Central bank fearmongers over decentralized currency that could potentially undermine its existence.
So awful it makes the Banks look like the good guys in comparison.
Bitcoin could become ‘worthless’, Bank of England warns
21–30 of 103 posts
Re: Bitcoin could become ‘worthless’, Bank of England warns
#22Bitcoin 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.
Bitcoin does not support monetary policy though. If you read the Wikipedia article on the Gold standard, historians and economists seem to agree that the inflexibility to increase currency supply to stimulate the economy made the great depression much worse than it could have been without it.
Re: Bitcoin could become ‘worthless’, Bank of England warns
#23Re: Bitcoin could become ‘worthless’, Bank of England warns
#24Earlier quoted context omitted.
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.
Known as https://en.wikipedia.org/wiki/Chartalism, by the way. :)
While these risks clearly _do_ apply to traditional currencies, I do think, as an investor, it's worth considering market cap (as a proxy for "social belief in") and history of stability.
Bitcoin's market cap is probably (factoring in permanently lost coins) something like $750B, which makes it a bit smaller than, say, the Swiss franc, and its history of stability is much, much shorter.
Re: Bitcoin could become ‘worthless’, Bank of England warns
#25I think these central banks really underestimate the Bitcoin maximalists.
These people will hold and buy Bitcoin for the rest of their lives.
Half of all Bitcoin hasn't been moved in 2+ years, despite multiple -50% moves.
The price went from 20k to 2k and most wallets didn't even have a coin move from it.
Re: Bitcoin could become ‘worthless’, Bank of England warns
#26I think these central banks really underestimate the Bitcoin maximalists. These people will hold and buy Bitcoin for the rest of their lives. Half of all Bitcoin hasn't been moved in 2+ years, despite multiple -50% moves. The price went from 20k to 2k and most wallets didn't even have a coin move from it.
If it never moves, that actually makes it worthless.
Re: Bitcoin could become ‘worthless’, Bank of England warns
#27Earlier quoted context omitted.
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.
That's like saying the $ or any other currency is entirely replaceable. What bitcoin has over any other cryptocurrency is the massive mining power behind it, making it the most secure. https://braiins.com/blog/how-much-would-it-cost-to-51-attack...
So if you create another cryptocurrency which could use the same ASICS as bitcoin and you convince a lot of miners to switch then maybe.. it could be replaced but that is a tall ask.
Re: Bitcoin could become ‘worthless’, Bank of England warns
#28I think these central banks really underestimate the Bitcoin maximalists. These people will hold and buy Bitcoin for the rest of their lives. Half of all Bitcoin hasn't been moved in 2+ years, despite multiple -50% moves. The price went from 20k to 2k and most wallets didn't even have a coin move from it.
Let them hold all the way to zero.
Re: Bitcoin could become ‘worthless’, Bank of England warns
#29Re: Bitcoin could become ‘worthless’, Bank of England warns
#30I think these central banks really underestimate the Bitcoin maximalists. These people will hold and buy Bitcoin for the rest of their lives. Half of all Bitcoin hasn't been moved in 2+ years, despite multiple -50% moves. The price went from 20k to 2k and most wallets didn't even have a coin move from it.
> Half of all Bitcoin hasn't been moved in 2+ years, despite multiple -50% moves.
Presumably a big chunk of this is permanently lost due to lost keys, etc.