrote: post #6

Bitcoin just like any other currency, is worth exactly what people think it is worth. The entire financial system is basically a collective delusion of sorts. Any currency can become worthless as faith in it drops out.

Caveat, national currencies are secured with economic power, a system of law, culture, military power, etc etc. It is a bit different. They aren't perfect either but there is more supporting what people "think" they are worth here. Bitcoin has it own culture and history, but it is still a baby. I do think bitcoin is a bit more like Gold, although Gold has real uses so that is still a bit of a rough comparison.

> I do think bitcoin is a bit more like Gold, although Gold has real uses so that is still a bit of a rough comparison.

I agree with everything except that last part is understated. Bitcoin is like gold with the only difference that gold has functional uses, whereas Bitcoin is entirely replaceable and can be forked and duplicated.

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