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Could you please give me your reason for believing that there is no inherent value in Bitcoin?

0wing 9y ago
Namely the codebase, history, delusional claims, and alternatives (other crypto-networks) that make Bitcoin obsolete. See also the false equivalency to gold: If you understand the computer science behind Bitcoin, you'll realize how ridiculous the false equivalency to gold is. 1. The claim of "rare" doesn't exactly hold true. Consider the 10,000 BTC pizza - how did this happen? This was the direct result of Satoshi's economic policy, granting vast sums of BTC to mint out very quickly very early for a short duration to the very small pool of people who ran the software. Satoshi's algorithm produced BTC in plentiful quantities enabling the 10,000BTC pizza - thus it wasn't rare if you were Satoshi and the dozen other early whales hording as much as possible, until the algorithm begins cutting off the production and limiting later users from producing coins, starving the economy. Now there's a psychological game being played, where public relations and marketing must convince new users to buy in. Because the exchanges are unregulated, they can manipulate the spot price though wash trading and painting the tape [2] (where trades are falsified and you just sell the same item back and forth to your friend for a higher and higher price). The supply was created by running a piece of software. It's not magic. Most of the supply was produced very early on and as much as 30% of all Bitcoins are owned by less than 100 people. Best estimates are that there are about one million holders of Bitcoin; 47 individuals hold about 30 percent, another 900 hold a further 20 percent, the next 10,000 about 25% and another million about 20%, with 5% being lost. So 1/10th of one percent represent about half the holdings of Bitcoin and 1 percent close to 80 percent (http://www.businessinsider.com/927-people-own-half- of-the-bitcoins-2013-12). The concentration of Litecoin ownership is similar (http://litecoin-rich-list.blogspot.com). Most of the big wallets have been in place from early on, so sitting back and watching your capital grow has been a very successful strategy. The distribution of Bitcoin holdings looks much like the distribution of wealth in North Korea and makes the China’s and even the US’ wealth distribution look like that of a workers’ paradise 2. Easy migration to more advanced e-cash services, LTC, XMR, ETH, so on See: https://coinmarketcap.com/currencies/views/all/ https://coinmarketcap.com/currencies/views/all/ 3. Bitcoin network requires ASIC miners, largely centralized in China [3]. Assuming the inveitable surpassing of a more advanced cryptosytem making Bitcoin obsolete, as the market is informed there will be a decline in BTC's spot price and once this falls below the cost of OPEX for miners, the hardware goes offline and the network will cease to function. Maximalists will attempt to offer an emergency fork, in any attempt to save their "investment", just as they have developed the lightening network to create centeralized payment hubs, so "investors" can act as liquidity providors and take fees, instead of miners. 4. Electricty usage is unsustainable, GOTO 3 [1] https://bitcoin.stackexchange.com/questions/86/is-it-possible-to-estimate-the-gini-coefficient-for-bitcoins-and-if-the-trend-is https://bitcoin.stackexchange.com/questions/86/is-it-possibl... http://www.businessinsider.com/bitcoin-inequality-2014-1 http://www.businessinsider.com/bitcoin-inequality-2014-1 [2] https://www.youtube.com/watch?v=6r04gfWfRkE https://www.youtube.com/watch?v=6r04gfWfRkE [3] https://qz.com/1055126/photos-china-has-one-of-worlds-largest-bitcoin-mines/ https://qz.com/1055126/photos-china-has-one-of-worlds-larges...
simonsarris 9y ago
Copied from an argument in another thread on the same thing: Any currency that a: 1. strong entity circulates and 2. wants back is fundamentally valuable. > American dollars have value because the US Government taxes things, like land, and if you do not pay those taxes they will send you mean letters (trust me) before resorting to other means (trust Al Capone). You pay these taxes in US dollars. You just having dollars does not make them valuable. And dollars are not valuable because they are backed by gold or silver or sea shells. What makes dollars valuable is that the government wants them back. https://hackernoon.com/the-guns-of-bitcoin-1f779309a718 https://hackernoon.com/the-guns-of-bitcoin-1f779309a718 Ways to destroy the US dollar value: Destroy the US tax collecting power, or have the US ask for taxes in a different currency. If the US started collecting taxes in Euros, the value of the US dollar would disappear instantly. The US is a strong entity and has no incentive to ruin the value of the dollar. It will not start collecting taxes in Euros. Or Bitcoin. Why would it give all that power away? More likely is that Bitcoin gets made illegal or very difficult to use. At the end of the day, if you have US-protected assets, you will have to pay US dollars to the US gov and this will continue to give USD value. Bitcoin has no such strong-entity backing, so it has no fundamental value. Bitcoin people are obsessed with the idea that mere possession is important. It's not. Ask people with loads of marks or Zimbabwe dollars.
- webninja 9y ago
  Technically you don't even "possess" Bitcoin. The network possesses them for you. You just have a private key that authorizes you to send the Bitcoins that are held on the network for you.
- passwordreset 9y ago
  Thanks for the response. If I understand the argument correctly, then the claim is that 1) a currency that fits the criteria - circulated by a strong entity who wants it returned - has value, 2) Bitcoin does not fit that criteria, therefore 3) Bitcoin has no value. I don't know if you're supporting this argument or not, but it is flawed in a manner that is called "denying the antecedent". To borrow an example, the following argument is flawed: 1) If you're a logic instructor, then you have a job, 2) you are not a logic instructor, therefore 3) you do not have a job. This does not follow, and is not a valid argument. One can simply point out that there are other jobs than logic instructor. This is the same form of argument as was made in your post. Surely, then I must be able to point to some other thing that has some value which is also not circulated by a strong entity. Rare-earth minerals come to mind. Sunken treasure. Works of art. Illegal drugs, certainly. Stolen goods, clearly, and I would think any illegal market has to be seen as coming from a weak actor. All these are examples of things that have value, but do not fit the given criteria. It is unfortunate, but it appears that people who believe this argument are fooling themselves. I hope they do not fool others.

Namely the codebase, history, delusional claims, and alternatives (other crypto-networks) that make Bitcoin obsolete. See also the false equivalency to gold: If you understand the computer science behind Bitcoin, you'll realize how ridiculous the false equivalency to gold is. 1. The claim of "rare" doesn't exactly hold true. Consider the 10,000 BTC pizza - how did this happen? This was the direct result of Satoshi's economic policy, granting vast sums of BTC to mint out very quickly very early for a short duration to the very small pool of people who ran the software. Satoshi's algorithm produced BTC in plentiful quantities enabling the 10,000BTC pizza - thus it wasn't rare if you were Satoshi and the dozen other early whales hording as much as possible, until the algorithm begins cutting off the production and limiting later users from producing coins, starving the economy. Now there's a psychological game being played, where public relations and marketing must convince new users to buy in. Because the exchanges are unregulated, they can manipulate the spot price though wash trading and painting the tape [2] (where trades are falsified and you just sell the same item back and forth to your friend for a higher and higher price). The supply was created by running a piece of software. It's not magic. Most of the supply was produced very early on and as much as 30% of all Bitcoins are owned by less than 100 people. Best estimates are that there are about one million holders of Bitcoin; 47 individuals hold about 30 percent, another 900 hold a further 20 percent, the next 10,000 about 25% and another million about 20%, with 5% being lost. So 1/10th of one percent represent about half the holdings of Bitcoin and 1 percent close to 80 percent (http://www.businessinsider.com/927-people-own-half- of-the-bitcoins-2013-12). The concentration of Litecoin ownership is similar (http://litecoin-rich-list.blogspot.com). Most of the big wallets have been in place from early on, so sitting back and watching your capital grow has been a very successful strategy. The distribution of Bitcoin holdings looks much like the distribution of wealth in North Korea and makes the China’s and even the US’ wealth distribution look like that of a workers’ paradise 2. Easy migration to more advanced e-cash services, LTC, XMR, ETH, so on See: https://coinmarketcap.com/currencies/views/all/ https://coinmarketcap.com/currencies/views/all/ 3. Bitcoin network requires ASIC miners, largely centralized in China [3]. Assuming the inveitable surpassing of a more advanced cryptosytem making Bitcoin obsolete, as the market is informed there will be a decline in BTC's spot price and once this falls below the cost of OPEX for miners, the hardware goes offline and the network will cease to function. Maximalists will attempt to offer an emergency fork, in any attempt to save their "investment", just as they have developed the lightening network to create centeralized payment hubs, so "investors" can act as liquidity providors and take fees, instead of miners. 4. Electricty usage is unsustainable, GOTO 3 [1] https://bitcoin.stackexchange.com/questions/86/is-it-possible-to-estimate-the-gini-coefficient-for-bitcoins-and-if-the-trend-is https://bitcoin.stackexchange.com/questions/86/is-it-possibl... http://www.businessinsider.com/bitcoin-inequality-2014-1 http://www.businessinsider.com/bitcoin-inequality-2014-1 [2] https://www.youtube.com/watch?v=6r04gfWfRkE https://www.youtube.com/watch?v=6r04gfWfRkE [3] https://qz.com/1055126/photos-china-has-one-of-worlds-largest-bitcoin-mines/ https://qz.com/1055126/photos-china-has-one-of-worlds-larges...

simonsarris 9y ago

Copied from an argument in another thread on the same thing: Any currency that a: 1. strong entity circulates and 2. wants back is fundamentally valuable. > American dollars have value because the US Government taxes things, like land, and if you do not pay those taxes they will send you mean letters (trust me) before resorting to other means (trust Al Capone). You pay these taxes in US dollars. You just having dollars does not make them valuable. And dollars are not valuable because they are backed by gold or silver or sea shells. What makes dollars valuable is that the government wants them back. https://hackernoon.com/the-guns-of-bitcoin-1f779309a718 https://hackernoon.com/the-guns-of-bitcoin-1f779309a718 Ways to destroy the US dollar value: Destroy the US tax collecting power, or have the US ask for taxes in a different currency. If the US started collecting taxes in Euros, the value of the US dollar would disappear instantly. The US is a strong entity and has no incentive to ruin the value of the dollar. It will not start collecting taxes in Euros. Or Bitcoin. Why would it give all that power away? More likely is that Bitcoin gets made illegal or very difficult to use. At the end of the day, if you have US-protected assets, you will have to pay US dollars to the US gov and this will continue to give USD value. Bitcoin has no such strong-entity backing, so it has no fundamental value. Bitcoin people are obsessed with the idea that mere possession is important. It's not. Ask people with loads of marks or Zimbabwe dollars.

webninja 9y ago
Technically you don't even "possess" Bitcoin. The network possesses them for you. You just have a private key that authorizes you to send the Bitcoins that are held on the network for you.
passwordreset 9y ago
Thanks for the response. If I understand the argument correctly, then the claim is that 1) a currency that fits the criteria - circulated by a strong entity who wants it returned - has value, 2) Bitcoin does not fit that criteria, therefore 3) Bitcoin has no value. I don't know if you're supporting this argument or not, but it is flawed in a manner that is called "denying the antecedent". To borrow an example, the following argument is flawed: 1) If you're a logic instructor, then you have a job, 2) you are not a logic instructor, therefore 3) you do not have a job. This does not follow, and is not a valid argument. One can simply point out that there are other jobs than logic instructor. This is the same form of argument as was made in your post. Surely, then I must be able to point to some other thing that has some value which is also not circulated by a strong entity. Rare-earth minerals come to mind. Sunken treasure. Works of art. Illegal drugs, certainly. Stolen goods, clearly, and I would think any illegal market has to be seen as coming from a weak actor. All these are examples of things that have value, but do not fit the given criteria. It is unfortunate, but it appears that people who believe this argument are fooling themselves. I hope they do not fool others.