Oh, I see. A student of that most disingenuous and awful and much maligned… oh I don’t know, horrible, awful, stupid, garbage OH FOR FUCK SAKE WHAT ARE YOU DOING HERE IN TRUMP’S AMERICA how do I explain it… je ne sais quoi … oh how tedious that I mention it… ewwww HISTORY…
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The obvious counterpoint is Silk Road and its successors. A lesser known but equally interesting one is Backpage.
Perhaps you don’t really need bitcoin, but someone does. And maybe everything you want to buy can be bought more easily with regular currency, but you’re not the only consumer.
I can turn my bitcoins into takeout food really easily, though. Admittedly it’s still being sold on an exchange at some point, but the point is I don’t have to, like, hope I can find a buyer for my investment vehicle so that I can get some real money to buy food. There are businesses out there which are ready to directly treat my bitcoin as though it were money and bring me food in exchange.
There is, however, a guy in China who needs bitcoin to move his off-the-books assets overseas in a particular way. That guy is actually part of the reason the price has been rising.
I think your argument is circular: Since bitcoin is worthless, the people willing to buy it are not “backing” the currency, they’re speculating. And speculating on an unbacked financial instrument inevitably results in a crash down to a worthless price.
You are correct though that - as with every other concept created by late-stage capitalism - if everyone decided at the same time that bitcoin was meaningless, it would be thus.
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This is pretty much wrong, but more like mangled truth than outright make-believe. No, you can’t flood the market; BitCoin scales the difficulty of mining new coins based on the total volume of computations in the network, so more computing power will give you a bigger share of newly minted coins but it won’t squeeze them out any faster.
And also no, one “single typical size super computer” is not enough to do any real damage to the network by itself, but BitCoin relies on veracity by consensus and 60% of the network’s hashes are computed in China. This apparently is because electricity in China is cheaper than most places, so as the rate of return on mining becomes prohibitively expensive in countries with higher power costs we might expect China’s share to grow further.
So if the Chinese government were to kick down the doors of a couple of BitCoin exchanges and build themselves a consensus of one, what could they do with it? For that we can refer to section 2.6 of “BitCoin Weaknesses”: Attacker Has A Lot Of Computing Power. Generating free money is still impossible (although double spending is possible) but by refusing to confirm transactions or to validate blocks they can render the entire system inoperable.
So that’s the heart of the whole China-BitCoin fear. So far as I’m aware the Chinese aren’t making any moves or noises about messing with BitCoin, but the hypothetical is there.
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I guess the thing about bit coin that makes it seem sort of questionable, is how much illegal activity seems to be involved in its value. That doesn’t seem to make for a stable future, in any scenario I can imagine.
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Those people don’t need bitcoin. They wont die without it. Their industry won’t disappear without it. Bitcoin was a quirk. Silk Road was shutdown. And most of what happens on Backpage and similar ad website is paid for in cash, more easily, and more surreptitiously.
Yeah that totally represents forceful economic activity.
Those two examples represent early attempts at adoption as a pseudo currency. Most cases of which are transient and black market. And as you admit with the take out, still require conversion to another currency to see the value extracted.
Our Chinese business man does not need Bitcoin for that. He uses Bitcoin for that. Without Bitcoin his business would still operate. And he would still have his wealth. If Bitcoin did not exist he would use something else. Perhaps he would clean/bank up his money through a certain real estate company using a certain bank in Cyprus. Here Bitcoin is still acting as a financial vehicle. An investment product. A sketchy one too. And in the absence of Bitcoin another would be used. If that real estate company goes belly up there is still the real estate to liquidate (also its brand, its brand is so valuable you guys, billions. Just billions of brand. HUGE). There is some base value there. If bitcoin goes belly up. What’s left?
I don’t think my logic is circular. I think you’re taking my very extracted examples, boiled down to one person, as literal. They’re just bar room examples. And you should be thinking about the what ifs in terms of much larger groups of people and numbers. What I’m trying to get at is most non-ridiculous financial products and currencies have a critical back stop of some sort. If a currency crashes you typically have a government that can reform it. If a stock or commodity crashes you often (and should) have a base value in physical assets to liquidate. You’re investment, wealth, can still evaporate. Its just that there is always a plan B. Always a back stop. And factors making it less likely to totally disappear than something more vapid. Bitcoin has none of that. As it does not actually function as a currency. And wont so long as speculation and boom bust valuations happen. I mean hell right now it is more massively valued than any currency on earth. It functions as a financial vehicle, and it looks like a uniquely unstable and very bad one.
I addressed this in a reply upthread. I think its a sound enough claim in theory. Because you don’t need to neccisarily over supply bit coin by mining more. And the issue is not necessarily on the mining side. The risk is about over concentration of that supply into one or a few parties and the effects coming out of those party’s attempts to extract the value of their bitcoin (because they have to). And you don’t even really have to succeed. The attempt if noticed could cause the same damage by sowing panic or eroding confidence.
That should be possible, some how. At a low price it would be in some one snapping up bitcoin. At a high price mining would theoretically be the more cost effective way. But I’ve never seen anyone show their work on the claim. What proportion of bitcoin being held by one or only a few groups is dangerous? What level of computing power do you need to gain a disproportionate share of mined bitcoins? How much is too much compute power? At what point does the cost of equipment and power to run it eclipse the value of the bitcoin? And what factors mean you might not care? What even is a “typical” size super computer or server farm that these people are referring to?
So really how feasible and/or difficult is it? Whenever I see that claim tossed around there’s no attempt to provide that information. But I think the risk is still there, and I think that risk is far greater than with other places to park your money. In fact I think something like that is inevitable. I think there’s a one too many busts point with bit coin where it just ceases to function and dies. You pile on all the other issues that have happened with bitcoin. Especially that there are multiple less legitimate ways to manipulate the market or grab a concentrated share. And well it the whole shebang looks to be on really shaky ground.
A freeze out of mining, and perhaps even freezing of the exchanges to prevent the subsequent dump. People simply loosing interest so that everyone still has their bitcoin. They just can’t extract any real world value/wealth out of them. These are all potentially just as bad as a crash in the “market” for bitcoin as a tradeable product. Frankly it might be more interesting to see that kind of stall out.
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I can’t tell if you’re moving the goalposts or I’m missing something…are you saying that the only assets with “real” (or stable long-term) value are things which people need to not die? And that’s also a much different standard than the question of whether an industry would die without an asset.
But the industry Silk Road spawned is alive, growing, and innovating around obstacles. The online drug trade is completely dependent on cryptocurrency, btw. Their industry would disappear without it.
I don’t know if you read the article, but it’s Backpage itself which depends on bitcoin. You have to pay to place ads there, and the only way to pay is via bitcoin (or anonymous snail mail money order, but…yeah). Backpage would disappear without bitcoin.
It occurs to me that what we have is vague/different definitions of “need”. I mean, it’s the nature of modern capitalism that almost all of the economy is made out of things we don’t need in the strictest sense. And furthermore, capitalism makes it so that there’s always a replacement, backup, or alternate path for any disaster in the market. This is true for almost everything, so it’s hard to pin down many specifics things that we actually need, as opposed to use because it’s currently the optimal solution.
It seems like you’re focused on the idea that there are scenarios where the market value of bitcoin could be reduced to 0, but isn’t that the case for the vast majority of commodities? I mean, you could have a warehouse full of real physical edible strawberries, and research comes out that strawberries cause cancer and now you have a warehouse full of toxic waste valued possibly even below 0.
Maybe more useful than simply asserting that it’s possible for bitcoin to be worth 0 is considering the scenarios that could cause that, their likelihood and collateral impacts. Because while it’s possible for very many things to become worthless, their current value tends to be predicated on the odds that such a scenario won’t happen - or that if it did happen, it would affect a lot of the rest of the economy too.
I suspect that considering such scenarios is better done through mathematical modelling rather than general assertions about whether bitcoin is/is not “real” or “stable”. And I also suspect that the answer is neither of those, and is more along the lines of “it’s complicated”.
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When I was growing up a 2bit coin was called a quarter and worth 25 cents.
Jus’sayin…
;~}
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That’s very 2012.
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I’ve bought quite a few ebooks and other online services with bitcoin in the past (and even recently). There are a lot of online vendors that accept it. No, I can’t easily go buy beer with it but I spend plenty on the Internet.
Update later: Man, you really don’t like bitcoin do you? I like you but after the fourth or so 10 paragraph plus comment of half-right stuff, my eyes just kind of glazed over. People have corrected many of your incorrect assumptions but you keep doubling down.
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But not guaranteed against bone-headed politicians.
I don’t see Bitcoin as a currency replacement (yet), just a hedge.
Alternatively, considering how much governments love to ban activities that its citizens are happy to pay for, I’d say it has a bright future.
The ratchet is rigged to only go one direction. Bitcoin itself may or may not be a good bet, but I wouldn’t bet against the ratchet.
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No. But the sort of investments we talk about being good and stable typically have some real world, stable, value behind them. Even money. Thinking about extracted examples of need is a nice way to get at that.
Silkroads industry was the drug trade/black market. It pre-existed bit coin. As did online sales of the same. Knew people buying psychedelics on line long before BC and Silk road. And it’s a pretty small factor in the drug trade even now. Without bitcoin it goes back to cash exchanges. Or they find another way. The bigger factor with BC and the drug trade, from what I understand is money laudering.
Likewise backpage rolled out of Village Voice Media. They didn’t always take bitcoin and without it they’d likely go back to they way they used to do things or find another way. Though from what I’ve heard Backpage is unlikely to make it that far. When they shut down the industries they advertise for will move on. No bit coin needed. Just like when Craigslist killed their sex ads.
In both cases bitcoin is simply acting as a token. Not as currency. It’s a place hold for real money, utilized for its anonymity in online transactions.
Commodities, stocks, bonds, currencies yes. I’m trying to illustrate why I think bitcoin is of higher risk in that regard. And even perhaps, destined to fail eventually.[quote=“enso, post:51, topic:96329”]
Man, you really don’t like bitcoin do you?
[/quote]
No I don’t. I see very little about it that resembles actual currency. It behaves like certain types of investment vehicles. And in a lot of ways like the bad sort. But it lacks the critical fall back positions, regulations, oversite that even those bad ones operate it. It’s got certain attempts to mimic free market dynamics and some of the actions a Central Bank has baked into it. But it runs in a parallel, unregulated market. It’s by design decoupled most of the economic world. Even if it was running through typical financial markets it’d probably be the sort of thing smart finance people tell you to avoid.
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Meh, I’ve bought and sold things with Bitcoin. I mined enough to more than break even in years past. It seems like you’re doing a lot of goal post moving in discussions here but at great length so maybe my impression is mistaken. You clearly care more than anyone else here, which makes it a rather lopsided “discussion.”
The interesting thing is more the blockchain, which you’ve avoided even discussing as a technology.
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I have bought many things with ski ball tickets over the years
Yeah but you aren’t ranting on the Internet at ski ball fans about how it is all a scam, are you?
I didn’t say scam. I said bad/risky investment and more likely to collapse than otherwise and not justifying it’s current valuation.
Ski ball tickets are a bad investment too. None of these switchblade combs have gotten me anywhere.
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Was this entire thread on Bitcoin as an “investment” or on using it as currency? I’ve seen you go back and forth on this.
I don’t “invest” in Bitcoin. I have some in a wallet a d I have a coinbase account with a Visa card attached that let’s me trivially buy and sell Bitcoin. I use it with some vendors…
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It’s a lesson in the advantage of intrinsic value of assets. One day you’ll find yourself in the middle of a hairdresser gang war and you’ll be glad you have them. 
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I don’t think you’re following. Bit coin is pitched as a currency but it is not. It does not behave like one in the world and its valuation on the exchange has little to do with its utility as such. The rare cases where bitcoin is used to purchase it behaves more like a token. Ski ball tickets are one of the text book examples of tokens and why they /= money.
Instead the way bitcoin behaves in the world is more like an investment of some sort. And it’s value is almost entirely down to speculation on the exchange. Examined as an investment vehicle. Bitcoin has some critical short Falling’s that would make it a bad bet even in existing regulated, connected markets. And in that lens it looks even worse given the state of its market.
And that’s what I was trying to explain. How it is unlike a currency. And why it is not good when examined as an investment.
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