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> Bitcoin's value, like any currency, is dictated by the market. Yeah, no. It's not a currency. https://medium.com/s/the-crypto-collection/play-bitcoin-remem

by chx 6y ago

> Bitcoin's value, like any currency, is dictated by the market. Yeah, no. It's not a currency. https://medium.com/s/the-crypto-collection/play-bitcoin-remember-its-just-a-game-jp-koning-lottery-investment-coinbase-6fd240297c93 https://medium.com/s/the-crypto-collection/play-bitcoin-reme... > Bitcoin lies in the same economic category as financial games like poker, roulette, and the lottery. These are all zero-sum games. The property binding all zero-sum games together is that the amount of resources contributed to the pot is precisely equal to the amount that is paid out. Because nothing additional is created in a zero-sum game, for every player who wins something from the pot, there must be a loser.

CryptoBanker 6y ago
Any market that is just a market is a zero sum game.... One cannot create value from trading.
- avmich 6y ago
  > One cannot create value from trading. I think you're wrong. An illustration could be McDonald's offering of a burger for $1, where you'd prefer burger and McDonald's would prefer $1. If you give them $1 and McDonald's give you the burger, both of you would be better off.
  - chii 6y ago
    The underlying assumption is that your utility of the burger is greater than $1. Which is true because MacDonald is very, very efficient at making burgers (compared to you). With bitcoin, it's a speculative trade. Everybody is "equally" good at making a coin. So the trade is happening purely due to an expectation of future utility, which may or may not come. So therefore, speculation is zero sum.
    - chx 6y ago
      > due to an expectation of future utility, which may or may not come. It's been 11 years and there's not an even idea of what legit utility it might have that existing tools and protocols do not fulfill. A significant proportion of suggestions could be done much better with git of all things...
- fidelramos 6y ago
  Isn't it the opposite, that any free market is not zero-sum? If two parties trade it means that each offers the other something they value more, so both parties end up in a better situation than before, thus increasing value.
wpietri 6y ago
I'm not sure why this is getting downvoted. Even prominent Bitcoin promoter Fred Wilson admitted that Bitcoin wasn't viable as a currency: https://avc.com/2017/08/store-of-value-vs-payment-system/ https://avc.com/2017/08/store-of-value-vs-payment-system/ A couple years back, an NYT writer tried living on Bitcoin: https://www.nytimes.com/2018/04/16/nyregion/new-york-today-living-on-bitcoin.html https://www.nytimes.com/2018/04/16/nyregion/new-york-today-l... It didn't work. It doesn't function as a currency. Whatever the intention, it's a speculative, high-volatility commodity with no use value traded in an unregulated market.
- jameslevy 6y ago
  Would you say the same thing about gold? Genuinely curious, since obviously Bitcoin is frequently compared to gold as a store of value instead of a unit of exchange. The most persuasive defense of Bitcoin as a store of value is that the world needs precisely one digital store of value, and game theory may dictate that it will end up being Bitcoin. But yes, Bitcoin is obviously ridiculously volatile. I tell friends that there is money to be made, but you need to have a very strong stomach for it.
  - chii 6y ago
    > the world needs precisely one digital store of value that's an assumption, not a fact. The existence of an object doesn't automatically prove that the world needs that object's existence. May be the world _never_ needs such a method, given existing mechanisms already fullfill such a need (e.g., a bank account/credit card).
  - wpietri 6y ago
    Would I say what? That it's a "speculative, high-volatility commodity with no use value traded in an unregulated market"? No. Gold has use value and is generally traded in regulated markets. If something is volatile and great for speculation, it's a bad store of value. So I don't think Bitcoin qualifies as that either.
- SilasX 6y ago
  I’m not sure why you’re confused about it being downvoted. 1) Whether or not it meets the (or someone’s preferred) definition of currency is wholly incidental to the answerer’s explanation, so even if correct, this is not the place to make the point. 2) Bizarre non-sequitur that equates finiteness of currency with zero sum utility which is a real stretch and easy to find counterexamples for (eg chore tokens). For the cherry on top, it links Medium as a main source. Is that a good enough justification to downvote?

by chx 6y ago

CryptoBanker 6y ago

Any market that is just a market is a zero sum game.... One cannot create value from trading.

avmich 6y ago
> One cannot create value from trading. I think you're wrong. An illustration could be McDonald's offering of a burger for $1, where you'd prefer burger and McDonald's would prefer $1. If you give them $1 and McDonald's give you the burger, both of you would be better off.
- chii 6y ago
  The underlying assumption is that your utility of the burger is greater than $1. Which is true because MacDonald is very, very efficient at making burgers (compared to you). With bitcoin, it's a speculative trade. Everybody is "equally" good at making a coin. So the trade is happening purely due to an expectation of future utility, which may or may not come. So therefore, speculation is zero sum.
  - chx 6y ago
    > due to an expectation of future utility, which may or may not come. It's been 11 years and there's not an even idea of what legit utility it might have that existing tools and protocols do not fulfill. A significant proportion of suggestions could be done much better with git of all things...
fidelramos 6y ago
Isn't it the opposite, that any free market is not zero-sum? If two parties trade it means that each offers the other something they value more, so both parties end up in a better situation than before, thus increasing value.

wpietri 6y ago

I'm not sure why this is getting downvoted. Even prominent Bitcoin promoter Fred Wilson admitted that Bitcoin wasn't viable as a currency: https://avc.com/2017/08/store-of-value-vs-payment-system/ https://avc.com/2017/08/store-of-value-vs-payment-system/ A couple years back, an NYT writer tried living on Bitcoin: https://www.nytimes.com/2018/04/16/nyregion/new-york-today-living-on-bitcoin.html https://www.nytimes.com/2018/04/16/nyregion/new-york-today-l... It didn't work. It doesn't function as a currency. Whatever the intention, it's a speculative, high-volatility commodity with no use value traded in an unregulated market.

jameslevy 6y ago
Would you say the same thing about gold? Genuinely curious, since obviously Bitcoin is frequently compared to gold as a store of value instead of a unit of exchange. The most persuasive defense of Bitcoin as a store of value is that the world needs precisely one digital store of value, and game theory may dictate that it will end up being Bitcoin. But yes, Bitcoin is obviously ridiculously volatile. I tell friends that there is money to be made, but you need to have a very strong stomach for it.
- chii 6y ago
  > the world needs precisely one digital store of value that's an assumption, not a fact. The existence of an object doesn't automatically prove that the world needs that object's existence. May be the world _never_ needs such a method, given existing mechanisms already fullfill such a need (e.g., a bank account/credit card).
- wpietri 6y ago
  Would I say what? That it's a "speculative, high-volatility commodity with no use value traded in an unregulated market"? No. Gold has use value and is generally traded in regulated markets. If something is volatile and great for speculation, it's a bad store of value. So I don't think Bitcoin qualifies as that either.
SilasX 6y ago
I’m not sure why you’re confused about it being downvoted. 1) Whether or not it meets the (or someone’s preferred) definition of currency is wholly incidental to the answerer’s explanation, so even if correct, this is not the place to make the point. 2) Bizarre non-sequitur that equates finiteness of currency with zero sum utility which is a real stretch and easy to find counterexamples for (eg chore tokens). For the cherry on top, it links Medium as a main source. Is that a good enough justification to downvote?