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If I were a bank, I'd stay far away from any non-bitcoin cryptos that I'm not an issuer of. Why would I want to own a coin that someone else is able to freely d

If I were a bank, I'd stay far away from any non-bitcoin cryptos that I'm not an issuer of. Why would I want to own a coin that someone else is able to freely devalue, in addition to conventional currencies? On the other hand, if I were a bank, bitcoin presents a compelling argument. The supply is finite. Disclaimer: I don't own any crypto or bitcoin.

dijit 4y ago
>if I were a bank, bitcoin presents a compelling argument. The supply is finite. Do you think that the most important thing about the value of something is the finite supply of it? Fiat currency is theoretically infinite since we abolished the gold standard, but seems to be compelling. Why would bitcoin be more compelling than gold (a finite store of wealth) or fiat currency (a fluctuating/volatile/infinite store of wealth)
- gfodor 4y ago
  You can own both gold and Bitcoin. At a minimum unless you think those who think bitcoin is ultimately worthless are right, it’s a way to diversify a gold-like asset class along the axis they are similar.
  - epolanski 4y ago
    Let's compare a highly valuable and needed metal with 6000+ years of history as a solid investment, with...cryptocurrencies and their proven record of having no real life utility but lots of speculation. Makes sense.
    - defrost 4y ago
      > Let's compare a highly valuable and needed metal with 6000+ years of history as a solid investment Hi, I've worked in the global mineral exploration industry for decades, both as a mine worker, an exploration geophysicist, and as a compiler of a global DB that now backends the S&P mineral intelligence division. Let's clear up some things about gold. 1) It's valuable because it's valued .. That's pretty much it, it's kind of rare, its shiny, it "stands alone" as a noble metal that doesn't easily react. 2) Much needed - it's used in jewellry, it's essential in high end long life zero maintaince space electronics ... a great deal of other uses (Gold Speaker Cables!!) are just pure performative BD (ie. it's not "essential") - other metals are in the same ballpark for conductivity, etc. 3) The greatest single application for gold, once mined at great expense, is to be formed into ingots and sit about as bullion as "proof" of work (digging a super pit and spending > billion to recover it per annum) and proof of wealth. It's more or less solid crypto that persists after the power goes out, can be worn as shiny jewellery, and has some neat niche applications that it is essential for. I'm not a huge cyrpto fan, although I did hang on the cypher punk boards where the bitcoin paper was first announced (as I have a math background) - I'm no fan of the vast amount of energy wasted (IMHO) on both gold extraction and bitcoin mining.
      - epolanski 4y ago
        I don't understand how does that relates to calling a cryptocurrency a gold-like asset. There's nothing in the world with such a long history of a solid investment that goes back to ancient times on a global scale.
        Ferret7446 4y ago
        They're saying that gold is a cryptocurrency-like asset. Gold's value is primarily that looks cool and it serves as proof of work: the work of finding, mining, and processing it. So basically, cryptocurrency (i.e. proof of work limited shiny token) has "a long history of a solid investment that goes back to ancient times on a global scale"
        epolanski 4y ago
        Gold's value stems from its unique properties as a metal and of its scarcicity.
        hem777 4y ago
        Bitcoin’s value stems from its unique properties as a digital network and of its scarcity.
        xigoi 4y ago
        What would those unique properties be?
        hem777 4y ago
        Permissionless, as in don’t need anyone’s approval and anyone can participate, transfer of value backed by trustless, as in don’t need to trust anyone’s word for it, global consensus system.
        epolanski 4y ago
    - gfodor 4y ago
      Your sarcastic reply was unnecessary, if you read my post you’ll see I carved out the case you’re talking about. Time will tell. If you can’t see literally any axis along which Bitcoin and gold are comparable, then I can’t really help you. It’s obvious there are some ways the two are comparable, even if you think these comparisons are weak or ultimately insufficient to hold up the price.
- tnel77 4y ago
  I personally find Bitcoin much easier to send to family than a chunk of gold, and Bitcoin’s block reward results in a far more favorable inflation rate than many currencies. There’s more to money than these two aspects, but they are IMO solid positives for Bitcoin.
  - xwdv 4y ago
    What would a family even do with bitcoin or a chunk of gold?
    - strangattractor 4y ago
      Chunk of gold - go down to the local gold broker pay a fee to get dollars. Bitcoin - pay a fee to get it exchanged for dollars so that you can buy something before it loses it's value ($60K -> $17K). Or just use dollars.
      - tnel77 4y ago
        What if they were on the other side of the bull run where it went $3.5k -> $65k? Why only focus on the maximum loss scenario?
        phs318u 4y ago
        That would arguably feel worse for the sender. "I did what?!" No thanks :)
        jevgeni 4y ago
        Yes, let's focus on the *positive* returns of Enron, you guys.
        strangattractor 4y ago
        They likely saw the $65K and listened to all the people that said it was going to $100K and never sold - watching it plummet. The "what if" scenario is pretty useless considering the entire point of any currency is to maintain value - which allows the predictable purchase of things creating an efficient market. One of the original arguments for BitCoin was that it would maintain it's value during inflationary periods - clearly something it has not achieved. The justification for BitCoin seems to be a moving target - depending on whatever the perceived problems are - Dr BitCoin's economic cure all.
- strangattractor 4y ago
  You seem to be forgetting the hard forks of bitcoin. https://www.investopedia.com/tech/history-bitcoin-hard-forks/ https://www.investopedia.com/tech/history-bitcoin-hard-forks... Creating new digital currencies is also rampant. It seems to me that a finite representation of the current wealth of the economy (the money in circulation) is not even desirable. New things are being created all the time that increase that wealth. It seems reasonable to be able to adjust the amount of currency in circulation to reflect that.
- britneybitch 4y ago
  I think he means the compelling aspect is its fixed monetary policy. Gold deposits can be discovered (Uganda) or asteroids mined. Governments actively change their monetary policy. But bitcoin, for the first time in history, sets monetary policy in stone and gives all participants perfect information (in the game theoretic sense). I'm not saying that's overall good or bad, but it certainly makes predicting the future easier!
  - acdha 4y ago
    > But bitcoin, for the first time in history, sets monetary policy in stone and gives all participants perfect information This is as true as saying that the United States Department of Treasury sets the supply of dollars in stone. Bitcoin is as fixed as the relatively small number of parties who run the network want it to be. If enough of them wanted to fork it, remove the deflationary model, change their rewards, etc. most users would be dragged along for the ride because there’s no anchor.
    - fyloraspit 4y ago
      What would be the shared motive for any of that tho? Like considering the requirements for forking (and the likely crash / loss of value) does that not present more of an anchor than most / all fiat systems which are regularly debased?
      - acdha 4y ago
        Say the mining rewards fall off as planned and electricity prices go up. What percentage of miners is going to stand up for purity of the original vision versus voting for them to make more money? As we’ve seen so many times already, wasting lots of resources doesn’t make cryptocurrency middlemen any less tempted to abuse their positions, there’s nothing like the democratic accountability which keeps most sovereign currencies more stable than Bitcoin, and every major holder knows that they’re holding the weakest fiat currency and will only profit if they cash out ahead of everyone else.
  - legutierr 4y ago
- bonestamp2 4y ago
  Nobody said it would be more compelling than gold or fiat. Even if it's less compelling than both, banks still like to diversify.
  - danaris 4y ago
    ....Actually, lots of people have been saying cryptocurrency is or would be more compelling than gold or fiat for several years now, and deriding those of us who disagreed with phrasing like "how do you like being poor?"
eli 4y ago
Lol a compelling argument for what? Like as an investment?
- 93po 4y ago
  Compelling against the US dollar which is "printed" by the trillions and is constantly losing value based on arbitrary decisions of people with effectively no accountability
  - Nursie 4y ago
    Good job nobody's advising you to invest in dollars then! FYI the 'trillions printed in the last two years!' line is a meme, not a reality, and those running the currency are accountable democratically, in a way that cryptobros are not.
    - hem777 4y ago
      Those running crypto networks are accountable legally. Those running the currency are not.
      - Nursie 4y ago
        I think you have that backwards. Those running the currency are accountable to the democratic system of the countries they operate within, even if they are not directly elected. Those running Bitcoin mining and nodes are accountable to nobody.
      - oblio 4y ago
        > Those running crypto networks are accountable legally. How? Aren't 99% of cryptocurrencies unregulated, ergo Ponzi schemes, pump and dump, trades by the same (hidden) identity? That's also a feature why a lot of people and finance institutions are drawn to them. Plus, did anyone take to account Ethereum, for example, for forking it?
    - 93po 4y ago
      > those running the currency are accountable democratically Except they can't be fired, and there's absolutely zero pressure for a presidential candidate/sitting president to hold this person accountable.
epolanski 4y ago
How being the supply finite is relevant? This idea that being scarce implies value makes no sense. You realize we can go on github and setup a bitcoin network too, we call it BitcoinYC, our coins have the same properties of bitcoins, why would that have a value? Please repeat with me: - currencies (wheter fiat or crypto) have no value. You can't do anything with them, maybe watch dead national heroes printed or them. They hold no assets and don't generate value. - Currencies have a price though, in other currencies, assets or services. E.g. Both usd and bitcoin are worthless but both have prices set by demand vs supply - scarcicity does not mean value. Intrinsic value means value. E.g. water has tremendous value but low price. Gold has tremendous value and price. A car has some value, a business has a value. But currencies only have a price.
- wayeq 4y ago
  > - currencies (wheter fiat or crypto) have no value. You can't do anything with them You can pay taxes to stay out of jail with fiat, which seems desirable.
  - jbverschoor 4y ago
    Don’t need to pay taxes if you don’t earn or own anything
  - epolanski 4y ago
    The example you've chosen reiterates that currencies have a price (letting you out), not a value. If you had only Deutsche Marks to pay would that help you avoid prison? No. Because they have no value, same as USD, on top of that, they have no price either because there's no demand for Deutsche Marks.
    - anonkogudhyfhhf 4y ago
      We should get rid of them since they have no value. Personally I like them because they facilitate trade and finance on a global, immense scale and allow for decentralised price discovery and information distribution. But then does trade and finance have value? ..wait maybe money networks do have value
threeseed 4y ago
> if I were a bank, bitcoin presents a compelling argument. The supply is finite. I've worked at a number of banks now and what keeps them up at night isn't how much money they could make or what competitive technologies like Bitcoin are doing. It's their ability to consistently operate with the increasingly tight regulatory guard-rails imposed by the government. And Bitcoin's incompatibility with KYC and AML regulations render it unpalatable for most financial organisations.
- orangepurple 4y ago
  So many financial institutions use Watchtower for their risk assessment framework and I think they are adding crypto risk management to their portfolio
willhslade 4y ago
Water is finite
- jononomo 4y ago
  grains of sand are finite
- bufferoverflow 4y ago
  Not in any practical sense. There's enough water in the universe to have a whole private solar system made entirely out of water for every single human.
  - acdha 4y ago
    What you’re describing is hypothetical. Following the dictionary definition of practical, our supply of water is limited to what we can actually use — and since people usually want fresh water, that means it’s limited to the point where there have been many conflicts over it.
ww520 4y ago
> if I were a bank, bitcoin presents a compelling argument. Banks don't make money by owning assets. That's not their business model.
- givemeethekeys 4y ago
  Good point. Catering to crypto or bitcoin firms is not the same as buying / lending crypto.
- Ekaros 4y ago
  And more importantly their model is actually build on currency not being finite. Transactions make only so much money. Making loans that is non-finite money scales much higher.
toinewx 4y ago
> The supply is finite Until It isn't. Miners will one day decide to hardfork bitcoin to increases the mining rewards, hence increasing the supply. They will of course need to prepare the narrative, and say "it is for the good of bitcoin". It might be in 10 years, or in 50 years. But on a long enough time-scale, you can be sure of one thing: Bitcoin will change, because it's man-made and because it's mutable/forkable.
- tnel77 4y ago
  Has that worked in the past? While they could obviously create their own fork, they can’t force people to actually use it.
  - toinewx 4y ago
    [flagged]
  - root_axis 4y ago
    It's entirely political. The miners and related business interests that profit off of bitcoin have a lot of influence and a lot of clear incentives, but any message signed by Satoshi could completely alter the direction of bitcoin.
  - pcthrowaway 4y ago
    I hadn't really considered this before, but I think there's a good chance they'll do something to increase their take-home if bitcoin becomes cheap enough relative to the mining reward that its security becomes threatened. Right now there are lots of people mining bitcoin at a paper loss due to speculation. If they go out of business after a few years, or are forced to sell because "number goes up" doesn't happen, there will be an exodus of mining power, which could then lead to the Bitcoin network being vulnerable to double spend attacks (these have already happened a number of time on networks with less hash power, like Ethereum Classic [not ethereum]) If double spends looked imminent, or started occuring, I think it would make sense to fork to increase the block reward. Of course, bitcoin has forked before and it becomes a political issue. Personally, the big block wars (and subsequent Bitcoin Cash split) was where I got off the Bitcoin train. But if a fork happened, and the network that didn't adopt the higher block reward started getting 51% attacked, I do think people would move over to the new network (and that would become "bitcoin")
simple-thoughts 4y ago
Why would a bank use Bitcoin instead of forking it? If a bank uses Bitcoin, they are buying out the early holders who got in cheap. They’d be better if with a fork - plus they can fix a lot of issues with scaling, cost, and energy usage.
bawolff 4y ago
> On the other hand, if I were a bank, bitcoin presents a compelling argument. The supply is finite. Finiteness is a neccesary but not sufficient condition for something to be valuable. Lots of things are finite that are stupid investments. Its not like banks are investing in vintage comic books.
- wardedVibe 4y ago
  Finiteness is not even necessary for value (ideas being the go-to example). Its necessary for a price (actually non-finite things are free, assuming they're produced in a free market).
  - bawolff 4y ago
    I don't know that ideas are really the best example. Most of the valuable ones (in the money-sense) are valuable more due to the person attached to them, and their ability to implement the idea or improve on it.
Nursie 4y ago
> On the other hand, if I were a bank, bitcoin presents a compelling argument. The supply is finite. The supply of most cryptocurrencies is finite. That in itself is completely meaningless. > Disclaimer: I don't own any crypto or bitcoin. Nor have you read about many of them, then? 'finite' bitcoin is also only finite by consensus, as are all the rules around it. As emission continues to decline, it's entirely possible the ecosystem could change the rules. And that's before we talk about what 'finite' means in the context of forks, be they source-code forks that spin up a new chain with an all-new supply of pretty much the exact same thing, or chain forks that instantly create new cryptocurrencies with the same history as the existing one.
kybernetikos 4y ago
I'd stay away from BTC too, its poor environmental effects invite regulation and they have no plan to pay for chain security in a way that scales as issuance drops off. If you like the "limited supply" thing (I don't) you might be interested to know that other chains exist that can even have negative issuance, and while there is a plan to eventually stop issuing BTC, right now the supply of BTC is actually increasing (1.72% at the moment i think). Ultimately if you want people to hold your cryptocurrency as a store of value rather than spend it, and you are using an expensive means like POW to secure the chain, then its going to be difficult to pay for securing the chain just with transaction fees, calling the whole "limited supply" thing into question. If you don't have issuance then the cost of securing the chain for all the people with value on the chain is an externality bourne entirely by those making transactions. Unless you have a plan to keep demand for transacting extremely high then the chain is unsustainable.
- paulgb 4y ago
  Yep. To put some numbers on this, transaction fees are currently about 1% of the block reward[1]. As of the next halving next year, transaction fees would have to grow by 50x to make up for the lower block reward. Bitcoiners I talk to either haven’t gamed out the long term, plan to sell before then, or have some wishy-washy story about how Coinbase et al. will mine as a loss leader to keep the industry running. 1: https://bitinfocharts.com/comparison/fee_to_reward-btc.html#3m https://bitinfocharts.com/comparison/fee_to_reward-btc.html#...
  - miracle2k 4y ago
    Coinbase mining at a loss makes it more difficult for other miners to turn a profit? The profits for miners = the security budget. The chain will work fine regardless, it's just less secure.
    - paulgb 4y ago
      I think the idea is that if big institutional holders like Coinbase subsidize mining at a loss, the for-profit miners become less necessary. To be clear, I'm not defending this theory, it's just the most reasonable theory I've heard. As it happens, mining is currently also subsidized by a bunch of retail investors flocking into the publicly traded miners, given that most of them are currently losing money per coin on a unit basis once hardware depreciation is factored in.
1vuio0pswjnm7 4y ago
You're a bank. Three of your regulators (a) Board of Governors of the Federal Reserve System (b) Federal Deposit Insurance Corporation (c) Office of the Comptroller of the Currency release a "Joint Statement on Crypto-Asset Risks to Banking Organizations". It contains the following text: "Based on the agencies current understanding and experience to date, the agencies believe that issuing or holding as principal crypto-assets that are issued, stored, or transferred on an open, public, and/or decentralized network, or similar system is highly likely to be inconsistent with safe and sound banking practices. Further, the agencies have significant safety and soundness concerns with business models that are concentrated in crypto-asset-related activities or have concentrated exposures to the crypto-asset sector." The Joint Statement is dated January 3, 2023. So, after this warning, what's your next move. (This thread is hilarious. The title has now changed twice.)
- givemeethekeys 4y ago
  Rake in the $$ at the risk of paying a small fine?
- kybernetikos 4y ago
  I was about to thank you for an interesting hypothetical, but then I did a quick search. Here's the link for anyone else who was wondering. https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20230103a1.pdf https://www.federalreserve.gov/newsevents/pressreleases/file...
tromp 4y ago
> The supply is finite. Finite supply is overrated [1]. [1] https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153 https://john-tromp.medium.com/a-case-for-using-soft-total-su...
edem 4y ago
> Why would I want to own a coin that someone else is able to freely devalue The same stands for USD and any other fiat currency. All of which are being debased right now.

dijit 4y ago

>if I were a bank, bitcoin presents a compelling argument. The supply is finite. Do you think that the most important thing about the value of something is the finite supply of it? Fiat currency is theoretically infinite since we abolished the gold standard, but seems to be compelling. Why would bitcoin be more compelling than gold (a finite store of wealth) or fiat currency (a fluctuating/volatile/infinite store of wealth)

gfodor 4y ago
You can own both gold and Bitcoin. At a minimum unless you think those who think bitcoin is ultimately worthless are right, it’s a way to diversify a gold-like asset class along the axis they are similar.
- epolanski 4y ago
  Let's compare a highly valuable and needed metal with 6000+ years of history as a solid investment, with...cryptocurrencies and their proven record of having no real life utility but lots of speculation. Makes sense.
  - defrost 4y ago
    > Let's compare a highly valuable and needed metal with 6000+ years of history as a solid investment Hi, I've worked in the global mineral exploration industry for decades, both as a mine worker, an exploration geophysicist, and as a compiler of a global DB that now backends the S&P mineral intelligence division. Let's clear up some things about gold. 1) It's valuable because it's valued .. That's pretty much it, it's kind of rare, its shiny, it "stands alone" as a noble metal that doesn't easily react. 2) Much needed - it's used in jewellry, it's essential in high end long life zero maintaince space electronics ... a great deal of other uses (Gold Speaker Cables!!) are just pure performative BD (ie. it's not "essential") - other metals are in the same ballpark for conductivity, etc. 3) The greatest single application for gold, once mined at great expense, is to be formed into ingots and sit about as bullion as "proof" of work (digging a super pit and spending > billion to recover it per annum) and proof of wealth. It's more or less solid crypto that persists after the power goes out, can be worn as shiny jewellery, and has some neat niche applications that it is essential for. I'm not a huge cyrpto fan, although I did hang on the cypher punk boards where the bitcoin paper was first announced (as I have a math background) - I'm no fan of the vast amount of energy wasted (IMHO) on both gold extraction and bitcoin mining.
    - epolanski 4y ago
      I don't understand how does that relates to calling a cryptocurrency a gold-like asset. There's nothing in the world with such a long history of a solid investment that goes back to ancient times on a global scale.
      - Ferret7446 4y ago
        They're saying that gold is a cryptocurrency-like asset. Gold's value is primarily that looks cool and it serves as proof of work: the work of finding, mining, and processing it. So basically, cryptocurrency (i.e. proof of work limited shiny token) has "a long history of a solid investment that goes back to ancient times on a global scale"
        epolanski 4y ago
        Gold's value stems from its unique properties as a metal and of its scarcicity.
        hem777 4y ago
        Bitcoin’s value stems from its unique properties as a digital network and of its scarcity.
        xigoi 4y ago
        What would those unique properties be?
        hem777 4y ago
        Permissionless, as in don’t need anyone’s approval and anyone can participate, transfer of value backed by trustless, as in don’t need to trust anyone’s word for it, global consensus system.
        epolanski 4y ago
  - gfodor 4y ago
    Your sarcastic reply was unnecessary, if you read my post you’ll see I carved out the case you’re talking about. Time will tell. If you can’t see literally any axis along which Bitcoin and gold are comparable, then I can’t really help you. It’s obvious there are some ways the two are comparable, even if you think these comparisons are weak or ultimately insufficient to hold up the price.
tnel77 4y ago
I personally find Bitcoin much easier to send to family than a chunk of gold, and Bitcoin’s block reward results in a far more favorable inflation rate than many currencies. There’s more to money than these two aspects, but they are IMO solid positives for Bitcoin.
- xwdv 4y ago
  What would a family even do with bitcoin or a chunk of gold?
  - strangattractor 4y ago
    Chunk of gold - go down to the local gold broker pay a fee to get dollars. Bitcoin - pay a fee to get it exchanged for dollars so that you can buy something before it loses it's value ($60K -> $17K). Or just use dollars.
    - tnel77 4y ago
      What if they were on the other side of the bull run where it went $3.5k -> $65k? Why only focus on the maximum loss scenario?
      - phs318u 4y ago
        That would arguably feel worse for the sender. "I did what?!" No thanks :)
      - jevgeni 4y ago
        Yes, let's focus on the *positive* returns of Enron, you guys.
      - strangattractor 4y ago
        They likely saw the $65K and listened to all the people that said it was going to $100K and never sold - watching it plummet. The "what if" scenario is pretty useless considering the entire point of any currency is to maintain value - which allows the predictable purchase of things creating an efficient market. One of the original arguments for BitCoin was that it would maintain it's value during inflationary periods - clearly something it has not achieved. The justification for BitCoin seems to be a moving target - depending on whatever the perceived problems are - Dr BitCoin's economic cure all.
strangattractor 4y ago
You seem to be forgetting the hard forks of bitcoin. https://www.investopedia.com/tech/history-bitcoin-hard-forks/ https://www.investopedia.com/tech/history-bitcoin-hard-forks... Creating new digital currencies is also rampant. It seems to me that a finite representation of the current wealth of the economy (the money in circulation) is not even desirable. New things are being created all the time that increase that wealth. It seems reasonable to be able to adjust the amount of currency in circulation to reflect that.
britneybitch 4y ago
I think he means the compelling aspect is its fixed monetary policy. Gold deposits can be discovered (Uganda) or asteroids mined. Governments actively change their monetary policy. But bitcoin, for the first time in history, sets monetary policy in stone and gives all participants perfect information (in the game theoretic sense). I'm not saying that's overall good or bad, but it certainly makes predicting the future easier!
- acdha 4y ago
  > But bitcoin, for the first time in history, sets monetary policy in stone and gives all participants perfect information This is as true as saying that the United States Department of Treasury sets the supply of dollars in stone. Bitcoin is as fixed as the relatively small number of parties who run the network want it to be. If enough of them wanted to fork it, remove the deflationary model, change their rewards, etc. most users would be dragged along for the ride because there’s no anchor.
  - fyloraspit 4y ago
    What would be the shared motive for any of that tho? Like considering the requirements for forking (and the likely crash / loss of value) does that not present more of an anchor than most / all fiat systems which are regularly debased?
    - acdha 4y ago
      Say the mining rewards fall off as planned and electricity prices go up. What percentage of miners is going to stand up for purity of the original vision versus voting for them to make more money? As we’ve seen so many times already, wasting lots of resources doesn’t make cryptocurrency middlemen any less tempted to abuse their positions, there’s nothing like the democratic accountability which keeps most sovereign currencies more stable than Bitcoin, and every major holder knows that they’re holding the weakest fiat currency and will only profit if they cash out ahead of everyone else.
- legutierr 4y ago
bonestamp2 4y ago
Nobody said it would be more compelling than gold or fiat. Even if it's less compelling than both, banks still like to diversify.
- danaris 4y ago
  ....Actually, lots of people have been saying cryptocurrency is or would be more compelling than gold or fiat for several years now, and deriding those of us who disagreed with phrasing like "how do you like being poor?"

eli 4y ago

Lol a compelling argument for what? Like as an investment?

93po 4y ago
Compelling against the US dollar which is "printed" by the trillions and is constantly losing value based on arbitrary decisions of people with effectively no accountability
- Nursie 4y ago
  Good job nobody's advising you to invest in dollars then! FYI the 'trillions printed in the last two years!' line is a meme, not a reality, and those running the currency are accountable democratically, in a way that cryptobros are not.
  - hem777 4y ago
    Those running crypto networks are accountable legally. Those running the currency are not.
    - Nursie 4y ago
      I think you have that backwards. Those running the currency are accountable to the democratic system of the countries they operate within, even if they are not directly elected. Those running Bitcoin mining and nodes are accountable to nobody.
    - oblio 4y ago
      > Those running crypto networks are accountable legally. How? Aren't 99% of cryptocurrencies unregulated, ergo Ponzi schemes, pump and dump, trades by the same (hidden) identity? That's also a feature why a lot of people and finance institutions are drawn to them. Plus, did anyone take to account Ethereum, for example, for forking it?
  - 93po 4y ago
    > those running the currency are accountable democratically Except they can't be fired, and there's absolutely zero pressure for a presidential candidate/sitting president to hold this person accountable.

epolanski 4y ago

How being the supply finite is relevant? This idea that being scarce implies value makes no sense. You realize we can go on github and setup a bitcoin network too, we call it BitcoinYC, our coins have the same properties of bitcoins, why would that have a value? Please repeat with me: - currencies (wheter fiat or crypto) have no value. You can't do anything with them, maybe watch dead national heroes printed or them. They hold no assets and don't generate value. - Currencies have a price though, in other currencies, assets or services. E.g. Both usd and bitcoin are worthless but both have prices set by demand vs supply - scarcicity does not mean value. Intrinsic value means value. E.g. water has tremendous value but low price. Gold has tremendous value and price. A car has some value, a business has a value. But currencies only have a price.

wayeq 4y ago
> - currencies (wheter fiat or crypto) have no value. You can't do anything with them You can pay taxes to stay out of jail with fiat, which seems desirable.
- jbverschoor 4y ago
  Don’t need to pay taxes if you don’t earn or own anything
- epolanski 4y ago
  The example you've chosen reiterates that currencies have a price (letting you out), not a value. If you had only Deutsche Marks to pay would that help you avoid prison? No. Because they have no value, same as USD, on top of that, they have no price either because there's no demand for Deutsche Marks.
  - anonkogudhyfhhf 4y ago
    We should get rid of them since they have no value. Personally I like them because they facilitate trade and finance on a global, immense scale and allow for decentralised price discovery and information distribution. But then does trade and finance have value? ..wait maybe money networks do have value

threeseed 4y ago

> if I were a bank, bitcoin presents a compelling argument. The supply is finite. I've worked at a number of banks now and what keeps them up at night isn't how much money they could make or what competitive technologies like Bitcoin are doing. It's their ability to consistently operate with the increasingly tight regulatory guard-rails imposed by the government. And Bitcoin's incompatibility with KYC and AML regulations render it unpalatable for most financial organisations.

orangepurple 4y ago
So many financial institutions use Watchtower for their risk assessment framework and I think they are adding crypto risk management to their portfolio

willhslade 4y ago

Water is finite

jononomo 4y ago
grains of sand are finite
bufferoverflow 4y ago
Not in any practical sense. There's enough water in the universe to have a whole private solar system made entirely out of water for every single human.
- acdha 4y ago
  What you’re describing is hypothetical. Following the dictionary definition of practical, our supply of water is limited to what we can actually use — and since people usually want fresh water, that means it’s limited to the point where there have been many conflicts over it.

ww520 4y ago

> if I were a bank, bitcoin presents a compelling argument. Banks don't make money by owning assets. That's not their business model.

givemeethekeys 4y ago
Good point. Catering to crypto or bitcoin firms is not the same as buying / lending crypto.
Ekaros 4y ago
And more importantly their model is actually build on currency not being finite. Transactions make only so much money. Making loans that is non-finite money scales much higher.

toinewx 4y ago

> The supply is finite Until It isn't. Miners will one day decide to hardfork bitcoin to increases the mining rewards, hence increasing the supply. They will of course need to prepare the narrative, and say "it is for the good of bitcoin". It might be in 10 years, or in 50 years. But on a long enough time-scale, you can be sure of one thing: Bitcoin will change, because it's man-made and because it's mutable/forkable.

tnel77 4y ago
Has that worked in the past? While they could obviously create their own fork, they can’t force people to actually use it.
- toinewx 4y ago
  [flagged]
- root_axis 4y ago
  It's entirely political. The miners and related business interests that profit off of bitcoin have a lot of influence and a lot of clear incentives, but any message signed by Satoshi could completely alter the direction of bitcoin.
- pcthrowaway 4y ago
  I hadn't really considered this before, but I think there's a good chance they'll do something to increase their take-home if bitcoin becomes cheap enough relative to the mining reward that its security becomes threatened. Right now there are lots of people mining bitcoin at a paper loss due to speculation. If they go out of business after a few years, or are forced to sell because "number goes up" doesn't happen, there will be an exodus of mining power, which could then lead to the Bitcoin network being vulnerable to double spend attacks (these have already happened a number of time on networks with less hash power, like Ethereum Classic [not ethereum]) If double spends looked imminent, or started occuring, I think it would make sense to fork to increase the block reward. Of course, bitcoin has forked before and it becomes a political issue. Personally, the big block wars (and subsequent Bitcoin Cash split) was where I got off the Bitcoin train. But if a fork happened, and the network that didn't adopt the higher block reward started getting 51% attacked, I do think people would move over to the new network (and that would become "bitcoin")

simple-thoughts 4y ago

Why would a bank use Bitcoin instead of forking it? If a bank uses Bitcoin, they are buying out the early holders who got in cheap. They’d be better if with a fork - plus they can fix a lot of issues with scaling, cost, and energy usage.

bawolff 4y ago

> On the other hand, if I were a bank, bitcoin presents a compelling argument. The supply is finite. Finiteness is a neccesary but not sufficient condition for something to be valuable. Lots of things are finite that are stupid investments. Its not like banks are investing in vintage comic books.

wardedVibe 4y ago
Finiteness is not even necessary for value (ideas being the go-to example). Its necessary for a price (actually non-finite things are free, assuming they're produced in a free market).
- bawolff 4y ago
  I don't know that ideas are really the best example. Most of the valuable ones (in the money-sense) are valuable more due to the person attached to them, and their ability to implement the idea or improve on it.

Nursie 4y ago

> On the other hand, if I were a bank, bitcoin presents a compelling argument. The supply is finite. The supply of most cryptocurrencies is finite. That in itself is completely meaningless. > Disclaimer: I don't own any crypto or bitcoin. Nor have you read about many of them, then? 'finite' bitcoin is also only finite by consensus, as are all the rules around it. As emission continues to decline, it's entirely possible the ecosystem could change the rules. And that's before we talk about what 'finite' means in the context of forks, be they source-code forks that spin up a new chain with an all-new supply of pretty much the exact same thing, or chain forks that instantly create new cryptocurrencies with the same history as the existing one.

kybernetikos 4y ago

I'd stay away from BTC too, its poor environmental effects invite regulation and they have no plan to pay for chain security in a way that scales as issuance drops off. If you like the "limited supply" thing (I don't) you might be interested to know that other chains exist that can even have negative issuance, and while there is a plan to eventually stop issuing BTC, right now the supply of BTC is actually increasing (1.72% at the moment i think). Ultimately if you want people to hold your cryptocurrency as a store of value rather than spend it, and you are using an expensive means like POW to secure the chain, then its going to be difficult to pay for securing the chain just with transaction fees, calling the whole "limited supply" thing into question. If you don't have issuance then the cost of securing the chain for all the people with value on the chain is an externality bourne entirely by those making transactions. Unless you have a plan to keep demand for transacting extremely high then the chain is unsustainable.

paulgb 4y ago
Yep. To put some numbers on this, transaction fees are currently about 1% of the block reward[1]. As of the next halving next year, transaction fees would have to grow by 50x to make up for the lower block reward. Bitcoiners I talk to either haven’t gamed out the long term, plan to sell before then, or have some wishy-washy story about how Coinbase et al. will mine as a loss leader to keep the industry running. 1: https://bitinfocharts.com/comparison/fee_to_reward-btc.html#3m https://bitinfocharts.com/comparison/fee_to_reward-btc.html#...
- miracle2k 4y ago
  Coinbase mining at a loss makes it more difficult for other miners to turn a profit? The profits for miners = the security budget. The chain will work fine regardless, it's just less secure.
  - paulgb 4y ago
    I think the idea is that if big institutional holders like Coinbase subsidize mining at a loss, the for-profit miners become less necessary. To be clear, I'm not defending this theory, it's just the most reasonable theory I've heard. As it happens, mining is currently also subsidized by a bunch of retail investors flocking into the publicly traded miners, given that most of them are currently losing money per coin on a unit basis once hardware depreciation is factored in.

1vuio0pswjnm7 4y ago

You're a bank. Three of your regulators (a) Board of Governors of the Federal Reserve System (b) Federal Deposit Insurance Corporation (c) Office of the Comptroller of the Currency release a "Joint Statement on Crypto-Asset Risks to Banking Organizations". It contains the following text: "Based on the agencies current understanding and experience to date, the agencies believe that issuing or holding as principal crypto-assets that are issued, stored, or transferred on an open, public, and/or decentralized network, or similar system is highly likely to be inconsistent with safe and sound banking practices. Further, the agencies have significant safety and soundness concerns with business models that are concentrated in crypto-asset-related activities or have concentrated exposures to the crypto-asset sector." The Joint Statement is dated January 3, 2023. So, after this warning, what's your next move. (This thread is hilarious. The title has now changed twice.)

givemeethekeys 4y ago
Rake in the $$ at the risk of paying a small fine?
kybernetikos 4y ago
I was about to thank you for an interesting hypothetical, but then I did a quick search. Here's the link for anyone else who was wondering. https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20230103a1.pdf https://www.federalreserve.gov/newsevents/pressreleases/file...

tromp 4y ago

> The supply is finite. Finite supply is overrated [1]. [1] https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153 https://john-tromp.medium.com/a-case-for-using-soft-total-su...

edem 4y ago

> Why would I want to own a coin that someone else is able to freely devalue The same stands for USD and any other fiat currency. All of which are being debased right now.