Semi OT: Anyone lose money in the crypto crash?

[brownbobcat]

Forgive me but this reads like you're having a debate with yourself. It has absolutely nothing to do with a) a monetary system that is based on credit and inflation and b) how Bitcoin is or isn't perceived as an asset in relation to 'a'.

I don't think you have any idea what your argument is.

You began by saying that the problem with fiat currency is debasement. I responded that moderate inflation is not a problem, it's been happening for centuries and the financial system is still working.
You don't seem to understand why it's important that the US dollar is backed by the world's most powerful economy and military, nor that the US dollar being accepted as a de facto global currency means it functions well in that role (or is the best option anyway).
It appears very important to you that Bitcoin maintain value despite it not having any intrinsic value whatsoever. You think it's a "digital asset". Newsflash: it's not an asset any more than my special rock is.

On a sidenote, debasement is actually very important. Without it, it wouldn't be possible to pay for wars, or social entitlements like pensions etc.

And I here I thought debasement was everything wrong with fiat currency? Sidenote, the economy doesn't need money to "pay for things". Money is merely another kind of debt instrument and monetary policy reflects the central bank's attempts to shape consumer behaviour by increasing/decreasing certainty about the future, among other things.

[refshateRaps]

Contrary to what our favorite sell-out, diamond/triangle/33(I see you Pac) hand masonic rapper or naive parent taught us... Currency is slavery.

We simply get a longer temporary chain if we obtain more of it ('Ballers' and other chit they use the mainstream sell-out to seed and make it all sound cool lol)... Is what it is...

Seems clear to me like the greater market monster-azz wick was lit around January... Tick tock for those of those about to stretch our chains.

Play it as you see it in the belly of the beast... I always keep in in mind whenever they bring real darkness they soon after bring the light to keep the majority subdued. Bets are in that we see one hell of a serious lightshow this time around.

[shefcurry]

Contrary to what our favorite sell-out, diamond/triangle/33(I see you Pac) hand masonic rapper or naive parent taught us... Currency is slavery.

We simply get a longer temporary chain if we obtain more of it ('Ballers' and other chit they use the mainstream sell-out to seed and make it all sound cool lol)... Is what it is...

Seems clear to me like the greater market monster-azz wick was lit around January... Tick tock for those of those about to stretch our chains.

Play it as you see it in the belly of the beast... I always keep in in mind whenever they bring real darkness they soon after bring the light to keep the majority subdued. Bets are in that we see one hell of a serious lightshow this time around.

"If there's a new way, I'll be the first in line. But it had better work this time." - Dave Mustaine.

If currency is slavery, then our need to eat is also slavery. Not sure you can have one without the other.

[shefcurry]

Forgive me but this reads like you're having a debate with yourself. It has absolutely nothing to do with a) a monetary system that is based on credit and inflation and b) how Bitcoin is or isn't perceived as an asset in relation to 'a'.

I don't think you have any idea what your argument is.

You began by saying that the problem with fiat currency is debasement. I responded that moderate inflation is not a problem, it's been happening for centuries and the financial system is still working.
You don't seem to understand why it's important that the US dollar is backed by the world's most powerful economy and military, nor that the US dollar being accepted as a de facto global currency means it functions well in that role (or is the best option anyway).
It appears very important to you that Bitcoin maintain value despite it not having any intrinsic value whatsoever. You think it's a "digital asset". Newsflash: it's not an asset any more than my special rock is.

On a sidenote, debasement is actually very important. Without it, it wouldn't be possible to pay for wars, or social entitlements like pensions etc.

And I here I thought debasement was everything wrong with fiat currency? Sidenote, the economy doesn't need money to "pay for things". Money is merely another kind of debt instrument and monetary policy reflects the central bank's attempts to shape consumer behaviour by increasing/decreasing certainty about the future, among other things.

The common thread from everyone I know that touts crypto is a shallow and incomplete understanding of monetary policy and how we got to the system we have today. We have central banks because decentralized finance was far, far worse. It existed many times throughout history, and in all cases it was a disaster.

Modern fiat is the product of evolution, and natural selection has given us a system that is right for the time, space, and place we are in today. Could fiat evolve into a purely digital medium of exchange in the future? Sure. But it ain't decentralized crypto, which is a regression.

We should listen to brownbobcat. He understands.

[canz55]

Forgive me but this reads like you're having a debate with yourself. It has absolutely nothing to do with a) a monetary system that is based on credit and inflation and b) how Bitcoin is or isn't perceived as an asset in relation to 'a'.

I don't think you have any idea what your argument is.

You began by saying that the problem with fiat currency is debasement. I responded that moderate inflation is not a problem, it's been happening for centuries and the financial system is still working.

You're taking leaps of bad faith in a range of places that I haven't visited in anything that I've written. I didn't say that the US dollar has to be replaced, or that any sovereign fiat currency needs to be replaced (this appears to be what you're implying in your responses). I also didn't suggest in any way that the current monetary system should be torn down.

I think the problem here is generally poor perception leading to miscommunication. There appears to be some kind of association (I would call it a misunderstanding) being made between bitcoiners (hard asset maxi's broadly speaking) and falsehoods about the need to "tear down monetary systems" or something to that effect. I'll admit that there are people in the ether that have made asinine, grandiose statements that are completely nonsensical but I can't control what people say or how Bitcoin is perceived in relation to that.

However, the statement "moderate inflation is not a problem" is a major red herring, not just in the statements you're making in relation to the topic at hand but also in your credibility overall. It's an affront to some of the greatest minds who are more literate on the subject of economic theory than you or I will ever be, namely Friedrich Hayek. It is well-accepted that inflation is compounded over time and its real effect on prices should be viewed as a vector (some things increase in price at a faster pace than others).

It appears very important to you that Bitcoin maintain value despite it not having any intrinsic value whatsoever. You think it's a "digital asset". Newsflash: it's not an asset any more than my special rock is.

Ok, this is a discussion worth having which is what I indicated earlier. You veered off in some other direction trying to explain the "merits of the sovereign fiat monetary system" (I guess?). You didn't explicitly say to buy US debt bonds so I won't put words in your mouth.

[Fairview4Life]

**** Frederick Hayek.

[brownbobcat]

You're taking leaps of bad faith in a range of places that I haven't visited in anything that I've written. I didn't say that the US dollar has to be replaced, or that any sovereign fiat currency needs to be replaced (this appears to be what you're implying in your responses). I also didn't suggest in any way that the current monetary system should be torn down.

I think the problem here is generally poor perception leading to miscommunication. There appears to be some kind of association (I would call it a misunderstanding) being made between bitcoiners (hard asset maxi's broadly speaking) and falsehoods about the need to "tear down monetary systems" or something to that effect. I'll admit that there are people in the ether that have made asinine, grandiose statements that are completely nonsensical but I can't control what people say or how Bitcoin is perceived in relation to that.

I'm not sure what the point of any of that is. First currency debasement was a problem and now it's a feature - what's your argument, exactly?

However, the statement "moderate inflation is not a problem" is a major red herring, not just in the statements you're making in relation to the topic at hand but also in your credibility overall. It's an affront to some of the greatest minds who are more literate on the subject of economic theory than you or I will ever be, namely Friedrich Hayek. It is well-accepted that inflation is compounded over time and its real effect on prices should be viewed as a vector (some things increase in price at a faster pace than others).

It's generally a mistake to cleave too closely to any one particular school of thought in economics. Since it's all based on human behaviour and increasingly complex/reflexive, it doesn't always model well. A lot of it is frankly pseudoscience. I'm not getting into a rabbit hole of debating Hayek or Friedman even though I think a lot of the Austrian school is bunk - but empiricism reigns supreme. The world continues to function reasonably well within a framework of moderate inflation. Obviously not everything changes at the same rate, but the idea is that people can adjust given sufficient time. And generally, that's been the case.

It appears very important to you that Bitcoin maintain value despite it not having any intrinsic value whatsoever. You think it's a "digital asset". Newsflash: it's not an asset any more than my special rock is.

Ok, this is a discussion worth having which is what I indicated earlier. You veered off in some other direction trying to explain the "merits of the sovereign fiat monetary system" (I guess?). You didn't explicitly say to buy US debt bonds so I won't put words in your mouth.

As I said, I have no idea what your argument is.

[wegotthabeet]

the point i think he's trying to make is that no one can simply hold 100% of their wealth/$/assets in any fiat currency over an extended period of time without it being debased. $100 will always be worth less next year and the year after and so on.

Those are 2 very different things you are conflating. No one should be holding all of their assets in cash of any currency. Having your assets denominated in USD is a separate matter and no, it does not equate to debasement.

the better question is does fiat $ need to be inflationary? if so why?

Complicated question. In a framework of zero economic growth, it would seem unnecessary. However, that's not the case. Furthermore, the global economy is not a homogenous closed system - it contains many systems within that grow and contract at different rates.

that's correct, but what happens when 50% of all US$ ever printed gets printed in one year?

https://fred.stlouisfed.org/series/M2SL

also look at how much assets have inflated since 2009. who benefits from this? is it younger people/future generations, middle class or poor people? inflation isn't going to be moderate ever again and it hasn't been moderate in a long time, it just shifted from currency to assets in the developed world. i can't see us going back to 2% inflation ever again. and while the global economy is not a homogenous closed system it has become increasingly connected/correlated with globalism. if the US is in a recession, everyone is in a recession.

[brownbobcat]

that's correct, but what happens when 50% of all US$ ever printed gets printed in one year?

https://fred.stlouisfed.org/series/M2SL

also look at how much assets have inflated since 2009. who benefits from this? is it younger people/future generations, middle class or poor people? inflation isn't going to be moderate ever again and it hasn't been moderate in a long time, it just shifted from currency to assets in the developed world. i can't see us going back to 2% inflation ever again. and while the global economy is not a homogenous closed system it has become increasingly connected/correlated with globalism. if the US is in a recession, everyone is in a recession.

I'm not suggesting that everything central banks do is good or defensible. There are many flaws and they get things wrong. There are also numerous bad actors in this mix that complicate things through actions like rent-seeking behaviour, financial engineering, fraud, etc.

What I am suggesting is that crypto isn't really a solution for any of that and a decentralized currency has problems too. For starters, the inability to inject liquidity into the system also makes it harder to recover from things like recessions or pandemics.

[shefcurry]

the point i think he's trying to make is that no one can simply hold 100% of their wealth/$/assets in any fiat currency over an extended period of time without it being debased. $100 will always be worth less next year and the year after and so on.

Those are 2 very different things you are conflating. No one should be holding all of their assets in cash of any currency. Having your assets denominated in USD is a separate matter and no, it does not equate to debasement.

the better question is does fiat $ need to be inflationary? if so why?

Complicated question. In a framework of zero economic growth, it would seem unnecessary. However, that's not the case. Furthermore, the global economy is not a homogenous closed system - it contains many systems within that grow and contract at different rates.

that's correct, but what happens when 50% of all US$ ever printed gets printed in one year?

https://fred.stlouisfed.org/series/M2SL

also look at how much assets have inflated since 2009. who benefits from this? is it younger people/future generations, middle class or poor people? inflation isn't going to be moderate ever again and it hasn't been moderate in a long time, it just shifted from currency to assets in the developed world. i can't see us going back to 2% inflation ever again. and while the global economy is not a homogenous closed system it has become increasingly connected/correlated with globalism. if the US is in a recession, everyone is in a recession.

Currency is largely a proxy for the economic output of a nation. So long as the US has a net positive birth and/or immigration rate and remains light years ahead of other nations in terms of GDP, inflation will be absolutely bounded by other nations necessity of the US economic machine for their own prosperity. In simpler terms, the US will always be prosperous and wages will eventually adjust for inflation so long as the world needs the US dollar.

[wegotthabeet]

Currency is largely a proxy for the economic output of a nation. So long as the US has a net positive birth and/or immigration rate and remains light years ahead of other nations in terms of GDP, inflation will be absolutely bounded by other nations necessity of the US economic machine for their own prosperity. In simpler terms, the US will always be prosperous and wages will eventually adjust for inflation so long as the world needs the US dollar.

right unless the petrodollar system collapses, which we're already seeing signs of.

and wages don't just magically adjust. they've been stagnant for decades.

[canz55]

I'm not sure what the point of any of that is. First currency debasement was a problem and now it's a feature - what's your argument, exactly?

Again, there's a miscommunication here because you were making inferences along the way regarding the utility of the monetary system as it exists today as if to imply that I am somehow in favour of replacing it. I never suggested the fiat system should be done away with - however, that doesn't make debasing money "an acceptable thing" (morally or otherwise) but I'm obviously not an anarchist. In my original post, I merely stated that money loses its worth over time which is a fact. There was no implicit argument in my original statement.

It's generally a mistake to cleave too closely to any one particular school of thought in economics. Since it's all based on human behaviour and increasingly complex/reflexive, it doesn't always model well. A lot of it is frankly pseudoscience. I'm not getting into a rabbit hole of debating Hayek or Friedman even though I think a lot of the Austrian school is bunk - but empiricism reigns supreme. The world continues to function reasonably well within a framework of moderate inflation. Obviously not everything changes at the same rate, but the idea is that people can adjust given sufficient time. And generally, that's been the case.

I wouldn't go around carelessly making those statements in public (even under a pseudonym). It's bereft of any depth or education.

If money were free then none of us would ever have to work. To deny the laws of wealth is akin to denying the laws of physics.

As I said, I have no idea what your argument is.

I actually think the onus is on you to explain why Bitcoin is devoid of value. Going on tangents about "what empirically works" isn't an explanation even worth reading. It's like saying: "well the system hasn't collapsed yet so might as well hold on to your dollars and bury them in the yard".

[brownbobcat]

Again, there's a miscommunication here because you were making inferences along the way regarding the utility of the monetary system as it exists today as if to imply that I am somehow in favour of replacing it. I never suggested the fiat system should be done away with - however, that doesn't make debasing money "an acceptable thing" (morally or otherwise) but I'm obviously not an anarchist. In my original post, I merely stated that money loses its worth over time which is a fact. There was no implicit argument in my original statement.

And water is wet, what's your point? You spend a lot of time expounding on what you haven't said, but curiously avoid saying anything concrete.

I wouldn't go around carelessly making those statements in public (even under a pseudonym). It's bereft of any depth or education.

Right, because economists never disagree with each other. Or build entire theories with limited empirical evidence and modelling. Nope, never happens - especially not with Austrian-school economists.

If money were free then none of us would ever have to work. To deny the laws of wealth is akin to denying the laws of physics.

I have no idea what that's supposed to mean other than sounding like a load of ****.

I actually think the onus is on you to explain why Bitcoin is devoid of value. Going on tangents about "what empirically works" isn't an explanation even worth reading. It's like saying: "well the system hasn't collapsed yet so might as well hold on to your dollars and bury them in the yard".

I'm not going to debate myself. State your claim or else move on.

[shefcurry]

I actually think the onus is on you to explain why Bitcoin is devoid of value. Going on tangents about "what empirically works" isn't an explanation even worth reading. It's like saying: "well the system hasn't collapsed yet so might as well hold on to your dollars and bury them in the yard".

I'll take a stab at that one.

Bitcoin is not devoid of value, or else there would be no price. So bitcoin has value. For now.

Things have value because of three things: permanence, utility, and scarcity.

A bag of rice, or a bar of gold, have intrnsic value because of tangible permanence and utility. The former isn't worth as much because it isn't scarce, while the latter is.

Fiat's tangible permanence it is the stability and structure of the government and the utility is the productivity of its citizens i.e. your ability to buy goods in that country using those dollars. The US dollar has more permanence and less volatility than the Venezuelan Bolívar because the government is more stable and you can buy more with it. So even though there are less Venezuelan Bolívars than US dollars, the US dollar has more value.

Bitcoin is very different. Bitcoin is backed by decentralized miners, which are impermanent. Miners need to create coins and immediately sell them for fiat in order to pay the power bill. If the price of bitcoin drops below the profitability threshold, the miners go bankrupt and the entire system backing bitcoin dies, along with bitcoin. Ironically, the stability of miners backing bitcoin infrastructure is tied to the stability of the bitcoin price, yet selling pressure is intrinsic to the system, so it's a snake eating its own tail.

Unlike humans that create value through work, Bitcoin destroys value through Proof of Work. So, it actually has negative utility baked into its own existence. The entire system only works with a constant influx of new fiat. No fiat buyers = total collapse of the system as a medium of exchange, as exchanges can no longer happen.

But does Bitcoin's extrinsic utility as a medium of exchange or store of value supersede the negative utility of Proof of Work?. You could make that argument. But that is not intrinsic to bitcoin. My pet rock can function as a store of value or medium of exchange if I have willing buyers. And you could argue that my pet rock is superior as a store of value because I don't have to constantly whittle it away through Proof of Rock.

Whatever utility there is in Bitcoin comes from the global network of willing buyers that facilitates easy conversion between Bitcoin and fiat. All good, except that we've already shown that the system is impermanent and, without buyers injecting new fiat into the system, the miners will deplete the battery to zero. So, if Bitcoin's utility is wholly predicated on fiat conversion, then what does it bring to the table? Fiat already exists as a store of value and medium of exchange. Bitcoin is just a layer of inconvenience on top of that. It's a nop.

Unless, of course, you perceive the value of Bitcoin to be an easier way to transfer value between jurisdictions outside the law. But that won't last. Bitcoin will either be declared illegal or regulated. So whatever utility there is today will vanish.

So no permanence and no long term utility. That leaves only scarcity as the value. Bitcoin is scarce, but can be fragmented infinitely, so it isn't really scarce.

So without permanence, utility, or scarcity, the value that exists to today is only transitory.

[hyper316]

I actually think the onus is on you to explain why Bitcoin is devoid of value. Going on tangents about "what empirically works" isn't an explanation even worth reading. It's like saying: "well the system hasn't collapsed yet so might as well hold on to your dollars and bury them in the yard".

I'll take a stab at that one.

Bitcoin is not devoid of value, or else there would be no price. So bitcoin has value. For now.

Things have value because of three things: permanence, utility, and scarcity.

A bag of rice, or a bar of gold, have intrnsic value because of tangible permanence and utility. The former isn't worth as much because it isn't scarce, while the latter is.

Fiat's tangible permanence it is the stability and structure of the government and the utility is the productivity of its citizens i.e. your ability to buy goods in that country using those dollars. The US dollar has more permanence and less volatility than the Venezuelan Bolívar because the government is more stable and you can buy more with it. So even though there are less Venezuelan Bolívars than US dollars, the US dollar has more value.

Bitcoin is very different. Bitcoin is backed by decentralized miners, which are impermanent. Miners need to create coins and immediately sell them for fiat in order to pay the power bill. If the price of bitcoin drops below the profitability threshold, the miners go bankrupt and the entire system backing bitcoin dies, along with bitcoin. Ironically, the stability of miners backing bitcoin infrastructure is tied to the stability of the bitcoin price, yet selling pressure is intrinsic to the system, so it's a snake eating its own tail.

Unlike humans that create value through work, Bitcoin destroys value through Proof of Work. So, it actually has negative utility baked into its own existence. The entire system only works with a constant influx of new fiat. No fiat buyers = total collapse of the system as a medium of exchange, as exchanges can no longer happen.

But does Bitcoin's extrinsic utility as a medium of exchange or store of value supersede the negative utility of Proof of Work?. You could make that argument. But that is not intrinsic to bitcoin. My pet rock can function as a store of value or medium of exchange if I have willing buyers. And you could argue that my pet rock is superior as a store of value because I don't have to constantly whittle it away through Proof of Rock.

Whatever utility there is in Bitcoin comes from the global network of willing buyers that facilitates easy conversion between Bitcoin and fiat. All good, except that we've already shown that the system is impermanent and, without buyers injecting new fiat into the system, the miners will deplete the battery to zero. So, if Bitcoin's utility is wholly predicated on fiat conversion, then what does it bring to the table? Fiat already exists as a store of value and medium of exchange. Bitcoin is just a layer of inconvenience on top of that. It's a nop.

Unless, of course, you perceive the value of Bitcoin to be an easier way to transfer value between jurisdictions outside the law. But that won't last. Bitcoin will either be declared illegal or regulated. So whatever utility there is today will vanish.

So no permanence and no long term utility. That leaves only scarcity as the value. Bitcoin is scarce, but can be fragmented infinitely, so it isn't really scarce.

So without permanence, utility, or scarcity, the value that exists to today is only transitory.

Very good points on selling pressure and electricity costs threat to shutdown miners

Whats your take on ETH and proof of stake?

[canz55]

Things have value because of three things: permanence, utility, and scarcity.

Things have value for a myriad of reasons. I don't know why you've limited it to three things.

A Mickey Mantle rookie card that sells on auction for over 12 million dollars is a scarce item with some degree of permanence but to pretend that a baseball card is going to last forever is ridiculous. Ultimately, a lot of what value is depends on perception which is a road to market price discovery.

Fiat's tangible permanence it is the stability and structure of the government and the utility is the productivity of its citizens i.e. your ability to buy goods in that country using those dollars. The US dollar has more permanence and less volatility than the Venezuelan Bolívar because the government is more stable and you can buy more with it. So even though there are less Venezuelan Bolívars than US dollars, the US dollar has more value.

Correct. Then in the same breath you also accept the risks of instability?

A treasurely bond market to the tune of 24 trillion dollars puts downward pressure on the dollar which is partly why rates are higher now. The point being that, the most powerful fiat among fiats is still subject to the same economic laws, if they were unaffected then you could have low rates forever without any consequence to the US dollar

Bitcoin is very different. Bitcoin is backed by decentralized miners, which are impermanent. Miners need to create coins and immediately sell them for fiat in order to pay the power bill. If the price of bitcoin drops below the profitability threshold, the miners go bankrupt and the entire system backing bitcoin dies, along with bitcoin. Ironically, the stability of miners backing bitcoin infrastructure is tied to the stability of the bitcoin price, yet selling pressure is intrinsic to the system, so it's a snake eating its own tail.

Bitcoin is backed by the network - that's it. You could shut down all the mines tomorrow without reaching 21 million Bitcoin and the ledger would continue on.

You need to do more reading about what Bitcoin is and stop listening to Jamie Dimon anecdotes on MSNBC (he personally owns BTC by the way).

Unlike humans that create value through work, Bitcoin destroys value through Proof of Work. So, it actually has negative utility baked into its own existence.

What are you even talking about? Where do you come up with this stuff?

But does Bitcoin's extrinsic utility as a medium of exchange or store of value supersede the negative utility of Proof of Work?. You could make that argument. But that is not intrinsic to bitcoin. My pet rock can function as a store of value or medium of exchange if I have willing buyers. And you could argue that my pet rock is superior as a store of value because I don't have to constantly whittle it away through Proof of Rock.

Whatever utility there is in Bitcoin comes from the global network of willing buyers that facilitates easy conversion between Bitcoin and fiat. All good, except that we've already shown that the system is impermanent and, without buyers injecting new fiat into the system, the miners will deplete the battery to zero. So, if Bitcoin's utility is wholly predicated on fiat conversion, then what does it bring to the table?

I'm not convinced you understand what permanence is (or scarcity for that matter). An immutable ledger with a fixed cap is what Bitcoin brings to the table. It's more scarce than even gold and has outperformed gold by every measure in a very short period of time.

The utility part you keep moaning on about will come when the lightning network becomes ubiquitous. Bitcoin will live side-by-side with fiat for the foreseeable future just like gold has.

Unless, of course, you perceive the value of Bitcoin to be an easier way to transfer value between jurisdictions outside the law. But that won't last. Bitcoin will either be declared illegal or regulated. So whatever utility there is today will vanish.

So no permanence and no long term utility. That leaves only scarcity as the value. Bitcoin is scarce, but can be fragmented infinitely, so it isn't really scarce.

So without permanence, utility, or scarcity, the value that exists to today is only transitory.

You make a series of grandiose deductions that are purely based on anecdotes and nonsense I'm sorry to say. A beautifully engineered, impenetrable network with a perfect ledger is simply more interesting and important than your "intrinsic utility" explanation.

[shefcurry]

There are too many points in your post to address each individually, but they all make the same mistake:

1. "Bitcoin is backed by the network". <-- The network IS the miners. If the miners fail, the network fails, and you can't transact with BTC anymore.

2. "An immutable ledger" <-- Again, with no miners, the ledger is dead, as you can't add to it or verify historical transactions. A ledger that can't be verified has no value.

3. The "lightning network" is another layer of miners, except they aren't even using the BTC network. Lightning transactions are off-chain. So now you're splitting computational cycles between lightning and Proof of Work, which further destabilizes the system as you need even more electricity to get the same amount of work done.

The core problem is you need miners, which need to pay the bills in fiat. It's a battery that needs to be constantly recharged with fiat. Therefore, its value will always be intrinsically derived from the value of fiat. It can't exist on its own. Anyone who tells you otherwise is just trying to sucker you in to pumping your fiat into the system so the game continues.

As for your ad-hominems, I've personally written crypto apps (including BTC) which are still in use today. Suggest not going that route.

[shefcurry]

Very good points on selling pressure and electricity costs threat to shutdown miners

Whats your take on ETH and proof of stake?

ETH is different beast because it doesn't claim to be a currency or a store of value. Smart contracts have intrinsic value because they codify a "business problem" right into a protocol, therefore saving the labour and infrastructure cost of human beings the need to verify the nuances of every exchange.

Of course, properly architected database software also does this too, so there's a counter-argument that it's a six-of-one, half-dozen of the other problem.

The question is do smart contracts create more value than the energy they consume to exist? I'd argue in some cases yes, and in others (NFT's, etc..), probably not. But that's true of all software. Some apps on the app store are really useful. Others are just deisgned to be ad factories.

DAO's are an interesting use case but I haven't seen it executed well yet.

As for Proof of Stake, once you cross that line, you're defeating the entire purpose of blockchain and centralizing power and authority again. May as well just be a database at a big tech firm. Same old problem as every other medium: S/he who has the most toys always wins.

[canz55]

There are too many points in your post to address each individually, but they all make the same mistake:

1. "Bitcoin is backed by the network". <-- The network IS the miners. If the miners fail, the network fails, and you can't transact with BTC anymore.

2. "An immutable ledger" <-- Again, with no miners, the ledger is dead, as you can't add to it or verify historical transactions. A ledger that can't be verified has no value.

3. The "lightning network" is another layer of miners, except they aren't even using the BTC network. Lightning transactions are off-chain. So now you're splitting computational cycles between lightning and Proof of Work, which further destabilizes the system as you need even more electricity to get the same amount of work done.

The core problem is you need miners, which need to pay the bills in fiat. It's a battery that needs to be constantly recharged with fiat. Therefore, its value will always be intrinsically derived from the value of fiat. It can't exist on its own. Anyone who tells you otherwise is just trying to sucker you in to pumping your fiat into the system so the game continues.

As for your ad-hominems, I've personally written crypto apps (including BTC) which are still in use today. Suggest not going that route.

If the entire network is turned off (yes I know they're the same) the ledger doesn't disappear. It lives on. You could shut down the entire world's internet and bring civilization back into the dark ages, crawl out of the ashes, and then run a single node and the ledger would still be there. You can't kill bitcoin just like you can't kill gold. The ledger CAN be verified.

The transaction issue is tied to the miners, yes, but energy costs would have to be so punitive that if you can't run computational rigs then we have bigger problems on our hands as a civilization, like keeping the lights on in our own homes.

[brownbobcat]

I'll take a stab at that one.

Bitcoin is not devoid of value, or else there would be no price. So bitcoin has value. For now.

Things have value because of three things: permanence, utility, and scarcity.

There are a lot of overlapping concepts that some others are having a hard time separating, resulting in basically saying nothing at all. There's value and then there's intrinsic value.

Value is completely arbitrary. If even 1 person thinks a good/service/abstraction is worth something (and is willing to act as such), then it has value. I'd say that scarcity is really the only attribute which is required, though not sufficient. After all, everything is finite to some degree.

Intrinsic value is a different matter. There, we're mostly talking utility. Where it starts to get really complicated is when financial markets and currency get involved. Never mind some complex mess of derivative instruments that no one can untangle, just look at a simple stock - say Apple.

What is the utility or value of owning a share of Apple and why would anyone want to do so? Most people would say because they expect the price to go up and/or dividends received. What does it mean if we remove money from of the equation? It's an exchange of current claims/IOUs against an expectation that Apple will generate enough future utility to return a greater amount of claims/IOUs in the future. To construct a more direct example of capital investment, it's like helping plow a common field in return for a greater share of crop than could've been harvested if everyone did their work individually.

Unfortunately, the world's economy is much more complicated than 1 field and there are many companies which will fail to generate the expected return, and many bad actors who will profit from behaviours like rent-seeking or pump & dump. All of which can make it hard to assess intrinsic value.

Currency has no intrinsic value, it is a representation of intrinsic value, a way to measure our respective claims/IOUs. Again, some other people are having a really hard time distinguishing that from the idea of "I can buy a candy bar with $1, of course currency is worth something." The usefulness of currency comes from being fungible, universally accepted and stable. For USD, those qualities are directly tied to the strength of the U.S. economy & military - a real world entity with the ability to perform real actions.

Blockchain has many useful applications, which don't need to be repeated. As a currency, it has many downsides as well. For starters, it isn't backed by anything in the real world. And no, just being a really good ledger doesn't count. A country has people and capital which can be utilized to produce goods and services, a ledger is just information. It's also not unique - there could be any number of crypto-currencies all based on similar technology, but countries cannot be replicated.

Of course you could have any number of micro-economies choosing to operate on such a financial system on a limited basis, but arbitrary scarcity isn't as important as people are making it out to be.