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I'm not a fan of Bitcoin but this statement is nonsense. A Bitcoin is worth something because some people are willing to pay for it, just like a car is worth s

I'm not a fan of Bitcoin but this statement is nonsense. A Bitcoin is worth something because some people are willing to pay for it, just like a car is worth something for that same reason. You might say that a car has 'real value' because it can help you to travel from place A to B. But similarly a Bitcoin has real value, at least for some people, because it can help you transfer or store money. One might say that there are better alternatives for Bitcoin, which might make Bitcoin eventually obsolete and worthless. But again similarly, for every car on the market right now, there will be probably a better alternative in the future. It's amazing to hear the chief of ECB make a statement so obviously and fundamentally wrong.

kgwgk 4y ago
> But similarly a Bitcoin has real value, at least for some people, because it can help you transfer or store money. It does that function just as well (not that well, really) at 30’000 dollars per bitcoin as it does at 30’000 bitcoins per dollar.
- tyrfing 4y ago
  With a market cap of $700, you would find that it is very poor at both transferring and storing any value. First of all, you're limited to $700, second, a single computer could attack the network.
  - kgwgk 4y ago
    Fair enough. But even a small amount could suffice if the turnover was fast enough. How many of the circulating bitcoins are used in transactions anyway?
ChuckNorris89 4y ago
>It's amazing to hear the chief of ECB make a statement so obviously and fundamentally wrong. Oh you sweet summer child. Remember when Olaf Scholz said, while he was minister of finance, that the best way to invest is to keep your money in your checking account? Yeah, those are EU politicians and their financial wisdom for you. I'm surprised the EU is still functioning and hasn't yet collapsed with such morons at the helm.
mellavora 4y ago
> I'm not a fan of Bitcoin but this statement is nonsense. Only if you read it as a statement of fact instead of as a policymaker giving hints on their view of the market. key word: policy maker. As in, they could enact policies which push the value towards 0. Yes, limited to EU countries, and even there limited, but it is possible that banking restrictions make it effectively impossible to hold crypto in anything which resembles a bank account (including i.e. Coinbase) which would certainly put a damper on EU demand and would set precedent for other countries.
- RandomLensman 4y ago
  However, European regulators also approved/allowed various investment products related to cryptocurrencies and law makers are creating a framework for markets/services around them (MiCA). So while the ECB might express one view here, I am not sure it is a homogeneous view among policy makers in the EU.
- compsciphd 4y ago
  As a simple police matter. we can track the flow of bitcoin very easily. Imagine we created a law, one is not allowed to interact with any "blacklisted/tainted" account/wallet and any account/wallet that interacts with a blacklisted/tainted account/walletn after its been marked as blacklisted/tainted is automatically blacklisted/tainted itself (easy to determine in bitcoin). I'd hazard to say, that such a policy would have a quick impact on bitcoin's valuation. now, at first glance, this type of law might seem reasonable - if an account has been marked as doing illegal actions, any account that interacts with it is benefiting from said illegal actions. However, this would setup a world of griefers. In bitcoin (I believe) you don't really have the ability to accept or reject transfers. if someone transfers coins to my wallet's address, it will be mine. Imagine someone who gains access to a blacklisted wallet and just transfers tiny amounts to all the addresses that contain massive sums of bitcoin, thereby tainting it all.
orwin 4y ago
Eth and monero are way better at that than btc, actually. Cryptocurrency pricing is based on brand.
- rglullis 4y ago
  Agreed with the first sentence. Ethereum is not about the price of coin, just about its need to power the blockchain. Monero is a better currency than BTC ever will be. Hard disagree on the second. The fact that BTC still is more valuable than others is more due to BTC having first-mover advantage and that there is too much price manipulation going on - Tether being the main culprit. Once Tether blows up, we will see people realizing how worthless BTC actually is.
  - orwin 4y ago
    Okay, maybe i misused the term and didn't explain my point well enough. To me, 'first mover' is like a brand. This help btc pricing, but when the image stop compensate the lack of utility the pricing will go down. Despite my historic of shitting on cryptocurrency, i actually used monero and used the eth Blockchain, I'm really not anti blockchain, i just have a healthy skepticism of cryptocurrency as an investment tool.
dtech 4y ago
Bitcoin only has value to transfer or store money as long as it has value. See problems with that circular logic? If faith in BTC is lost, all its value is also permanently lost. It's even worse since a lot of crypto price is driven due to speculation that it will increase in price. This is a much worse situation than with fiat money, since there is a government and economy backing fiat, e.g. you have to pay taxes in the local fiat if you want to do business in a country. If I magically set the value of BTC to $0.01, it will never recover. If I do the same with €, people will quickly convert to a lot of € to buy things, driving the price back up.
- ur-whale 4y ago
  > Bitcoin only has value to transfer or store money as long as it has value. See problems with that circular logic Same exact logic applies to the Euro, the thing she is in charge of shoving down everyone's throat and competes with BTC.
  - Bubble_Pop_22 4y ago
    At the end of the day it all comes down to what soldiers and military contractors accept as payment for their services. Currencies, like everything are backed by the power of violence. She speaks like that because she knows that the Euro is backed by the power of violence
    - ur-whale 4y ago
      > the Euro is backed by the power of violence Is it though? I'd be willing to agree with that argument for the USD, but the Euro? Apart from a few old firecrackers in french submarines, what violence is Europe capable of exactly these days?
      - Bubble_Pop_22 4y ago
        NATO and being best buddies with the US is important because once you remove the US, then the EU military might is clear when compared to the rest of the world ex US. It's like when Guns n Roses had "Use Your Illusion 1" at #1 and "Use Your Illusion 2" at #2 in the Billboard. #2 feels nice when #1 is also under your umbrella.
okintheory 4y ago
Actually, the explanations for why bitcoin has value coming from different supporters is quite different, e.g. some argue it is useful as a means of payment, some argue it isn't but it will be, some argue it is only useful as a store of value. If you read "The Nature of Money" by George Ingham, you'll see that many economists think of money as something that is simultaneously: (1) A means of payment (2) a unit of account (3) a store of value. And historically, all successful currencies have been backed by a state that created demand for the currency by taxing people in it. Bitcoin is arguably doing very poorly on (1) and (2), which from a historical perspective makes it prospects look very uncertain.
- elefanten 4y ago
  Bitcoin can have value even if it's not money. So, gp's point stands.
  - okintheory 4y ago
    The point was that Lagarde is a complete idiot for saying that Bitcoin has no (future) value? But, a fairly sound argument can be made that this is a plausible prediction, in part on the basis that Bitcoin is likely fail as 'money', which makes its long-term position as a 'store of value' precarious. So, I don't think the point is fair.
- once_inc 4y ago
  To become a Unit of Account, you generally need to become a Means of Payment. To become a Means of Payment, you need to be a store of value. Why would you price a product or service in something without value? Why would you denote all prices in something that nobody is pricing in? Your blanket argument that all successful currencies have been backed by a state is obviously wrong. Gold, Salt, Rai stones, sea shells all had value and were used as currency without governments taxing in them. Rai stones especially are a very interesting use case of money.
  - okintheory 4y ago
    Writing 'state' is arguably inaccurate if you read it as 'nation state', but taxation in gold by city states goes way back to early city states and more generally gold has a very long history of being accepted as payment by governments. I'm not sure about salt. I'm not convinced Rai stones are a meaningful counterpoint -- reading about them they only appear to act as money in a fairly weak and impractical sense. Secondly, I did not say that Bitcoin has to be money to be valuable. Rather that Bitcoin is not likely to be 'money' in any serious way, and this makes the 'store of value' proposition precarious. But I don't think it's inconceivable that bitcoin might still be worth a lot 100 years from now.
ur-whale 4y ago
> It's amazing to hear the chief of ECB make a statement so obviously and fundamentally wrong. It's not. Centralized entities with a govt. enforced monopoly on what they manage simply abhor competition.
grapeskin 4y ago
A car has real value because you can scrap it and sell individual components or the metal itself. Even if asphalt roads all get destroyed tomorrow and driving becomes impossible, there’s intrinsic value in the materials. What happens if there’s a targeted attack against Bitcoin and the network goes down or gets compromised? The only answers I’ve ever heard are “that’s very unlikely to happen”, which is not an answer. Bitcoin proponents then jump to “well, the same can happen with cash!” Which is true. But that’s why having a million in cash isn’t a good idea. Hyperinflation is unlikely, but it does happen. Crypto is the risks of cash amplified, but without the ability to walk to a store or hand a stack to your neighbor in times of need.
- OrderlyTiamat 4y ago
  > What happens if there’s a targeted attack against Bitcoin and the network goes down or gets compromised? The only answers I’ve ever heard are “that’s very unlikely to happen”, which is not an answer. Serting aside the value of bitcoin in particular for the moment, that is a totally reasonable response in my reading. It deconstructs the question instead of answering it (which of course implicitly gives an answer...), but that's totally valid. If it is indeed extremely unlikely to happen, then you shouldn't worry about it. Then the counter is whether or not they're right in that assessment- plus all the other risks and drawbacks of bitcoin as you brought up already.
- AnonHP 4y ago
  Your analogy with the car don’t make sense to me because it doesn’t seem like an apt comparison. I could ask you what you’d do if your car were obliterated by a tsunami or an explosive. There would be no intrinsic value to redeem in that case. Same if the bitcoin network goes down or is compromised.
  - grapeskin 4y ago
    Nothing has any value if it’s completely destroyed and whisked away 3000 miles and to the bottom of the ocean. But you can insure a car and get paid in dollars and provided with a rental car until you purchase a new car if such a disaster does happen. Nobody is paying out insurance claims in bitcoins or for bitcoins—why that is is a total mystery. Truly bizarre that insurance companies steer so far away from crypto.
low_tech_love 4y ago
Bitcoin has value today because people are willing to pay something, but that doesn’t mean it has value, intrinsically, or in the long run. Most of the crypto market is purely speculation, a bunch of people hoping that they will cash out early in the next spike. Don’t get me wrong, they can do whatever the hell they want with their money (including gamble it), but to say it has value, is much more complicated. I’d much rather an ECB boss that is conservative and doesn’t give people poor advice.
- piva00 4y ago
  It only has value because some hundreds of TWh/year are consumed and wasted to prop its transactions. Remove the real-world impact of energy consumption vs rewards and there won't be anything left of value being consumed to prop BTC up, given that Proof-of-Stake (touted as the solution of environmental disaster of cryptocurrencies) won't be ever implemented in that protocol. To be very reductive: it's a Ponzi-like built in burning a lot of electricity to check some random numbers.

kgwgk 4y ago

> But similarly a Bitcoin has real value, at least for some people, because it can help you transfer or store money. It does that function just as well (not that well, really) at 30’000 dollars per bitcoin as it does at 30’000 bitcoins per dollar.

tyrfing 4y ago
With a market cap of $700, you would find that it is very poor at both transferring and storing any value. First of all, you're limited to $700, second, a single computer could attack the network.
- kgwgk 4y ago
  Fair enough. But even a small amount could suffice if the turnover was fast enough. How many of the circulating bitcoins are used in transactions anyway?

ChuckNorris89 4y ago

>It's amazing to hear the chief of ECB make a statement so obviously and fundamentally wrong. Oh you sweet summer child. Remember when Olaf Scholz said, while he was minister of finance, that the best way to invest is to keep your money in your checking account? Yeah, those are EU politicians and their financial wisdom for you. I'm surprised the EU is still functioning and hasn't yet collapsed with such morons at the helm.

mellavora 4y ago

> I'm not a fan of Bitcoin but this statement is nonsense. Only if you read it as a statement of fact instead of as a policymaker giving hints on their view of the market. key word: policy maker. As in, they could enact policies which push the value towards 0. Yes, limited to EU countries, and even there limited, but it is possible that banking restrictions make it effectively impossible to hold crypto in anything which resembles a bank account (including i.e. Coinbase) which would certainly put a damper on EU demand and would set precedent for other countries.

RandomLensman 4y ago
However, European regulators also approved/allowed various investment products related to cryptocurrencies and law makers are creating a framework for markets/services around them (MiCA). So while the ECB might express one view here, I am not sure it is a homogeneous view among policy makers in the EU.
compsciphd 4y ago
As a simple police matter. we can track the flow of bitcoin very easily. Imagine we created a law, one is not allowed to interact with any "blacklisted/tainted" account/wallet and any account/wallet that interacts with a blacklisted/tainted account/walletn after its been marked as blacklisted/tainted is automatically blacklisted/tainted itself (easy to determine in bitcoin). I'd hazard to say, that such a policy would have a quick impact on bitcoin's valuation. now, at first glance, this type of law might seem reasonable - if an account has been marked as doing illegal actions, any account that interacts with it is benefiting from said illegal actions. However, this would setup a world of griefers. In bitcoin (I believe) you don't really have the ability to accept or reject transfers. if someone transfers coins to my wallet's address, it will be mine. Imagine someone who gains access to a blacklisted wallet and just transfers tiny amounts to all the addresses that contain massive sums of bitcoin, thereby tainting it all.

orwin 4y ago

Eth and monero are way better at that than btc, actually. Cryptocurrency pricing is based on brand.

rglullis 4y ago
Agreed with the first sentence. Ethereum is not about the price of coin, just about its need to power the blockchain. Monero is a better currency than BTC ever will be. Hard disagree on the second. The fact that BTC still is more valuable than others is more due to BTC having first-mover advantage and that there is too much price manipulation going on - Tether being the main culprit. Once Tether blows up, we will see people realizing how worthless BTC actually is.
- orwin 4y ago
  Okay, maybe i misused the term and didn't explain my point well enough. To me, 'first mover' is like a brand. This help btc pricing, but when the image stop compensate the lack of utility the pricing will go down. Despite my historic of shitting on cryptocurrency, i actually used monero and used the eth Blockchain, I'm really not anti blockchain, i just have a healthy skepticism of cryptocurrency as an investment tool.

dtech 4y ago

Bitcoin only has value to transfer or store money as long as it has value. See problems with that circular logic? If faith in BTC is lost, all its value is also permanently lost. It's even worse since a lot of crypto price is driven due to speculation that it will increase in price. This is a much worse situation than with fiat money, since there is a government and economy backing fiat, e.g. you have to pay taxes in the local fiat if you want to do business in a country. If I magically set the value of BTC to $0.01, it will never recover. If I do the same with €, people will quickly convert to a lot of € to buy things, driving the price back up.

ur-whale 4y ago
> Bitcoin only has value to transfer or store money as long as it has value. See problems with that circular logic Same exact logic applies to the Euro, the thing she is in charge of shoving down everyone's throat and competes with BTC.
- Bubble_Pop_22 4y ago
  At the end of the day it all comes down to what soldiers and military contractors accept as payment for their services. Currencies, like everything are backed by the power of violence. She speaks like that because she knows that the Euro is backed by the power of violence
  - ur-whale 4y ago
    > the Euro is backed by the power of violence Is it though? I'd be willing to agree with that argument for the USD, but the Euro? Apart from a few old firecrackers in french submarines, what violence is Europe capable of exactly these days?
    - Bubble_Pop_22 4y ago
      NATO and being best buddies with the US is important because once you remove the US, then the EU military might is clear when compared to the rest of the world ex US. It's like when Guns n Roses had "Use Your Illusion 1" at #1 and "Use Your Illusion 2" at #2 in the Billboard. #2 feels nice when #1 is also under your umbrella.

okintheory 4y ago

Actually, the explanations for why bitcoin has value coming from different supporters is quite different, e.g. some argue it is useful as a means of payment, some argue it isn't but it will be, some argue it is only useful as a store of value. If you read "The Nature of Money" by George Ingham, you'll see that many economists think of money as something that is simultaneously: (1) A means of payment (2) a unit of account (3) a store of value. And historically, all successful currencies have been backed by a state that created demand for the currency by taxing people in it. Bitcoin is arguably doing very poorly on (1) and (2), which from a historical perspective makes it prospects look very uncertain.

elefanten 4y ago
Bitcoin can have value even if it's not money. So, gp's point stands.
- okintheory 4y ago
  The point was that Lagarde is a complete idiot for saying that Bitcoin has no (future) value? But, a fairly sound argument can be made that this is a plausible prediction, in part on the basis that Bitcoin is likely fail as 'money', which makes its long-term position as a 'store of value' precarious. So, I don't think the point is fair.
once_inc 4y ago
To become a Unit of Account, you generally need to become a Means of Payment. To become a Means of Payment, you need to be a store of value. Why would you price a product or service in something without value? Why would you denote all prices in something that nobody is pricing in? Your blanket argument that all successful currencies have been backed by a state is obviously wrong. Gold, Salt, Rai stones, sea shells all had value and were used as currency without governments taxing in them. Rai stones especially are a very interesting use case of money.
- okintheory 4y ago
  Writing 'state' is arguably inaccurate if you read it as 'nation state', but taxation in gold by city states goes way back to early city states and more generally gold has a very long history of being accepted as payment by governments. I'm not sure about salt. I'm not convinced Rai stones are a meaningful counterpoint -- reading about them they only appear to act as money in a fairly weak and impractical sense. Secondly, I did not say that Bitcoin has to be money to be valuable. Rather that Bitcoin is not likely to be 'money' in any serious way, and this makes the 'store of value' proposition precarious. But I don't think it's inconceivable that bitcoin might still be worth a lot 100 years from now.

ur-whale 4y ago

> It's amazing to hear the chief of ECB make a statement so obviously and fundamentally wrong. It's not. Centralized entities with a govt. enforced monopoly on what they manage simply abhor competition.

grapeskin 4y ago

A car has real value because you can scrap it and sell individual components or the metal itself. Even if asphalt roads all get destroyed tomorrow and driving becomes impossible, there’s intrinsic value in the materials. What happens if there’s a targeted attack against Bitcoin and the network goes down or gets compromised? The only answers I’ve ever heard are “that’s very unlikely to happen”, which is not an answer. Bitcoin proponents then jump to “well, the same can happen with cash!” Which is true. But that’s why having a million in cash isn’t a good idea. Hyperinflation is unlikely, but it does happen. Crypto is the risks of cash amplified, but without the ability to walk to a store or hand a stack to your neighbor in times of need.

OrderlyTiamat 4y ago
> What happens if there’s a targeted attack against Bitcoin and the network goes down or gets compromised? The only answers I’ve ever heard are “that’s very unlikely to happen”, which is not an answer. Serting aside the value of bitcoin in particular for the moment, that is a totally reasonable response in my reading. It deconstructs the question instead of answering it (which of course implicitly gives an answer...), but that's totally valid. If it is indeed extremely unlikely to happen, then you shouldn't worry about it. Then the counter is whether or not they're right in that assessment- plus all the other risks and drawbacks of bitcoin as you brought up already.
AnonHP 4y ago
Your analogy with the car don’t make sense to me because it doesn’t seem like an apt comparison. I could ask you what you’d do if your car were obliterated by a tsunami or an explosive. There would be no intrinsic value to redeem in that case. Same if the bitcoin network goes down or is compromised.
- grapeskin 4y ago
  Nothing has any value if it’s completely destroyed and whisked away 3000 miles and to the bottom of the ocean. But you can insure a car and get paid in dollars and provided with a rental car until you purchase a new car if such a disaster does happen. Nobody is paying out insurance claims in bitcoins or for bitcoins—why that is is a total mystery. Truly bizarre that insurance companies steer so far away from crypto.

low_tech_love 4y ago

Bitcoin has value today because people are willing to pay something, but that doesn’t mean it has value, intrinsically, or in the long run. Most of the crypto market is purely speculation, a bunch of people hoping that they will cash out early in the next spike. Don’t get me wrong, they can do whatever the hell they want with their money (including gamble it), but to say it has value, is much more complicated. I’d much rather an ECB boss that is conservative and doesn’t give people poor advice.

piva00 4y ago
It only has value because some hundreds of TWh/year are consumed and wasted to prop its transactions. Remove the real-world impact of energy consumption vs rewards and there won't be anything left of value being consumed to prop BTC up, given that Proof-of-Stake (touted as the solution of environmental disaster of cryptocurrencies) won't be ever implemented in that protocol. To be very reductive: it's a Ponzi-like built in burning a lot of electricity to check some random numbers.