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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

#61

Post by md_ »

KptMarchewa wrote: post #31
1cvmask wrote: post #2

I wonder when and if they will pass an act outlawing or “regulating” bitcoin/crypto like that was passed for gold in 1934: https://en.wikipedia.org/wiki/Gold_Reserve_Act Hillary Clinton talks about how crypto is a threat to currencies and especially to the dollar as a reserve currency (minute 29:30): https://www.bloomberg.com/news/videos/2021-11-19/great-power...

Can't wait for this.

Or at least outlaw talking incessantly about it. It'd make online communities so much more pleasant. ;)

Like, if you want to post about BTC more than five times an hour, you first have to take an undergraduate class in cryptography and economics.

Ten times an hour? You can't use "crypto" to mean "cryptocurrency."

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

#62

Post by donatj »

mattbrewsbytes wrote: post #40
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.

I would counter that Bitcoin is not a currency. A currency is used as a medium to exchange goods/services so you don't have to take goats down to the market to purchase seed. It operates more like a stock than a currency and can be moved by any person/firm/entity that has a few billion dollars. I would venture a guess that the number of individuals using bitcoin to purchase goods/services is less than a couple percen…

You can pay for things with Cypto using PayPal, right now, and for a while now.

It's a currency. I've paid for many things with crypto.

https://www.paypal.com/us/smarthelp/article/how-to-use-crypt...

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

#63

Post by jack_pp »

croon wrote: post #52
jack_pp wrote: post #27

Earlier quoted context omitted.

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…

> That's like saying the $ or any other currency is entirely replaceable. No it's not. That's just another reduction missing the point. If the dollar was to be replaced, a new currency would be issued, there would be a period of trade-in for old currency, all systems of governance, regulation, etc would recognize it and issues could be handled. Gold would still be used for everything from electronics to satellite coa…

Any property you hold is gambling to a certain degree, if you buy a house you gamble that the society you bought it in will provide security for it and based on the laws of that society you will be able to keep it.

You gamble your property tax won't jump 50% or that police will stop rioters from stealing from it. I admit it is a much smaller gamble than bitcoin but it is still a gamble.

Holding your savings in $ is a bigger gamble than buying a house and some would argue it is a bigger gamble than holding bitcoin.

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

#64

Post by mattbrewsbytes »

jack_pp wrote: post #57
mattbrewsbytes wrote: post #40

Earlier quoted context omitted.

I would counter that Bitcoin is not a currency. A currency is used as a medium to exchange goods/services so you don't have to take goats down to the market to purchase seed. It operates more like a stock than a currency and can be moved by any person/firm/entity that has a few billion dollars. I would venture a guess that the number of individuals using bitcoin to purchase goods/services is less than a couple percen…

It is a currency, a fairly new one that hasn't gained mass adoption yet, with many problems (tx cost and tx/s limits) but people can and do use it to buy stuff. My energy provider in Romania lets me pay my bills with bitcoin. That's like saying any new social media website you create isn't really a social media website because it has only 10 users.

If a currency hasn't gained mass adoption, I don't believe its a currency. I can claim I have a currency of green marbles and my son lets me buy candy from him with green marbles and he buys candy from a friend with green marbles so therefore its a currency.

I'm not saying bitcoin can't get there, its certainly possible, but when the majority of use cases use terminology like "holding", "investing", "trading" its treated by users as more of a security/equity than a currency.

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

#65

Post by lousyd »

bwb wrote: post #38
rjbwork wrote: post #15

Earlier quoted context omitted.

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.

Taxes are good, they pay for civilization and the platform we all operate within :) I know people hate hearing that, but it is the truth. I am frustrated with how high they are on some things, bad spending, etc. But at the end of the day look around at what we have built as a civilization. That is from the collective pooling of money to build the entire system.

Perhaps there are people who don't want the civilisation and platform we operate in to be paid for.

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

#66

Post by kergonath »

donatj wrote: post #41
bwb wrote: post #12

Earlier 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.

What would you propose the actual mechanism is for these giving fiat its value? Simply these things giving people more faith in fiat? Minimum wage laws, target interest rates and federal reserve shenanigans? I think if anything all that give me less faith overall than something maintained by people who operate a currency for the love of it. The value of my past work being tied to the success of something I have no co…

> Simply these things giving people more faith in fiat?

Yes, it rests largely on the trust and faith you have in the currency. At a basic level, you at least need to trust that your money won’t lose half its value overnight. Otherwise, you’d just use another currency; there are a couple of examples in recent history. Now, whether your faith is justified or not is another question. Then you can look at the size of the economy or the power of whatever is backing the currency.

> The value of my past work being tied to the success of something I have no control over, a machine that murders innocent people in drone strikes across the world?

Such is the world we live in, whether we like it or not. As a side note, a lot of the drone murdering is done more or less transparently for economic reasons. Yes, a government powerful enough to project power on the other side of the planet to secure a good supply of cheap oil or to ensure some form of hegemony does inspire confidence in its currency. I wish it weren’t so, but here we are.

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

#67

Post by mojuba »

While it's still debatable whether crypto currencies are pure speculation vs. the new "gold" vs. a new currency that will kill the national ones -

As a philosophical idea, can we at least agree that the inherent value of Bitcoin and the fundamental reason some people invest in it is... the beauty of mathematics?

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

#68

Post by Valgrim »

md_ wrote: post #58
ghiculescu wrote: post #56

Earlier quoted context omitted.

I’ve heard this metaphor lots and find it super confusing. The price of art is still based on something - some art looks nice, or was made by someone famous.

Hmm, I don't fully buy the metaphor (since BTC are fungible), but I do think it exhibits collector economics. I'm in many ways an art fan, but art pricing is totally irrational: 1. Prints cost substantially less than paintings since they're less limited 2. Prints price based on lots of intangibles (how limited the series is, what series it was, what the artist's role was in it, etc) 3. Fundamentally, I don't think bu…

I'd like to rebuke #3: like most people, art buyers are vain. They feel pride in owning things of value, especially if that value is recognized by their peers.

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

#69

Post by croon »

jack_pp wrote: post #63
croon wrote: post #52

Earlier quoted context omitted.

> That's like saying the $ or any other currency is entirely replaceable. No it's not. That's just another reduction missing the point. If the dollar was to be replaced, a new currency would be issued, there would be a period of trade-in for old currency, all systems of governance, regulation, etc would recognize it and issues could be handled. Gold would still be used for everything from electronics to satellite coa…

Any property you hold is gambling to a certain degree, if you buy a house you gamble that the society you bought it in will provide security for it and based on the laws of that society you will be able to keep it. You gamble your property tax won't jump 50% or that police will stop rioters from stealing from it. I admit it is a much smaller gamble than bitcoin but it is still a gamble. Holding your savings in $ is a…

> Any property you hold is gambling to a certain degree

The degrees are what separates milk from butter, or a paper box from a house. That is the entire point. If you ignore the degrees to which something is different from another, then sure, everything is everything else.

> Holding your savings in $ is a bigger gamble than buying a house and some would argue it is a bigger gamble than holding bitcoin.

Perhaps, I'm not one of them. Time will tell.

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

#70

Post by donatj »

bwb wrote: post #38
rjbwork wrote: post #15

Earlier quoted context omitted.

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.

Taxes are good, they pay for civilization and the platform we all operate within :) I know people hate hearing that, but it is the truth. I am frustrated with how high they are on some things, bad spending, etc. But at the end of the day look around at what we have built as a civilization. That is from the collective pooling of money to build the entire system.

I feel like you're undervaluing the role individuals and private enterprise have on civilization. If there were just a bunch of roads and power lines without homes and businesses it wouldn't be much of a civilization.
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