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> The reason bitcoin miners are willing to do the very real work of processing transactions is that they think the bitcoin they're getting paid with will keep r

> The reason bitcoin miners are willing to do the very real work of processing transactions is that they think the bitcoin they're getting paid with will keep rising in value. And what would make them do that? Well, the finite supply certainly helps, but at some point there has to be more demand for them too. Which means that people have to actually start using them. I can't help but feel some similarities to housing bubbles here.

bb88 8y ago
And demand will only return when the price stabilizes. And because the price isn't stabilizing, demand isn't coming back.
- Spartan-S63 8y ago
  Not to mention that Bitcoin has a very low value proposition outside of being a store of value. I can see a crypto economy where Bitcoin backs the value of other cryptocurrencies, but it’s not a good first-party currency. It’s a mere store of values nd people don’t really agree that it’s useful to exchange for services. They just see it as useful to hold value. Something like Ethereum, with a real value-proposition, is a more worthwhile cryptocurrency. Basically, I see crypto evolving into pseudo-fiat currencies with some large financial institution (that isn’t a nation-state) ensuring it’s a valuable commodity. I’m just not convinced we can (or should) escape a fiat-like economic system.
  - bb88 8y ago
    I would argue it's not even a store of value anymore with the price tumbling. When you buy bitcoin or ethereum, you get what? A number. I can sell you a number. Better yet, I can sell you a cryptographically signed number if you want. But that itself is just a number. At some point, even something like gold has a certain amount of scarcity. But with crypto, there's no scarcity, even if you can artificially limit the number of coins. One can always just create a new bitcoin alternative... The point is, there is nothing, absolutely nothing, that underpins the price of a BTC to anything in the real world.
    - yebyen 8y ago
      Yes, but how many of those numbers can you sell at cost? (There is crypto scarcity, who values the random newcoin at the same as some "established coin" Bitcoin or close, older friend coin? I can see that BCH, LTC, BAB, BSV, etc have all not come close to the price of the original BTC. So, "store of value" is obviously wrong, but...)
      - bb88 8y ago
        That's a marketing problem. :) "Each one will be a unique and priceless number using the largest of prime numbers. Each number comes with a genuine certificate of authenticity hand signed with the author's private key..."
        yebyen 8y ago
        Only the best numbers... I hear you, one must back their best issued numbers with actual software to ensure their value ;) BSV has handcash, honestly that seemed like a great wallet until I realized it wasn't supported by any of my held coins!
        bb88 8y ago
        My point is that one way to look at bitcoin is that it's nothing more than a marketing scheme. And the "scarcity" in bitcoin is just artificial at best. Yes BTC has scarcity, but cryptocurrency itself has no scarcity, proven by the fact that there are over 1,000 alt coins. And all of those coins are just number generators. Here's another way to illustrate the issue: I have two numbers. 1. The first takes your user id "yebyen" and appends a number to it so that the SHA-256 hash is exactly 0x0. It will take 20 years of processing power on the NSA computers, so it should be worth something to you. 2. The second number is an encrypted location somewhere in the US where I've buried $1000. It will cost you $1010 to acquire it from me. I'll decrypt it for free but it will be worth exactly $0 afterwards. But until then it's worth $1000 and you can give the number to whoever you want to. Which number has a bigger intrinsic value?
gus_massa 8y ago
I thought that miners are essentially selling most of the new mined coins (in particular to pay for electricity, new hardware). Since the info in the blockchain is public ... does someone have a good study about this?
xiphias2 8y ago
That's great. Bitcoin needs to get to the state where mass media also thinks that it's over for Bitcoin. The desparate phase is when the last weak hands get rid of their Bitcoins, and that marks the bottom of.the crash.

bb88 8y ago

And demand will only return when the price stabilizes. And because the price isn't stabilizing, demand isn't coming back.

Spartan-S63 8y ago
Not to mention that Bitcoin has a very low value proposition outside of being a store of value. I can see a crypto economy where Bitcoin backs the value of other cryptocurrencies, but it’s not a good first-party currency. It’s a mere store of values nd people don’t really agree that it’s useful to exchange for services. They just see it as useful to hold value. Something like Ethereum, with a real value-proposition, is a more worthwhile cryptocurrency. Basically, I see crypto evolving into pseudo-fiat currencies with some large financial institution (that isn’t a nation-state) ensuring it’s a valuable commodity. I’m just not convinced we can (or should) escape a fiat-like economic system.
- bb88 8y ago
  I would argue it's not even a store of value anymore with the price tumbling. When you buy bitcoin or ethereum, you get what? A number. I can sell you a number. Better yet, I can sell you a cryptographically signed number if you want. But that itself is just a number. At some point, even something like gold has a certain amount of scarcity. But with crypto, there's no scarcity, even if you can artificially limit the number of coins. One can always just create a new bitcoin alternative... The point is, there is nothing, absolutely nothing, that underpins the price of a BTC to anything in the real world.
  - yebyen 8y ago
    Yes, but how many of those numbers can you sell at cost? (There is crypto scarcity, who values the random newcoin at the same as some "established coin" Bitcoin or close, older friend coin? I can see that BCH, LTC, BAB, BSV, etc have all not come close to the price of the original BTC. So, "store of value" is obviously wrong, but...)
    - bb88 8y ago
      That's a marketing problem. :) "Each one will be a unique and priceless number using the largest of prime numbers. Each number comes with a genuine certificate of authenticity hand signed with the author's private key..."
      - yebyen 8y ago
        Only the best numbers... I hear you, one must back their best issued numbers with actual software to ensure their value ;) BSV has handcash, honestly that seemed like a great wallet until I realized it wasn't supported by any of my held coins!
        bb88 8y ago
        My point is that one way to look at bitcoin is that it's nothing more than a marketing scheme. And the "scarcity" in bitcoin is just artificial at best. Yes BTC has scarcity, but cryptocurrency itself has no scarcity, proven by the fact that there are over 1,000 alt coins. And all of those coins are just number generators. Here's another way to illustrate the issue: I have two numbers. 1. The first takes your user id "yebyen" and appends a number to it so that the SHA-256 hash is exactly 0x0. It will take 20 years of processing power on the NSA computers, so it should be worth something to you. 2. The second number is an encrypted location somewhere in the US where I've buried $1000. It will cost you $1010 to acquire it from me. I'll decrypt it for free but it will be worth exactly $0 afterwards. But until then it's worth $1000 and you can give the number to whoever you want to. Which number has a bigger intrinsic value?

gus_massa 8y ago

I thought that miners are essentially selling most of the new mined coins (in particular to pay for electricity, new hardware). Since the info in the blockchain is public ... does someone have a good study about this?

xiphias2 8y ago

That's great. Bitcoin needs to get to the state where mass media also thinks that it's over for Bitcoin. The desparate phase is when the last weak hands get rid of their Bitcoins, and that marks the bottom of.the crash.