BITCOIN

Adyinvestment

Frequentlyhere said:

Ref:  'I can see it working primarily as a global reserve asset in the nearer term, like gold'.

The thing that stands out to me from this statement is that it's a classic example of how advocates for Bitcoin and all other cryptos are stuck in a loop trying to justify a real world value or at least even a future potential value to this stuff.

The trouble is, it isn't there. Bitcoin isn't young. It has been around for over 12 years and has no real usage for anything, at least nothing that isn't done better by something else.

So instead we're subjected to a frankly embarrassing tirade of contradictory social media interventions full of nonsense and misdirection about it all, when the truth is that if it had any value then no one would need to try and cajole, persuade, browbeat and of course accuse people of being ignorant and of needing to do more research.

I'm surprised anyone still brings up the lightning network. That's 7 years old itself, pretty ancient in tech terms, and they still can't make it work to any sort of scale. I doubt they ever will, it's just a pretense at this stage of another 'potential' use for bitcoin.

Many people just don't get it, btc, indeed because there's nothing to get. No-one can understand why anyone would want to use it in real life, and indeed it isn't used in real life. Not in any meaningful way. No matter how much technobabble you pour over it, nothing can take that basic point away. 

Do we all sit on forums like this bickering about whether Apple, Amazon or Google are actually delivering anything useful to people? No, because they patently are. We do however with crypto because there is no value but an awful lot of people carrying heavy heavy bags would like us to believe there is.

At root, it's a vehicle offering zero real income whilst coming with a very tangible set of costs. It's a negative sum game, as per the FT

And here we are...back to page 1 🥱

seatbeltnoob

It's not a scam (mostly), it's a tulip bubble and the ones holding it at the end when it all crashes will be the people who sold their houses for a few sacks of tulip bulbs thar are now worth pennies.

Bitcoin hashing takes an unrealistic amount of computer resources, using both energy and precious computing power which are both in short supply right now. 

The more tokens are generated, the harder it will be to mine more and at some point, very soon, the cost to mine will nothave a positive ROI. When that happens mining will cease, no mining means no transactions can take place. It will create a whirlwind of factors causing the value to freefall. 

[Deleted User]

Worth reading.

https://bitcoinmagazine.com/business/bitcoin-energy-per-transaction-metric-is-misleading

User232002

Zola. said:

Blockchain Is NOT the Technology Behind Bitcoin

Out of the hype arose this fantastic saying, "Blockchain is the technology behind bitcoin," which is incorrect. Blockchain is one of the four foundational technologies (Blockchain, Proof-of-Work, P2P Network, and Cryptography) behind bitcoin, and it can’t stand alone. But that hasn’t stopped people from trying to sell it.

Today, “blockchain” is bitcoin with a haircut and suit that you parade in front of your board. It’s the ability to deliver a sanitised, clean, comfortable version of bitcoin, to people who are too terrified of truly disruptive technology. You enter this very strange world, where the words no longer mean anything.

Can you define "blockchain"? I think a few people in this room could probably define "blockchain." The real challenge would be: can you define "blockchain" in such a way that I can’t do search-and-replace with the word "database" and still make that sentence work? Because that’s the challenge: if what you’re doing is a database with signatures, it’s not interesting. It’s boring.”

Excerpt From: Andreas M. Antonopoulos. “The Internet of Money Volume Two”. 

Good point, well made. Unfortunately, the window of discourse on this forum is located at the tulip and ponzi end of the spectrum and we spend all our time discussing the boring bits rather than actually articulating some of the more nuanced points. I'm not sure this forum is ready for discussion of the byzantine generals problem though, depressing as it is.

Adyinvestment said:

Zola. said:

https://markets.businessinsider.com/news/currencies/bitcoin-rio-de-janeiro-mayor-invest-city-reserves-miami-cryptocurrency-2022-1

I saw that and think it is great that Brazil are embracing crypto.

Emerging market countries seem to be all over Bitcoin and I can see why, where as a country like Tonga (looking like it will make Bitcoin a legal tender this year) will not ruffle many feathers, a country like Brazil with the 8th largest gdp in the world will surely make other countries take note.

I think the game theory was always going to play out such that countries with little to lose would be the first adopters and then it would gradually move up the ladder. As the volatility reduces, I think you'll see more central banks and commodities trading taking place in it I believe. Of course, if you follow the ladder up you eventually get countries making speculative attacks on their own currencies.

Zola. said:

Ethereum is a centralised mess.... amongst the many issues (such as unscalable gas fees), there is no information available on the total supply, the software so is badly designed its about to fall over and they are trying to rebuild it all over again, unworkable... its has a huge pre-mine going to the owners...its a pump and dump for venture capitalists and is doomed to failure. 

Tell me why you like it?

Of course, this is a Bitcoin thread, but in an attempt to move the window of discourse;

I think this is a little bit unfair on ETH, even though I'd wholeheartedly agree on all of these points applying to pretty much every other L1 smart contract network out there. I think BTC and ETH can co-exist as they are aiming for different use cases and the whole industry would be better off if the maxi schtick stopped. Put simply, I believe both BTC and ETH are the only two assets that could meaningfully survive a state attack right now.

The total supply does change yes, and I think we can say that the changeable monetary policy stops ETH being base money, or 'ultra-sound' money according to the ETH maxi's, but it also means it can be useful for many other functions. Yes, the network needs an upgrade - but its the only meaningfully decentralised smart contract platform out there given that Solana has incredibly high technical requirements and BSC makes centralisation trade offs with its number of validators. Yeah, the pre-mine means its not as much of a virgin as Bitcoin, but the pre-sale was open to everyone (so don't understand the VC comment) and its been around since 2015 and been under $100 for like 80% of that time so plenty of people have had plenty of time to buy it at a good price if they believed in it. 

Actually, the best argument against ETH I think is that moving to PoS is a hugely risky endeavour and even if it isn't, I'm not sold on the idea of moving to a system that rewards the entrenched interests over the new ones given the nature of PoS emission schedules. I think thats a very open question at the minute in the community though so who knows how that plays out really.

User232002

RogerIrvine said:

Tesla shares, off the top of my head. 

20 years. Not as fast.

RogerIrvine said:

Apple shares have gone up $2.5t over the same period. 

You understand how exponential growth works right?

RogerIrvine said:

These companies make tangible things, useful to society and are accountable.

Linking tangibility to value is a relic of a world that isn't coming back. 

RogerIrvine said:

But if I understand you, you believe in time Bitcoin will become mainstream and replace existing currencies? What's the rationale for that happening?

Bitcoin is not a currency. Its money. This thread is 1600 posts long and the rationale has already been posted before. Perhaps go back and read previous posts.

RogerIrvine said:

In fact, I don't think Bitcoin can co-exist long-term with existing currencies. I think Govts will act to destroy Bitcoin. Because it threatens their ability to plan and control the economy . How?

Bitcoin is not a currency. Its money.

There are openly pro-Bitcoin countries, senators, congressmen/women, mayors and presidents. It provides tens of thousands of very well paid jobs. If you ban it, a good number of us just us and move, taking our skills and wealth with us, to another country that treats us better.

We are past the point where it can be banned.

RogerIrvine said:

 Govt issues a business loan. Business owner straightaway ploughs the money into Bitcoin, effectively beyond the reach of Govt.. Money gone. 

Not a Bitcoin problem. Perhaps the govt in your example should be more careful to who they loan money to. And the fiat debt still exists in your example by the way.

RogerIrvine said:

But even if Govt doesn't kill Bitcoin, it certainly isn't going to allow it to rival its own currency. Even that would disrupt the tax system, causing all sorts of problems. So I see more chance of Bitcoin going to zero than $11t.

Bitcoin, and other digital assets, are taxable as any other property is. There is plenty of HMRC and IRS guidance on the matter.

Frequentlyhere said:

Ref:  'I can see it working primarily as a global reserve asset in the nearer term, like gold'.

The thing that stands out to me from this statement is that it's a classic example of how advocates for Bitcoin and all other cryptos are stuck in a loop trying to justify a real world value or at least even a future potential value to this stuff.

Many people just don't get it, btc, indeed because there's nothing to get. No-one can understand why anyone would want to use it in real life, and indeed it isn't used in real life. Not in any meaningful way. No matter how much technobabble you pour over it, nothing can take that basic point away. 

30 billion dollars are traded every day. Bitcoin has a $900Bn market cap. Hundreds of thousands of transactions occur on the Bitcoin network every day. There are tens of millions of people that own Bitcoin. 

Seems plenty of people are using it right now.

Frequentlyhere said:

Do we all sit on forums like this bickering about whether Apple, Amazon or Google are actually delivering anything useful to people? No, because they patently are. We do however with crypto because there is no value but an awful lot of people carrying heavy heavy bags would like us to believe there is.

What a lovely amount of hindsight bias you have there.

In the 80s and 90s, Apple was derided as being a dead company. At the turn of the century, Amazons stock price went from $113 to $6. Google was derided as a non income producing search engine in the early 2000's, as well as being idiots for buying things like YouTube. Plenty of people indeed were bickering on forums over whether these companies had any value.

The same will be true of digital assets. Right now, the majority of talented STEM grads are going to work for a crypto startups and building out real world utility. Not only is this a path to incredible riches for them given that jobs in this space offer far higher salaries than almost every other graduate job, it appeals to the highest levels of Maslow's hierachy -> You don't have to spend 2 years being subservient to someone thirty years older than you that can't send a properly formatted email or understand the difference between a jpg and a gif. Go to a crypto startup and get paid far more and be given a far higher level of responsibility straight away. Why go and work for a hedge fund doing 90 hr weeks in the hopes of one day in 5 years being given a few million dollars to manage, when you can work on a DeFi protocol and if its good enough have tens of billions locked up under management within a year or two. A DeFi protocol that will spread that wealth to other people to boot. This forum is still having a hernia over whether Bitcoin is a tulip or can buy a coffee and have missed the massive value creation that is taking place in this space.

User232002

seatbeltnoob said:

It's not a scam (mostly), it's a tulip bubble and the ones holding it at the end when it all crashes will be the people who sold their houses for a few sacks of tulip bulbs thar are now worth pennies.

Almost nobody sold their houses for tulips. The tulip bubble was driven by options contracts, many of which were voidable by the buyer or voided by the government soon after the collapse of tulip prices. The tulip bubble wasn't actually even a bubble. 

Apologies for the inconvenient history lesson.

seatbeltnoob said:

Bitcoin hashing takes an unrealistic amount of computer resources, using both energy and precious computing power which are both in short supply right now. 

I mean it clearly uses a realistic amount of resources because it is actually using them.

If your argument is that its using too many resources then I'd suggest reading about 3 pages back from here where it was discussed.

seatbeltnoob said:

The more tokens are generated, the harder it will be to mine more and at some point, very soon, the cost to mine will nothave a positive ROI. When that happens mining will cease, no mining means no transactions can take place. It will create a whirlwind of factors causing the value to freefall. 

This is so wrong on so many levels. It appears you have no knowledge whatsoever of Bitcoins mining algorithm and how it contains a difficulty function that acts against this.

However, even without this knowledge your argument is clearly fatally flawed. As miners ROI turned negative, they would shut down their operations which would result in more output for the remaining miners which would make them more profitable. By this metric, only the most efficient miners survive. Its the same process that operates in the oil, gas and gold mining operations. In mid/late 2000's, oil price was double what it is today - As the price fell, some producers turned off their production but not all producers did (because some were still profitable).


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I think we really need a moderator intervention here. Its just ridiculous that on a 1600 page thread people can come in and post an opinion that isn't new or novel and the same arguments have to be dredged up again. People don't like to be told their opinion isnt valuable or intelligent because its offensive, but honestly this thread is turning in to evidence for the prevalence of the Dunning-Kruger effect in modern society.

Scottex99

Yeah it’s pretty boring tbh. People turn up with the same views that were already debunked 150 pages ago and we have to explain it all over again.

I’m finally reading The Bitcoin Standard, highly recommended for everyone. I’m halfway through and BTC has barely been mentioned because we’re still on the history of money and how unsound it’s always been when not managed properly.

At least the NFT thread had some new points to argue/discuss.

We won’t even be able to get a decent BTC vs ETH chat going because it’s over 90% of people’s heads. 

This will be excellent to come back to in 5-10 years though, I’m already looking forward to it 

Zola.

100% @darren232002 . It's odd that many of the same people keep coming back to moan about Bitcoin.

I don't go into threads about bond funds to say I think they are a complete waste of money, repeatedly, I just stay away from it as I have nothing positive to say about it. 

I admire your energy to reply to everyone, I can barely be bothered anymore and I don't know why I do. I think maybe it's because I look forward to reviewing this in a few years time to see how we are all doing....I really hope we are all still active on here.. Even if Bitcoin hits a million dollars they'll still be the "old man yelling at the cloud" posts. 

RogerIrvine

Well, to be fair, darren232002, I only came aboard to ask Zola about game theory and the domino effect, and he was a bit coy about it. So thanks for the heads up. I get it now.

"I think the game theory was always going to play out such that countries with little to lose would be the first adopters and then it would gradually move up the ladder. As the volatility reduces, I think you'll see more central banks and commodities trading taking place in it I believe. Of course, if you follow the ladder up you eventually get countries making speculative attacks on their own currencies."

Right, so El Salvador is merely the first domino. Here's how that went, Darren.
https://foreignpolicy.com/2021/12/06/bitcoin-city-el-salvador-nayib-bukele/

Second domino, presumably, is the city of Rio De Janeiro putting 1% of its treasury into Bitcoin. Don't you see a slight problem of scale extrapolating this? The whole value of Bitcoin couldn't buy Central Park, if it came up for sale.

"There are openly pro-Bitcoin countries, senators, congressmen/women, mayors and presidents. It provides tens of thousands of very well paid jobs. If you ban it, a good number of us just us and move, taking our skills and wealth with us, to another country that treats us better." 

Try El Salvador, it's perfect. Nice climate and the President wears a baseball cap backwards on his head, darren232002, 

SonOfPearl

darren232002 said:

I think we really need a moderator intervention here. Its just ridiculous that on a 1600 page thread people can come in and post an opinion that isn't new or novel and the same arguments have to be dredged up again. People don't like to be told their opinion isnt valuable or intelligent because its offensive, but honestly this thread is turning in to evidence for the prevalence of the Dunning-Kruger effect in modern society.

Hello to all the folks on this thread. I've been lurking here for a long time but haven't posted before. To me, the most telling thing is that despite such a long discussion, those who see inherent value in Bitcoin have been unable to convince most (any?) of the sceptics here. I don't think Bitcoin sceptics are suffering from the Dunning-Kruger effect - we just don't see that Bitcoin has any real value and nothing I have read here has convinced me (an enquiring person with a reasonable education) otherwise. Of course I may be wrong, but it won't be from overestimating my knowledge of the subject.

Ultimately, time will tell and I'll continue to read news about Bitcoin as I find it interesting, but I think it's time for me to stop reading this thread as (apart from the occasional laugh) it's not a productive use of my time. Thanks to all who have contributed with constructive comments and links.