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It’s the bitcoin of yestercentury. It doesn’t display wealth - it proves effort has been spent for something that’s mostly (or entirely) useless. Quite, but not
by beagle3 7y ago
It’s the bitcoin of yestercentury. It doesn’t display wealth - it proves effort has been spent for something that’s mostly (or entirely) useless. Quite, but not exactly sunk cost.
People are willing to give something up for proof of effort; a personal union, or something else of value.
Whenever someone tells me bitcoin is a scam and has no intrinsic value, I ask them about diamonds, expensive art, etc. Most people cannot reconcile bitcoin and diamonds (as jewelery) in the same value frame.
Diamonds do have some functional uses of course, as does gold. But their price is wholly determined by the belief (whether justified or not) that they cannot easily be manufactured on demand. Just like bitcoin.
- ryanmercer 7y ago>It’s the bitcoin of yestercentury. It doesn’t display wealth - it proves effort has been spent for something that’s mostly (or entirely) useless. Quite, but not exactly sunk cost. I really like that, bitcoin as the diamond of yesteryear. Effectively finite, has to be mined, only has value/importance because a group of people assign it one, has limited practical use (diamonds as abrasives mostly, bitcoin as a cookie crumb record of transactions) is seen as foolish/wasteful by others, you can't use either for practical trade as the vast majority of individuals/companies don't accept either for trade and both could easily be rendered worthless by a technological advancement or social change.
- ncmncm 7y agoThe analogy is closer than you might imagine. The rock is not at all rare, and the bitcoins are often mined with other peoples' money.
- bn7t 7y agoTo be fair with bitcoin you can at least pay (in some places). Also the worth of bitcoin is (kinda) backed by the worth of the electricty which is used to mine blocks (and consequently new bitcoins).
- nathantotten 7y agoI know you’re not being precise, but the term “backed” is not valid. For a currency to be “backed” or more accurately commodity backed currency, you must be able to exchange that currency for that other thing. I.e. money for gold. You can’t get the electricity back in exchange for your bitcoin. :)
- Finnucane 7y agoCan you pay your electric bills in bitcoin? Even though dollars are not 'backed' by gold, you can still exchange dollars for gold. Just not from the government at a government-fixed price.
- nathantotten 7y agoWell, that is a completely different thing. That’s just a market exchange of goods/services.
- Finnucane 7y agoSure, one way is government price control, the other isn’t.
- dmihal 7y agoInteresting metaphor, but the difference between Bitcoin and diamonds is fungibility. Unlike gold, there's no way to sell 1% of a diamond.
- sgt101 7y agoYeah, you can, you can pawn it. 3 days = 1%
- AndyMcConachie 7y agoGood luck even trying to sell 100% of a diamond.
- dnautics 7y agoYou can sell 1% of a really huge diamond, but its value doesn't scale
- tromp 7y ago> it proves effort has been spent Diamonds only prove that in a very narrow sense, namely in that some gemstone expert (that you need to trust) can subject the diamond to a battery of sophisticated tests in order to testify to its genuine, non-counterfeit nature. Bitcoin's Proof of Work is trivially verifiable in comparison.
- TheGallopedHigh 7y agoTo be contrarian: Bitcoin is only verifiable with a very sophisticated machine and algos...
- ncmncm 7y agoI.e. a cheap computer and off-the-shelf software.
- magnamerc 7y agoExcept bitcoin can't be manufactured on demand. I'm sorry, but this is a terrible analogy. There's a reason why people compare bitcoin to gold, because it makes for a better analogy, despite the fact that gold is actually ubiquitous throughout the solar system, and bitcoin is actually finite. For the record, I own zero bitcoin.
- klodolph 7y agoAnalogy illustrates a point, it’s not meant to claim that two things are totally equivalent. It’s very hard to make an analogy on HN because someone will make a complaint about it like this one, and the overall effect just lowers the quality of discourse.
- beagle3 7y agoI don’t understand where you believe I am wrong; I said the gold, diamond and bitcoin all have the property that they cannot be manufactured on demand.
- oarabbus_ 7y agoI mean, it's a bit overly broad of an analogy. Iron can't be manufactured on demand either. Neither can corn.
- beagle3 7y agoCorn can be, and regularly is; iron is abundant. Both are priced by their functionality (with a price floor set by the cost of manufacturing/extracting/growing if we ignore subsidies for a moment). If they become too expensive, they will be replaced by other cheap metals or crop in most uses. Gold/bitcoins/diamonds just become more desirable when their price goes up.
- 52-6F-62 7y agoAh yes. Every girl and woman I know would cherish a Bitcoin. It really sparkles in the light. This is literally what my sister responded with when I asked her why she liked diamonds so much: https://pics.me.me/hello-everybody-sparkle-sparkle-15208126.png https://pics.me.me/hello-everybody-sparkle-sparkle-15208126.... Bitcoins aren’t pretty. Sparkling, finely cut specific rocks are. Sometimes it’s as simple as that.
- ncmncm 7y agoYet, it never really is.
- beagle3 7y agoMojssanite (sp?) and zirconium stones have those properties as well, and cost much less. Some other gem stones are very hard to distinguish from diamonds without specific tools. Does your sister have a preference for diamonds over finely cut zirconium (or even glass)? It’s likely not as simple as that, even if you and her try to rationalize it that way.
- 52-6F-62 7y agoI nor her have any specific preference for diamonds. I only explained why she, and many people, like them: it’s as dumbly simply as “sparkle, sparkle”.