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Bitcoin was designed to be honest and sound money. In the way that gold once was. Contrary to the way fiat money is. For now, the fundamentals are simple: supp

by javert 7y ago

Bitcoin was designed to be honest and sound money. In the way that gold once was. Contrary to the way fiat money is. For now, the fundamentals are simple: supply side is fixed and known, and demand is speculation. In the ideal case for bitcoin, over time, people will gradually use bitcoin more for actual commerce. As this adoption increases, liquidity increases, and price becomes less volatile. The speculation we have now is the necessary first step on that road, because it gives bitcoin a price (i.e. props it up) and gives it some liquidity. People complaining that bitcoin is just for crime are slandering it. People complaining that it has no intrinsic value don't understand that nothing in the world has intrinsic value, including gold. Intrinsic value is bad monetary theory derived from bad philosophy.

woah 7y ago
I have a small amount of Bitcoin so this scenario would be good for me, but the looming crisis is that transaction fees will go really high (or the chain will become insecure) once Bitcoin’s inflation runs out. The magical 21 number will come into question, which will really dent confidence in the entire premise.
awt 7y ago
> People complaining that bitcoin is just for crime are just slandering it. This one really gets my goat. There are so many ridiculous laws. It’s illegal to consume alcohol in Saudi Arabia. It’s illegal in Russia to use profanity in theaters, and in Thailand it’s illegal not to play a salute to the king before every film. Besides geographical differences in current times, the differences throughout history are more striking.
- CryptoPunk 7y ago
  Thank God for the existence of other countries or else I would be forced to say those laws in Russia and Saudi Arabia are justified, and any technology that that lets people subvert them is immoral. The idea that one can live in a country where fundamental political values are wrong is alien to most people. Every form of imposition that the government applies is justified with ideological notions like the social contract. So one can only explain the value of censorship resistance by pointing out how it enables people to escape tyrannical laws in those other countries, which unlike our own perfect countries, are repressive.
CPLX 7y ago
> nothing in the world has intrinsic value, including gold This is incorrect. Both Western Europe and uncontacted pre-Colombian America considered gold extremely valuable for use as jewelry. That’s what intrinsic value means, people value it for what it actually is. And nobody says bitcoin is exclusively used for crime. In practice it is used both for crime and financial speculation.
- drcode 7y ago
  This is a circular argument, as the earliest uses of jewelery was likely as a store of value (your tribe could trade jewelery for food with a neighboring tribe in emergencies) There exists no objective argument that gold is somehow more beautiful than say, a flower or a rainbow... We only think of it as "beautiful" because of its money-like properties (i.e. it's scarce, durable, easily carried & transferred) This suggests to me that gold is valuable precisely for the same reasons as Bitcoin, not because of some magical notion of "intrinsic value" that eludes other money alternatives. (Yes, I'm aware gold has some minor uses in electronics manufacturing, but then lots of people are currently building electronic devices with Bitcoin wallets, so both have uses in this regard...)
- javert 7y ago
  In my experience, overwhelmingly, intrinsic value means something has value "just because." That's how most people discussing monetary concepts use the term. Also true in philosophy. It's basically a magical thinking/religion type of idea. If you have a citation to the contrary, like in an economics textbook, I'd be interested to see it, and I'm open to that possibility. But I would still think that most people are using the term the way I described [unless you have a citation about that...]. Today, the price of gold is overwhelmingly determined by its use as a financial instrument. Not because it's pretty and not for its industrial uses. To the best of my knowledge. I don't know how to actually measure this.
- h0l0cube 7y ago
  > That’s what intrinsic value means, people value it for what it actually is. People value gold for it's scarcity. If there was limitless supply of gold, no-one would be interested in buying it for a high price. It's the same for diamonds, and why De Beers sought to control the supply of mines and synthetic means of production, which creates an artificial 'scarcity'. This is also why cubic zirconia is not prized for jewelry, despite it's similar aesthetic qualities to diamonds.
CryptoPunk 7y ago
Bitcoin was designed first and foremost to be a peer-to-peer electronic cash. That is exactly what it is called in the title of its whitepaper. Satoshi describes how Bitcoin would be used in peer-to-peer transactions with full nodes processing gigabytes of data every day, so that Bitcoin could process transaction volumes comparable to Visa. Now with a limit of 300,000 transaction per day thanks to the Core development team and the censorship of the main forums, BTC has no underlying or intrinsic value. It is based entirely on speculation and memes.
- willi32 7y ago
  10 minute block times, no path to proof of stake or any less resource intensive consensus protocol, dominated by ~19 mining pools, some handful could arguably collude to launch a 51% attack, and block rewards halving in 2020

by javert 7y ago

woah 7y ago

I have a small amount of Bitcoin so this scenario would be good for me, but the looming crisis is that transaction fees will go really high (or the chain will become insecure) once Bitcoin’s inflation runs out. The magical 21 number will come into question, which will really dent confidence in the entire premise.

awt 7y ago

> People complaining that bitcoin is just for crime are just slandering it. This one really gets my goat. There are so many ridiculous laws. It’s illegal to consume alcohol in Saudi Arabia. It’s illegal in Russia to use profanity in theaters, and in Thailand it’s illegal not to play a salute to the king before every film. Besides geographical differences in current times, the differences throughout history are more striking.

CryptoPunk 7y ago
Thank God for the existence of other countries or else I would be forced to say those laws in Russia and Saudi Arabia are justified, and any technology that that lets people subvert them is immoral. The idea that one can live in a country where fundamental political values are wrong is alien to most people. Every form of imposition that the government applies is justified with ideological notions like the social contract. So one can only explain the value of censorship resistance by pointing out how it enables people to escape tyrannical laws in those other countries, which unlike our own perfect countries, are repressive.

CPLX 7y ago

> nothing in the world has intrinsic value, including gold This is incorrect. Both Western Europe and uncontacted pre-Colombian America considered gold extremely valuable for use as jewelry. That’s what intrinsic value means, people value it for what it actually is. And nobody says bitcoin is exclusively used for crime. In practice it is used both for crime and financial speculation.

drcode 7y ago
This is a circular argument, as the earliest uses of jewelery was likely as a store of value (your tribe could trade jewelery for food with a neighboring tribe in emergencies) There exists no objective argument that gold is somehow more beautiful than say, a flower or a rainbow... We only think of it as "beautiful" because of its money-like properties (i.e. it's scarce, durable, easily carried & transferred) This suggests to me that gold is valuable precisely for the same reasons as Bitcoin, not because of some magical notion of "intrinsic value" that eludes other money alternatives. (Yes, I'm aware gold has some minor uses in electronics manufacturing, but then lots of people are currently building electronic devices with Bitcoin wallets, so both have uses in this regard...)
javert 7y ago
In my experience, overwhelmingly, intrinsic value means something has value "just because." That's how most people discussing monetary concepts use the term. Also true in philosophy. It's basically a magical thinking/religion type of idea. If you have a citation to the contrary, like in an economics textbook, I'd be interested to see it, and I'm open to that possibility. But I would still think that most people are using the term the way I described [unless you have a citation about that...]. Today, the price of gold is overwhelmingly determined by its use as a financial instrument. Not because it's pretty and not for its industrial uses. To the best of my knowledge. I don't know how to actually measure this.
h0l0cube 7y ago
> That’s what intrinsic value means, people value it for what it actually is. People value gold for it's scarcity. If there was limitless supply of gold, no-one would be interested in buying it for a high price. It's the same for diamonds, and why De Beers sought to control the supply of mines and synthetic means of production, which creates an artificial 'scarcity'. This is also why cubic zirconia is not prized for jewelry, despite it's similar aesthetic qualities to diamonds.

CryptoPunk 7y ago

Bitcoin was designed first and foremost to be a peer-to-peer electronic cash. That is exactly what it is called in the title of its whitepaper. Satoshi describes how Bitcoin would be used in peer-to-peer transactions with full nodes processing gigabytes of data every day, so that Bitcoin could process transaction volumes comparable to Visa. Now with a limit of 300,000 transaction per day thanks to the Core development team and the censorship of the main forums, BTC has no underlying or intrinsic value. It is based entirely on speculation and memes.

willi32 7y ago
10 minute block times, no path to proof of stake or any less resource intensive consensus protocol, dominated by ~19 mining pools, some handful could arguably collude to launch a 51% attack, and block rewards halving in 2020