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If you own Bitcoin, you have a major incentive to spin everything as good for BTC so that they price rises. You are also incentivized to convince others to buy

by esens 5y ago

If you own Bitcoin, you have a major incentive to spin everything as good for BTC so that they price rises. You are also incentivized to convince others to buy BTC so that the your investment in BTC pays off. Given there is no intrinsic worth of BTC, rather just the collectively belief it is worth something, these incentives are very strong with BTC.

lowkey 5y ago
> Given there is no intrinsic worth of BTC, rather just the collectively belief it is worth something, these incentives are very strong with BTC. Explain how this is any different from the US dollar? What is the intrinsic worth of USD?
- haasted 5y ago
  The ability to tax all residents and companies of the US?
  - ldiracdelta 5y ago
    Plus the ability to take away their assets if they don't comply.
  - pygy_ 5y ago
    Yes, the value of USD value is proportional to the power of the US government (and its judiciary/police/army)... The power to let the private sector flourish, mainly. The value of Crypto comes from the decentralization (no need for trusted third parties), and is proportional to the hashing power of the network. Upstarts can easily be 51%ed by an incumbent with a large mining infrastructure of the same kind... But this holds as long as people with destructive power let them run.
  - jermaustin1 5y ago
    AND US citizens and nationals no matter where they are in the world.
- acjohnson55 5y ago
  It's a system that matches up quite well to the price of goods and services over time. Though it declines in purchasing power, it does so very gradually and predictably. It's the best money that's ever been created.
- imtringued 5y ago
  The USD is equally worthless but at least people don't pretend that it is a store of value (some people want it to be one). You can't eat USD or BTC. The primary difference is that people have to pay taxes and monthly payments on their debt. Every dollar created has to be returned one day. This ensures the continued existence of USD as a medium of exchange. Once something turns into a "store of value" it ceases to be a good medium of exchange.
  - fuzzylightbulb 5y ago
    > The USD is equally worthless but at least people don't pretend that it is a store of value (some people want it to be one). You can't eat USD or BTC The ability to eat something is not what makes it a store of value. Milk is a TERRIBLE store of value for time frames greater than a few weeks, for instance. The USD is a store of value as it is relatively stable and so you know that you'll be able to leverage its value in the future; gold does the same. The beauty of USD is that unless you think the United States of America is going to cease to be, it is the only thing accepted for tax payments and so a few hundred million people along with countless businesses and institutions are going to need USD to pay the government every year. Literally every stable currency is a "store of value"; the predictability of the value is what makes it stable. This is precisely why BTC is not stable, nor a good store of value. It is an asset whose primarily uses are speculation and illicit financial flows. > Once something turns into a "store of value" it ceases to be a good medium of exchange. I fail to see the connection. Sure, not all stores of value are good mediums of exchange, but this has more to do with the physical properties of the underlying commodity rather than the fact that it holds its value stably. Gold is too heavy to carry around in your pocket, and securely storing a lot of it requires specific infrastructure that most people don't want to maintain. These things are true regardless of whether or not the value of gold is relatively stable over time.
- w0m 5y ago
  > What is the intrinsic worth of USD? Since dropping gold standard, I've always seen it as faith in the US economy. There's no similar entity backing BTC.
  - cft 5y ago
    That probably means that BTC will be priced more accurately than USD
  - rantwasp 5y ago
    faith != intrinsic value. all forms of money are worth something because people collectively agree that they are worth something and trade them for goods. the USD is not special. BTC is not special. People getting on their high horse about the USD and the faith in the US economy seem to forget that all things have a lifecycle and eventually everything goes away / is replaced. There is immense immediate pressure to keep the USD valuable and the thing that is used for international trade, but my guess is given 20-30 years a lot of things can happen.
- sam345 5y ago
  The ability to buy something? BTC is not a currency at least in the US. With cash you can actually buy something. BTC is a collectable investment where the seller gets taxed on every transaction. And the only value to BTC is that there are sometimes, depending on the market, a Greater Fool out there to buy it from you. See Tulip Mania.https://en.m.wikipedia.org/wiki/Tulip_mania https://en.m.wikipedia.org/wiki/Tulip_mania. Possibly BTC a way to store value between investments or during a currency crisis but the extreme volatility makes that extremely questionable. It seems it's mostly a gamble that a greater Fool will buy from you or, outside of investment/gambling a conduit for illicit transactions, though the publicly available tracking aspect of BTC puts that role in question also.
  - lowkey 5y ago
    Assuming everything you said is true you still haven’t answered my question. If Bitcoin has no intrinsic value, how is that different than fiat? What gives the USD or British pound intrinsic value?
    - NovemberWhiskey 5y ago
      The value of the USD is that it's a currency that can be used to buy goods and services. The same is largely not the case for BTC. To the extent that any goods and services are for sale with prices in BTC, they are (in my experience) priced consistently with trading out of BTC into some currency (say USD) and then purchasing the product with proceeds of the sale.
      - herbst 5y ago
        To be fair there are a lot more places in a 1000 miles radius around me taking bitcoin or crypto than there are taking dollars as payment. The relevance of USD, and any currency, is a regional value. And bitcoin is actually widely accepted here in Switzerland
    - Twixes 5y ago
      The USD or practically all fiat currencies are an abstraction over barter. Obviously they are only worth as much as we all collectively believe, but that belief is anchored by what the currency primarily is used for, which normally is obtaining goods and services. That's not intrinsic but relatively stable, and central banks try to steer things in a stable way. Meanwhile BTC currently only serves as an abstraction over fiat currencies. It's practically only exchanged from and to fiat currencies, and that's not stable, as popularity is then the only mechanism dictating the price. BTC is much more like gold this way than the dollar.
- pwinnski 5y ago
  It's the word's reserve currency. You could pick literally any other fiat currency to compare against and make a marginally better case, but you picked the currency in which about 60% of the entire world's reserves are kept, which has value established by a large collection of national governments.
  - lowkey 5y ago
    Notably the world’s reserve currency has lost literally 100x in purchasing power since 1933. That’s right, since moving off the gold standard the USD has lost 99% of its purchasing power relative to gold. In 1933 $20USD would buy you 1oz of Gold. In 2021 it would take $2000USD to buy the same oz of gold. It seems that the world’s reserve currency leaks approximately 99% of its value per century through the process of debasement which leads to inflation. I would argue the world deserves a better store of value.
    - esens 5y ago
      You are comparing currency (dollar) against assets (gold.). You are complaining that a currency is acting like a currency (inflationary) and not an asset (relatively resistant to inflation.) I am so confused by this argument. I think you are right though that Bitcoin isn't acting like a currency, it is acting like an asset. Although it is highly speculative, more so that gold, as evidenced by its wild swings. Bitcoin is a crypto-asset, not a crypto-currency.
      - lowkey 5y ago
        > You are complaining that a currency is acting like a currency (inflationary) I challenge the assumption that a currency is naturally inflationary in nature. Though it is very tempting to politicians to print money and debase the currency if they can get away with it, there is no inherent law of currencies that makes them inflationary. In fact, throughout hostory the only way fiat currencies could be inflated was through debasement. Bitcoin has a fixed supply and cannot be debased but those properties do not make it less of a currency.
    - 5y ago
- tcmart14 5y ago
  The US Dollar derives value from economic activity of the US. You can essentially say the US Dollar is a representation of US markets.

by esens 5y ago

lowkey 5y ago

> Given there is no intrinsic worth of BTC, rather just the collectively belief it is worth something, these incentives are very strong with BTC. Explain how this is any different from the US dollar? What is the intrinsic worth of USD?

haasted 5y ago
The ability to tax all residents and companies of the US?
- ldiracdelta 5y ago
  Plus the ability to take away their assets if they don't comply.
- pygy_ 5y ago
  Yes, the value of USD value is proportional to the power of the US government (and its judiciary/police/army)... The power to let the private sector flourish, mainly. The value of Crypto comes from the decentralization (no need for trusted third parties), and is proportional to the hashing power of the network. Upstarts can easily be 51%ed by an incumbent with a large mining infrastructure of the same kind... But this holds as long as people with destructive power let them run.
- jermaustin1 5y ago
  AND US citizens and nationals no matter where they are in the world.
acjohnson55 5y ago
It's a system that matches up quite well to the price of goods and services over time. Though it declines in purchasing power, it does so very gradually and predictably. It's the best money that's ever been created.
imtringued 5y ago
The USD is equally worthless but at least people don't pretend that it is a store of value (some people want it to be one). You can't eat USD or BTC. The primary difference is that people have to pay taxes and monthly payments on their debt. Every dollar created has to be returned one day. This ensures the continued existence of USD as a medium of exchange. Once something turns into a "store of value" it ceases to be a good medium of exchange.
- fuzzylightbulb 5y ago
  > The USD is equally worthless but at least people don't pretend that it is a store of value (some people want it to be one). You can't eat USD or BTC The ability to eat something is not what makes it a store of value. Milk is a TERRIBLE store of value for time frames greater than a few weeks, for instance. The USD is a store of value as it is relatively stable and so you know that you'll be able to leverage its value in the future; gold does the same. The beauty of USD is that unless you think the United States of America is going to cease to be, it is the only thing accepted for tax payments and so a few hundred million people along with countless businesses and institutions are going to need USD to pay the government every year. Literally every stable currency is a "store of value"; the predictability of the value is what makes it stable. This is precisely why BTC is not stable, nor a good store of value. It is an asset whose primarily uses are speculation and illicit financial flows. > Once something turns into a "store of value" it ceases to be a good medium of exchange. I fail to see the connection. Sure, not all stores of value are good mediums of exchange, but this has more to do with the physical properties of the underlying commodity rather than the fact that it holds its value stably. Gold is too heavy to carry around in your pocket, and securely storing a lot of it requires specific infrastructure that most people don't want to maintain. These things are true regardless of whether or not the value of gold is relatively stable over time.
w0m 5y ago
> What is the intrinsic worth of USD? Since dropping gold standard, I've always seen it as faith in the US economy. There's no similar entity backing BTC.
- cft 5y ago
  That probably means that BTC will be priced more accurately than USD
- rantwasp 5y ago
  faith != intrinsic value. all forms of money are worth something because people collectively agree that they are worth something and trade them for goods. the USD is not special. BTC is not special. People getting on their high horse about the USD and the faith in the US economy seem to forget that all things have a lifecycle and eventually everything goes away / is replaced. There is immense immediate pressure to keep the USD valuable and the thing that is used for international trade, but my guess is given 20-30 years a lot of things can happen.
sam345 5y ago
The ability to buy something? BTC is not a currency at least in the US. With cash you can actually buy something. BTC is a collectable investment where the seller gets taxed on every transaction. And the only value to BTC is that there are sometimes, depending on the market, a Greater Fool out there to buy it from you. See Tulip Mania.https://en.m.wikipedia.org/wiki/Tulip_mania https://en.m.wikipedia.org/wiki/Tulip_mania. Possibly BTC a way to store value between investments or during a currency crisis but the extreme volatility makes that extremely questionable. It seems it's mostly a gamble that a greater Fool will buy from you or, outside of investment/gambling a conduit for illicit transactions, though the publicly available tracking aspect of BTC puts that role in question also.
- lowkey 5y ago
  Assuming everything you said is true you still haven’t answered my question. If Bitcoin has no intrinsic value, how is that different than fiat? What gives the USD or British pound intrinsic value?
  - NovemberWhiskey 5y ago
    The value of the USD is that it's a currency that can be used to buy goods and services. The same is largely not the case for BTC. To the extent that any goods and services are for sale with prices in BTC, they are (in my experience) priced consistently with trading out of BTC into some currency (say USD) and then purchasing the product with proceeds of the sale.
    - herbst 5y ago
      To be fair there are a lot more places in a 1000 miles radius around me taking bitcoin or crypto than there are taking dollars as payment. The relevance of USD, and any currency, is a regional value. And bitcoin is actually widely accepted here in Switzerland
  - Twixes 5y ago
    The USD or practically all fiat currencies are an abstraction over barter. Obviously they are only worth as much as we all collectively believe, but that belief is anchored by what the currency primarily is used for, which normally is obtaining goods and services. That's not intrinsic but relatively stable, and central banks try to steer things in a stable way. Meanwhile BTC currently only serves as an abstraction over fiat currencies. It's practically only exchanged from and to fiat currencies, and that's not stable, as popularity is then the only mechanism dictating the price. BTC is much more like gold this way than the dollar.
pwinnski 5y ago
It's the word's reserve currency. You could pick literally any other fiat currency to compare against and make a marginally better case, but you picked the currency in which about 60% of the entire world's reserves are kept, which has value established by a large collection of national governments.
- lowkey 5y ago
  Notably the world’s reserve currency has lost literally 100x in purchasing power since 1933. That’s right, since moving off the gold standard the USD has lost 99% of its purchasing power relative to gold. In 1933 $20USD would buy you 1oz of Gold. In 2021 it would take $2000USD to buy the same oz of gold. It seems that the world’s reserve currency leaks approximately 99% of its value per century through the process of debasement which leads to inflation. I would argue the world deserves a better store of value.
  - esens 5y ago
    You are comparing currency (dollar) against assets (gold.). You are complaining that a currency is acting like a currency (inflationary) and not an asset (relatively resistant to inflation.) I am so confused by this argument. I think you are right though that Bitcoin isn't acting like a currency, it is acting like an asset. Although it is highly speculative, more so that gold, as evidenced by its wild swings. Bitcoin is a crypto-asset, not a crypto-currency.
    - lowkey 5y ago
      > You are complaining that a currency is acting like a currency (inflationary) I challenge the assumption that a currency is naturally inflationary in nature. Though it is very tempting to politicians to print money and debase the currency if they can get away with it, there is no inherent law of currencies that makes them inflationary. In fact, throughout hostory the only way fiat currencies could be inflated was through debasement. Bitcoin has a fixed supply and cannot be debased but those properties do not make it less of a currency.
  - 5y ago
tcmart14 5y ago
The US Dollar derives value from economic activity of the US. You can essentially say the US Dollar is a representation of US markets.