Just because idiots abuse cryptos for baseless manias doesn't make the underlying technology or idea or thing bad, nor a pyramid scheme or an MLM. You could say the same thing about property, art, vintage cars, any number of things that are also not pyramid schemes or MLMs. Bitcoin is definitely experiencing baseless manias, but it's very clearly not a MLM or pyramid scheme.
> It's negative-sum because miners constantly extract $60 million dollars per day, $21B per year in block rewards. These are liquidated and cause negative price pressure, socializing what amounts to a $250 transaction fee.
Agree this is bad but that's an artifact of what people are doing with Bitcoin, not an inescapable fundamental quality of Bitcoin. Bitcoin can and for a long, long time used to run just fine on comparatively little energy and transaction costs measured in cents. More energy efficient protocols (and those exist now) can comfortably accommodate orders of magnitude more transactions than Bitcoin for orders of magnitude less energy. (I guess if you wanted to calculate in dollar terms the "intrinsic value" of Bitcoin, it would be the equipment and energy cost of running a comparable or better blockchain, which could possibly be what a couple of grand per year?)
> You can't have it both ways :)
I'm not making claims about whether Bitcoin (or any other crypto) is a currency, or a good currency. But they undeniably share in common with currencies that they are means of transacting (other) things that are created, that otherwise wouldn't be created, if there was no means to transact. (despite them being insanely deflationary) (and while their psuedonymous nature certainly makes them attractive for illicit transactions, it simply isn't true that they're "only" used for those)
> We have yet to find a single use for it
This just isn't true. It's not difficult to imagine how a distributed tamper proof ledger could be useful, or find actual practical uses of blockchains. I'll be the first to admit blockchains are overhyped and that they don't offer any meaningful advantages over existing tech in many, many of of the proposed use cases, but the legitimate uses cases do exist.
I'd love to see you address any of jstolfi's points directly!
> Agree this is bad but that's an artifact of what people are doing with Bitcoin, not an inescapable fundamental quality of Bitcoin. Bitcoin can and for a long, long time used to run just fine on comparatively little energy and transaction costs measured in cents.
It really can't. Its security is proportional to its wastefulness. It must always waste more than its opponents are willing to spend to destroy it meaning its waste must grow with its valuation. It's a proof of waste algorithm.
> I'm not making claims about whether Bitcoin (or any other crypto) is a currency, or a good currency.
I am making the claim its so utterly bad at being a currency pretending it's a currency is pointless and harmful to the discourse.
> This just isn't true. It's not difficult to imagine how a distributed tamper proof ledger could be useful, or find actual practical uses of blockchains.
It's been 14 years. There isn't a single use that isn't crime or regulatory arbitrage - or solving a problem crypto created for itself. The proof is in the pudding, and there's simply no pudding.
> ... but the legitimate uses cases do exist.
If you find one, and productize it, you will be the single wealthiest person alive. Elon better step aside.
The handle I'm responding to hasn't exactly provided "evidence" either, including for:
* the existence of nebulous things like "value stores", "intrinsic value" or what constitutes or possesses either
* that Bitcoin is a negative-sum asset, a MLM or a pyramid scheme
* that a distributed tamper proof ledger doesn't have any usefulness for any practical purpose
which is fine by me, we're all just here to kill time between builds and deploys anyway :P but if you think evidence is required knock yourself out and prove some for any of the above
Just to be clear, my point was that the classical definition of a "store of value" isn't something that goes up exponentially and flails around wildly at the whims of folks trying to liquidate leveraged positions.
It's broadly regarded as something you can purchase and expect to get your money back. Not a ton more, not a ton less, roughly what you put in. I don't think there's a single world in which any cryptocurrency falls into that definition today. Might it? It could. I don't think it will. But that's speculation, what's not speculation is that it's not one today.
The "store of value" narrative was coopted once folks in the community realized it couldn't ever actually sustain more transactions than required by a small Costco.
> Gold and other precious metals are terrible stores of value, their dollar values are incredibly volatile...
They're dramatically less volatile than cryptocurrencies which does make them better suited, however I do not personally advocate for owning metals - for exactly the reasons you rightly describe.
> Most central banks aim for 2% inflation per year, literally guaranteeing any amount to become worthless over time if stored in currency. (vs bonds or some other appreciating asset)
Modern economies intentionally split long-term stores of value from short-term medium of exchange. Currencies are inflated slowly to incentivize investment, and to maximize employment along the Philips curve. This is the charter of the Federal Reserve and most other world central banks.
> Just what. Bitcoin is strictly positive sum under any sane definition. Unlike MLMs or pyramid schemes, Bitcoin never alleges to return anything other than Bitcoin.
It doesn't allege a return, however literally every frothing at the mouth holder of crypto will allege it for you, as they are incentivized to do. Bring in more people, you get wealthier. Sound familiar? It's a decentralized MLM. It's negative-sum because miners constantly extract $60 million dollars per day, $21B per year in block rewards. These are liquidated and cause negative price pressure, socializing what amounts to a $250 transaction fee. [1]
> Neither do currencies. They're just currencies.
Which is why they don't go up in value. You can't have it both ways :) dreadful currencies go up astronomically in value, because this creates a deflationary spiral. Dreadful currencies go down a ton in value because it doesn't offer you time to productively allocate. A good currency averages a low, predictable rate of inflation.
> ... tamper-proof ledger is useful, and thus has "intrinsic value" just like toilet paper or gold.
We have yet to find a single use for it. All you can do is look at your spreadsheet cell in a web browser, or get someone else to buy it from you. You can't do anything with it. At least you can turn gold into electronics, like bitcoin miners.
[1] https://www.ic.unicamp.br/~stolfi/bitcoin/2020-12-31-bitcoin...