As soon as the BTC market reaches maximum penetration and no new buyers can be found, Bitcoin becomes price stable. And once price stability is reached, because the price isn't appreciating anymore, people will want to start spending their earnings. And as BTC in particular isn't actually that good as a currency, people need to turn their BTC into fiat in order to realise their value and spend them.

And then suddenly... there aren't any buyers and it crashes.

The stock market goes up because you are looking at a market index of the biggest companies, which are growing bigger as markets concentrate. The difference is if you have a share for a year, it earns you a return separate to what happens to the price of the stock (i.e. a dividend), and this is the intrinsic value (i.e. you can do a fundamental analysis of the stock to reach a price). If you hold onto a Bitcoin for a year it might be worth more, but only because the market is pricing it differently, not because of any fundamentals. This is why it does not have intrinsic value.

People need to turn gold into fiat in order to spend it. Those are people with excess wealth and not enough income. There will always be people on the other side, excess income but low wealth.

The supply of new people earning money who will want to invest income into Bitcoin has to be finite. Growth can't continue forever because you always need to find someone new who is willing to pay more than you did for a bitcoin/satoshi to keep the price growing, and there isn't an infinite supply of people with an infinite supply of money.

In fact, inflation is the only reason people put money into Bitcoin lol. If there wasn't any inflation, nobody would buy Bitcoin. Really makes you think.

Bitcoin is negative sum because the miners constantly have to sell Bitcoins for real currency to pay their electric bills. The equilibrium point is when the new money entering the system is equal to the cash value of block rewards. The higher the price, the more new money has to come in to keep it stable.

Currently, Tesla's $1.5B investment is about 4-5 weeks of electric bills (lmao).

The point at which there are no new buyers is actually a negative slope point.

The nuance in this is that its value also includes a financial incentive - the MLM structure inherent to Bitcoin, and that is truly what aligns everyone in Bitcoin - it's not for whatever other positives may exist as the primary glue, arguably 99%+ is the financial gain and potential that is the glue.

But yes, pro-Bitcoiners have been good at refining their narrative, the propaganda, conveniently ignoring the MLM structure whenever writing prose of how amazing Bitcoin is - while avoiding answering questions related to its pitfalls like with Bitcoin how do you implement policy and mechanisms like the Magnisky Act to block money of known bad actors as an economic punishment and attempt to sway their bad actions - before needing to perhaps (hopefully not) escalate actions into the physical, destruction-violence mechanism?

Whereas with bitcoin, it is fairly unmoored from physical constraints.

There is no natural price for bitcoin.

It could go up forever or drop to nothing and both are acceptable valuations that would be hard to question -- because it is merely shared belief.

People should know more about the paper gold market. Most importantly how much gold people think they have stored safely in vaults, but is essentially just an IOU that could never be paid if everyone withdrew at the same time. Pretty scary/exciting stuff. I couldn't even begin to describe all the dimensions to this and still learning myself. But long story short, consider the possibility that the price of gold isn't anywhere near tied to a physical thing. :)

All money, currency and assets are based on faith on the continuing demand for that thing. All the other properties are incidental.

How? As an intrinsically valuable means of speculation because sound investment opportunities are absent?

The EU came the closest, but no one outside of Europe has wanted Euros since the Greek economic crisis. Hell a large chunk of internal European trade is still done in dollars on the back-end.

On the stick side, under Obama the US stepped up the various mechanisms such that we can cut off trade denominated in dollars on a whim to anyone we want, that's part of how sanctions work. If we (the US) decides we don't want a country to be able to trade internationally, we just cut them off from converting into dollars at the exchanges. There are no economically viable ways around this at present. Just ask Iran.

Bitcoin however, will collapse the moment enough of the crowd loses the faith. It'll go on for a while because it's the new hotness, and some people will get lucky and rich, but at the end of the day it's an ultimately worthless commodity (unless you're trying to avoid government regulation over financial transfers) that exists as long as world governments allow it to exist.

Sure, if theoretically some critical mass of the population all collectively decided Bitcoin was the future it would be, but right now we can't get a critical mass of US citizens to wear masks during a pandemic that's killed hundreds of thousands. So I wouldn't hold out too much hope for pan-Bitcoinism.

USD is the dirtiest fiat there is because it's backed by blood at a global scale.

As for moral purity, it's no secret that a significant (albeit unknowable) portion of Bitcoin's current value comes from illegal transactions concerning everything from human trafficking to drug sales to organized crime rackets. The ability to obfuscate financial transactions is part of its intrinsic value, so anyone with an interest in doing so will be attracted to it. Plus if Bitcoin were to somehow grow large enough to even consider replacing the dollar, all the blood behind the dollar would simply shift to Bitcoin in some (albeit likely different) manner. Someone has to enforce monetary policy and financial laws, a chaotic, decentralized enforcement would arguably be even worse than centralized fiat enforcement.

There's no way forward financially without some blood on your hands at some stage. So for my money I'm going to build my financial house on solid ground. I'm all for making the system more just and less bloody, but IMO Bitcoin isn't it. In the meantime we've all got to play the hand we're dealt, the only other option is to be a martyr, and while they might get some occasional press and lip service, martyrs typically don't accomplish much.

No. Internal trade is balanced with target2.

Bitcoin's block reward can be changed as well, it's not some immutable law of the blockchain. I'm not claiming that it will change, but I also see the potential for there to be a change there to incentivize mining once the block rewards are minuscule and miners are dependent on transaction fees for profitability.

Those people are losing money due to inflation. This is well known and an issue with people keeping cash in "mattresses".

> Bitcoin's block reward can be changed as well, it's not some immutable law of the blockchain. I'm not claiming that it will change, but I also see the potential for there to be a change there to incentivize mining once the block rewards are minuscule and miners are dependent on transaction fees for profitability.

This is called a hard fork, and has been done more or less unsuccessfully multiple times now.

I'm aware of what a hard fork is, I'm also aware of what a 51% attack is. The risk of that down the road could be a fair amount of incentive for folks (and the network effect) to get on board. I'm not saying something will happen there. You do need to maintain clarity to understand the reality of what's possible though. It's also possible that bitcoin's first mover advantage is overcome at some point.

As I said, I own some cryptocurrency too. It's important to see through the mania that is the current market.

The fixed, deflationary nature of Bitcoin isn't the only financial instrument we need, but it is desperately needed in its own right.

Competing tenders in most countries are outlawed. It is an enforced shared belief.

That's not just shared acceptance because even if the mighty USD should crumble and fall, a US citizen will still be able to pay the taxman with a dollar bill which is in itself of great value.

Clearly it has value as a speculative vehicle and as a systemic risk hedge (like Gold). Whether it can become a true currency is still debatable. Its infrastructure feels more like selling stock or bonds today.

You can change the code, but it's up to the miners to actually run that code. Not saying it's impossible, but that's a big ask for a controversial change like that. Maybe someday if the mining is even more centralized than it currently is.

It's difficult to imagine this causing the price to go any direction other than up.

Though in the longer run, assuming the network stays up (I see no reason why not), I also think it would strengthen the case and we'd see prices continue to climb.

To what do you refer here?

So is US dollar.

Bitcoin is not even not in the same league - it’s playing different sport.

the only thing novel is that its decentralized and inefficient but the average user really doesnt care about that.

These are some of the problems with centralization that decentralization solves. The original Satoshi white paper calls out many of these use cases. Part of the reason bitcoin is exploding in value again is because the US government is inflating everyone's money.

This is before even getting into applications of smart contracts...

Congratulations on your successful investment (that's not something I would recommend publicizing though)...