4 ms·

how do you know?

tobyhinloopen 9y ago
How do I know what? That it will crash and burn? Because it is a useless resource. It is only worth something because other people say it is worth something, and unlike paper money it is not backed by anything significant. It is a bubble of hot air, ready to pop at any time. It might continue rising for years or decades. But it is not usable as a real currency, so it will always remain a useless waste of resources. There might be a replacement cryptocoin that will actually be useful in the future, but it won't be bitcoin. Bitcoin will be the thing that started the "future", but it will not be the thing that remained the future.
- linards 9y ago
  :D yeah, paper money .... backed by what? debt, yes. Militaryindustrial complex, yes. QE, yes. bitcoin is backed by mathematical algorithm, that has a limit on the amount of coins mined. Go read some more Wallstreet Journal
- benbou09 9y ago
  What do you mean by 'anything significant'? Paper money is not backed by anything material. Rather, it is backed by institutions (central banks, governments, banks) and individuals using them. To me, that's pretty much the same as cryptocurrencies.
  - Twisell 9y ago
    Not exactly, if your country economy collapse you still live in your country and are onboard with your fellow citizen to start anew. If bitcoin collapse you are totally on you own while your neighbors that never invested in bitcoin remain totally unharmed by this virtual event.
  - perseiden 9y ago
    I think that was the point he was trying to make. Without major support of such institutions / individuals, bitcoin won't catch on as a "real" currency.
- singold 9y ago
  To be fair, I don't think paper money is backed by anything more than "trust" in the goverments that print it, and that people will accept that as payment. If you "trust" the bitcoin network, and think that someone may accept bitcoin in exchange for something that you want, it looks pretty similar (obviously not comparable in scale yet)
- aquadrop 9y ago
  Paper money also worth something because other people say it's worth something. You can't buy anything with Czech krones in some Kenyan village, because people there don't its worth.
- lemondrops 9y ago
  >> It is only worth something because other people say it is worth something That is actually the very definition of most currencies currently in use [1]. Money is actually just a promise that someone will provide you goods or services in exchange for it sometime in the future, it has no intrinsic worth. Also, paper money isn't tied to anything [2] either, let alone the "digital" money we have in the banks. [1] https://en.wikipedia.org/wiki/Fiat_money https://en.wikipedia.org/wiki/Fiat_money [2] https://en.wikipedia.org/wiki/Nixon_shock https://en.wikipedia.org/wiki/Nixon_shock
  - alex_young 9y ago
    Money is traditionally backed by something though right? Isn't a currency a bunch of tokens with an army? Where's the Bitcoin army when I need them to enforce my contacts?
    - alien_at_work 9y ago
      Actually, the main thing that gives money value is the fact that you have to pay your taxes in it. If you live in the US, you might be able to live day-to-day with nothing but BTC but when tax time comes you'll be converting some of that to dollars or facing some ugly consequences.
    - lemondrops 9y ago
      Not really, see e.g. the 2012-2013 financial crisis in Cyprus, there was no "army" to enforce that people got all their money back... [1] The only thing that keeps the system working is trust (see other reply to my initial comment that explained it more thoroughly). Though I agree that there is a lot less "backing" of Bitcoin in that sense, nothing protects you from losing everything if something goes wrong. https://www.theguardian.com/world/2013/mar/30/bank-of-cyprus-depositors-lose-savings https://www.theguardian.com/world/2013/mar/30/bank-of-cyprus...
  - notahacker 9y ago
    "Fiat" money is backed by enormous sums of debt repayable only in that currency and a tax burden representing a large proportion of GDP payable only in that country, and its supply is kept in balance with demand on a day to day basis by central banks. (And even then, people are entirely justified in worrying that certain currencies will struggle to retain value because their state and central bank are very bad at doing the latter jobs) So it's basically backed by years' worth of guaranteed future demand to obtain that currency from people who will therefore be willing to provide goods and services in return. Bitcoin is backed by optimism.
- scotty79 9y ago
  > Because it is a useless resource. It is only worth something because other people say it is worth something So, like art?
alex_young 9y ago
The burden of proof is on the side saying "this time is different", the four most dangerous words in investing. Of course we will have to wait and see yet again, because "the market can remain irrational longer than you can remain solvent." Same song different drummer.

how do you know?

How do I know what? That it will crash and burn? Because it is a useless resource. It is only worth something because other people say it is worth something, and unlike paper money it is not backed by anything significant. It is a bubble of hot air, ready to pop at any time. It might continue rising for years or decades. But it is not usable as a real currency, so it will always remain a useless waste of resources. There might be a replacement cryptocoin that will actually be useful in the future, but it won't be bitcoin. Bitcoin will be the thing that started the "future", but it will not be the thing that remained the future.

linards 9y ago
:D yeah, paper money .... backed by what? debt, yes. Militaryindustrial complex, yes. QE, yes. bitcoin is backed by mathematical algorithm, that has a limit on the amount of coins mined. Go read some more Wallstreet Journal
benbou09 9y ago
What do you mean by 'anything significant'? Paper money is not backed by anything material. Rather, it is backed by institutions (central banks, governments, banks) and individuals using them. To me, that's pretty much the same as cryptocurrencies.
- Twisell 9y ago
  Not exactly, if your country economy collapse you still live in your country and are onboard with your fellow citizen to start anew. If bitcoin collapse you are totally on you own while your neighbors that never invested in bitcoin remain totally unharmed by this virtual event.
- perseiden 9y ago
  I think that was the point he was trying to make. Without major support of such institutions / individuals, bitcoin won't catch on as a "real" currency.
singold 9y ago
To be fair, I don't think paper money is backed by anything more than "trust" in the goverments that print it, and that people will accept that as payment. If you "trust" the bitcoin network, and think that someone may accept bitcoin in exchange for something that you want, it looks pretty similar (obviously not comparable in scale yet)
aquadrop 9y ago
Paper money also worth something because other people say it's worth something. You can't buy anything with Czech krones in some Kenyan village, because people there don't its worth.
lemondrops 9y ago
>> It is only worth something because other people say it is worth something That is actually the very definition of most currencies currently in use [1]. Money is actually just a promise that someone will provide you goods or services in exchange for it sometime in the future, it has no intrinsic worth. Also, paper money isn't tied to anything [2] either, let alone the "digital" money we have in the banks. [1] https://en.wikipedia.org/wiki/Fiat_money https://en.wikipedia.org/wiki/Fiat_money [2] https://en.wikipedia.org/wiki/Nixon_shock https://en.wikipedia.org/wiki/Nixon_shock
- alex_young 9y ago
  Money is traditionally backed by something though right? Isn't a currency a bunch of tokens with an army? Where's the Bitcoin army when I need them to enforce my contacts?
  - alien_at_work 9y ago
    Actually, the main thing that gives money value is the fact that you have to pay your taxes in it. If you live in the US, you might be able to live day-to-day with nothing but BTC but when tax time comes you'll be converting some of that to dollars or facing some ugly consequences.
  - lemondrops 9y ago
    Not really, see e.g. the 2012-2013 financial crisis in Cyprus, there was no "army" to enforce that people got all their money back... [1] The only thing that keeps the system working is trust (see other reply to my initial comment that explained it more thoroughly). Though I agree that there is a lot less "backing" of Bitcoin in that sense, nothing protects you from losing everything if something goes wrong. https://www.theguardian.com/world/2013/mar/30/bank-of-cyprus-depositors-lose-savings https://www.theguardian.com/world/2013/mar/30/bank-of-cyprus...
- notahacker 9y ago
  "Fiat" money is backed by enormous sums of debt repayable only in that currency and a tax burden representing a large proportion of GDP payable only in that country, and its supply is kept in balance with demand on a day to day basis by central banks. (And even then, people are entirely justified in worrying that certain currencies will struggle to retain value because their state and central bank are very bad at doing the latter jobs) So it's basically backed by years' worth of guaranteed future demand to obtain that currency from people who will therefore be willing to provide goods and services in return. Bitcoin is backed by optimism.
scotty79 9y ago
> Because it is a useless resource. It is only worth something because other people say it is worth something So, like art?

alex_young 9y ago

The burden of proof is on the side saying "this time is different", the four most dangerous words in investing. Of course we will have to wait and see yet again, because "the market can remain irrational longer than you can remain solvent." Same song different drummer.