It’s been 15 years for Bitcoin. At what point will it be that we accept it has staying power?
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Bitcoin, Cryptocurrency and Blockchain Discussion Thread
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Knightshade
Well-Known Member
When bubbles finally actually pop they tend to revert to their actual value.
For beanie babies that's a few bucks for a cute toy.
For housing it's the new market value for a house.
For dot com stocks it varied based on the underlying- some went to nothing, some just dropped back to regain value years later.
For BTC it's literally $0.00 since it has no inherent value or use.
When it's broadly useful for anything of actual value, rather than an asset you buy in hopes of selling it for more to a Greater Fool later
For beanie babies that's a few bucks for a cute toy.
For housing it's the new market value for a house.
For dot com stocks it varied based on the underlying- some went to nothing, some just dropped back to regain value years later.
For BTC it's literally $0.00 since it has no inherent value or use.
When it's broadly useful for anything of actual value, rather than an asset you buy in hopes of selling it for more to a Greater Fool later
Thought for sure the new lower cost BTC ETFs would give BTC holders (aka 'smart money) an exit opportunity - so far retail investors appear to be smarter than that.
So you can stay in denial forever, as you have no real criteria to change your mind.
People all over the world use it for goods and services today. That's a simple fact.
Given that definition, Bitcoin's bubble will never pop. There will always be some sucker willing to pay $0.01 for 1M BTC as a collector unit. If at some point nobody is mining you could claim that Bitcoin has died, but all it takes is that one person does a few hashes, and in the future hashes will be cheap, and bitcoin is living on. The only thing that would pop the bubble would be an extinction level event like AGI deciding to turn off all the hashing for good. But then there will be no bear left to celebrate their final victory.
Fun story, there was a famous Swedish blogger who claimed that Bitcoin was worthless. He gave away his 2.29 bitcoins for free back in 2011 as a part of his campaign against bitcoin. A $100k mistake in hindsight. Also fun fact, that person is now a huge Tesla proponent.
Bitcoinpyramidspelet - jag gav bort mina 2.29
Jag ägnade mig åt en maskirovka under gårdagen när jag bjöd ut mina 2.29 bitcoins. Jag ville se om det kunde komma in några seriösa bud, men min avsikt var aldrig att sälja mynten. Jag anser nämligen att de är värdelösa och utgör ett pyramidspel. Som sådant är det väl rent av olagligt att lura på nå
cornucopia-se.translate.goog
Those swept up in the pyramid scheme posted in comments yesterday that BTC would go to both $160,000,000 or $700,000 apiece. Good luck trying to get that kind of money out of the system I say…
When Bitcoins are $700,000,000 each in some unrealizable market, I'll probably be mocked, but I can take that. I can tell the difference between having $7,000,000,000 on a screen and a carton of milk in my hand.
Guess it's not at $700k yet, but $42k is not bad given that it was $20 back then.
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I remember about a decade ago, when first looking into Bitcoin, reading quite a lot about what "worth" and "value" are. The more I read about it the more stupid it sounded. A fun one I liked was the story of Rai Stones. They are nearly the dumbest form I can think of for currency and a store of value. They're so big they can't be moved, you can chisel new ones whenever you want, they're not fungible, etc. etc. They've been a store of value for centuries by a relatively small population.
If a small population can believe a bunch of rocks have value, why can't a subset of 8 billion people believe BTC has value over the long term?
It's the same with many things that have "value". Gold, fancy cars, artworks, sneakers - all of them have a utility value that is nothing compared to the price they trade at. Value appears to rely on a core group of die hard believers driving a wider level of interest.
If I had to argue (in short hand) why BTC has value, the following is a relatively succinct list:
- It has the highest amount of computational work put into it - making it provably the most difficult to forge
- It has gained traction in areas where fiat currency doesn't work well (crime and failed states mostly)
- It is legitimately cheaper than certain fiat currencies in cross border remittance - the main example seen here is migrant workers sending funds home
- The people who believe in and use BTC for the above find utility in the currency - so it's not going to 0 unless something else supplants it, and it won't be fiat.
- The longer people see BTC having value the more confident they will be in its enduring value
Buckminster
Well-Known Member
First it was the cyberpunks and utopians. Then it was the was nerds with graphic cards. Then it was the people buying cannabis and mushrooms. Then it was the people who were speculating. Then it was remittance. Then it was chinese miners using hydro power. Then it was store of value. Now it's institutions.
I read a story about a guy who got arrested for smuggling gold bars in his ass, imo would have been easier to just use bitcoin. Chinese citizens trying to bring their wealth out of China when they move to Canada, imo easier to just use Bitcoin. Are they doing illegal things when they smuggle money out of the country? Yes, but should it really be a crime? And in Argentina before Milei was it illegal to use bitcoin to get a better conversion rate on your dollars? Sure, but the currency market was messed up there.
Often people used Bitcoin because the state they lived in was totalitarian, the market was messed up by the government or they wanted to do things that should not have been illegal. Whenever you saw people having to use Bitcoin it was often to get around the government. Which imo had a very big impact in that governments had to be careful with how bad they were as people now had an alternative. I would not be surprised if Bitcoin being big in Argentina had an impact that later helped Milei get into power. Btw his speech should be mandatory watch:
Daniel in SD
(supervised)
This is a great post, though I disagree with the last aspect.
You know what has ZERO value to me and nobody "needs"? Designer purses. That's my opinion. However, my one humble opinion does not reflect the market as a whole. Obviously designer purses have value no matter how much I think they "should" not.
Where I disagree with the above post is in terms of blocksize. Small blocks are good as they make it more affordable for the masses to run a node. The nodes are in charge of bitcoin, though many media articles make it seem like the miners are. Keeping running a node affordable is key, and small blocks help with that. Second layers will arise (such as Lightning), and with proper coin management users can mitigate the impact of fees.
dhanson865
Well-Known Member
You wanna know where I fit on that spectrum?
Ever hear of Folding at home? Or Seti at home? Way back in the day (think Windows 95) people used to download "screensavers" just to keep the CRT from burning in a static image. Later there were screensavers that did something like Seti or Folding. But all the benefit for those went elsewhere and left the person running it to pay the bill.
When I first heard of Bitcoin I though it could be my screensaver and maybe pay for itself. I though if I got lucky it might more than pay for itself, but really if it paid my electric bill and was break even I would have considered that good enough. Turns out I still had to turn my monitor off manually and I didn't get much mining done as a background task. But I let it run in overnight and while I was otherwise away from the PC for a few months.
I have no expectation of how big BTC will be someday, I have no emotional attachment to it. I mined a few coins and I was smart enough not to spend them all before BTC passed into 5 figure territory.
If I did expect it to pay off, I would have kept mining it much longer and got more than a few bitcoin. C'est La Vie.
Even if I had known and mined the heck out of it, I'd just have retired earlier and still wouldn't have any different opinion on it. I'd just be reporting more gains to the IRS.
Oh, and why don't I lump myself into the "nerds with graphics cards" group? Well that is because I had a GPU in those days that was slower than my CPU for mining so I did all my mining with a desktop PC running an AMD processor. The mining code was x86 not GPU based.
Nice! I came in a bit later. Some of my friends were mining on CPU, sold and got out before $30. Some bought tens of GPUs, I thought it would be a bad investment as the people with knowhow and with cheaper energy would quickly make the market efficient. But Bitcoin was going up faster than people could buy GPUs so they made a decent return and proved me wrong, but I guess just buying Bitcoin would have made them about the same without the hassle.
I got lucky in that I had some time off from school and had nothing better to do. Spent a few weeks reading libertarian/ancap forums and Bitcoin was a hot potato and I love when people disagree because then there is an opportunity to beat the market. I read everything I could, watched every debate(aantonop, evoorhees, bitcoin jesus etc) and I listened to the bears. To me it seemed the bears were all over the place with their wild arguments that seldom stuck in the debates and that convinced me to go pretty deep in BTC. A decade later I hear the same arguments all over the place from new bears. I had hoped time would settle the debate, but better to make a profit than to be right I guess.
Knightshade
Well-Known Member
It's really not institutions. See the earlier link to Gary Blacks comments-- inflows to BTC ETFs, excluding those coming from...other BTC ETFS... have been quite underwhelming so far.
I'm not sure "it's easier to move than physical gold when escaping a totalitarian regime" is an especially compelling use case that would remotely support the alleged financial value of crypto.
Can you cite any "being careful how bad they were" to their people that, say, China, has engaged in specifically due to BTC?
Also you can easily describe an actual, physical, utilitarian task they can be easily used for, and will do an at least marginally comparable job compared to any other bag of similar size at carrying things.
Certainly the value is vastly inflated compared to a bag 10-100x cheaper- but it still is a functional item,
BTC, not so much.... except I guess "better alternative to carrying gold bars rectally"?
I mean I specifically pointed out that tiny marginal value to ubernerds in my earlier post.
Yeah, no... here's a paper on this exact comparison and why it's....not a good one.... or as the conclusion begins:
I read this is "we wasted more energy to accomplish nothing useful than anyone else"
See above as this being a pretty poor business case for valuation.[/QUOTE][/QUOTE][/QUOTE]
BTC is already used daily, all over the world. By people who apparently value it more than you do, which is fine. We don't all value things the same, as my purse example tried to illustrate. To say that BTC has 0 value when the market has obviously proven otherwise, over a decade plus of time!!, is an unwillingness to accept things as they are.
The author is a DEI warrior and creative writer with a clearly agenda driven paper. The article is also not addressing my point, which is only that there are items we think are absurd that hold value as a currency for generations, and not that they are analogous to Bitcoin - which the writer is trying to disprove while they do acknowledge the point around value and currency.
Yes, that is what people who align with the other side of the discussion say. The whole topic is a dead end these days as lines have been drawn in the community - so not a discussion that I would want to open up.
Yes, you're right - it was remiss of me to not include the cyberpunks, utopians, Austrian economists, and libertarians. These somewhat overlapping ideological groups formed the core group of die hard fans that underpin the story. There was an interesting infographic on the r/bitcoin forum that laid out some of the key technological and ideological inventions that lead to its creation. I think this longer timeframe reinforces that there is a subset of the population that has been looking for something like Bitcoin to store value in.
Knightshade
Well-Known Member
Can you cite any factual errors rather than make anti-woke attacks on the author?
If they're not analogues to bitcoin then comparing them to bitcoin- the thing you actually did- seems like a weird choice. Because it means the reasons they were currency (and they weren't QUITE currency either- the stones weren't typically used for buy food for the day or anything like that- they most often were used as gift exchange- to seal political deals, marriages, or hilariously FOR CRIME (paying ransom)) aren't relevant to BTC.
One author cited wrote of the stones as " used principally “to create, maintain, and otherwise reorganize relations between people”, not principally for activities like buying goods and services or loaning at interest for profit."
Even one of the pro-BTC authors cited (Fitzpatrick) is cited admitting "Yapese stone money is not really money at all"
What % of it is used to buy goods and services (trhe thing actual money is for) rather than for either crime, or speculative, but fundamentally baseless, "investment"?
See again tulips, beanie babies, or the myriad other things throughout history that people thought were SUPER VALUABLE for a little while until they finally realized they were not terribly valuable at all. Those things usually had at least a LITTLE intrinsic value (tulips are still pretty, beanie babies are still cute) it was just vastly less than "the market" thought for a good while.
The market, as some dude who allegedly knew something about econ once said, can remain irrational longer than you can remain solvent... a good financial advice not to, say, short BTC even if you understand it's fundamentally of little to no actual value.
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