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But it doesn't have any value. Except that some people think it has. In times of truly global trouble, nobody will accept bitcoins as payment for bread.

samfisher83 6y ago
That is true of a lot of things. Would diamonds or gold be as valuable if people didn't think it was a store of value?
- auggierose 6y ago
  You can use diamonds to cut things. As for store of value, nobody sees it as a store of value. If you think it has value, go and buy a large diamond from a jewellery store, and then try to sell it somewhere for the same price.
- RC_ITR 6y ago
  Diamonds are mostly consumption. Used diamonds always sell for WAY less than new, unless there’s some other factor.
- ragnese 6y ago
  Right. It's all mass psychology. Gold, the stock market, bitcoin, whatever. It only has value as long as people believe it has value. The caveat of course is that all of the things I listed have SOME more inherent value, but that is NOT the major contributor to their actual trading prices. Gold is not THAT useful. Neither is owning a billionth of a company.
  - Grustaf 6y ago
    Obviously this is much less true for gold than for bitcoin, and the value of the stock market is very real. If you own a piece of Apple or the local hot dog stand, you own a piece of something that is continuously producing value for people.
    - Strom 6y ago
      > you own a piece of something that is continuously producing value for people. People will only pay for the next Apple product as long as they believe it provides value to them. It's all the same. Perception is king.
      - Grustaf 6y ago
        Over a billion people use Apple products, it's an extremely solid business. You can't compare that to a speculative bubble. Tulips were also very expensive once.
        machinebun 6y ago
        True, but when you own a part of Apple you also have to have faith that your shares won't be diluted to nothing via new stock offerings (which numerous companies have done in the past). So while there is intrinsic value in the shares, some of that is still based on faith (if Apple doubled their outstanding shares overnight, the value of yours would go down).
        chii 6y ago
        > you also have to have faith that your shares won't be diluted to nothing via new stock offerings if the existing majority shareholders chose to do this, then it will happen, but otherwise, this can't happen. And i don't see a situation where the existing shareholders would willingly choose to do this dilution for no reason.
        Grustaf 6y ago
        No that is not how it works. In order to double the number of shares they’d need to issue and sell more shares, meaning that they would increase their cash balance, and hence overall value, by 2.5 trillion. So issuing more shares would not change the value of existing shares, at least in the short term. Never mind the fact that the shareholders would have to make this decision, and that Apple has long been doing the exact opposite.
        6y ago
sz4kerto 6y ago
> In times of truly global trouble, nobody will accept bitcoins as payment for bread. That is true for gold as well. (Ofc not 'nobody', just 'almost nobody'.)
- auggierose 6y ago
  Gold makes a nice filling for your teeth, if you like that look.
  - deleted 6y ago
    [deleted]
  - fogihujy 6y ago
    It also has industrial applications, not to mention that it's being used for jewellery. A golden chain with a gold-plated USB key containing a Bitcoin wallet might have a considerable bling factor though. :)
- ForHackernews 6y ago
  Is this really true historically? Obviously these are biased goldbugs, but there are at least some anecdotes that suggest https://www.bullionstar.com/blogs/ronan-manly/the-power-of-gold-in-times-of-crisis/ https://www.bullionstar.com/blogs/ronan-manly/the-power-of-g... It seems more likely that people conflict zones would be happy to accept gold (with the assumption it will be valuable in the future/in more stable areas) than bitcoins that require electricity, stable internet and tons of disk space.
  - XorNot 6y ago
    Conflict zones are generally aware that there are non-conflict zones. The existence of the first world, and detailed knowledge of it's demands, means people know to collect assets that will be valued there. The problem with Bitcoin is it's not a physical thing at the end of the day: nobody mints jewellery out of bitcoin.
- burade 6y ago
rorykoehler 6y ago
The same could be said it FIAT currencies. It’s all an illusion/religion.
- ForHackernews 6y ago
  Absolutely. It's just funny that many cryptocurrency advocates reject "fiat" currencies for being fake and arbitrary, but bitcoin is even more fake and arbitrary. At least USD has the non-illusionary property of keeping me out of jail when paid to the IRS. ;) Why is BTC worth more than BCH?
- auggierose 6y ago
  it is, but bitcoin is a particularly stupid one
- notahacker 6y ago
  One is an illusion based around a legal system of enforceable debt, and the other is an illusion based on current speculator psychology. One of those illusions is more powerful and sustainable than the other
- UncleMeat 6y ago
  Fiat currencies (of democratic nations) are democratically controlled. That makes them fundamentally different from cryptocurrencies controlled by early adopters, a few engineers, and mining rigs.
  - freddieoduks 6y ago
    serious question, how is the democratic process different between the two? One i.e. democratic nations are a group of people on the same piece of land that. The other is a group of people on the internet.
    - UncleMeat 6y ago
      A few years ago the BTC/BCH split happened. This was a major philosophical decision that creates winners and losers and changes the trajectory of the winning coin forever. It was a fiscal policy decision. It was made exclusively by software engineers and miners. Miners get to vote based on their wealth. I don't consider that to be "a democratic process". There is no guarantee of enfranchisement. Some people get far far far more votes than others. It is more like a council of aristocrats.
root_axis 6y ago
Indeed, it doesn't even need to be global trouble, e.g. if you were a bitcoin enthusiast living in Puerto Rico during 2017, you learned first-hand exactly how useless bitcoin becomes when a major disaster strikes. Cash and gold didn't suffer the same fate.
- miracle2k 6y ago
  Presumably it wasn't used for everyday payments before, and obviously the global price was unaffected, so when you say it become useless, in what way do you mean?
  - root_axis 6y ago
    I mean that the island was without power for months so anybody that was expecting to rely on bitcoin in any capacity during the disaster was totally screwed.
deleted 6y ago
[deleted]

samfisher83 6y ago

That is true of a lot of things. Would diamonds or gold be as valuable if people didn't think it was a store of value?

auggierose 6y ago
You can use diamonds to cut things. As for store of value, nobody sees it as a store of value. If you think it has value, go and buy a large diamond from a jewellery store, and then try to sell it somewhere for the same price.
RC_ITR 6y ago
Diamonds are mostly consumption. Used diamonds always sell for WAY less than new, unless there’s some other factor.
ragnese 6y ago
Right. It's all mass psychology. Gold, the stock market, bitcoin, whatever. It only has value as long as people believe it has value. The caveat of course is that all of the things I listed have SOME more inherent value, but that is NOT the major contributor to their actual trading prices. Gold is not THAT useful. Neither is owning a billionth of a company.
- Grustaf 6y ago
  Obviously this is much less true for gold than for bitcoin, and the value of the stock market is very real. If you own a piece of Apple or the local hot dog stand, you own a piece of something that is continuously producing value for people.
  - Strom 6y ago
    > you own a piece of something that is continuously producing value for people. People will only pay for the next Apple product as long as they believe it provides value to them. It's all the same. Perception is king.
    - Grustaf 6y ago
      Over a billion people use Apple products, it's an extremely solid business. You can't compare that to a speculative bubble. Tulips were also very expensive once.
      - machinebun 6y ago
        True, but when you own a part of Apple you also have to have faith that your shares won't be diluted to nothing via new stock offerings (which numerous companies have done in the past). So while there is intrinsic value in the shares, some of that is still based on faith (if Apple doubled their outstanding shares overnight, the value of yours would go down).
        chii 6y ago
        > you also have to have faith that your shares won't be diluted to nothing via new stock offerings if the existing majority shareholders chose to do this, then it will happen, but otherwise, this can't happen. And i don't see a situation where the existing shareholders would willingly choose to do this dilution for no reason.
        Grustaf 6y ago
        No that is not how it works. In order to double the number of shares they’d need to issue and sell more shares, meaning that they would increase their cash balance, and hence overall value, by 2.5 trillion. So issuing more shares would not change the value of existing shares, at least in the short term. Never mind the fact that the shareholders would have to make this decision, and that Apple has long been doing the exact opposite.
      - 6y ago

sz4kerto 6y ago

> In times of truly global trouble, nobody will accept bitcoins as payment for bread. That is true for gold as well. (Ofc not 'nobody', just 'almost nobody'.)

auggierose 6y ago
Gold makes a nice filling for your teeth, if you like that look.
- deleted 6y ago
  [deleted]
- fogihujy 6y ago
  It also has industrial applications, not to mention that it's being used for jewellery. A golden chain with a gold-plated USB key containing a Bitcoin wallet might have a considerable bling factor though. :)
ForHackernews 6y ago
Is this really true historically? Obviously these are biased goldbugs, but there are at least some anecdotes that suggest https://www.bullionstar.com/blogs/ronan-manly/the-power-of-gold-in-times-of-crisis/ https://www.bullionstar.com/blogs/ronan-manly/the-power-of-g... It seems more likely that people conflict zones would be happy to accept gold (with the assumption it will be valuable in the future/in more stable areas) than bitcoins that require electricity, stable internet and tons of disk space.
- XorNot 6y ago
  Conflict zones are generally aware that there are non-conflict zones. The existence of the first world, and detailed knowledge of it's demands, means people know to collect assets that will be valued there. The problem with Bitcoin is it's not a physical thing at the end of the day: nobody mints jewellery out of bitcoin.
burade 6y ago

rorykoehler 6y ago

The same could be said it FIAT currencies. It’s all an illusion/religion.

ForHackernews 6y ago
Absolutely. It's just funny that many cryptocurrency advocates reject "fiat" currencies for being fake and arbitrary, but bitcoin is even more fake and arbitrary. At least USD has the non-illusionary property of keeping me out of jail when paid to the IRS. ;) Why is BTC worth more than BCH?
auggierose 6y ago
it is, but bitcoin is a particularly stupid one
notahacker 6y ago
One is an illusion based around a legal system of enforceable debt, and the other is an illusion based on current speculator psychology. One of those illusions is more powerful and sustainable than the other
UncleMeat 6y ago
Fiat currencies (of democratic nations) are democratically controlled. That makes them fundamentally different from cryptocurrencies controlled by early adopters, a few engineers, and mining rigs.
- freddieoduks 6y ago
  serious question, how is the democratic process different between the two? One i.e. democratic nations are a group of people on the same piece of land that. The other is a group of people on the internet.
  - UncleMeat 6y ago
    A few years ago the BTC/BCH split happened. This was a major philosophical decision that creates winners and losers and changes the trajectory of the winning coin forever. It was a fiscal policy decision. It was made exclusively by software engineers and miners. Miners get to vote based on their wealth. I don't consider that to be "a democratic process". There is no guarantee of enfranchisement. Some people get far far far more votes than others. It is more like a council of aristocrats.

root_axis 6y ago

Indeed, it doesn't even need to be global trouble, e.g. if you were a bitcoin enthusiast living in Puerto Rico during 2017, you learned first-hand exactly how useless bitcoin becomes when a major disaster strikes. Cash and gold didn't suffer the same fate.

miracle2k 6y ago
Presumably it wasn't used for everyday payments before, and obviously the global price was unaffected, so when you say it become useless, in what way do you mean?
- root_axis 6y ago
  I mean that the island was without power for months so anybody that was expecting to rely on bitcoin in any capacity during the disaster was totally screwed.

deleted 6y ago

[deleted]