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Bitcoin made a unique imprint in the collective consciousness by painting a believable picture of a world where a decentralized currency is viable. It wasn’t j

Bitcoin made a unique imprint in the collective consciousness by painting a believable picture of a world where a decentralized currency is viable. It wasn’t just a white paper. It was a working protocol and an actual network. Think about what it was like to become aware of that and participate in it as an early adopter — to go from not being able to conceive of how such a system could work to participating in an actual working system. It was (and still is) a working peer-to-peer monetary transaction system. If you have Bitcoin, you have units of account in that monetary system. Whether the system is slow or not, it’s money. I don’t think Bitcoin will be a cash-type unit of account. It’s like gold: it is divisible and fungible, but a pain to actually use as cash. Hundreds of years ago gold became a store of value used to back paper currencies. Bitcoin has value in that owning Bitcoin means owning a unit of account in a tamper-proof, global, decentralized ledger. To the extent many many people think that the Bitcoin ledger is worth holding units in (and not a fork or alternative), the units of the ledger become valuable. When people treat Bitcoin as a speculative investment, what they’re really doing is expecting even more people in the future to consider Bitcoin THE ledger to want to own units in, which would make the units in the ledger even more valuable. But the type of value they’re expecting to see more of is already there: a huge number of people think the Bitcoin ledger is the ledger to own units in, and comparatively very few care about owning units in the forks or alternatives.

shkkmo 3y ago
Right, people predominantly buy bitcoin to speculate on it's future value, not to use as a medium of value exchange.
wolverine876 3y ago
> When people treat Bitcoin as a speculative investment, what they’re really doing is expecting even more people in the future to consider Bitcoin THE ledger to want to own units in, which would make the units in the ledger even more valuable. But the type of value they’re expecting to see more of is already there: a huge number of people think the Bitcoin ledger is the ledger to own units in, and comparatively very few care about owning units in the forks or alternatives. Doesn't that describe a pyramid scheme that's not yet bust?
- Drakim 3y ago
  It depends. If people think bitcoin will become more valuable, because they suspect future people will think it will become valuable, because future people think it will become more valuable, because future people think it will become more valuable, then eventually you run out of people and it collapses. We can visualize this as the last person on earth not investing in bitcoin because there is nobody after him left to invest in bitcoin to make the price rise more. And by that same logic, the previous-to-last person wouldn't invest either because he knows the last person won't invest, and by that same logic, the previous-to-previous-to-last person wouldn't invest, etc etc etc. At some point the pyramid simply stops because it's used up all the fertile soil, and the growth itself was the only value creation. It stops ways before the last person on earth, the moment the market is saturated the growth stops and the entire thing collapses. But if people think bitcoin will become more valuable, because they suspect it will be useful as a decentralized currency to more and more people, then it's not a pyramid scheme in the same way. Even the last person on earth would have ample reason to start using bitcoin, it's just a convenient way to be able to pay for goods and services in any context. Early adopters do get a big payout, but that's because they were early in on something that's valuable on it's own. Obviously these days the later scenario looks less and less likely as Bitcoin's everyday adoption has slowed down, while Bitcoin's role as a growth speculation seems to have taken over.

shkkmo 3y ago

Right, people predominantly buy bitcoin to speculate on it's future value, not to use as a medium of value exchange.

wolverine876 3y ago

> When people treat Bitcoin as a speculative investment, what they’re really doing is expecting even more people in the future to consider Bitcoin THE ledger to want to own units in, which would make the units in the ledger even more valuable. But the type of value they’re expecting to see more of is already there: a huge number of people think the Bitcoin ledger is the ledger to own units in, and comparatively very few care about owning units in the forks or alternatives. Doesn't that describe a pyramid scheme that's not yet bust?

Drakim 3y ago
It depends. If people think bitcoin will become more valuable, because they suspect future people will think it will become valuable, because future people think it will become more valuable, because future people think it will become more valuable, then eventually you run out of people and it collapses. We can visualize this as the last person on earth not investing in bitcoin because there is nobody after him left to invest in bitcoin to make the price rise more. And by that same logic, the previous-to-last person wouldn't invest either because he knows the last person won't invest, and by that same logic, the previous-to-previous-to-last person wouldn't invest, etc etc etc. At some point the pyramid simply stops because it's used up all the fertile soil, and the growth itself was the only value creation. It stops ways before the last person on earth, the moment the market is saturated the growth stops and the entire thing collapses. But if people think bitcoin will become more valuable, because they suspect it will be useful as a decentralized currency to more and more people, then it's not a pyramid scheme in the same way. Even the last person on earth would have ample reason to start using bitcoin, it's just a convenient way to be able to pay for goods and services in any context. Early adopters do get a big payout, but that's because they were early in on something that's valuable on it's own. Obviously these days the later scenario looks less and less likely as Bitcoin's everyday adoption has slowed down, while Bitcoin's role as a growth speculation seems to have taken over.