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other than trying to get the money of suckers, I've never understood the point of bitcoin. no currency, digital or not, can be removed from the world's activiti
by endisneigh 5y ago
other than trying to get the money of suckers, I've never understood the point of bitcoin. no currency, digital or not, can be removed from the world's activities.
why would you ever want something that could plunge 30% in a day? even if it went up 5 billion percent, then what? everyone sells and it goes down? what's the point?
it's like the most zero-sum activity imaginable.
edit: I'm sincerely wondering what the value of bitcoin is, other than things surrounding preserving its value
- almost_usual 5y agoSomething something hedge against 4% YoY inflation
- bko 5y agoNot everyone in the world lives in an economy that has 4% YoY inflation. And not everyone has access to financial services or a developed banking sector
- yunohn 5y agoBut almost everyone with Bitcoin live in low-inflation developed countries.
- sueders101 5y agoThat’s incorrect. If I’m remembering correctly Nigeria was the second largest Bitcoin market pretty recently.
- 8note 5y agoSecond largest doesn't mean large. That could be anywhere from 1 person has a bit coin in Nigeria to just under half the bitcoins
- dragontamer 5y agoIf you don't have a financial service / developed banking sector, how do you get your local currency into BTC and back? Mt. Gox proved that you can't just trust random exchanges. Even in the best of times, the exchange can get hacked and all the holdings disappear.
- jeltz 5y agoIt is not that easy to do even in many countries with a developed banking sector. Bitcoin is very impractical as a currency.
- riffraff 5y agosure, but let's say that you're in Turkey, and very worried about your currency devaluating 17% every year. Does putting your money in something that can devaluate 30% in a day sound like a better solution?
- mavhc 5y agoAs long as you can wait long enough it should always go up, because there's 3 built in methods of deflation. Which also means you should never sell bitcoin.
- almost_usual 5y agoSo you should never use your wealth in the best case scenario. What’s the point?
- gojomo 5y agoIf you're interested in a long-term hedge, and all the 30% down-days are eventually offset by a soild long-term up-trend: yes, sure, why not? If asset A reliably loses 4% of its value per year, in a totally-predictable straight-line, and asset B has wild up- and down-swings, but over years reliably delivers 25% appreciation per year - asset B is better, unless you'll be forced to urgently sell at unpredictable times. (And if you can find a basket of uncorrelated B-like assets, all the better!)
- robjan 5y agoIf you're from an undeveloped country you probably can't afford the huge transaction fees and wild swings in price
- tryptophan 5y agoDo stocks, commodities, real estate, etc... not work anymore?
- jp555 5y agoYour self-admitted lack of understanding is not evidence there's no value in Bitcoin.
- endisneigh 5y agoplease, feel free to educate me. what's the value of bitcoin, other than the tautological argument around preserving its value?
- deleted 5y ago[deleted]
- EGreg 5y ago"Bitcoin is the first and best, and will be the one world store of value in the end. Everything else is shitcoins." - any Bitcoin maximalist
- jp555 5y agoKind of like when you create money:credit out of thin air when you run a tab at a bar. But with code.
- King-Aaron 5y agoIt's not like that at all.
- jp555 5y agoHow is it not an agreed-upon way to settle IOUs? It's not only this, but it is this as well.
- NhanH 5y agoI left the US a few years ago. Occasionally, I sent a few thousands to my US bank account via bitcoin + coinbase. I was then able to wire my money to a seller in Singapore for a lovely set of Go (the board game) problem books that I have been looking for. I am a Vietnamese living in Vietnam, and I would have absolutely no way to wire $2000 to a bank in Singapore (I tried). I do wish bitcoin stay alive (along with the US financial system too)
- barkingcat 5y agoThe point is those people who sold at the peak makes some money. That's always been the point of bitcoin. It's used for speculation.
- 535188B17C93743 5y agoIt's a cool technology/concept, but at the cost of all the energy it's wasting to be a "speculative asset" at best... yeah, it's frustrating.
- drcross 5y agoYou'll listen to Bitcoin FUD all day but you don't seem to care about the hydro carbons purged in the process of strip mining the earth for shiny rocks though. https://www.nasdaq.com/articles/why-bitcoin-may-actually-speed-up-the-transition-to-renewable-energy-2021-05-18 https://www.nasdaq.com/articles/why-bitcoin-may-actually-spe...
- cogman10 5y agoThis is pure garbage. The problem bitcoin solves, a distributed ledger, is one that's simply solved with a ledger over a trust network. In otherwords, this is a "solution" that is burning TWh of energy doing something global banks accomplish with kWh of power. All the power funneled into BTC would be far better spent doing anything useful. From electrolysis to protein folding. Also, it should be noted that shiny rocks have intrinsic value beyond their aesthetics. BTC is literally just a number with no value.
- drcross 5y ago>over a trust network There's your problem, you don't understand that bitcoin is trustless and the worlds first implementation of it's kind. If you can't understand why that's important I don't have the time to convince you.
- cogman10 5y agolol. Oh I understand what bitcoin is, I just think it has no value. You are arguing that bogosort, because it's the first sort of it's kind to use a random number generator, MUST have some value! After all, look at all the watts it burns! Just because someone does something first, doesn't mean that thing is useful or good.
- cma 5y agoIt's not zero sum, it already got close to 1% of the worlds electricity usage. It is negative sum.
- dahfizz 5y agoIt has a legitimate use as a store of value / means of exchange, especially in places where private, online banking services are not great. However, because it is also used so heavily for speculation, it is very volatile and therefore not an optimal store of value / means of exchange.
- drcross 5y ago>However, because it is also used so heavily for speculation, it is very volatile and therefore not an optimal store of value / means of exchange. It's better than gold in every way, including energy use.
- drcross 5y agoDon't buy bitcoin, it always crashes. https://www.youtube.com/watch?v=XbZ8zDpX2Mg https://www.youtube.com/watch?v=XbZ8zDpX2Mg We'll be back here in four years when bitcoin is well above 100k being used happily as a store of value by millions of people and someone like you will say the exact same thing again. How long will it take you to realise that it's already a success?
- endisneigh 5y agolet's just skip to the end. at $DAY $COIN is at $MAX_PRICE. it never reaches $MAX_PRICE ever again. for someone who bought at $MAX_PRICE, what is the value they received?
- somethingAlex 5y agoNone. It's not meant to be an investment, it just happens to be used like one currently. It's ironic, the same thing that makes these coins valuable to people (volatility, and mostly in the upwards direction) is a major reason why they are hard to use for mass transactions. However, there is some good here. People are getting familiar with crypto by participating in this investment strategy. A relatively stable coin capable of high transaction throughput and low fees - one that can actually be used as a currency instead of an investment - will benefit from this in the future.
- 8note 5y agoGiven the decentralized nature of cryptos, won't they always be used for what the richest people want them used for? They will always want to form an oligopoly
- hparadiz 5y agoI've used it to pay for things more than a handful of times. Just cause you don't have a reason doesn't mean the tech should be immediately dismissed.
- endisneigh 5y agoyou can also use fiat to pay for things. what's the benefit of bitcoin compared to say, USD for paying for things? is it cheaper or faster to buy $1 trinket using bitcoin vs. paypal?
- adamhp 5y agoThe typical argument (not one I necessarily agree with or am making) is that there is a limited supply of Bitcoin, whereas the supply of USD is controlled by US monetary policy. On the other hand, it is "decentralized", i.e. backed by the blockchain and not a political body. Again, not my arguments, but arguments I have heard.
- 8note 5y agoThe supply is only kinda limited though; most of it is controlled by a few accounts, and they could release more supply if they wanted to in order to do things like US monetary policy They'd run out eventually, but you'd still have lost out
- unknown_error 5y ago> what's the benefit of bitcoin compared to say, USD for paying for things? You help enrich the Bitcoin speculators. Spending in USD doesn't do that.
- hparadiz 5y agoInternational transactions where PayPal locks your account for no reason comes to mind.
- rcxdude 5y agoIf it were actually used as a medium of exchange, it would likely be more stable and it would provide value by facilitating trade. That was basically the original intention behind the design. Unfortunately most people are buying it to hoard and sell later, not to use as a payment mechanism, in part because it hasn't scaled to a higher transaction rate, causing large transaction fees whenever anyone attempts to use it.
- xgulfie 5y agoIt is an expensive way to send money around without involving PayPal or a bank etc. If you're buying something illegal or forbidden by them it would be handy for that. That's about it.
- mynameishere 5y agoIt could plausibly be used for things that should be legitimate but are banned by an oppressive establishment. For instance, a writer could become blacklisted by VISA and Mastercard effectively impoverishing him. Crypto could get around that ban. Of course, envelopes with 20 dollar bills can also get around that, but it seems like governments are moving away from cash. So, maybe in the future crypto will be very useful to non-criminals.
- aazaa 5y agoThe point of Bitcoin is that the world's governments have weaponized money. If all you pay attention to is the ups and downs of the exchange rate, then it all probably seems pretty pointless. But if you look at it against the backdrop of sanctions, civil asset forfeiture, erosion of civil liberties, and monetary debasement, things look different.
- fbcpck 5y ago> The point of Bitcoin is that the world's governments have weaponized money. This. I like to think it as a monopoly game where a player has a cheat code to practically print infinite amount of money. Bitcoin solves this problem; unfortunately the volatility (due to massive speculation game), transaction bottleneck, energy costs, etc. affects its function as a currency. There are other cryptocurrencies trying to tackle these problems (e.g. eth2), but I believe the ultimate goal is that it replaces government controlled currencies.
- optymizer 5y agoThese are some heavy assertions here. How would Bitcoin protect against any of that? The government already tracks who buys Bitcoin by having all points of purchase of USD<->Bitcoin require proof of identity, and they can obviously look at the blockchain to get all the transaction made by each individual. Let's be realistic for a second. All it would take for the government to forfeit your bitcoins is a $5 wrench [1]. I don't like that it's that way, and I don't know what the solution is, but I know it's not as simple as "make Bitcoin happen". [1] https://xkcd.com/538/ https://xkcd.com/538/
- pdpi 5y agoFor a long time, you could achieve that through localbitcoins or similar (not sure what the situation looks like now). You have tools to achieve some degree of anonymity, and there's other currencies that deal with that aspect of things better. Well-regulated exchanges are part of an effort by (usually VC-backed) startups to legitimise making money off of cryptocurrencies, rather than a core part of the original ethos behind Bitcoin.
- spelunker 5y agoI view it as a similar asset class to gold - why own gold? No really though, I don't own any physical gold for the same reasons.
- endisneigh 5y agowhat does gold have to do with bitcoin? why even bring it up? did gold also crash today?
- spelunker 5y agoI used gold as an analogy. I have no idea if gold crashed today because I don't own any, just like I don't own any bitcoin.
- simonh 5y agoBitcoin is frequently compared to gold because in both cases their value is mainly based on speculative trading. They do both have practical functions - gold is used in small amounts in industry and jewellery while Bitcoin can be used as a currency - but these have little or no relation to their traded value.
- whack 5y agoThe stock market has plunged 30% in a short period of time. Sure, it might be over a few weeks as opposed to days, but that's just a quantitative difference, not qualitative. The main value propositions behind bitcoin are: - stable store of value in its end state (minimal inflation)(note: you'll see wild fluctuations during the interim period where its future is uncertain) - not under the control of any government or central authority (no risk of hyperinflation) - easy to store in large quantities (you don't need to buy a large vault just to store all your bitcoin) - easy to trade in large quantities (you don't need to hire trucks to transport your bitcoin) - easy to hide from a predatory tax regime (ie, communist takeovers) - may one day be accepted as a common currency for the above reasons, just like gold 100 years ago Investing in bitcoin is like investing in a startup. There are no guarantees, its value proposition is contentious, and it requires a leap of faith. I personally refuse to speculate on its success. But I don't see anything innately nonsensical or zero-sum about it
- itake 5y agoClearly it’s failed at being a stable value
- whack 5y agoIt's impossible for any currency to be stable in the period before it gains mainstream acceptance. Fiat currencies share the same fate
- itake 5y agoThe fundamental problem with BTC's stability is why spend it today if tomorrow it will be worth +20% more?
- whack 5y agoYou're right, it is not a good currency today. In the interim period, BTC is extremely risky, volatile, and not a stable store of value. The value proposition is that: - People will want to adopt BTC as a mainstream currency in future, for all the reasons I listed earlier - When BTC is adopted as a mainstream currency, the value of each BTC will be X (in relation to raw materials, manufactured goods, etc) - Because today's price of BTC is much smaller than X, you stand to make a huge profit if you buy BTC, and it later becomes a mainstream currency Ie, BTC is a startup that if successful, everyone will want to use in the future. And that makes it a very valuable investment for angels/VCs today
- itsoktocry 5y ago>I've never understood the point of bitcoin I'm far from a Bitcoin maxi, but I own a small % in my portfolio. Here's my take: We are entering a world of abundant cyber-terrorism. If my bank and/or brokerage gets hacked, why do I own? I have nothing except that entry in their book keeping. And if you think, "It's backed up, they'll have you up and running in no time", I'm skeptical. I think anything like this would be chaotic. This is much harder to do to whatever wealth I have tied up in Bitcoin. As long as the internet is running, there's a permanent record of what I own.
- simonsarris 5y agoThat's funny because the only people I know who had big sums of money lost via hacking were holding crypto.
- salamandersauce 5y agoCouldn't the hacker just transfer your bitcoin into their wallet? I think if my bank had a castrophihic record failure I'm going to get the money back eventually. I have far less hope about recovering stolen bitcoin.
- LanceH 5y agoIt can hold value while your country's fiat currency doesn't. Or while you move out of that country and they would seize your assets as you leave. Or you can buy the reopening of your pipeline.
- unmole 5y ago> It can hold value while your country's fiat currency doesn't. It can also spectacularly crash overnight.
- fsociety 5y agoDo you think fiat can’t do that?
- 8note 5y agoMost of them can. The USD likely can not
- LanceH 5y agoAnd if you don't have access to USD? Everyone with a computer or even a phone has access to BTC.
- sombremesa 5y agoNot everyone has access to a computer or a phone, though.
- deleted 5y ago[deleted]
- sorbits 5y ago> it's like the most zero-sum activity imaginable. I would argue it’s actually a sub-zero-sum game because the “game master” (bitcoin miners) withdraw 12.5 coins from the pool every 10th minute.
- wppick 5y agoZoom out. Look at the performance on a larger scale. Are you making the same claims about stock options? They can plunge much more than 30% in a day, but is there no value in them? Bitcoin and cryptocurrencies are still in their infancy. Compare to other assets in their infancy. This might not be a great comparison but think about real estate. In it's infancy raiders or militaries could wipe out the value of your real estate overnight. Now it's relatively very stable. Why? Because we made it that way over time. Just because an asset is currently volatile does not mean it has no value.
- codyswann 5y agoIt sounds like you’re arguing crypto is a commodity and not a currency. I think OP is saying “why would you want a currency that could lose 30% of its value in a day” Which I agree with wholeheartedly.
- drcongo 5y agoFiat currencies can and do do that also.
- ericmay 5y agoI think the idea is that eventually this won't happen, and there are currencies issued by governments where this happens too, and certainly you wouldn't want that either. Cryptocurrency will simply have to compete with currency issued by sovereign governments, similar to how government-issued currencies compete with each other now. I think an issue for many people is that crypto is looked at categorically as a currency, but it could be much more. It could be a crappy currency, but a good store of value (a better version of gold in most respects, though gold retains an intrinsic value), it could also be a great currency - transiting government borders with impunity and anonymity, which may be very valuable to some. Historically, we've used gold, up until the last 150 years or so (don't quote me on exact timeline here) and even then the U.S. finally went off the gold standard in the 1970s. For most people, cash was still thought of as a store of value - they'd throw it in the bank or under a mattress. Or they thought gold was, but since it's heavy they just trade cash instead that's backed by gold. It'll take a while for the global paradigm shift to occur that pits currencies (sovereign issued and otherwise) against each other as a separate theory to assets in general. Cryptocurrency (which is now a bad name IMO) straddles the borders here, so it tends to be confusing. Personally I view cash as good for liquidity, but that's mostly it. I want the cash I receive to be turned into productive assets, so I hold a much smaller amount compared to assets.
- SkyMarshal 5y agoWell so far it’s anything but zero sum. From nothing to tens of thousands of dollars in 10yrs is not zero sum. It’s highly volatile yes, and has lost >= 80% of its value four times in those ten years (so this little 30% dip is nothing by comparison). But not zero sum. It originally mainly appealed to two factions: techies who like disrupting big things from first principles, and people who were long concerned with the mechanics of government fiat money and central banks [1]. There was some overlap between those two groups, and they were the innovators and early adopters. Interest has since expanded to investors of all kinds due to its, so far, non-zero-sum aspect. But if you’re not interested in the mechanics of how money works, it’s not surprising Bitcoin or cryptocurrency won’t be of interest to you. Also, Bitcoin has aspects of both currency and commodity (and possibly security, though the US SEC has said they don’t consider it that). It’s impossible to categorize based on previous definitions for this reason. Try not to get caught up in debating whether it’s one of these things, because it’s a mix of both (or maybe all three). So many people drive themselves crazy trying to define it as a currency, or arguing against it as a currency, but that’s just a mental tar pit. [1]:One well-researched take: https://en.wikipedia.org/wiki/Princes_of_the_Yen https://en.wikipedia.org/wiki/Princes_of_the_Yen
- alimw 5y agoWhen it began it was worth nothing and when it ends it will be worth nothing. Zero sum.
- tlb 5y agoHowever, it will have transferred a lot of money from people who are bad at predicting the future to people who are good at predicting the future. This is good for the economy, because more capital is in the hands of people who are likely to invest in things that work.
- alimw 5y agoWell we know the people who lose significant money will be a strict subset of people who are greedy. Maybe that's a good thing? More seriously, study after study has shown that unless you take the fundamentals into consideration there is no way reliably to make money on the stock market, and certainly that will be the case for Bitcoin for which there are, amazingly, no fundamentals. The exception would be if you were, say, a person who can manipulate the market with tweets and with large purchases through a publicly owned company that you control.