5 ms·

Works pretty fine for me when I buy stuff with it, idk. Not like it's replaced money for me, but sometimes I use it. I wouldn't go investing in it as a currency

Works pretty fine for me when I buy stuff with it, idk. Not like it's replaced money for me, but sometimes I use it. I wouldn't go investing in it as a currency on its own but completely writing off at the very least the technology itself is a bit ignorant, don't you think? And don't forget that Ponzi schemes were originally invented using that foolproof valuable currency you cite as a foil to bitcoin's scam! I'd say the time and resources that go into making bitcoin have inherent value just like using a little bit of gold to fill a tooth.

Ologn 11y ago
> Works pretty fine for me when I buy stuff with it, idk. Were you around for the last .com bubble? You could have ( https://en.wikipedia.org/wiki/Flooz.com https://en.wikipedia.org/wiki/Flooz.com ) said the same thing ( https://en.wikipedia.org/wiki/Beenz.com https://en.wikipedia.org/wiki/Beenz.com ) back then ( https://www.youtube.com/watch?v=4s7V9I7LVp4 https://www.youtube.com/watch?v=4s7V9I7LVp4 ). Not that I'm saying startups are currently bubble level overvalued - but stuff like the Bitcoin hype is a canary in a coal mine. > but completely writing off at the very least the technology itself is a bit ignorant, don't you think? I can conceive of the possibility of people using blockchains and such things in the future for various reasons. I have no desire to right off the technology of the blockchain any more than I would write off the technology of a distributed git repository. The question though is whether Bitcoins should have a $4 billion market cap, and to me the answer is clearly no - it already fell from $11 billion to $4 billion, and I see this falling to $0. P.S. Re-watching that Whoopi Goldberg ad about "hip, young" Flooz versus "old, out of touch" money gives me deja vu all over again....
- zanny 11y ago
  > and I see this falling to $0. This implies that a trustless perfectly transparent currency has no value, which is obviously not true. Bitcoin might die because the protocol is flawed. It does make a lot of mistakes that altcoins do great work to solve - block size, chain size, volume, and proof of work are all messed up to varying degrees. The rate of monetary base inflation being a piecewise downward spiral to a limited final supply is in no way practical for a day to day currency, ever. But the technology basically crushes whatever nonsense you want to throw around when discussing fiat currencies, because at the end of the day every fiat dollar has to be "trust us". The financial industry has exploded on the back of phantom wealth with no physical asset backing, and bitcoin and cryptocurrencies in general are the counter to that entirely by being perfectly forwarded backed assets moreso than any other holding or investment you can have. You can literally have the wallet file controlling a portion of wealth, and that wealth is backed by the computational power of the network, and the combined appraisals of everyone else using the money. If you hold gold shares, you have records that you own an amount of gold held by a third party trading company, maybe (its not like you are ever going to go withdraw it), and you are in good faith assuming the market cap is accurate, because nobody can actually summarize the amount of gold out there, even in just the investment market, accurately. And fiat dollars are even worse, since fractional reserve banking and digitization had led to tremendous amounts of money out there being literally numbers in a database but they have none of the benefits of bitcoin having a collective ledger of transaction history. The technology is superior. We just need a Snowden of money the way Snowden was of privacy to demonstrate that "trust us" is what has literally zero valuation.
  - dnautics 11y ago
    > The rate of monetary base inflation being a piecewise downward spiral to a limited final supply is in no way practical for a day to day currency, ever. Can you explain this, specifically what the relationship is between having a limited final supply and day to day practicality.
    - zanny 11y ago
      There is no way for bitcoin not to be deflationary in the long run. First, consider that inflation and deflation of currency is the opposite what most people want to happen to bitcoin right now - which is still counterintuitive, because its adoption as a money is counter to its value as an investment. If the cost of a bitcoin rises against fiat, IE, the price goes up, then the currency is monetarily deflating - it is getting more valuable over time. Likewise, when the price drops - ie, after the 2013 bubble until the start of 2015 - thats inflating, because your money is worth less over time. For pretty much every fiat currency there is, your money is always worth less over time. It means you don't actually want to have physical money, because that money is all kinds of things you could have instead that either appreciate in value or give you a value add versus the money just losing its purchasing power. In almost all cases that inflation is due to a growing monetary base. States are printing more fiat money all the time, and sometimes they do major injections of money (quantitative easing, for example) to stimulate economic growth. That devalues the money, and it means you don't want to have any money. That mechanism is good for society, because it means that nobody is just hoarding a gold pile somewhere. Every billionaire is still spending almost every cent they have because to not spend it is to lose value. The last thirty years since the removal of the gold standard, the USD has seen rise to an insane turnover rate, where monetary velocity is incredibly high because nobody wants to have USD for long. You turn it into shares, you turn it into physical assets, you turn it into salaries, you do something with it that is not letting its value rot in a vault. With bitcoin, varying design constraints compound the issue that unlike with fiat, and like with a scarce resource like gold, hoarding it makes perfectly good sense. Bitcoins monetary base has constant velocity for years, and its only decelerating. Every four years the payout rate of mining a block is halved. Its already been halved once, and will be halved again next year. It keeps getting halved until mining stops paying out at all in about a hundred years. But because you are halving the payout rates, there are already over 14 million btc out a limit of 21 million, so the monetary base is already over 2/3's as large as it is ever going to get. That kind of base cannot handle anything catastrophic to its monetary system. A sudden influx of investment into bitcoin will always skyrocket the price. Whenever it has a breakout moment the price goes insane, and there is nothing to price control it because there is no way to expand or contract the monetary base to account. As a result, I and many other people are just sitting on bitcoin hoards waiting for Amazon to start accepting them so that the price goes to Mars again. That kind of thinking, and that kind of economic interaction, is a huge backslide of a common currency from what we have today. The best money is one you don't hold onto for long, that you want to get rid of as quickly as possible, because it maximizes monetary velocity which means your economy is running at max speed. If you slow down velocity - if people stop spending money, and it stops changing hands, as is often the case during uncertain political environments - your economy slows down. If you put bitcoin in that position, there is a huge incentive to not spend bitcoin because bitcoin is a mathematically limited resource. The more its used the more valuable it gets and the more pervasive it is the more reason there is to never use it for its "intended" function. Its the perfect gold replacement. You could strike a gold vein today and be a millionaire overnight. Unless you can impersonate a wallet (basically a sha1 hash, good luck brute forcing that) you aren't going to find random gold. And that isn't even digging up new gold so much as its finding gold in someones basement, maybe in a vault you broke into or maybe buried behind a wall long forgotten because the owner lost the wallet or password. Its even better because bitcoin is literally only the value of electricity and computer hardware that make up its network. Its a lot less distortionary to goods markets than treating gold, silver, platinum, etc as scarce commodities is, because it means people buy and hoard gold and other precious metals just for the sake of hoarding them, which drives the price up for anyone who has a practical use for that metal (gold is a great conductor, and gold capacitors are super efficient) making it prohibitive to use because everyone is valuing the metal not for its practical utility but for its rarity. The commodity market for palladium is no where near as ridiculous as golds, even though they are both rare earth metals, because gold has a history that makes people buy and own it for literally no good reason besides other people do. And you could do that exact same mutually respected scarcity == rarity == value proposition with bitcoin, without any ugly side effects like making my computer slower because putting gold in half my circuits would double or triple the cost of the product at least. Of note most altcoins have no monetary base caps. Litecoin is basically a slightly improved forked bitcoin, so it still does. But currencies like peercoin and dogecoin have no caps, but do it in different ways - peercoin has a static 1% inflation rate, so its constantly minting more peercoin over time, but the same amount of the base is minted annually - which means if you are losing more than 1% of the monetary base each year due to lost wallets, your currency is still deflating. Dogecoin statically mints 5.25 billion coins a year, so eventually your monetary base becomes large enough that you are losing as many coins as you are minting. What I'm getting at is that no cryptocurrency yet has actually solved this problem, and I've already posted my own ideas on it all over the place, but its really the breakout problem domain to getting a viable money replacement for average joes rather than a gold replacement.
- drcode 11y ago
  Something has "value" if people will buy it. People have been buying Bitcoin for US Dollars reliably for years, hence bitcoins have "value". Could the US government collapse and the USD become worthless tomorrow? Certainly. Could everyone wake up tomorrow and decide "Bitcoins are worthless?" certainly. But both those things are unlikely to happen. The more interesting question is whether Bitcoins are "overvalued" or "undervalued"... but that is a far more difficult question to answer.
  - Ologn 11y ago
    > Something has "value" if people will buy it. People buy it because they can use it. Gold, oil, sitting chairs etc. have value because they are useful. Bitcoins have no inherit use after purchase. > People have been buying Bitcoin for US Dollars reliably for years, hence bitcoins have "value". No they have price, not value. I quoted Keynes before "markets can remain irrational longer than I can remain solvent". > everyone wake up tomorrow...But both those things are unlikely to happen. Both of those things are unlikely to happen tomorrow, but the chance of the US government collapsing tomorrow is relatively a much lower chance than Bitcoin's price diving tomorrow, and people selling it like crazy. I mean, this just happened - Bitcoins were worth $315 at the beginning of the week and are worth $290 at the moment.
    - kinghajj 11y ago
      What's the use value of a dollar bill? To wipe one's ass? To place into a wallet to make it bulkier? No: to store for later exchange for goods and services. And so with Bitcoin. And that doesn't even get into colored coins/smart property and the myriad of other uses that have been thought. It's hard to accept your assertion "Bitcoins have no inherit use after purchase."
  - kaonashi 11y ago
    Bitcoins have value, but it's safe to say that nobody is going to jail if they can't get their hands on it in lieu of other currencies. Because of this, BTC will be subordinate to those currencies where this is the case. This may or may not be a problem for any particular BTC application.
- czzarr 11y ago
  I'm guessing you are short then ?

Ologn 11y ago

> Works pretty fine for me when I buy stuff with it, idk. Were you around for the last .com bubble? You could have ( https://en.wikipedia.org/wiki/Flooz.com https://en.wikipedia.org/wiki/Flooz.com ) said the same thing ( https://en.wikipedia.org/wiki/Beenz.com https://en.wikipedia.org/wiki/Beenz.com ) back then ( https://www.youtube.com/watch?v=4s7V9I7LVp4 https://www.youtube.com/watch?v=4s7V9I7LVp4 ). Not that I'm saying startups are currently bubble level overvalued - but stuff like the Bitcoin hype is a canary in a coal mine. > but completely writing off at the very least the technology itself is a bit ignorant, don't you think? I can conceive of the possibility of people using blockchains and such things in the future for various reasons. I have no desire to right off the technology of the blockchain any more than I would write off the technology of a distributed git repository. The question though is whether Bitcoins should have a $4 billion market cap, and to me the answer is clearly no - it already fell from $11 billion to $4 billion, and I see this falling to $0. P.S. Re-watching that Whoopi Goldberg ad about "hip, young" Flooz versus "old, out of touch" money gives me deja vu all over again....

zanny 11y ago
> and I see this falling to $0. This implies that a trustless perfectly transparent currency has no value, which is obviously not true. Bitcoin might die because the protocol is flawed. It does make a lot of mistakes that altcoins do great work to solve - block size, chain size, volume, and proof of work are all messed up to varying degrees. The rate of monetary base inflation being a piecewise downward spiral to a limited final supply is in no way practical for a day to day currency, ever. But the technology basically crushes whatever nonsense you want to throw around when discussing fiat currencies, because at the end of the day every fiat dollar has to be "trust us". The financial industry has exploded on the back of phantom wealth with no physical asset backing, and bitcoin and cryptocurrencies in general are the counter to that entirely by being perfectly forwarded backed assets moreso than any other holding or investment you can have. You can literally have the wallet file controlling a portion of wealth, and that wealth is backed by the computational power of the network, and the combined appraisals of everyone else using the money. If you hold gold shares, you have records that you own an amount of gold held by a third party trading company, maybe (its not like you are ever going to go withdraw it), and you are in good faith assuming the market cap is accurate, because nobody can actually summarize the amount of gold out there, even in just the investment market, accurately. And fiat dollars are even worse, since fractional reserve banking and digitization had led to tremendous amounts of money out there being literally numbers in a database but they have none of the benefits of bitcoin having a collective ledger of transaction history. The technology is superior. We just need a Snowden of money the way Snowden was of privacy to demonstrate that "trust us" is what has literally zero valuation.
- dnautics 11y ago
  > The rate of monetary base inflation being a piecewise downward spiral to a limited final supply is in no way practical for a day to day currency, ever. Can you explain this, specifically what the relationship is between having a limited final supply and day to day practicality.
  - zanny 11y ago
    There is no way for bitcoin not to be deflationary in the long run. First, consider that inflation and deflation of currency is the opposite what most people want to happen to bitcoin right now - which is still counterintuitive, because its adoption as a money is counter to its value as an investment. If the cost of a bitcoin rises against fiat, IE, the price goes up, then the currency is monetarily deflating - it is getting more valuable over time. Likewise, when the price drops - ie, after the 2013 bubble until the start of 2015 - thats inflating, because your money is worth less over time. For pretty much every fiat currency there is, your money is always worth less over time. It means you don't actually want to have physical money, because that money is all kinds of things you could have instead that either appreciate in value or give you a value add versus the money just losing its purchasing power. In almost all cases that inflation is due to a growing monetary base. States are printing more fiat money all the time, and sometimes they do major injections of money (quantitative easing, for example) to stimulate economic growth. That devalues the money, and it means you don't want to have any money. That mechanism is good for society, because it means that nobody is just hoarding a gold pile somewhere. Every billionaire is still spending almost every cent they have because to not spend it is to lose value. The last thirty years since the removal of the gold standard, the USD has seen rise to an insane turnover rate, where monetary velocity is incredibly high because nobody wants to have USD for long. You turn it into shares, you turn it into physical assets, you turn it into salaries, you do something with it that is not letting its value rot in a vault. With bitcoin, varying design constraints compound the issue that unlike with fiat, and like with a scarce resource like gold, hoarding it makes perfectly good sense. Bitcoins monetary base has constant velocity for years, and its only decelerating. Every four years the payout rate of mining a block is halved. Its already been halved once, and will be halved again next year. It keeps getting halved until mining stops paying out at all in about a hundred years. But because you are halving the payout rates, there are already over 14 million btc out a limit of 21 million, so the monetary base is already over 2/3's as large as it is ever going to get. That kind of base cannot handle anything catastrophic to its monetary system. A sudden influx of investment into bitcoin will always skyrocket the price. Whenever it has a breakout moment the price goes insane, and there is nothing to price control it because there is no way to expand or contract the monetary base to account. As a result, I and many other people are just sitting on bitcoin hoards waiting for Amazon to start accepting them so that the price goes to Mars again. That kind of thinking, and that kind of economic interaction, is a huge backslide of a common currency from what we have today. The best money is one you don't hold onto for long, that you want to get rid of as quickly as possible, because it maximizes monetary velocity which means your economy is running at max speed. If you slow down velocity - if people stop spending money, and it stops changing hands, as is often the case during uncertain political environments - your economy slows down. If you put bitcoin in that position, there is a huge incentive to not spend bitcoin because bitcoin is a mathematically limited resource. The more its used the more valuable it gets and the more pervasive it is the more reason there is to never use it for its "intended" function. Its the perfect gold replacement. You could strike a gold vein today and be a millionaire overnight. Unless you can impersonate a wallet (basically a sha1 hash, good luck brute forcing that) you aren't going to find random gold. And that isn't even digging up new gold so much as its finding gold in someones basement, maybe in a vault you broke into or maybe buried behind a wall long forgotten because the owner lost the wallet or password. Its even better because bitcoin is literally only the value of electricity and computer hardware that make up its network. Its a lot less distortionary to goods markets than treating gold, silver, platinum, etc as scarce commodities is, because it means people buy and hoard gold and other precious metals just for the sake of hoarding them, which drives the price up for anyone who has a practical use for that metal (gold is a great conductor, and gold capacitors are super efficient) making it prohibitive to use because everyone is valuing the metal not for its practical utility but for its rarity. The commodity market for palladium is no where near as ridiculous as golds, even though they are both rare earth metals, because gold has a history that makes people buy and own it for literally no good reason besides other people do. And you could do that exact same mutually respected scarcity == rarity == value proposition with bitcoin, without any ugly side effects like making my computer slower because putting gold in half my circuits would double or triple the cost of the product at least. Of note most altcoins have no monetary base caps. Litecoin is basically a slightly improved forked bitcoin, so it still does. But currencies like peercoin and dogecoin have no caps, but do it in different ways - peercoin has a static 1% inflation rate, so its constantly minting more peercoin over time, but the same amount of the base is minted annually - which means if you are losing more than 1% of the monetary base each year due to lost wallets, your currency is still deflating. Dogecoin statically mints 5.25 billion coins a year, so eventually your monetary base becomes large enough that you are losing as many coins as you are minting. What I'm getting at is that no cryptocurrency yet has actually solved this problem, and I've already posted my own ideas on it all over the place, but its really the breakout problem domain to getting a viable money replacement for average joes rather than a gold replacement.
drcode 11y ago
Something has "value" if people will buy it. People have been buying Bitcoin for US Dollars reliably for years, hence bitcoins have "value". Could the US government collapse and the USD become worthless tomorrow? Certainly. Could everyone wake up tomorrow and decide "Bitcoins are worthless?" certainly. But both those things are unlikely to happen. The more interesting question is whether Bitcoins are "overvalued" or "undervalued"... but that is a far more difficult question to answer.
- Ologn 11y ago
  > Something has "value" if people will buy it. People buy it because they can use it. Gold, oil, sitting chairs etc. have value because they are useful. Bitcoins have no inherit use after purchase. > People have been buying Bitcoin for US Dollars reliably for years, hence bitcoins have "value". No they have price, not value. I quoted Keynes before "markets can remain irrational longer than I can remain solvent". > everyone wake up tomorrow...But both those things are unlikely to happen. Both of those things are unlikely to happen tomorrow, but the chance of the US government collapsing tomorrow is relatively a much lower chance than Bitcoin's price diving tomorrow, and people selling it like crazy. I mean, this just happened - Bitcoins were worth $315 at the beginning of the week and are worth $290 at the moment.
  - kinghajj 11y ago
    What's the use value of a dollar bill? To wipe one's ass? To place into a wallet to make it bulkier? No: to store for later exchange for goods and services. And so with Bitcoin. And that doesn't even get into colored coins/smart property and the myriad of other uses that have been thought. It's hard to accept your assertion "Bitcoins have no inherit use after purchase."
- kaonashi 11y ago
  Bitcoins have value, but it's safe to say that nobody is going to jail if they can't get their hands on it in lieu of other currencies. Because of this, BTC will be subordinate to those currencies where this is the case. This may or may not be a problem for any particular BTC application.
czzarr 11y ago
I'm guessing you are short then ?