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I bet any argument you could give for that statement could be equally applied to dollars. Bitcoin is valued because it functions as an [imperfect] form of mone

I bet any argument you could give for that statement could be equally applied to dollars. Bitcoin is valued because it functions as an [imperfect] form of money. People value it (aka are willing to exchange their dollars for it) because it lets them transact with other people in a way that is, barring massive computational power, immutable and uncensorable, and because it was the first system to do this and therefore has the longest history of transactions. There are plenty of valid criticisms of bitcoin, but it would be idiotic to deny that a currency which functions in this way would be valueless or not in demand. Some people are certainly fools, but nobody has to be a fool in order to explain a world in which bitcoin commands a high price.

rbanffy 5y ago
> could be equally applied to dollars. It could, but it'd be wrong. What would happen if nobody wanted to buy or receive BTC tomorrow? Some people would be very angry. Now imagine what would happen if the dollar ceased to have any value? Unimaginable, isn't it? Economies would collapse, the whole world would be in disarray.
- Geee 5y ago
  Economies wouldn't collapse because people can switch to bitcoin. In free markets, people always try to switch to a stronger currency, when their own currency loses value. Bitcoin is volatile, but it's still better than a currency that loses value in long term. Recently, the president of Turkey said that they are in war with Bitcoin. This is exactly what happens when cronies manipulate money supply for their own benefit, but they can't do anything to stop people from choosing a better currency. Cronies get demonetized and finally they lose power. Same thing is happening in Africa in many countries.
  - rbanffy 5y ago
    > but it's still better than a currency that loses value in long term. Why would BTC be imune to that?
    - Geee 5y ago
      We know that in a free market, people tend to choose money that has certain properties. Historically, gold has been the best form of money, and it has been chosen by a free market, not by legislation. The most important property of Bitcoin is that it can't be debased arbitrarily, which is similar to gold. Bitcoin can be also easily stored and transferred, which makes it better than gold. So, as long as people keep choosing to use Bitcoin rather than something else, it will also gain or hold its value. It is not immune to losing value, but there has to be even better currency, or it has to be banned. Both of these options might be impossible.
      - rbanffy 5y ago
        I don't think banning it is that implausible. The energy costs of transferring it are not trivial, making small transfers impractical. That cost also makes it politically interesting to suppress it.
        Geee 5y ago
        The metric of energy per transaction doesn't actually make sense, because there can be almost unlimited number of layer 2 transactions, whether they're on Lightning Network[0] or something else. Most Bitcoin transactions happen already on Lightning Network. Also, the energy used in mining is mostly independent from the number of on-chain transactions. The energy is not used to append new transactions, but to keep the complete transaction history objectively immutable, i.e. the network is designed to defend digital property rights with energy. [0] https://lightning.network https://lightning.network
        voldacar 5y ago
        I've been out of the btc loop since around 2016 but I remember a lot of people were very negative about lightning network back then. The main contentions were that it was not actually trustless and it would create a semi-centralized hierarchy of third parties rather than being p2p, leading to big bank-like actors that could veto your transactions. Has this changed significantly? Just asking because you seem knowledgable

rbanffy 5y ago

> could be equally applied to dollars. It could, but it'd be wrong. What would happen if nobody wanted to buy or receive BTC tomorrow? Some people would be very angry. Now imagine what would happen if the dollar ceased to have any value? Unimaginable, isn't it? Economies would collapse, the whole world would be in disarray.

Geee 5y ago
Economies wouldn't collapse because people can switch to bitcoin. In free markets, people always try to switch to a stronger currency, when their own currency loses value. Bitcoin is volatile, but it's still better than a currency that loses value in long term. Recently, the president of Turkey said that they are in war with Bitcoin. This is exactly what happens when cronies manipulate money supply for their own benefit, but they can't do anything to stop people from choosing a better currency. Cronies get demonetized and finally they lose power. Same thing is happening in Africa in many countries.
- rbanffy 5y ago
  > but it's still better than a currency that loses value in long term. Why would BTC be imune to that?
  - Geee 5y ago
    We know that in a free market, people tend to choose money that has certain properties. Historically, gold has been the best form of money, and it has been chosen by a free market, not by legislation. The most important property of Bitcoin is that it can't be debased arbitrarily, which is similar to gold. Bitcoin can be also easily stored and transferred, which makes it better than gold. So, as long as people keep choosing to use Bitcoin rather than something else, it will also gain or hold its value. It is not immune to losing value, but there has to be even better currency, or it has to be banned. Both of these options might be impossible.
    - rbanffy 5y ago
      I don't think banning it is that implausible. The energy costs of transferring it are not trivial, making small transfers impractical. That cost also makes it politically interesting to suppress it.
      - Geee 5y ago
        The metric of energy per transaction doesn't actually make sense, because there can be almost unlimited number of layer 2 transactions, whether they're on Lightning Network[0] or something else. Most Bitcoin transactions happen already on Lightning Network. Also, the energy used in mining is mostly independent from the number of on-chain transactions. The energy is not used to append new transactions, but to keep the complete transaction history objectively immutable, i.e. the network is designed to defend digital property rights with energy. [0] https://lightning.network https://lightning.network
        voldacar 5y ago
        I've been out of the btc loop since around 2016 but I remember a lot of people were very negative about lightning network back then. The main contentions were that it was not actually trustless and it would create a semi-centralized hierarchy of third parties rather than being p2p, leading to big bank-like actors that could veto your transactions. Has this changed significantly? Just asking because you seem knowledgable