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If you are a believer in bitcoin as a viable currency, store of value, or whatever you reason for supporting it, how is this a good thing?

by jwozn 6y ago

doopy1 6y ago
Because if you have some, you become rich.
- Salgat 6y ago
  This is exactly it. Cryptocoins aren't actually used in any practical sense for the vast majority of transactions (beyond the black market). It's all a gambling racket/ponzi scheme that has simply gotten big enough for larger players to want to get in on the action. That doesn't make it legitimate in its utility, it just means that it's not regulated enough for people to not be taken advantage of. Going to be bizarre seeing the fallout when bitcoin eventually collapses after it stabilizes in cost and all the people buying in on the hype dry up and start selling after seeing it not going up after several years.
  - ryanlol 6y ago
    Why would the black market not be sufficient to prop it up?
  - alwillis 6y ago
    How many times does this have to be debunked? “Why Bitcoin is Not a Ponzi Scheme: Point by Point”— https://www.swanbitcoin.com/why-bitcoin-is-not-a-ponzi-scheme-point-by-point/ https://www.swanbitcoin.com/why-bitcoin-is-not-a-ponzi-schem...
    - Salgat 6y ago
      Is it literally a ponzi scheme? Of course not. It's very abstracted but the concept is the same. The problem with your article is that everything they argue is reliant on the price keeping increasing. Everyone buys into the hype of something not fully understanding it. Bitcoin simply has a much larger cap before it falls apart, as bigger and bigger players start pouring money into it in hopes of those wild returns before it all comes crashing. The problem Bitcoin has not yet addressed is real-world usage. When the vast majority of transactions are gamblers buying up in hopes of making money, what do you think will happen when the price finally hits a ceiling and all those gamblers start to acknowledge that the price won't go up anymore, especially after several years? They'll start to sell, causing a panic. And you'll see it recover a little, but never reach past a certain point, making the next recovery worse, until it gradually drops down into nothing. By then people will either move onto other coins to gamble on or just give up entirely on it. I will absolutely change my position on all of this the day Bitcoin becomes used in a way that justifies its price beyond "that thing that magically keeps climbing in price that everyone's gambling their money on".
      - alwillis 5y ago
        Is it literally a ponzi scheme? Of course not. It's very abstracted but the concept is the same. I'm going to say no on this. It's nothing like a Ponzi scheme by definition, which is the point of the article. A Ponzi scheme is run by a person or a group of people to pay existing participants with the membership fees of new people. Since nobody runs bitcoin and nobody is paying anyone, it's not a Ponzi scheme. Buying a monetary asset where the price is based on market dynamics is how the free market works. I will absolutely change my position on all of this the day Bitcoin becomes used in a way that justifies… You don't understand bitcoin, so you likely won't change your position. Bitcoin maxis like to say people buy bitcoin at the price they deserve… many more people will buy bitcoin at $100,000 USD or $500,000 USD than at the current price of $56,000 because they didn't get it early on. Perhaps if you read "Bitcoin Obsoletes All Other Money" you might start to get it: https://unchained-capital.com/blog/bitcoin-obsoletes-all-other-money/ https://unchained-capital.com/blog/bitcoin-obsoletes-all-oth...
atat7024 6y ago
Solidifying final holdouts to adoption, stabilizing price at....
briefcomment 6y ago
Why would its value increasing relative to the dollar negatively effect any of those things?
- ryanlol 6y ago
  I think many people fail to realize that bitcoins are divisible in a way that cash isn’t. While massive deflation would require you to print more cash, with Bitcoin you can just use a smaller amount.
  - briefcomment 6y ago
    That's a surprising misconception. I hope we quickly overcome that.
- GhostVII 6y ago
  It is pretty difficult to actually conduct business with an asset that changes value so much. For example a bank wouldn't want to give someone a mortgage in terms of Bitcoin if that house could be worth half as much in Bitcoin in the space of a month or two.
  - ryanlol 6y ago
    Nobody wants bitcoin denominated mortgages.
lumost 6y ago
As an alternative, this might be a long bet by institutional investors on future instability in the dollar. BTC is one of the few assets that one can use to reasonably avoid risk of inflation, illegal seizure, or future capital controls. Which jurisdiction do your bitcoins really reside in any way?
- alwillis 6y ago
  Which jurisdiction do your bitcoins really reside in any way? Someone’s bitcoin are always on the blockchain; the private keys required to move or spend them reside in the jurisdiction with whoever has those keys.
  - lumost 6y ago
    I can have bank accounts in multiple jurisdictions. If I print off the private key and send it to a safety deposit box in Canada are the BTC still under American jurisdiction? An institution could maintain copies of the keys in multiple jurisdictions for business continuity purposes. If push came to shove it would be tough to ascertain when the BTC moved borders.
markburns 6y ago
It’s getting closer to its true value. Volatility gradually decreases the higher its value. If you filter out the crashes of early adopters cashing out. Once the final cycle of 10-100x followed by a crash has complete then I think a more interesting period for Bitcoin can begin. That’s where mass adoption starts to become more viable. Bitcoin is the tcp/ip stack, lightning is http, the exciting part is really yet to come. If the web and all the innovation that arose came about because of programmatic decentralised information transfer, then I’m interested to see what can occur with programmatic value transfer. In the 90s a lot of people couldn’t be convinced of the benefit of communicating with people on the internet but many of these same people are convinced enough to use social media now. But it couldn’t occur until the network effects were present. I’m excited to find out what that equivalent paradigm shift looks like. Of course mass adoption may never happen, and I won’t spend my time trying to convince people that it will or how it could. But I do see price approaching a true valuation and reaching stability as a prerequisite for it being truly useful.

If you are a believer in bitcoin as a viable currency, store of value, or whatever you reason for supporting it, how is this a good thing?

by jwozn 6y ago

If you are a believer in bitcoin as a viable currency, store of value, or whatever you reason for supporting it, how is this a good thing?

doopy1 6y ago

Because if you have some, you become rich.

Salgat 6y ago
This is exactly it. Cryptocoins aren't actually used in any practical sense for the vast majority of transactions (beyond the black market). It's all a gambling racket/ponzi scheme that has simply gotten big enough for larger players to want to get in on the action. That doesn't make it legitimate in its utility, it just means that it's not regulated enough for people to not be taken advantage of. Going to be bizarre seeing the fallout when bitcoin eventually collapses after it stabilizes in cost and all the people buying in on the hype dry up and start selling after seeing it not going up after several years.
- ryanlol 6y ago
  Why would the black market not be sufficient to prop it up?
- alwillis 6y ago
  How many times does this have to be debunked? “Why Bitcoin is Not a Ponzi Scheme: Point by Point”— https://www.swanbitcoin.com/why-bitcoin-is-not-a-ponzi-scheme-point-by-point/ https://www.swanbitcoin.com/why-bitcoin-is-not-a-ponzi-schem...
  - Salgat 6y ago
    Is it literally a ponzi scheme? Of course not. It's very abstracted but the concept is the same. The problem with your article is that everything they argue is reliant on the price keeping increasing. Everyone buys into the hype of something not fully understanding it. Bitcoin simply has a much larger cap before it falls apart, as bigger and bigger players start pouring money into it in hopes of those wild returns before it all comes crashing. The problem Bitcoin has not yet addressed is real-world usage. When the vast majority of transactions are gamblers buying up in hopes of making money, what do you think will happen when the price finally hits a ceiling and all those gamblers start to acknowledge that the price won't go up anymore, especially after several years? They'll start to sell, causing a panic. And you'll see it recover a little, but never reach past a certain point, making the next recovery worse, until it gradually drops down into nothing. By then people will either move onto other coins to gamble on or just give up entirely on it. I will absolutely change my position on all of this the day Bitcoin becomes used in a way that justifies its price beyond "that thing that magically keeps climbing in price that everyone's gambling their money on".
    - alwillis 5y ago
      Is it literally a ponzi scheme? Of course not. It's very abstracted but the concept is the same. I'm going to say no on this. It's nothing like a Ponzi scheme by definition, which is the point of the article. A Ponzi scheme is run by a person or a group of people to pay existing participants with the membership fees of new people. Since nobody runs bitcoin and nobody is paying anyone, it's not a Ponzi scheme. Buying a monetary asset where the price is based on market dynamics is how the free market works. I will absolutely change my position on all of this the day Bitcoin becomes used in a way that justifies… You don't understand bitcoin, so you likely won't change your position. Bitcoin maxis like to say people buy bitcoin at the price they deserve… many more people will buy bitcoin at $100,000 USD or $500,000 USD than at the current price of $56,000 because they didn't get it early on. Perhaps if you read "Bitcoin Obsoletes All Other Money" you might start to get it: https://unchained-capital.com/blog/bitcoin-obsoletes-all-other-money/ https://unchained-capital.com/blog/bitcoin-obsoletes-all-oth...

atat7024 6y ago

Solidifying final holdouts to adoption, stabilizing price at....

briefcomment 6y ago

Why would its value increasing relative to the dollar negatively effect any of those things?

ryanlol 6y ago
I think many people fail to realize that bitcoins are divisible in a way that cash isn’t. While massive deflation would require you to print more cash, with Bitcoin you can just use a smaller amount.
- briefcomment 6y ago
  That's a surprising misconception. I hope we quickly overcome that.
GhostVII 6y ago
It is pretty difficult to actually conduct business with an asset that changes value so much. For example a bank wouldn't want to give someone a mortgage in terms of Bitcoin if that house could be worth half as much in Bitcoin in the space of a month or two.
- ryanlol 6y ago
  Nobody wants bitcoin denominated mortgages.

lumost 6y ago

As an alternative, this might be a long bet by institutional investors on future instability in the dollar. BTC is one of the few assets that one can use to reasonably avoid risk of inflation, illegal seizure, or future capital controls. Which jurisdiction do your bitcoins really reside in any way?

alwillis 6y ago
Which jurisdiction do your bitcoins really reside in any way? Someone’s bitcoin are always on the blockchain; the private keys required to move or spend them reside in the jurisdiction with whoever has those keys.
- lumost 6y ago
  I can have bank accounts in multiple jurisdictions. If I print off the private key and send it to a safety deposit box in Canada are the BTC still under American jurisdiction? An institution could maintain copies of the keys in multiple jurisdictions for business continuity purposes. If push came to shove it would be tough to ascertain when the BTC moved borders.

markburns 6y ago

It’s getting closer to its true value. Volatility gradually decreases the higher its value. If you filter out the crashes of early adopters cashing out. Once the final cycle of 10-100x followed by a crash has complete then I think a more interesting period for Bitcoin can begin. That’s where mass adoption starts to become more viable. Bitcoin is the tcp/ip stack, lightning is http, the exciting part is really yet to come. If the web and all the innovation that arose came about because of programmatic decentralised information transfer, then I’m interested to see what can occur with programmatic value transfer. In the 90s a lot of people couldn’t be convinced of the benefit of communicating with people on the internet but many of these same people are convinced enough to use social media now. But it couldn’t occur until the network effects were present. I’m excited to find out what that equivalent paradigm shift looks like. Of course mass adoption may never happen, and I won’t spend my time trying to convince people that it will or how it could. But I do see price approaching a true valuation and reaching stability as a prerequisite for it being truly useful.