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> If Bitcoin is the same as gold, then we don't really need Bitcoin This argument doesn't make much sense. It's like saying if rubies are the same as emeralds,

by bhupy 6y ago

> If Bitcoin is the same as gold, then we don't really need Bitcoin This argument doesn't make much sense. It's like saying if rubies are the same as emeralds, then we don't need rubies. Also, there can be multiple types of assets! Nobody wants to put all of their eggs in one basket. Bitcoin can coexist with gold. Bitcoin is also arguably superior to gold in that it's MUCH easier to pay for bread with a little bit of bitcoin, and MUCH harder to do the same with gold (who's going to chop up the gold bar?). In fact, if I were to use the same zero-sum argument as above, one could even say: "if Bitcoin is the same as gold, then we don't really need gold" (again that's also a bad argument, both can coexist and gold is sometimes better) > But its point is being different. So you can't handwave away concerns based on it being exactly the same. You're right that gold and Bitcoin are different, but things can be different while still being "the same" at a fundamental/conceptual level. Cars and bicycles are different, but they still serve the same underlying need: transportation. > My point is that Bitcoin has not demonstrated any significant value certainly not in excess of its costs and harms, and it's had plenty of time. Bitcoin and Android are basically the same age. Android is coming up on 3 billion users worldwide, providing clear daily value. I think this is a really strong argument that Android is more valuable than Bitcoin (in some subjective sense), I agree with you that Android is extremely valuable and "good". That said, this is not a particularly strong argument that Bitcoin is absolutely valueless. The value of Bitcoin is in the eyes of the "behodler", and some people seem to value it a lot. People are using it as a safe haven from their country's poor monetary policies (happening in Nigeria and Argentina right now, has happened in Venezuela and Zimbabwe before). That's clearly non-zero value. And if your argument is that value is strictly a function of its utility, well then I'd like to introduce you to the economic concept of the Diamond-water paradox (https://www.investopedia.com/ask/answers/032615/how-can-marginal-utility-explain-diamondwater-paradox.asp https://www.investopedia.com/ask/answers/032615/how-can-marg...) which is the fundamental underpinning for the Subjective Theory of Value. > Bitcoin is still at best a niche, probably a shrinking one. We agree that Bitcoin is currently a niche, but I'm not sure that I agree that it's a shrinking niche. As of the last month, major institutional investors like BNY Mellon and BlackRock have started to include it in their asset mixtures. Major companies like Square and Tesla have started to hold some of their cash reserves in Bitcoin. Canada just approved North America's first Bitcoin ETF, trading on the TSX. I'm not sure how we can conclude that Bitcoin is shrinking with all of this institutional activity.

wpietri 6y ago
> It's like saying if rubies are the same as emeralds, then we don't need rubies. If rubies didn't exist and somebody were setting out to invent them at the cost of major ecological harm plus enormous waste and collateral damage to financial novices then that would be a decent comparison. Except that rubies have intrinsic value, whereas Bitcoin doesn't, making it a yet worse analogy. > different but [...] still being "the same" I am going to take this as an exercise in aggressive point-missing on your part. If you still don't get the point, feel free to ask. > Bitcoin is absolutely valueless I didn't say Bitcoin was valueless. Again, you seem to be aggressively missing the point. > BNY Mellon and BlackRock That's not proof of value. Traders will trade anything with enough volatility, because that's how they make money. Making money is frequently distinct from creating value. I'm speaking specifically of value, which again, Bitcoin has not demonstrated net value creation, especially when compared with other things that started at the same time, and especially when there's a full accounting of costs.
- bhupy 6y ago
  > major ecological harm This is _really_ debatable. By most measures, the vast majority of Bitcoin mining is done via renewables: https://www.iea.org/commentaries/bitcoin-energy-use-mined-the-gap https://www.iea.org/commentaries/bitcoin-energy-use-mined-th... "Around 60% to 70% of bitcoin is currently mined in China, where more than two-thirds of electricity generation comes from coal. But bitcoin mining facilities are concentrated in remote areas of China with rich hydro or wind resources (cheap electricity), with about 80% of Chinese bitcoin mining occurring in hydro-rich Sichuan province. These mining facilities may be absorbing overcapacity in some of these regions, using renewable energy that would otherwise be unused, given difficulties in matching these rich wind and hydro resources with demand centres on the coast." "Electricity generation in other key bitcoin mining centres are also dominated by renewables, including Iceland (100%), Quebec (99.8%), British Columbia (98.4%), Norway (98%), and Georgia (81%). Globally, one analysis estimates that the bitcoin is powered by at least 74% renewable electricity as of June 2019. Another analysis of data from 93 mining facilities (representing 1.7 GW, or about a third of global mining capacity) estimates that 76% of the identified energy mix includes renewables." Another report: https://coinshares.com/assets/resources/Research/bitcoin-mining-network-december-2019.pdf https://coinshares.com/assets/resources/Research/bitcoin-min... "Furthermore, we show that Bitcoin mining is mainly located in global regions where there are ample supplies of renewable electricity available. And finally, we calculate an estimate of the renewables penetration in the energy mix powering the Bitcoin mining network at 73%, making Bitcoin mining more renewables-driven than almost every other large-scale industry in the world. Our renewables estimate has marginally dropped since our last report, reflecting increased levels of mining in low-renewables regions such as Kazakhstan. However, we still caution that our location estimates likely have error margins of ±5% and should be considered within that context." Of the BTC mining that isn't on renewables, it would be interesting to see how the net CO2 output compares to diamond/gold/ruby mining, not to mention the labor exploitation. > Except that rubies have intrinsic value, whereas Bitcoin doesn't, making it a yet worse analogy. What intrinsic value do rubies have? They're just used for jewelry. It doesn't really "do" anything. Bitcoin is the same. It doesn't "do" anything, and its value is subjectively derived by the people that use/hold it. Much like jewelry, when it's not being used as a store of value, it serves a somewhat superficial use case, and that's censorship resistant transaction. > I am going to take this as an exercise in aggressive point-missing on your part. If you still don't get the point, feel free to ask. > I didn't say Bitcoin was valueless. Again, you seem to be aggressively missing the point. You'll have to help me out here, because whatever point you think you're making simply isn't coming across. You just said "Except that rubies have intrinsic value, whereas Bitcoin doesn't...", while also saying "I didn't say Bitcoin was valueless". It's hard to follow. > That's not proof of value. My point about BNY Mellon, BlackRock, Square, Tesla, Canada, etc was meant to be in response to your claim that Bitcoin use is "shrinking". The entire argument here is that Bitcoin is (among many things) a store of value. Its worth as a store of value is entirely predicated on whether others think that it's a store of value. The fact that institutional investors are also beginning to treat it as a store of value suggests that it might not be "shrinking", per your conclusion. It's also used for censorship resistant payments: https://www.coindesk.com/nigeria-bitcoin-adoption https://www.coindesk.com/nigeria-bitcoin-adoption > I'm speaking specifically of value, which again, Bitcoin has not demonstrated net value creation Calculating "net" value creation is debatable, because different people have a different point of view on how to measure the cost (eg how "bad" the electricity usage is). But, we can talk about the output: and that it has provided an easy-to-use store of value, comparable to gold, which can be used as a hedge against fiat currency. It's being used in regimes with poor monetary policy: https://news.bitcoin.com/venezuela-bitcoin-use-hyperinflation-crypto-adoption/ https://news.bitcoin.com/venezuela-bitcoin-use-hyperinflatio... https://qz.com/africa/1947769/nigeria-is-the-second-largest-bitcoin-market-after-the-us/ https://qz.com/africa/1947769/nigeria-is-the-second-largest-... You, personally, may not see any value in that, and that's fine! But we go back to the Diamond-water paradox; you probably derive more use from a glass of water (or an Android phone, to your earlier point) than Bitcoin, but utility alone doesn't determine the price/value of the thing.

by bhupy 6y ago

wpietri 6y ago

> It's like saying if rubies are the same as emeralds, then we don't need rubies. If rubies didn't exist and somebody were setting out to invent them at the cost of major ecological harm plus enormous waste and collateral damage to financial novices then that would be a decent comparison. Except that rubies have intrinsic value, whereas Bitcoin doesn't, making it a yet worse analogy. > different but [...] still being "the same" I am going to take this as an exercise in aggressive point-missing on your part. If you still don't get the point, feel free to ask. > Bitcoin is absolutely valueless I didn't say Bitcoin was valueless. Again, you seem to be aggressively missing the point. > BNY Mellon and BlackRock That's not proof of value. Traders will trade anything with enough volatility, because that's how they make money. Making money is frequently distinct from creating value. I'm speaking specifically of value, which again, Bitcoin has not demonstrated net value creation, especially when compared with other things that started at the same time, and especially when there's a full accounting of costs.

bhupy 6y ago
> major ecological harm This is _really_ debatable. By most measures, the vast majority of Bitcoin mining is done via renewables: https://www.iea.org/commentaries/bitcoin-energy-use-mined-the-gap https://www.iea.org/commentaries/bitcoin-energy-use-mined-th... "Around 60% to 70% of bitcoin is currently mined in China, where more than two-thirds of electricity generation comes from coal. But bitcoin mining facilities are concentrated in remote areas of China with rich hydro or wind resources (cheap electricity), with about 80% of Chinese bitcoin mining occurring in hydro-rich Sichuan province. These mining facilities may be absorbing overcapacity in some of these regions, using renewable energy that would otherwise be unused, given difficulties in matching these rich wind and hydro resources with demand centres on the coast." "Electricity generation in other key bitcoin mining centres are also dominated by renewables, including Iceland (100%), Quebec (99.8%), British Columbia (98.4%), Norway (98%), and Georgia (81%). Globally, one analysis estimates that the bitcoin is powered by at least 74% renewable electricity as of June 2019. Another analysis of data from 93 mining facilities (representing 1.7 GW, or about a third of global mining capacity) estimates that 76% of the identified energy mix includes renewables." Another report: https://coinshares.com/assets/resources/Research/bitcoin-mining-network-december-2019.pdf https://coinshares.com/assets/resources/Research/bitcoin-min... "Furthermore, we show that Bitcoin mining is mainly located in global regions where there are ample supplies of renewable electricity available. And finally, we calculate an estimate of the renewables penetration in the energy mix powering the Bitcoin mining network at 73%, making Bitcoin mining more renewables-driven than almost every other large-scale industry in the world. Our renewables estimate has marginally dropped since our last report, reflecting increased levels of mining in low-renewables regions such as Kazakhstan. However, we still caution that our location estimates likely have error margins of ±5% and should be considered within that context." Of the BTC mining that isn't on renewables, it would be interesting to see how the net CO2 output compares to diamond/gold/ruby mining, not to mention the labor exploitation. > Except that rubies have intrinsic value, whereas Bitcoin doesn't, making it a yet worse analogy. What intrinsic value do rubies have? They're just used for jewelry. It doesn't really "do" anything. Bitcoin is the same. It doesn't "do" anything, and its value is subjectively derived by the people that use/hold it. Much like jewelry, when it's not being used as a store of value, it serves a somewhat superficial use case, and that's censorship resistant transaction. > I am going to take this as an exercise in aggressive point-missing on your part. If you still don't get the point, feel free to ask. > I didn't say Bitcoin was valueless. Again, you seem to be aggressively missing the point. You'll have to help me out here, because whatever point you think you're making simply isn't coming across. You just said "Except that rubies have intrinsic value, whereas Bitcoin doesn't...", while also saying "I didn't say Bitcoin was valueless". It's hard to follow. > That's not proof of value. My point about BNY Mellon, BlackRock, Square, Tesla, Canada, etc was meant to be in response to your claim that Bitcoin use is "shrinking". The entire argument here is that Bitcoin is (among many things) a store of value. Its worth as a store of value is entirely predicated on whether others think that it's a store of value. The fact that institutional investors are also beginning to treat it as a store of value suggests that it might not be "shrinking", per your conclusion. It's also used for censorship resistant payments: https://www.coindesk.com/nigeria-bitcoin-adoption https://www.coindesk.com/nigeria-bitcoin-adoption > I'm speaking specifically of value, which again, Bitcoin has not demonstrated net value creation Calculating "net" value creation is debatable, because different people have a different point of view on how to measure the cost (eg how "bad" the electricity usage is). But, we can talk about the output: and that it has provided an easy-to-use store of value, comparable to gold, which can be used as a hedge against fiat currency. It's being used in regimes with poor monetary policy: https://news.bitcoin.com/venezuela-bitcoin-use-hyperinflation-crypto-adoption/ https://news.bitcoin.com/venezuela-bitcoin-use-hyperinflatio... https://qz.com/africa/1947769/nigeria-is-the-second-largest-bitcoin-market-after-the-us/ https://qz.com/africa/1947769/nigeria-is-the-second-largest-... You, personally, may not see any value in that, and that's fine! But we go back to the Diamond-water paradox; you probably derive more use from a glass of water (or an Android phone, to your earlier point) than Bitcoin, but utility alone doesn't determine the price/value of the thing.