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That's too complicated, the worth of a bitcoin can be defined in the following two ways: 1. the price the last person paid to buy a bitcoin 2. the price the n

by ericls 5y ago

That's too complicated, the worth of a bitcoin can be defined in the following two ways: 1. the price the last person paid to buy a bitcoin 2. the price the next person is willing to pay to buy a bitcoin Until human beings figure out the Truth of the universe or at least the meaning of life, the word "value" means nothing. We don't deserve to use the word "value", because we haven't being able to define it.

tptacek 5y ago
That argument proves too much, obviously.
X6S1x6Okd1st 5y ago
IMO this article actually does hit on something that is frequently missed: the chain is worthless if there are regular re-orgs The chain's security is primarily paid by the block subsidy The block subsidy trends to zero. Either the fees need to increase or the security property falls away and 1 Bitcoin = 2 Bitcoin
- tromp 5y ago
  > The chain's security is primarily paid by the block subsidy > The block subsidy trends to zero. These statements are misleading. As the block subsidy trends to zero, the chain's security will be primarily paid by transaction fees. This will likely happen within two decades, in which the block subsidy will diminish by a factor 2^5 = 32. > Either the fees need to increase or the security property falls away The security will diminish, but not fall away completely as long as bitcoin maintains a constant backlog of high-fee paying transactions.
  - X6S1x6Okd1st 5y ago
    Totally agree, the key insight is that Bitcoin in the limit e.g. 50 years from now will need regular high txn fees to stay secure, we've only seen high txn fees periods twice in 12 years. In the limit Bitcoin either is a chain that you can use for under 60 bucks a txn (two of which are needed for each lighting network channel) and it has meh security or it costs greater than 60 bucks a txn and is like an extra expensive wire txn system and used as financial infra. As long as the problem is somewhere in the future it is in the present because it's all about speculation & speculation depends on future value. There are two other things to think of in this thought experiment: other cryptocurrency, they can set higher subsidy, use different L2 solutions And dark miners. Even if bitcoin's security parameter is stable is it goes down then miners will turn off and try to sell their hardware at a discount. If that happens >50% then there's a persistent threat that a single actor bought it all and is waiting to turn it on.
Osiris 5y ago
I've been seeing a lot of content on the internet talking about what "backs" Bitcoin or why it's worth what it is. No one admits this simple truth that you just did. It worth what someone is willing to pay for it. End of story. Asking WHY someone is willing to pay a certain amount is definitely an interesting question but a very different one.
jeliotj 5y ago
Do humans have to figure out the Truth for it to exist? Words cannot mean nothing or they would not be used. A word has meaning. That is what a word is.
grognak420 5y ago
it costs electricity, bandwidth, computing power, and space to create a Bitcoin

by ericls 5y ago

tptacek 5y ago

That argument proves too much, obviously.

X6S1x6Okd1st 5y ago

IMO this article actually does hit on something that is frequently missed: the chain is worthless if there are regular re-orgs The chain's security is primarily paid by the block subsidy The block subsidy trends to zero. Either the fees need to increase or the security property falls away and 1 Bitcoin = 2 Bitcoin

tromp 5y ago
> The chain's security is primarily paid by the block subsidy > The block subsidy trends to zero. These statements are misleading. As the block subsidy trends to zero, the chain's security will be primarily paid by transaction fees. This will likely happen within two decades, in which the block subsidy will diminish by a factor 2^5 = 32. > Either the fees need to increase or the security property falls away The security will diminish, but not fall away completely as long as bitcoin maintains a constant backlog of high-fee paying transactions.
- X6S1x6Okd1st 5y ago
  Totally agree, the key insight is that Bitcoin in the limit e.g. 50 years from now will need regular high txn fees to stay secure, we've only seen high txn fees periods twice in 12 years. In the limit Bitcoin either is a chain that you can use for under 60 bucks a txn (two of which are needed for each lighting network channel) and it has meh security or it costs greater than 60 bucks a txn and is like an extra expensive wire txn system and used as financial infra. As long as the problem is somewhere in the future it is in the present because it's all about speculation & speculation depends on future value. There are two other things to think of in this thought experiment: other cryptocurrency, they can set higher subsidy, use different L2 solutions And dark miners. Even if bitcoin's security parameter is stable is it goes down then miners will turn off and try to sell their hardware at a discount. If that happens >50% then there's a persistent threat that a single actor bought it all and is waiting to turn it on.

Osiris 5y ago

I've been seeing a lot of content on the internet talking about what "backs" Bitcoin or why it's worth what it is. No one admits this simple truth that you just did. It worth what someone is willing to pay for it. End of story. Asking WHY someone is willing to pay a certain amount is definitely an interesting question but a very different one.

jeliotj 5y ago

Do humans have to figure out the Truth for it to exist? Words cannot mean nothing or they would not be used. A word has meaning. That is what a word is.

grognak420 5y ago

it costs electricity, bandwidth, computing power, and space to create a Bitcoin