(1) Bitcoin has not collapsed because it works well.
No, it doesn't. It works only because less than 7 transactions per second worth of people want to use it. It works well because it’s collapsed. We saw how it reacted when people did want to use it. inb4 lightning, to open and close a single channel for everyone in the world will take 68 years.
(2) The price is going up! Then...
(3) Stop focusing on the price!
Yes, everyone's got it wrong because in the same breath you tell us the price is going up then not to look at the price. Not to mention all the basic problems with it: the rampant manipulation you can't stamp out by design, the actively user-hostile nature, the massive deflation because everyone keeps losing their keys and all the features people want like chargebacks being stripped out of it. Nobody wants to be their own bank, it’s so hard. Then there’s the economics of it, my lord, ECON 101 level stuff.
Inflation isn’t bad because you’re not supposed to hold cash. You’re supposed to use it to purchase productive assets, like stocks, bonds or real estate which track and exceed inflation. It’s even good for borrowers because debts become cheaper over time. It’s a regular haircut for unproductive capital, the mechanism by which capitalism allocates capital efficiently. Money isn’t supposed to become more valuable by virtue of you just having it. Under your bird bath, of course because it’s not safe anywhere else.
Even the hardcore coiners on reddit have started admitting it’s sole value is hiding your wealth offshore out of reach of the long arm of the tax man. Or for the narcos!
Yes, it's going swimmingly.
your info is pretty old
> Yes, everyone's got it wrong because in the same breath you tell us the price is going up then not to look at the price.
You're a lot like a climate change denier. Just like there is a difference between weather and climate, there is a difference between short term volatility vs a long term trend.
> Inflation isn’t bad because you’re not supposed to hold cash. You’re supposed to use it to purchase productive assets, like stocks, bonds or real estate which track and exceed inflation. It’s even good for borrowers because debts become cheaper over time. It’s a regular haircut for unproductive capital, the mechanism by which capitalism allocates capital efficiently. Money isn’t supposed to become more valuable by virtue of you just having it. Under your bird bath, of course because it’s not safe anywhere else.
There isn't a "supposed to/not supposed to" argument. Cryptocurrency doesn't have to be something that is supposed to be anything. Inflation gives a currency pressure to be traded, yes, and being able to trade it easily makes it more useful, and hence adds to its popularity.
But it's not the only reason a currency becomes popular, and the other benefits that cryptocurrency have over little green pieces of paper are IMO enough so it can continue to grow.
> Even the hardcore coiners on reddit have started admitting it’s sole value is hiding your wealth offshore out of reach of the long arm of the tax man. Or for the narcos!
It can be easily transferred anywhere in the world almost instantly, and ownership very well hidden. These are great benefits, even if they haven't been completely capitalized on yet.
I'm not sure if Bitcoin or some other cryptocurrency is going to end up the leader, but I do believe that this industry is going to continue to grow. The cryptocurrency market has crashed and recovered 6 times in the last 8 or 9 years or so. All of your arguments had exactly the same amount of weight as they did the previous 5 crashes, yet the crypto market recovered and greatly surpassed even the weighty highs of the peak before the last crash. Are you really going to tell me that this time is different?
I’m no denier, I have facts. The declining hash rate, the declining price, the exchanges going under, the 85% of dApps that don’t have a single daily transaction on average, the miners shutting down, going out of business, steam, Microsoft, Expedia all stopping supporting crypto. And the price too. It takes some serious head in the sandmanship not to notice.
I will tell you this time is different in the same way you tell yourself on the way up each time it’ll be different and this time it won’t crash. What’s different this time is there are no new bag holders. They all lost their shirts last time around. The price relies on new bag holders because 1800 new BTC are generated by miners and then sold to pay the electricity bills. That’s $2.4 billion dollars per year in sales pressure. The more the price goes up the more the sales pressure goes up. $20K per bitcoin requires $13B in new bag holder money per year. $100K means $65B in new bag holder money per year.
You sidestepped all the issues I pointed out: usability, intentionally built to prevent stopping scams, fraud, illegal activity. How it can’t serve the needs of the public. Nothing. Just more religious/MLM/ponzi sales pitch of hope, pray, moon soon. You even said so where you mentioned it’s a good thing your idle useless capital is increasing in value for NO REASON.
> The declining hash rate, the declining price, the exchanges going under
This has happened every previous cycle. When mining becomes less profitable, the hash rate declines and difficulty declines until it reaches equilibrium. Currently 1800 BTC are being created every day, but when the next "halvening" happens I wouldn't be surprised to see an increase in price as all of a sudden the same amount of demand is competing for half the daily supply (900 BTC).
If you look at past cycles, the "halvening" has precipitated many BTC bull runs.
Again you side step. This time side stepped that everyone’s now heard of and been burned by btc which was not true prior to the last run up, that my figures are still astronomical whether halved or not, or quartered, or eighthed. That major companies were burned by it. VCs were burned by it. That people have come down from their hopium high and realized blockchain in and of itself won’t solve literally any problem it’s thrown at better than MySQL will.
You side step explaining why you think your money should be magically worth more over time.
The question is whether there’s still 2.4 or 1.2 billion in new cash to add every single year until the next “mooning” which if were using your own expectations will be followed by an equally horrific crash.
Why would we use that kind of thing as a currency?
> all the features people want like chargebacks being stripped out of it.
Chargebacks were never stripped out because they don't exist. Bitcoin has always had irreversible transactions, and many people view that as a feature.
Your argument would carry more weight if you didn't have inaccuracies in it.
> We saw how it reacted when people did want to use it.
The number of transactions today are as high as January 2018, but the fees never been any lower.
If that isn't progress, what is?
https://preview.redd.it/khdi0m4pq3f21.png?width=960&crop=smart&auto=webp&s=d658434e3fd77cdb828e93737fa19b57973d823c https://preview.redd.it/khdi0m4pq3f21.png?width=960&crop=sma...
Can’t tell if this is sarcasm to be honest. SegWit added a small amount of breathing room without changing block sizes. Not increasing block sizes lead to the split into BCH, then further into BCHABC and BCHSV. The core decided to switch to lightning as the scaling strategy which is still capped at 7 tx/s which still requires 68 years to open and close a single channel for everyone on earth, net new births of course.
I probably shouldn't let myself get dragged into this discussion, but I think BCH splitters didn't want lightning and used the excuse of not increasing block sizes to fork. SegWit's initial purpose was to fix the bugs that were stopping lightning. Block size was not increased because BTC devs want people to go towards lightning. They specifically indicated that block size might increase in the future. The fact that current transaction speeds do will not accommodate the entire planet is a bit of a strawman. Nobody needs that capacity right now and I think it remains to be seen if there will ever be the need. Not everybody who thinks BTC is potentially useful thinks that it must be used by the entire planet in order to be useful.
Just to be clear, I think it's great to call out the scammers and educate the deluded. I just think that taking a binary stance of either it will work the way the scammers say it will or it's a useless pile of garbage is not a reasonable position. I think there are lots of serious problems with BTC, but as a proof of concept decentralised payment processing system it's actually pretty interesting. I wish the scammers would go away and let people work on it earnestly, though. In that way, I really thought that having the BCH guys go their separate ways was a true blessing.
I just have to say, for your first point, it indeed does work... It's just that what it works for isn't what everyone's hyping. For buying things and supporting services that are illegal or culturally resented, it is working just fine, and has been for many years without interruption. :)
EDIT: Oh yea, and currencies inspired by BTC like XMR are making such economic activity easier and more anonymous than ever. So it's always going to satisfy this niche...
Everytime it's crashed it's recovered to a point where the low is now higher than the last peak. I am fully aware of that and expect if it zooms up again, it probably will crash again. I don't deny this. But if when it crashes it ends up higher than the last peak, who cares?
I didn't sidestep your issues. I didn't address them directly, but that doesn't mean I didn't address them. They were as valid as they during the last crashes, and proven to not prevent a recovery then, so therefore the same issues do not prevent a recovery now. You weren't providing any reasons that a recovery like it did before, even in the face of all the issues you mentioned.
Now you respond with a new reason:
> What’s different this time is there are no new bag holders. They all lost their shirts last time around. The price relies on new bag holders because 1800 new BTC are generated by miners and then sold to pay the electricity bills. That’s $2.4 billion dollars per year in sales pressure. The more the price goes up the more the sales pressure goes up. $20K per bitcoin requires $13B in new bag holder money per year. $100K means $65B in new bag holder money per year.
By "bag holders" you talk as if it's a big scam. Only it's not. Everything is out in the open for people to see, and no one is lying about what it is. Whether people in the future will choose to invest or not, and whether the industry will continue to grow or not is what determines whether the price will recover.
You say there won't be any more of that, due to price pressure from miners, but again, there has always been pressure from miners and that didn't prevent recovery the last 5 times.
I grant you the selling pressure from the miners has increased, but the size of the market has also increased as well. Also, due to block reward halving, they do not increase at the same rate. So, even if the selling pressure is too much currently, for the market to grow enough and make up for it, it will eventually reduce so that won't be the case forever.
To repeat though, I also am not 100% sure bitcoin will be the dominate cryptocurrency. As I said before, I'm bullish on the cryptocurrency market in general, not just bitcoin.
Why would we use as a currency something that swings 90% back and forth every few years? That's an objectively awful currency. Imagine your checking account explodes from time to time, one week you can buy a mansion the next you can't afford rent. That should be QED for why this isn't viable - isn't this what it's supposed to be saving Venezuela from?
Whether we call them bag holders or not, there's no guarantee there's another $2.4B/yr to maintain the current price let alone drive it up. It is not intrinsically a scam its just built in a way that explicitly makes it impossible to prevent scams. IMO by the transitive property, it's a scam. Let's say I own a coffee shop. I also know that it's a breeding ground for venomous cobras, but I refuse to let an exterminator in. If someone gets bitten there's no world in which I'm not going to prison. It's not fair to call what I have "just a coffee shop" is it?
It's also not an investment, as you're not obtaining a share of ownership in anything. It's like calling Subway sub stamps an investment. They're just tokens I can redeem at Subway, not a 401(k).
The market is now smaller than its been in terms of total market cap, in terms of transaction count, in terms of transaction volume, than it's been in 2 years: https://data.bitcoinity.org/markets/volume/5y/USD/coinbase?t=b&vu=curr https://data.bitcoinity.org/markets/volume/5y/USD/coinbase?t...
All the other cryptocurrencies are even less used, less useful, and not even worth talking about, like Dentacoin -- your dental records but on the blockchain for no apparent reason.
You know Visa's market cap is "only" $300B? At $100K bitcoin you have to buy, in cash, one whole new Visa every 4.6 years just to maintain the price.
> Why would we use as a currency something that swings 90% back and forth every few years? That's an objectively awful currency.
No, that's a subjectively awful currency.
> isn't [volatility] what [BitCoin is] supposed to be saving Venezuela from?
No, it's supposed to provide an alternative to those subjected to and abused by centralized currencies and/or their government. Bitcoin's creation happened way back when Venezuela was massively wealthy, -before- they did the exact thing cryptocurrency backers feared they would.
> Whether we call them bag holders or not, there's no guarantee there's another $2.4B/yr to maintain the current price let alone drive it up.
Of course there isn't - I don't believe anyone implied there was? So far, historically, there _has been_ enough to drive the price up. Just zoom out a bit. Even if there is not 2.4B/yr, wouldn't the bag holders be the first to lose? I do not understand your argument here.
> IMO by the transitive property, it's a scam. Let's say I own a coffee shop. I also know that it's a breeding ground for venomous cobras, but I refuse to let an exterminator in. If someone gets bitten there's no world in which I'm not going to prison. It's not fair to call what I have "just a coffee shop" is it?
I have _no idea_ what you're trying to say here.
> It's also not an investment, as you're not obtaining a share of ownership in anything.
This is also false.
> It's like calling Subway sub stamps an investment
Despite your value judgement, Subway sub stamps _are absolutely_ an investment. Maybe not a wise one, but that's my opinion.
> The market is now smaller than its been in terms of total market cap, in terms of transaction count, in terms of transaction volume, than it's been in 2 years
Yes, 2 years ago was the peak of the hype. This is expected. It's also up over the last 1 year, and up over the last 3 years. Zooming to a particular part of a graph to suit a theory is not a good way to look at the world.
> All the other cryptocurrencies are even less used, less useful, and not even worth talking about, like Dentacoin
Conjecture and straw-man argument. This is akin to saying "spacejam.com"? Useless! That INTERNET is going NOWHERE!
I understand you feel strongly about this, and I understand you will reply as if I am a strong die-hard crypto fan, but I want you to know that I am just a simple internet citizen and your line of argument is unhelpful at best and actively driving people the other direction at worst.
You can play devils advocate all day long, I always like to challenge my preconceptions. I only care because people's laissez-faire attitude towards crypto is putting real peoples' hard earned money at risk through some fanciful delusion of 'moon soon.' I'd make as strong an argument against Herbalife if people came to its defense.
A currency has 3 objective functions: medium of exchange, unit of account and store of value. It objectively fails the third test. [1]
Re Venezuela: If Bitcoin is to replace the status quo it must show itself to be better than the existing. If it's effectively as good as the Bolivar who cares whether it's their government or a group of self-appointed open source finance champs who are doing it? I thought the goal was to avoid the ends, not the means?
Re $2.4B/yr, people who have no understanding of the system put their money in because a group of loud activists (existing "investors") are encouraging them to do so. This is to prop up their own "investments" at the expense of the new money. They are running out of people who are willing to throw down solely because "moon soon" which is what's forcing the price down in spite of all the rampant manipulation. It's unlikely to go anywhere but down due to the high new money requirement for even price maintenance. You don't hear anything bad out of crypto investors mouths because they require $2.4B in new money just to keep their bags afloat.
Re the snake den, I'm saying that in re: the idea that it's not a scam just because scams operate on it. It's designed in a way that precludes stopping scams, which makes it de facto complicit / transitively a scam. You may disagree, it's just an optimization to think of it that way.
Fine it's an investment, it's a bad one.
I'm not making the case that the internet is going nowhere because pets.com is going nowhere. The idea that you're buying into blockchain technology's future by owning bitcoin is like saying you're buying pets.com stock because you want to invest in TCP/IP, and that appears to be the MO for most blockchain investors. Finally, nobody's made a good case yet for a problem blockchain can solve better than any existing solution, whereas TCP/IP, I'd say, solved real problems from day 1.
If anything crypto is making the best case I've seen for accredited investor rules.
[1] http://money.visualcapitalist.com/infographic-the-properties-of-money/ http://money.visualcapitalist.com/infographic-the-properties...
You're throwing out a lot of heat in this thread but not much light. To address just the very first 'factual' claim in your comment here:
> I’m no denier, I have facts. The declining hash rate
Please check the difficulty page on Bitcoinwisdom [1] and scroll to the bottom where the history of hash rate changes over the last year is shown. You will find that over the last year it has gone from 18,633,553,122 GH/s on January 25, 2018 to 43,390,041,906 GH/s on February 10, 2019. So more than doubled over the last year while the price was rapidly declining. You will also see that there was a drop in hash rate over November/December after a peak in Octeber last year but the trend is now back up again. And as I said above, the trend over the whole year is obviously up (it more than doubled).
[1] https://bitcoinwisdom.com/bitcoin/difficulty https://bitcoinwisdom.com/bitcoin/difficulty
Thanks for the clarity around the fork. IMO the split was, to your point, largely political. One camp made the argument that increasing the block size would prevent people from being able to store the entire chain locally in support of decentralization, the other was arguing it was time to let go in favor of pragmatically maximizing transaction count and that those who cared would buy the storage necessary. I'm sure there was much more to it than that -- this felt like a power grab by Ver et al. I addressed the basics as I saw them of SegWit vs block size growth because the post I was replying to originally cited them, then edited them out after my reply.
As you say, it's probably a straw man to say that LN should accommodate everyone now. That said, bitcoin operates on a principal of anti-efficiency; the more we ask of it the worse it does. We can't apply the same standard that "of course it will get faster/better/stronger/more efficient" over time because it's designed to go the opposite way. We need active plans to scale, to move forward, to grow it. That's why I ask more of them -- not because they should know but they should have some conceptually cohesive idea to justify their $100B market cap -- exceeding Visas's at peak -- a decade into this experiment.
It's fair that my position could be more nuanced. I've yet to find a way to untangle decentralized (in as much as BTC hashpower is over 50% in Beijing's purview) from lawless.
In some ways that's the root of the issue. Aren't they synonymous? Without authority, whose to judge? Who's to say a transaction was legitimate? So what if it wasn't, it can't be reversed anyways. The scammers are, in my opinion, part and parcel. You can't have decentralized, trustless and permissionless without letting people do as they will with it. By definition, nobody in cryptocurrency is a scammer, the code is the law and they've found some loopholes. Or are they as intended? Who's to say?
51% attacks are part and parcel too. The longest chain wins. You've got more hash power, you've got the longest chain, you are truth. Beijing writes a strongly worded memo to the miners in China, and that happens immediately.
Without appealing to authority and the status quo there's a reason humans tend to organize hierarchically. Hierarchy is an abstraction and an optimization. Humans are messy, we make messy code, messy systems and as such we have to appeal to each other to undo them, and with this system, we can't.
I do wish you and the others forging ahead luck, of course.