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Crypto does have utility, but there's only room for one: bitcoin. Everything else is just a me-too derivative that can add nothing except the possibility of ce

Crypto does have utility, but there's only room for one: bitcoin. Everything else is just a me-too derivative that can add nothing except the possibility of central control (like the "digital dollar"). The ability to instantly transmit the hardest asset known to man (harder than gold, in the sense of inflation resistance) does have utility, regardless of what critics say. It has downsides too: the ability to be lost or stolen if custody is sloppy, energy use, and many others. But the balance between its utility and its limitations is something that enough holders recognize that it maintains a value above $26k for now. The US debt recently increased by the entire market cap of bitcoin ($275 billion [1]) in a single day. That doesn't guarantee anything, but in the old days when the global reserve currency started to become frankly inflationary, there was no easy recourse - you could only jump to the next best national fiat (which could have the same problems or worse), or gold (with all of its limitations). Now, due to bitcoin, an alternative exists. People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why. I think it might be harder to recognize its value when it's part of your implicit cultural background: the dollar is money. We lack the perspective of our great grandparents, who lived through the great depression, and understand that the dollar has no intrinsic value, either. Once that epiphany is reached by the masses, the appreciation in bitcoin value could come quickly. [1] https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fwhwnv46y66sb1.jpg https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fw...

dukeyukey 3y ago
> People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why "Hate" is a strong word, but I dislike Bitcoin because so much of its value doesn't come from utility, but from speculation. People rarely buy Bitcoin to actually use it, but instead because they hope/expect the price will go up. And that's what leads to cases like SBF. > and understand that the dollar has no intrinsic value, either. You need US dollars to pay US taxes and buy/sell into the world's largest consumer market. That's why there's a strong demand for dollars.
- krupan 3y ago
  People are speculating on Bitcoin for different reasons, but many of us are doing so because we have examined it closely and seen it's utility. It is still very early in the adoption phase and so it's hard to see the utility in practice right now, but as you learn more about our current financial system and how Bitcoin works, the potential of Bitcoin is pretty astounding.
  - dukeyukey 3y ago
    Some people are, and a lot of them are here if HN. But the _extreme_ vast majority of people buying Bitcoin wouldn't be interested in it if it had a stable long-term value - they're in it for the speculation.
    - hollerith 3y ago
      > the _extreme_ vast majority of people buying Bitcoin wouldn't be interested in it if I am impressed by your powers of perception! You can probably read my mind, too, and tell me why I do the things I do, at least my major purchasing and investment decisions. It's a little scary knowing that there exists people as perceptive as you. It makes me feel naked almost.
- w1nst0nsm1th 3y ago
  Strong demand for Dollar is linked to commodities being all priced in Dollar. If global oil output had to decrease due to, for example, peak oil, dollar value would collapse very quickly, because all of a sudden, monetary mass would be excessive compared with declining economic activity.
quickthrowman 3y ago
> That doesn't guarantee anything, but in the old days when the global reserve currency started to become frankly inflationary, there was no easy recourse - you could only jump to the next best national fiat (which could have the same problems or worse), or gold (with all of its limitations). Now, due to bitcoin, an alternative exists. Or you just buy assets priced in dollars; bonds, real estate, equities, etc. Nobody with half a brain holds their wealth in currency. Currency is for transacting, not storing wealth. > People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why. See above and below. It has 0 intrinsic value. It also has no cash flows. The only “value” it has is speculative.
k__ 3y ago
In my opinion, Bitcoin was just the low hanging fruit. Proof of Work is probably the way to go, but please make it useful work.
- sandworm101 3y ago
  Revise SETI@home. A bitcoin for every earth-sized exoplanet your GPU can discover in a given day. Ten bitcoin if it finds intelligent life. Or a darker proof of work concept: Forget the big data centers, the NSA could hand out bitcoins to GPUs who help them brute force enemy encryption.
  - kQq9oHeAz6wLLS 3y ago
    > NSA could hand out bitcoins to GPUs who help them brute force enemy encryption. Plot twist - that was your own encryption you helped the NSA (presumably legally) break!
- krupan 3y ago
  Securing the Bitcoin network is the useful work.
  - k__ 3y ago
    Too hard to sell ;)
notamy 3y ago
> People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why. I think it might be harder to recognize its value when it's part of your implicit cultural background: the dollar is money. Because if BTC is going to be my money for transactions, I actively do not want any of the speculation on its price. It’s not useful for normal transactions if the price can swing as much as 50-100% within a year — some quick searching says BTC started the year around $17k/BTC and is currently around $27k/BTC. BTC currently acts like both a currency and a speculative store of value, and only one of those is really useful if it’s supposed to be the future of money. Otherwise it’s just a more-volatile speculative bet than stocks or bonds or etc that people hope to eventually trade for USD.
- krupan 3y ago
  You do realize that people heavily speculate on the price of dollars, stocks, real estate, etc., don't you? ;-) In all seriousness, we do understand what you are saying, bitcoin's price relative to the things you want to buy does fluctuate pretty heavily right now because it is still very much in the early adoption phase. But eventually that will even out.
  - __loam 3y ago
    I don't think you can call something early adoption if it's been around for 15 years. The iPhone had been around for about the same amount of time and it's a mature platform. The "it's early" argument is really only peddled by people who seem to have an interest in bitcoin's value increasing.
    - krupan 3y ago
      The temptation for sarcasm here is so high...15 whole years huh? This isn't a JavaScript framework we are talking about here. A secure and reliable financial system has very different properties than a consumer product like an iPhone. You do know the Internet got started in the 1960's, right? And didn't really take off until 30 years later?
pixl97 3y ago
>and they all seem to hate bitcoin with passion, but I haven't yet understood why The dollar buys drugs, it buys guns, it buys terrible things. But it also buys bread and pays your rent. The interface a large portion of us has had with bitcoin is speculation and cybercrime. "Your computer has been encrypted, please insert X bitcoin to continue" is not a great interface for making someone have a good feeling about a product. >We lack the perspective of our great grandparents, who lived through the great depression, and understand that the dollar has no intrinsic value, either. You also lack the perspective that if the economy collapses, particularly a large economy like the US economy your "unpinned" bitcoin is going to behave like it is very much pinned to that dollar.
- pfisch 3y ago
  People don't really buy things on a daily basis with gold either, and 99% of its valuation is based on speculation.
  - pixl97 3y ago
    Hence the dollar is not pinned to the price of gold.
  - the_gastropod 3y ago
    You’re right that gold isn’t used as a currency and that it is a speculative asset. But 99%? Hardly. The majority of gold is used for jewelry or in electronics manufacturing.
    - pixl97 3y ago
      >The majority of gold is used for jewelry or in electronics manufacturing. I feel this is some kind of trick answer.... https://www.statista.com/statistics/299609/gold-demand-by-industry-sector-share/ https://www.statista.com/statistics/299609/gold-demand-by-in... Around 53% of mined gold is used in jewelry (46%) and technology (6%). 47% is in investment and markets. But this doesn't really properly break down how much jewelry is purchased as a type of investment hedge in places where markets are not stable. Unfortunately there is no easy way to separate out jewelry purchases for enjoyment/fashion verses alternate wealth holding.
adgjlsfhk1 3y ago
The main problem with bitcoin is it's fundamentally a terrible currency. With a transaction time of between 30 minutes and 16 hours, throughput of 7 transactions per second, and an energy consumption comparable to a medium sized country, it's an obviously awful currency for anything other than selling large quantities of drugs, ransom payments, or gambling.
- pfisch 3y ago
  That is an improvement over gold though, which has an insane cost to move from the us to china.
  - lawn 3y ago
    Crypto had the ability to improve on both gold and cash though.
    - deleted 3y ago
      [deleted]
- krupan 3y ago
  You are talking about settlement times of Bitcoin transactions. Yes, those take 10 minutes at best, or roughly around an hour if you want to be very confident that the funds have settled. Settlement times on dollars is generally 3 days at best. The lightning network on top of Bitcoin gives you credit card speed transaction times, with settlement still happening on the Bitcoin layer in minutes not days.
  - bhaak 3y ago
    The settlement times of the Dollar is instant if cash is used. Credit cards are fast, too. Even bank transactions are usually faster than 3 days. How do you arrive at „3 days at best“? LN transactions are usually not settled within minutes but when channels are closed. Anything else would negate their whole advantage. Are you thinking of rollups (which Bitcoin doesn’t have yet).
dghlsakjg 3y ago
You say it is inflation resistant, but after a period of massive deflation, it has seen inflation rates that would make an African dictator blush, and now it is back to deflating. Things that are inflation resistant don’t rise AND fall wildly in relation to gently inflating assets like USD. They have a pricing curve which would be completely flat when priced in real (inflation adjusted == real) dollars. Bitcoin is not that
- netcruiser 3y ago
  He is talking about inflating the money supply.
  - deleted 3y ago
    [deleted]
JSavageOne 3y ago
Bitcoin uses about 100x more energy than ethereum, has 5x less throughput, and doesn't natively support smart contracts. There's definitely also room for ethereum.
- krupan 3y ago
  Ethereum is essentially centrally controlled and Bitcoin is absolutely not.
  - bhaak 3y ago
    In what way is Ethereum centrally controlled that Bitcoin isn‘t?
    - krupan 3y ago
      Vitalik says, "hey, let's do this" and everyone does it. Even when it's crazy things like rolling back transactions. Satoshi doesn't even say anything and hasn't for a very long time.
      - bhaak 3y ago
        So you don't believe in the existence of Ethereum Classic?
        krupan 3y ago
        Does it still exist, with people actually using it? Is that what you were referring to originally?
        bhaak 3y ago
        You said people do what Vitalik says. Ethereum Classic is the prime counter argument that this is not true. It almost flipped Ethereum, split the community, and completely wreaked the price. That's not supposed to happen if everybody follows the supreme leader.
lawn 3y ago
> Crypto does have utility, but there's only room for one: bitcoin. Except that Bitcoin is very expensive to actually use and isn't private by default. That Bitcoin is the only one with value is only wishful thinking from the Bitcoin maximalists.
- krupan 3y ago
  Bitcoin is not expensive to use, I'm not sure why you think it is It is far more private by default than our current central bank and credit card system. Could it be better? Maybe. Does everyone want a fully anonymous system? I'm not sure
  - lawn 3y ago
    Not expensive? Is that a joke? At the moment the average transaction fee is almost $4, but cases of more than $10 or $20 are not uncommon. It has been as high as $50 as well. It's just too expensive and/or too slow to work for day to day payments.
    - krupan 3y ago
      $4 per what? Do you even know? Have you heard of the lightning network that is a fast transaction layer built on top of Bitcoin?
      - lawn 3y ago
        Is it too hard to comprehend what I wrote? Average fee per transaction? I have heard about this mystery thing that supposedly solves all of Bitcoins problems. Except that it's been years and it's still not ready, you still have load it up via the expensive transactions and you have to use third party services to get a somewhat useable UX. Lightning is even more of a joke than Bitcoin is.
        krupan 3y ago
        Yeah, you don't even have the right units on that metric, Bitcoin fees are not per transaction. They are not scaled by the amount of Bitcoin you are transacting either. It's a per byte fee. Different transactions take up more or less space on the blockchain depending on how many addresses are involved. Here's a good explanation: https://99bitcoins.com/bitcoin/fees/ https://99bitcoins.com/bitcoin/fees/
krupan 3y ago
People on hacker news are smart, but not about everything. It takes some effort to really understand our central bank dollar based financial system. It's takes effort to understand Bitcoin. Most of us here are focused on other things and only take a cursory look at Bitcoin and dismiss it's "slow transaction times" (which are actually incredibly fast settlement times), high energy use (which actually uses marginal energy that would otherwise be wasted), and conclude "this is not worth my time to understand, and I wish everyone would just shut up about it."
AnonC 3y ago
> Crypto does have utility, but there's only room for one: bitcoin. That it doesn’t have any known/recognizable founder has helped it quite a bit. Compare that to other coins with founders who have compromised on things (in some or many people’s views) and it makes the case stronger. Plus the fact that it didn’t have an ICO-like event — where the people launching it and their friends get a big stake for close to nothing — has also helped reinforce the idea that it’s less scammy. > Everything else is just a me-too derivative that can add nothing except the possibility of central control (like the "digital dollar"). I’m not sure where you’re getting this from if you’re comparing all other cryptocurrencies. Would Monero and similar currencies be a “me too” derivative too? If yes, why? Monero is quite steady, AFAIK, in its valuation in fiat currency terms.
kylebenzle 3y ago
The Bitcoin project is called Bitcoin Cash now
__loam 3y ago
> harder than gold, in the sense of inflation resistance Are we saying bitcoin is this? Because it's stupid volatile and seems pretty correlated to inflation.

dukeyukey 3y ago

> People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why "Hate" is a strong word, but I dislike Bitcoin because so much of its value doesn't come from utility, but from speculation. People rarely buy Bitcoin to actually use it, but instead because they hope/expect the price will go up. And that's what leads to cases like SBF. > and understand that the dollar has no intrinsic value, either. You need US dollars to pay US taxes and buy/sell into the world's largest consumer market. That's why there's a strong demand for dollars.

krupan 3y ago
People are speculating on Bitcoin for different reasons, but many of us are doing so because we have examined it closely and seen it's utility. It is still very early in the adoption phase and so it's hard to see the utility in practice right now, but as you learn more about our current financial system and how Bitcoin works, the potential of Bitcoin is pretty astounding.
- dukeyukey 3y ago
  Some people are, and a lot of them are here if HN. But the _extreme_ vast majority of people buying Bitcoin wouldn't be interested in it if it had a stable long-term value - they're in it for the speculation.
  - hollerith 3y ago
    > the _extreme_ vast majority of people buying Bitcoin wouldn't be interested in it if I am impressed by your powers of perception! You can probably read my mind, too, and tell me why I do the things I do, at least my major purchasing and investment decisions. It's a little scary knowing that there exists people as perceptive as you. It makes me feel naked almost.
w1nst0nsm1th 3y ago
Strong demand for Dollar is linked to commodities being all priced in Dollar. If global oil output had to decrease due to, for example, peak oil, dollar value would collapse very quickly, because all of a sudden, monetary mass would be excessive compared with declining economic activity.

quickthrowman 3y ago

> That doesn't guarantee anything, but in the old days when the global reserve currency started to become frankly inflationary, there was no easy recourse - you could only jump to the next best national fiat (which could have the same problems or worse), or gold (with all of its limitations). Now, due to bitcoin, an alternative exists. Or you just buy assets priced in dollars; bonds, real estate, equities, etc. Nobody with half a brain holds their wealth in currency. Currency is for transacting, not storing wealth. > People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why. See above and below. It has 0 intrinsic value. It also has no cash flows. The only “value” it has is speculative.

k__ 3y ago

In my opinion, Bitcoin was just the low hanging fruit. Proof of Work is probably the way to go, but please make it useful work.

sandworm101 3y ago
Revise SETI@home. A bitcoin for every earth-sized exoplanet your GPU can discover in a given day. Ten bitcoin if it finds intelligent life. Or a darker proof of work concept: Forget the big data centers, the NSA could hand out bitcoins to GPUs who help them brute force enemy encryption.
- kQq9oHeAz6wLLS 3y ago
  > NSA could hand out bitcoins to GPUs who help them brute force enemy encryption. Plot twist - that was your own encryption you helped the NSA (presumably legally) break!
krupan 3y ago
Securing the Bitcoin network is the useful work.
- k__ 3y ago
  Too hard to sell ;)

notamy 3y ago

> People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why. I think it might be harder to recognize its value when it's part of your implicit cultural background: the dollar is money. Because if BTC is going to be my money for transactions, I actively do not want any of the speculation on its price. It’s not useful for normal transactions if the price can swing as much as 50-100% within a year — some quick searching says BTC started the year around $17k/BTC and is currently around $27k/BTC. BTC currently acts like both a currency and a speculative store of value, and only one of those is really useful if it’s supposed to be the future of money. Otherwise it’s just a more-volatile speculative bet than stocks or bonds or etc that people hope to eventually trade for USD.

krupan 3y ago
You do realize that people heavily speculate on the price of dollars, stocks, real estate, etc., don't you? ;-) In all seriousness, we do understand what you are saying, bitcoin's price relative to the things you want to buy does fluctuate pretty heavily right now because it is still very much in the early adoption phase. But eventually that will even out.
- __loam 3y ago
  I don't think you can call something early adoption if it's been around for 15 years. The iPhone had been around for about the same amount of time and it's a mature platform. The "it's early" argument is really only peddled by people who seem to have an interest in bitcoin's value increasing.
  - krupan 3y ago
    The temptation for sarcasm here is so high...15 whole years huh? This isn't a JavaScript framework we are talking about here. A secure and reliable financial system has very different properties than a consumer product like an iPhone. You do know the Internet got started in the 1960's, right? And didn't really take off until 30 years later?

pixl97 3y ago

>and they all seem to hate bitcoin with passion, but I haven't yet understood why The dollar buys drugs, it buys guns, it buys terrible things. But it also buys bread and pays your rent. The interface a large portion of us has had with bitcoin is speculation and cybercrime. "Your computer has been encrypted, please insert X bitcoin to continue" is not a great interface for making someone have a good feeling about a product. >We lack the perspective of our great grandparents, who lived through the great depression, and understand that the dollar has no intrinsic value, either. You also lack the perspective that if the economy collapses, particularly a large economy like the US economy your "unpinned" bitcoin is going to behave like it is very much pinned to that dollar.

pfisch 3y ago
People don't really buy things on a daily basis with gold either, and 99% of its valuation is based on speculation.
- pixl97 3y ago
  Hence the dollar is not pinned to the price of gold.
- the_gastropod 3y ago
  You’re right that gold isn’t used as a currency and that it is a speculative asset. But 99%? Hardly. The majority of gold is used for jewelry or in electronics manufacturing.
  - pixl97 3y ago
    >The majority of gold is used for jewelry or in electronics manufacturing. I feel this is some kind of trick answer.... https://www.statista.com/statistics/299609/gold-demand-by-industry-sector-share/ https://www.statista.com/statistics/299609/gold-demand-by-in... Around 53% of mined gold is used in jewelry (46%) and technology (6%). 47% is in investment and markets. But this doesn't really properly break down how much jewelry is purchased as a type of investment hedge in places where markets are not stable. Unfortunately there is no easy way to separate out jewelry purchases for enjoyment/fashion verses alternate wealth holding.

adgjlsfhk1 3y ago

The main problem with bitcoin is it's fundamentally a terrible currency. With a transaction time of between 30 minutes and 16 hours, throughput of 7 transactions per second, and an energy consumption comparable to a medium sized country, it's an obviously awful currency for anything other than selling large quantities of drugs, ransom payments, or gambling.

pfisch 3y ago
That is an improvement over gold though, which has an insane cost to move from the us to china.
- lawn 3y ago
  Crypto had the ability to improve on both gold and cash though.
  - deleted 3y ago
    [deleted]
krupan 3y ago
You are talking about settlement times of Bitcoin transactions. Yes, those take 10 minutes at best, or roughly around an hour if you want to be very confident that the funds have settled. Settlement times on dollars is generally 3 days at best. The lightning network on top of Bitcoin gives you credit card speed transaction times, with settlement still happening on the Bitcoin layer in minutes not days.
- bhaak 3y ago
  The settlement times of the Dollar is instant if cash is used. Credit cards are fast, too. Even bank transactions are usually faster than 3 days. How do you arrive at „3 days at best“? LN transactions are usually not settled within minutes but when channels are closed. Anything else would negate their whole advantage. Are you thinking of rollups (which Bitcoin doesn’t have yet).

dghlsakjg 3y ago

You say it is inflation resistant, but after a period of massive deflation, it has seen inflation rates that would make an African dictator blush, and now it is back to deflating. Things that are inflation resistant don’t rise AND fall wildly in relation to gently inflating assets like USD. They have a pricing curve which would be completely flat when priced in real (inflation adjusted == real) dollars. Bitcoin is not that

netcruiser 3y ago
He is talking about inflating the money supply.
- deleted 3y ago
  [deleted]

JSavageOne 3y ago

Bitcoin uses about 100x more energy than ethereum, has 5x less throughput, and doesn't natively support smart contracts. There's definitely also room for ethereum.

krupan 3y ago
Ethereum is essentially centrally controlled and Bitcoin is absolutely not.
- bhaak 3y ago
  In what way is Ethereum centrally controlled that Bitcoin isn‘t?
  - krupan 3y ago
    Vitalik says, "hey, let's do this" and everyone does it. Even when it's crazy things like rolling back transactions. Satoshi doesn't even say anything and hasn't for a very long time.
    - bhaak 3y ago
      So you don't believe in the existence of Ethereum Classic?
      - krupan 3y ago
        Does it still exist, with people actually using it? Is that what you were referring to originally?
        bhaak 3y ago
        You said people do what Vitalik says. Ethereum Classic is the prime counter argument that this is not true. It almost flipped Ethereum, split the community, and completely wreaked the price. That's not supposed to happen if everybody follows the supreme leader.

lawn 3y ago

> Crypto does have utility, but there's only room for one: bitcoin. Except that Bitcoin is very expensive to actually use and isn't private by default. That Bitcoin is the only one with value is only wishful thinking from the Bitcoin maximalists.

krupan 3y ago
Bitcoin is not expensive to use, I'm not sure why you think it is It is far more private by default than our current central bank and credit card system. Could it be better? Maybe. Does everyone want a fully anonymous system? I'm not sure
- lawn 3y ago
  Not expensive? Is that a joke? At the moment the average transaction fee is almost $4, but cases of more than $10 or $20 are not uncommon. It has been as high as $50 as well. It's just too expensive and/or too slow to work for day to day payments.
  - krupan 3y ago
    $4 per what? Do you even know? Have you heard of the lightning network that is a fast transaction layer built on top of Bitcoin?
    - lawn 3y ago
      Is it too hard to comprehend what I wrote? Average fee per transaction? I have heard about this mystery thing that supposedly solves all of Bitcoins problems. Except that it's been years and it's still not ready, you still have load it up via the expensive transactions and you have to use third party services to get a somewhat useable UX. Lightning is even more of a joke than Bitcoin is.
      - krupan 3y ago
        Yeah, you don't even have the right units on that metric, Bitcoin fees are not per transaction. They are not scaled by the amount of Bitcoin you are transacting either. It's a per byte fee. Different transactions take up more or less space on the blockchain depending on how many addresses are involved. Here's a good explanation: https://99bitcoins.com/bitcoin/fees/ https://99bitcoins.com/bitcoin/fees/

krupan 3y ago

People on hacker news are smart, but not about everything. It takes some effort to really understand our central bank dollar based financial system. It's takes effort to understand Bitcoin. Most of us here are focused on other things and only take a cursory look at Bitcoin and dismiss it's "slow transaction times" (which are actually incredibly fast settlement times), high energy use (which actually uses marginal energy that would otherwise be wasted), and conclude "this is not worth my time to understand, and I wish everyone would just shut up about it."

AnonC 3y ago

> Crypto does have utility, but there's only room for one: bitcoin. That it doesn’t have any known/recognizable founder has helped it quite a bit. Compare that to other coins with founders who have compromised on things (in some or many people’s views) and it makes the case stronger. Plus the fact that it didn’t have an ICO-like event — where the people launching it and their friends get a big stake for close to nothing — has also helped reinforce the idea that it’s less scammy. > Everything else is just a me-too derivative that can add nothing except the possibility of central control (like the "digital dollar"). I’m not sure where you’re getting this from if you’re comparing all other cryptocurrencies. Would Monero and similar currencies be a “me too” derivative too? If yes, why? Monero is quite steady, AFAIK, in its valuation in fiat currency terms.

kylebenzle 3y ago

The Bitcoin project is called Bitcoin Cash now

__loam 3y ago

> harder than gold, in the sense of inflation resistance Are we saying bitcoin is this? Because it's stupid volatile and seems pretty correlated to inflation.