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You're right. While bitcoin has certain similarities to Ponzi schemes (i.e. the fact that the people who start the scheme get rich while the folks who come late

by hugh3 15y ago

You're right. While bitcoin has certain similarities to Ponzi schemes (i.e. the fact that the people who start the scheme get rich while the folks who come later lose their money) I think it's really more accurately described simply as an asset bubble. Except, y'know, without any actual underlying asset. I don't think I've ever seen an asset bubble in something that was literally worthless before. Even the tulip bulbs of the Dutch tulip mania (http://en.wikipedia.org/wiki/Tulip_mania http://en.wikipedia.org/wiki/Tulip_mania) could be planted in your garden and would look quite pretty, even if not ten years' salary worth of pretty.

knowtheory 15y ago
pets.com stock doesn't count? ;)
- hugh3 15y ago
  I know you're being facetious, but just to clarify it for everybody: no, stock in a company never counts, because pets.com was an actual company with actual assets. For instance, they owned that sock puppet. Bitcoins have literally zero value.
  - deleted 15y ago
    [deleted]
mcantelon 15y ago
The worth is in the design, adoption, and utility. Anonymous currency has MUCH utility. And this currency, unlike the paper issues by states, is backed by math.
Tichy 15y ago
Money is just a tool, and BitCoin is a particular variant of that tool. It has unique properties that can be used for lots of things. Therefore I wouldn't say that they are worthless.
- hugh3 15y ago
  It has unique properties that can be used for lots of things Well, no, it doesn't have any unique properties. For instance, as I've said before, I'm running an alternative currency called "bitcoin prime" which has these two properties: 1. Every string of bits that is a bitcoin is also a bitcoin prime, and 2. Every bitcoin prime extant as of April 1, 2011 belongs to me (all subsequently mined bitcoins prime belong to whoever mined the relevant bitcoin). Mathematically there's no difference between bitcoin and bitcoin prime. And that's just one of an infinite number of possible bitcoin alternatives which can be arbitrarily declared, at any time, to exist.
  - premchai21 15y ago
    Hrrrm. This redefinition, while trivially possible, seems irrelevant. Possession of assets is first and foremost a practical matter. (I think you understand this, but for the benefit of the discussion…) In the case of primary real-world goods, possession comes from being able to physically access the state of various matter and energy: I physically own a house to the extent that I can reliably live in it and make modifications to it and so forth. I physically own food to the extent that I can make use of it by eating it. Other people can alter the game by acting as environmental forces to change the set of available interactions. In the case of fiat currency and economic goods, practical ownership (including but not strictly identical to theoretical legal ownership) is similarly determined, but with more of a focus on laws of people rather than the laws of physics; the former are backed by the latter, but usefully form a separate conceptual layer. The case of Bitcoin is also analogous, but there is now a focus on the laws of mathematics as they apply to the state space in which the Bitcoin system operates, and in particular to the practicalities of computing—a strong cryptographic attack could still destroy the system. So the reason that owning all the early Bitcoins prime is not useful is the same reason owning all the virtual dollars in a parallel system to the US banks is not useful despite being able to invent whatever such system you want. Because no one will recognize this, the amount this changes your set of available physical interactions with regard to primary goods is very small. (I haven't taken weird social goods into account in the above, but I think a similar argument applies since they also require external recognition.) That said, I think the GP poster would do well to clarify what ey meant by “unique properties”, and perhaps whether (as I interpret it) “unique” is meant to be “of the set of currently active systems, for some fuzzy activity threshold”, thus excluding Bitcoin prime and the infinite variations thereof.

by hugh3 15y ago

knowtheory 15y ago

pets.com stock doesn't count? ;)

hugh3 15y ago
I know you're being facetious, but just to clarify it for everybody: no, stock in a company never counts, because pets.com was an actual company with actual assets. For instance, they owned that sock puppet. Bitcoins have literally zero value.
- deleted 15y ago
  [deleted]

mcantelon 15y ago

The worth is in the design, adoption, and utility. Anonymous currency has MUCH utility. And this currency, unlike the paper issues by states, is backed by math.

Tichy 15y ago

Money is just a tool, and BitCoin is a particular variant of that tool. It has unique properties that can be used for lots of things. Therefore I wouldn't say that they are worthless.

hugh3 15y ago
It has unique properties that can be used for lots of things Well, no, it doesn't have any unique properties. For instance, as I've said before, I'm running an alternative currency called "bitcoin prime" which has these two properties: 1. Every string of bits that is a bitcoin is also a bitcoin prime, and 2. Every bitcoin prime extant as of April 1, 2011 belongs to me (all subsequently mined bitcoins prime belong to whoever mined the relevant bitcoin). Mathematically there's no difference between bitcoin and bitcoin prime. And that's just one of an infinite number of possible bitcoin alternatives which can be arbitrarily declared, at any time, to exist.
- premchai21 15y ago
  Hrrrm. This redefinition, while trivially possible, seems irrelevant. Possession of assets is first and foremost a practical matter. (I think you understand this, but for the benefit of the discussion…) In the case of primary real-world goods, possession comes from being able to physically access the state of various matter and energy: I physically own a house to the extent that I can reliably live in it and make modifications to it and so forth. I physically own food to the extent that I can make use of it by eating it. Other people can alter the game by acting as environmental forces to change the set of available interactions. In the case of fiat currency and economic goods, practical ownership (including but not strictly identical to theoretical legal ownership) is similarly determined, but with more of a focus on laws of people rather than the laws of physics; the former are backed by the latter, but usefully form a separate conceptual layer. The case of Bitcoin is also analogous, but there is now a focus on the laws of mathematics as they apply to the state space in which the Bitcoin system operates, and in particular to the practicalities of computing—a strong cryptographic attack could still destroy the system. So the reason that owning all the early Bitcoins prime is not useful is the same reason owning all the virtual dollars in a parallel system to the US banks is not useful despite being able to invent whatever such system you want. Because no one will recognize this, the amount this changes your set of available physical interactions with regard to primary goods is very small. (I haven't taken weird social goods into account in the above, but I think a similar argument applies since they also require external recognition.) That said, I think the GP poster would do well to clarify what ey meant by “unique properties”, and perhaps whether (as I interpret it) “unique” is meant to be “of the set of currently active systems, for some fuzzy activity threshold”, thus excluding Bitcoin prime and the infinite variations thereof.