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> and therefore they should be putting their money into Bitcoin as an investment (not to spend). I disagree with this part of the paragraph. Maybe legitimising

> and therefore they should be putting their money into Bitcoin as an investment (not to spend). I disagree with this part of the paragraph. Maybe legitimising Bitcoin was hijacked by cryptobros later on to push their own narrative, but the people who originally got into Bitcoin simply wanted to be an accepted currency for goods and services, nothing more and nothing less.

spookthesunset 5y ago
> Maybe legitimising Bitcoin was hijacked by cryptobros later on to push their own narrative, but the people who originally got into Bitcoin simply wanted to be an accepted currency for goods and services, nothing more and nothing less. I mean the "pay for starbucks using bitcoin" ship sailed, what, 10 years ago? Bitcoin is absolutely nothing more than a giant pump & dump scam. Of course pedants will say "technically it isn't a pump & dump" just like "technically it isn't a pyramid scheme"... Bitcoin might not meet the technical definition of any of those... but it is a scam none the less.
- tata71 5y ago
  Then why aren't the majority of the miners or large wallets selling at all-time highs?
  - divs1210 5y ago
    I used to hold similar views before life-changing events that now have me firmly on the side of BTC and crypto in general. You can't convince them - in their mind, you are part of the "scam", and hence not trustworthy. No point in debating, they will buy in when it clicks for them.
    - suriyaG 5y ago
      I'd love to hear the life-changing events, if possible. Because I've been trying to convince myself that BTC might be good. But I really couldn't find a reason. The "pump and dump" thing is the one that makes most sense right now. I'm open to contrarian ideas.
      - stann 5y ago
        Some things are a little more appealing when you are in a country without a competent Federal Reserve
        tablespoon 5y ago
        > Some things are a little more appealing when you are in a country without a competent Federal Reserve Why bother with Bitcoin, when you can just use money from a country with a competent Federal Reserve? IIRC many countries have "dollarized" (either de jure or de facto).
        bradwood 5y ago
        Simple: there is no country with a competent Federal Reserve (Central Bank)
        tablespoon 5y ago
        > Simple: there is no country with a competent Federal Reserve (Central Bank) Eh, that's pretty obviously untrue under any reasonable definition of "competent Federal Reserve." Now, there are definitely unreasonable an/or extreme ideological definitions under which you could make such a statement (e.g. the most reasonable of these are monomanically overoptimizing to one metric), but those definitions are irrelevant and can be ignored.
        bradwood 5y ago
        > Eh, that's pretty obviously untrue under any reasonable definition of "competent Federal Reserve" It's not obvious. Is any central bank that debases currency through money printing without some kind of fixed peg/ratio to a scarce asset competent? No. This is self-evidently true as, by doing so, they are perniciously taxing the savings of the poor in order to feather the nests of the (asset-)rich. There is no avoiding the truth of this inviolable fact as Cantillion himself described many years ago.
    - arcticbull 5y ago
      > No point in debating, they will buy in when it clicks for them. Sounds like Herbalife to me.
      - throwaway248329 5y ago
        The only way WikiLeaks could accept donations when they were cut off from traditional finance. Yup, sounds like Herbalife.
    - imtringued 5y ago
      >No point in debating, they will buy in when it clicks for them. Yeah, it didn't take long for the aristocracy to click that owning land and passing it onto their heirs for all eternity is good for humanity and the landless peasants are just jealous that they can't abuse their own landless peasants.
      - throwaway248329 5y ago
        Bitcoin is the most egalitarian money ever created. Nobody will ever refuse to sell you Bitcoin because you're a "peasant". And comparing money with land is also incorrect - having Bitcoins in a wallet that you're never going to spend is as useful as having no Bitcoins at all. Unlike land, where you can live, extract resources, grow food, etc.
  - californical 5y ago
    The “greater fool” effect — most of them think the price will continue to rise so they’ll be able to sell it later and make even more money. It has little to do with a bunch of people suddenly believing that Bitcoin has intrinsic value
    - throwaway248329 5y ago
      So, like gold or any other speculative investment?
  - arcticbull 5y ago
    Miners have discovered that by going public they can simply sell shares in their Bitcoin without selling it, making them yet another degenerate ETF. DeFi lending has opened an avenue for old wallets to obtain liquidity without selling. This side-steps both the liquidity issues in BTC and also negative price pressure.
- kkjjkgjjgg 5y ago
  It's a technology, and open source. You could say it is literally the opposite of a scam. Alternatively, you could say everything is a scam. For example the USA is a scam. It only exists because people play along and collectively decide it exists. At most you could argue that tanks would come and force people to play along if they stopped. So is that perhaps your threshold for something not being a scam? What is the minimum number of tanks that stand ready to enforce an idea, to make you call it "not a scam anymore"?
  - BoorishBears 5y ago
    I'm sorry but if the US dollar was deflated at the rate Bitcoin has no one would continue to play along. These kinds of arguments held water when BTC doubled after two years or something, not anymore.
    - kkjjkgjjgg 5y ago
      Clearly people are playing along with Bitcoin, so I don't see your point? I also don't fully understand what you are saying. You mean if dollar would gain in value as fast as Bitcoin, people would stop using dollars?
      - BoorishBears 5y ago
        > You mean if dollar would gain in value as fast as Bitcoin, people would stop using dollars? Yes, did you not realize that?! Are you really rallying this hard against people discarding its economic value without understanding something as basic as deflation? - Deflation is more deadly to a currency than inflation. By far. You reduce interest rates to 0% and then what? You can try negative interest rates, but with the kind of deflation BTC has seen you would need negative triple digit interest rates which is a complete absurdity. You'd probably see the government outlaw physical cash to boot, forcing you to use a bank and forcing the bank to constantly siphon your money if you don't spend it quickly enough. It would be a literal hellscape.
        5y ago
- imtringued 5y ago
  It's not a scam. It's a parody of the USD back when it was on the gold standard. Why is a fixed supply a bad idea for a day to day currency? Just look at Bitcoin. A currency is effectively a public good, it's needed to facilitate trade. People sell stuff for currency and this creates a chain of transactions. If someone saves money beyond what they intend to spend, it's like damming a river. There are less transactions on the other side, in extreme cases no transactions may happen, which means an infinite chain of transactions has been interrupted. If the owner of the dam periodically releases the water (spends the money) then people downstream don't mind it. However, the dam owner may abuse his power and charge these people for the privilege of not having their water drained. (real interest) People get indebted to the dam owner but at least the infinite chain of transactions is no longer interrupted. However, there is a problem with this. The dam owner makes it harder to make a living. Everyone starts building their own dam because it is more profitable than working. Suddenly, there are droughts everywhere even though there is no lack of water in the dams. That's how you get a 30s style depression. It's like panic buying money instead of toilet paper. All these Bitcoin investors are panic buying into it, for whatever (possibly valid) reason. When you think about it, a fixed supply currency is meant to be exclusive for elites that don't want to give up their power. In my opinion we might be in a mini depression (Japan and euro area) since 2008 or maybe even 2001. Our money systems are more flexible than a gold standard, however, pessimistic outlooks prevent banks from lending to small businesses. So you get a lopsided recovery at the top income spectrum where the rich are highly credit worthy and get their shoes kissed by the banks, meanwhile the average person still gets up to 10% interest for a small $10k loan.
  - throwaway248329 5y ago
    >People sell stuff for currency and this creates a chain of transactions. If someone saves money beyond what they intend to spend, it's like damming a river. There are less transactions on the other side, in extreme cases no transactions may happen Please explain how does me not spending money stops others from spending theirs?
    - MrMan 5y ago
      if everyone doesn't spend any money, and incentives encourage hoarding treasure instead of productive work, this is a bad outcome in the aggregate
BobbyJo 5y ago
This was largely based on an implicit technical promise that did not pan out. Bitcoin simply doesn't scale well enough to ever be a functional payment system, certainly not a commonly used one. I doubt any digital currency will ever be performant enough to work like a credit card while being widely adopted, not without some level of centralization, but then why bother?
- imaginator 5y ago
  You might want to look into the Lightning Network - this enables instant payments on top of Bitcoin.
  - arcticbull 5y ago
    It's just a talking point. Only about 2x as many people are using it as 3 years ago, and due to being boat-anchored to the molasses slow L1, it would take 75 years, $500,000,000,000 worth of electricity and all the remaining block reward to open a lightning channel for everyone on earth. Even then its quadratic routing complexity would likely render it completely ineffective long before that many people tried to onboard. It's like a Soviet phone line, if you apply now, you might get a channel before you shuffle off this mortal coil.
    - CallMeJim 5y ago
      So you're against the lightning network because it can't be scaled infinitely? The overall system is just software, and it can be improved. L1 is capable of 4.6 transactions per second. L2 is capable of 25 million per second currently. L3 will be in existence long before getting a channel to every human on Earth becomes a problem (please note that this is something the traditional financial system has also failed to do, despite hundreds of years and legislative support).
      - arcticbull 5y ago
        I’m against it because it’s physically impossible to sign up people in any quantity and doesn’t offer the same guarantees as the L1. We can talk about an L3 when there is one. I've not even got anything against LN per se, what I'm pushing back on is the marketing that it's some sort of panacea, that it makes BTC a viable payment mechanism, or even that its particularly interesting.
roughly 5y ago
> the people who originally got into Bitcoin simply wanted to be an accepted currency for goods and services Unfortunately, they built the currency to be deflationary, so it’s only used for speculation.
- throwaway248329 5y ago
  It's not deflationary, it's inflating at a predetermined rate, gradually getting closer to the 21M cap. The governments are unable to rebase it to fund their wars and propaganda though, so naturally they don't like it.
  - imtringued 5y ago
    Due to technical reasons Bitcoins are lost every day though. There is nothing that keeps the dead Bitcoins moving. So the supply is shrinking over the long term.
    - throwaway248329 5y ago
      Bitcoin custody is getting better every day, so the supply shrinking is not a real, fundamental problem.
      - deleted 5y ago
        [deleted]
  - roughly 5y ago
    Presuming population continues to rise, any currency whose volume does not rise at the same rate is de facto deflationary. Similarly, assuming an increasing supply of goods and services in the market, the same logic applies. It’s possible to have a currency that’s neither deflationary nor inflationary, but Bitcoin is not that.
base698 5y ago
2010: > While this view of Bitcoin might sound like it is a betrayal of Bitcoin's original vision of fully peer‐to‐peer cash, it is not a new vision. Hal Finney, the recipient of the first Bitcoin transaction from Nakamoto, wrote this on the Bitcoin forum in 2010: Actually there is a very good reason for Bitcoin‐backed banks to exist, issuing their own digital cash currency, redeemable for bitcoins. Bitcoin itself cannot scale to have every single financial transaction in the world be broadcast to everyone and included in the block chain. There needs to be a secondary level of payment systems which is lighter weight and more efficient. Likewise, the time needed for Bitcoin transactions to finalize will be impractical for medium to large value purchases. Bitcoin backed banks will solve these problems. They can work like banks did before nationalization of currency. Different banks can have different policies, some more aggressive, some more conservative. Some would be fractional reserve while others may be 100% Bitcoin backed. Interest rates may vary. Cash from some banks may trade at a discount to that from others. George Selgin has worked out the theory of competitive free banking in detail, and he argues that such a system would be stable, inflation resistant and self‐regulating.

spookthesunset 5y ago

> Maybe legitimising Bitcoin was hijacked by cryptobros later on to push their own narrative, but the people who originally got into Bitcoin simply wanted to be an accepted currency for goods and services, nothing more and nothing less. I mean the "pay for starbucks using bitcoin" ship sailed, what, 10 years ago? Bitcoin is absolutely nothing more than a giant pump & dump scam. Of course pedants will say "technically it isn't a pump & dump" just like "technically it isn't a pyramid scheme"... Bitcoin might not meet the technical definition of any of those... but it is a scam none the less.

tata71 5y ago
Then why aren't the majority of the miners or large wallets selling at all-time highs?
- divs1210 5y ago
  I used to hold similar views before life-changing events that now have me firmly on the side of BTC and crypto in general. You can't convince them - in their mind, you are part of the "scam", and hence not trustworthy. No point in debating, they will buy in when it clicks for them.
  - suriyaG 5y ago
    I'd love to hear the life-changing events, if possible. Because I've been trying to convince myself that BTC might be good. But I really couldn't find a reason. The "pump and dump" thing is the one that makes most sense right now. I'm open to contrarian ideas.
    - stann 5y ago
      Some things are a little more appealing when you are in a country without a competent Federal Reserve
      - tablespoon 5y ago
        > Some things are a little more appealing when you are in a country without a competent Federal Reserve Why bother with Bitcoin, when you can just use money from a country with a competent Federal Reserve? IIRC many countries have "dollarized" (either de jure or de facto).
        bradwood 5y ago
        Simple: there is no country with a competent Federal Reserve (Central Bank)
        tablespoon 5y ago
        > Simple: there is no country with a competent Federal Reserve (Central Bank) Eh, that's pretty obviously untrue under any reasonable definition of "competent Federal Reserve." Now, there are definitely unreasonable an/or extreme ideological definitions under which you could make such a statement (e.g. the most reasonable of these are monomanically overoptimizing to one metric), but those definitions are irrelevant and can be ignored.
        bradwood 5y ago
        > Eh, that's pretty obviously untrue under any reasonable definition of "competent Federal Reserve" It's not obvious. Is any central bank that debases currency through money printing without some kind of fixed peg/ratio to a scarce asset competent? No. This is self-evidently true as, by doing so, they are perniciously taxing the savings of the poor in order to feather the nests of the (asset-)rich. There is no avoiding the truth of this inviolable fact as Cantillion himself described many years ago.
  - arcticbull 5y ago
    > No point in debating, they will buy in when it clicks for them. Sounds like Herbalife to me.
    - throwaway248329 5y ago
      The only way WikiLeaks could accept donations when they were cut off from traditional finance. Yup, sounds like Herbalife.
  - imtringued 5y ago
    >No point in debating, they will buy in when it clicks for them. Yeah, it didn't take long for the aristocracy to click that owning land and passing it onto their heirs for all eternity is good for humanity and the landless peasants are just jealous that they can't abuse their own landless peasants.
    - throwaway248329 5y ago
      Bitcoin is the most egalitarian money ever created. Nobody will ever refuse to sell you Bitcoin because you're a "peasant". And comparing money with land is also incorrect - having Bitcoins in a wallet that you're never going to spend is as useful as having no Bitcoins at all. Unlike land, where you can live, extract resources, grow food, etc.
- californical 5y ago
  The “greater fool” effect — most of them think the price will continue to rise so they’ll be able to sell it later and make even more money. It has little to do with a bunch of people suddenly believing that Bitcoin has intrinsic value
  - throwaway248329 5y ago
    So, like gold or any other speculative investment?
- arcticbull 5y ago
  Miners have discovered that by going public they can simply sell shares in their Bitcoin without selling it, making them yet another degenerate ETF. DeFi lending has opened an avenue for old wallets to obtain liquidity without selling. This side-steps both the liquidity issues in BTC and also negative price pressure.
kkjjkgjjgg 5y ago
It's a technology, and open source. You could say it is literally the opposite of a scam. Alternatively, you could say everything is a scam. For example the USA is a scam. It only exists because people play along and collectively decide it exists. At most you could argue that tanks would come and force people to play along if they stopped. So is that perhaps your threshold for something not being a scam? What is the minimum number of tanks that stand ready to enforce an idea, to make you call it "not a scam anymore"?
- BoorishBears 5y ago
  I'm sorry but if the US dollar was deflated at the rate Bitcoin has no one would continue to play along. These kinds of arguments held water when BTC doubled after two years or something, not anymore.
  - kkjjkgjjgg 5y ago
    Clearly people are playing along with Bitcoin, so I don't see your point? I also don't fully understand what you are saying. You mean if dollar would gain in value as fast as Bitcoin, people would stop using dollars?
    - BoorishBears 5y ago
      > You mean if dollar would gain in value as fast as Bitcoin, people would stop using dollars? Yes, did you not realize that?! Are you really rallying this hard against people discarding its economic value without understanding something as basic as deflation? - Deflation is more deadly to a currency than inflation. By far. You reduce interest rates to 0% and then what? You can try negative interest rates, but with the kind of deflation BTC has seen you would need negative triple digit interest rates which is a complete absurdity. You'd probably see the government outlaw physical cash to boot, forcing you to use a bank and forcing the bank to constantly siphon your money if you don't spend it quickly enough. It would be a literal hellscape.
      - 5y ago
imtringued 5y ago
It's not a scam. It's a parody of the USD back when it was on the gold standard. Why is a fixed supply a bad idea for a day to day currency? Just look at Bitcoin. A currency is effectively a public good, it's needed to facilitate trade. People sell stuff for currency and this creates a chain of transactions. If someone saves money beyond what they intend to spend, it's like damming a river. There are less transactions on the other side, in extreme cases no transactions may happen, which means an infinite chain of transactions has been interrupted. If the owner of the dam periodically releases the water (spends the money) then people downstream don't mind it. However, the dam owner may abuse his power and charge these people for the privilege of not having their water drained. (real interest) People get indebted to the dam owner but at least the infinite chain of transactions is no longer interrupted. However, there is a problem with this. The dam owner makes it harder to make a living. Everyone starts building their own dam because it is more profitable than working. Suddenly, there are droughts everywhere even though there is no lack of water in the dams. That's how you get a 30s style depression. It's like panic buying money instead of toilet paper. All these Bitcoin investors are panic buying into it, for whatever (possibly valid) reason. When you think about it, a fixed supply currency is meant to be exclusive for elites that don't want to give up their power. In my opinion we might be in a mini depression (Japan and euro area) since 2008 or maybe even 2001. Our money systems are more flexible than a gold standard, however, pessimistic outlooks prevent banks from lending to small businesses. So you get a lopsided recovery at the top income spectrum where the rich are highly credit worthy and get their shoes kissed by the banks, meanwhile the average person still gets up to 10% interest for a small $10k loan.
- throwaway248329 5y ago
  >People sell stuff for currency and this creates a chain of transactions. If someone saves money beyond what they intend to spend, it's like damming a river. There are less transactions on the other side, in extreme cases no transactions may happen Please explain how does me not spending money stops others from spending theirs?
  - MrMan 5y ago
    if everyone doesn't spend any money, and incentives encourage hoarding treasure instead of productive work, this is a bad outcome in the aggregate

BobbyJo 5y ago

This was largely based on an implicit technical promise that did not pan out. Bitcoin simply doesn't scale well enough to ever be a functional payment system, certainly not a commonly used one. I doubt any digital currency will ever be performant enough to work like a credit card while being widely adopted, not without some level of centralization, but then why bother?

imaginator 5y ago
You might want to look into the Lightning Network - this enables instant payments on top of Bitcoin.
- arcticbull 5y ago
  It's just a talking point. Only about 2x as many people are using it as 3 years ago, and due to being boat-anchored to the molasses slow L1, it would take 75 years, $500,000,000,000 worth of electricity and all the remaining block reward to open a lightning channel for everyone on earth. Even then its quadratic routing complexity would likely render it completely ineffective long before that many people tried to onboard. It's like a Soviet phone line, if you apply now, you might get a channel before you shuffle off this mortal coil.
  - CallMeJim 5y ago
    So you're against the lightning network because it can't be scaled infinitely? The overall system is just software, and it can be improved. L1 is capable of 4.6 transactions per second. L2 is capable of 25 million per second currently. L3 will be in existence long before getting a channel to every human on Earth becomes a problem (please note that this is something the traditional financial system has also failed to do, despite hundreds of years and legislative support).
    - arcticbull 5y ago
      I’m against it because it’s physically impossible to sign up people in any quantity and doesn’t offer the same guarantees as the L1. We can talk about an L3 when there is one. I've not even got anything against LN per se, what I'm pushing back on is the marketing that it's some sort of panacea, that it makes BTC a viable payment mechanism, or even that its particularly interesting.

roughly 5y ago

> the people who originally got into Bitcoin simply wanted to be an accepted currency for goods and services Unfortunately, they built the currency to be deflationary, so it’s only used for speculation.

throwaway248329 5y ago
It's not deflationary, it's inflating at a predetermined rate, gradually getting closer to the 21M cap. The governments are unable to rebase it to fund their wars and propaganda though, so naturally they don't like it.
- imtringued 5y ago
  Due to technical reasons Bitcoins are lost every day though. There is nothing that keeps the dead Bitcoins moving. So the supply is shrinking over the long term.
  - throwaway248329 5y ago
    Bitcoin custody is getting better every day, so the supply shrinking is not a real, fundamental problem.
    - deleted 5y ago
      [deleted]
- roughly 5y ago
  Presuming population continues to rise, any currency whose volume does not rise at the same rate is de facto deflationary. Similarly, assuming an increasing supply of goods and services in the market, the same logic applies. It’s possible to have a currency that’s neither deflationary nor inflationary, but Bitcoin is not that.

base698 5y ago

2010: > While this view of Bitcoin might sound like it is a betrayal of Bitcoin's original vision of fully peer‐to‐peer cash, it is not a new vision. Hal Finney, the recipient of the first Bitcoin transaction from Nakamoto, wrote this on the Bitcoin forum in 2010: Actually there is a very good reason for Bitcoin‐backed banks to exist, issuing their own digital cash currency, redeemable for bitcoins. Bitcoin itself cannot scale to have every single financial transaction in the world be broadcast to everyone and included in the block chain. There needs to be a secondary level of payment systems which is lighter weight and more efficient. Likewise, the time needed for Bitcoin transactions to finalize will be impractical for medium to large value purchases. Bitcoin backed banks will solve these problems. They can work like banks did before nationalization of currency. Different banks can have different policies, some more aggressive, some more conservative. Some would be fractional reserve while others may be 100% Bitcoin backed. Interest rates may vary. Cash from some banks may trade at a discount to that from others. George Selgin has worked out the theory of competitive free banking in detail, and he argues that such a system would be stable, inflation resistant and self‐regulating.