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What do you hold when you hold USD in a bank account? The best argument I've heard for the value of USD is: 1. is that you can pay your US federal and state ta
by EthanHeilman 8y ago
What do you hold when you hold USD in a bank account? The best argument I've heard for the value of USD is:
1. is that you can pay your US federal and state taxes in USD
2. and many companies and individuals will accept USD in trade for goods and services.
Measuring BTC by that same rule you'll find:
1. You can pay your Ohio state taxes in Bitcoin [0],
2. and you can trade BTC (Bitcoin) for some goods and services (overstock for example).
Thus if USD has value by the measure above than BTC must share some of that value. The value of BTC might be significantly smaller than USD but it must be non-zero.
>When you hold stocks you hold actual ownership of a productive corporation
Not every company is productive. The stock is worth what someone is willing to pay for it now or at some future point. Companies have issued stock as cryptocurrency tokens.
>When you hold Bitcoin...you don't hold anything which can convert into something useful at the end of the day - you hold the useless result of expended computing power
You raise an interesting point here. Should currencies have a use other than being a medium of exchange? For example you can burn paper money to generate heat or melt down coinage into useful metals. Does having that property make paper money or physical coins better as a currency? Goldbugs would say yes, I'm less sure.
[0]: https://www.wsj.com/articles/pay-taxes-with-bitcoin-ohio-says-sure-1543161720 https://www.wsj.com/articles/pay-taxes-with-bitcoin-ohio-say...
- bluecalm 8y ago>>1. is that you can pay your US federal and state taxes in USD >>2. and many companies and individuals will accept USD in trade for goods and services. First of all to have USD someone needed to borrow it first and they need to return it. The USD you hold is useful for someone else to pay their debt back. This is much more important than taxes. >>Thus if USD has value by the measure above than BTC must share some of that value. No, the reasoning is based on missing the point of fiat currency: someone else owns USD to the central authority with a lot of power. >>For example you can burn paper money to generate heat or melt down coinage into useful metals. Does having that property make paper money or physical coins better as a currency? Goldbugs would say yes, I'm less sure. The point is that USD represents someone's debt. They will need to come up with goods/services to pay that debt back if they don't currently own enough USD. BTC represents wasted power and its only value is a hope someone wants to accept it as payment even though no one really needs to (unlike USD).
- chrischen 8y agoYou can’t actually pay your Ohio state taxes with BTC. They convert immediately to USD when you pay with BTC. If it didn’t convert, you can bet they would not accept BTC.