No, this is an absolutely ass-backwards argument. To be a currency or a store of value or money (read: to be of any use) it has to be exchangeable for goods and services. Now we can see transactions on the blockchain but we have no idea what that transaction was for. *Nobody* can tell you what a bitcoins worth of wheat is without resorting to exchange rates of bitcoin to actual currencies. But because the entire exchange ecosystem is so illiquid, intransparent, unaudited and rife with fraud there is no way to know how many bushels of wheat you could get for something like 13 BTC.

Isn't this counter-argument equally applicable to silver or gold?

Well, the problem is you can easily trade gold for cash because it is socially acceptable to do so. If Bitcoin became outlawed, it would be very hard to exchange Bitcoin for cash, since it has no extrinsic value outside of being a financial asset (as compared to, for example, barrels of crude oil). That being said, I doubt Bitcoin will be outlawed in the West, and generally agree that it will be around for the long term.

> That being said, I doubt Bitcoin will be outlawed in the West, and generally agree that it will be around for the long term.

Well, not entirely without precedent, since private ownership of gold was outlawed nationwide in the US during the Great Depression. It wasn't fully legalized until 1974.

https://en.m.wikipedia.org/wiki/Executive_Order_6102

This is an entirely new fact for me. It’s surprising to me that I’d never heard of this. Thanks for sharing!

Wait till you hear that the first chairman of the SEC was a notorious market manipulator who was hired by his friend FDR to prevent anyone else from doing the things that made him rich. He also happened to be JFK's dad.

https://en.wikipedia.org/wiki/Joseph_P._Kennedy_Sr.#Wall_Str...

That's why history repeats. Most people have no idea what happened a 100 years ago.

Yes.

Nobody can tell you what a gold oz. worth of wheat is without resorting to exchange rates of gold to actual currencies.

I'll give you 1kg of wheat for an ounce of gold right now.

I'll see your 1kg and raise to 100kg.

Congrats boys! We just created a market using gold as the unit of account!

Gold has intrinsic value as a commodity though. It's scarce, has industrial uses, and has aesthetic value to a lot of people. Bitcoin doesn't have that. Bitcoin has value entirely because people think it has value. As an inflation hedge it fuckin sucks because it follows the market. When the fed increased rates, bitcoin crashed. As a store of value, it's too volatile to really work well for that and small mistakes can leave you with nothing. As a currency, the transactions per second is way way too low to be useful.

> Gold has intrinsic value as a commodity though. It's scarce, has industrial uses, and has aesthetic value to a lot of people.

Yet this value is a small fraction of gold's trading price. How do you explain the current price of gold?

Gold, like stocks and real estate, trades at some multiple of book (with metals this ratio is generally between 0 and 1, with stocks it's generally greater than 1). In fact, looking at the P/B ratio is often one of the first things someone does when evaluating an investment. That ratio for bitcoin is infinite which is why it's not an "investment" in the usual sense of the word.

why is BTC ratio infinite, but not gold?

Gold has industrial uses; the gold traces on a PCB add $X value to it which is a floor for the value of the gold itself

That ratio is a somewhat arbitrary thing. Who says it's a good measure?

For gold, perhaps 20% of its value is its actual use and 80% is for the scarcity. For bitcoin it's 0% for actual use and 100% of the price is its scarcity.

When you look at it like this, the difference between gold and bitcoin is not nearly as dramatic.

We almost had that with oil, but then they killed the guy trying to make it happen.

Unrelated to the killing, tying you medium of exchange to a physical commodity was ill-suited to a time where the global productivity growth was double-digits for 50 years. Limiting the growth of your exchange medium to the rate at which a commodity can be extracted is almost as bad as going full command economy.

I'm not sure what point you think you're making here, because this is in fact entirely correct for gold and why gold isn't some magic "better money" alternative.

This is a very valid point. However, the gold:<random currency> markets have been extremely liquid and somewhat transparent for the past thousand years. In the dark ages there was no way for someone to move the *global* gold:wheat chart by 50% just by executing shadowy trades at a single marketplace. Of course this is because medieval markets lacked a great deal of information synchronization, but it was also because medieval markets were actually decentralized.

You do need to separate medium of exchange from store of value. Real estate is useless as a currency while being the primary store of value for most people. Most of your objections also apply to real estate: can't know how much wheat a house is worth, houses are notoriously illiquid, price discovery is difficult and quite opaque, the sector is rife with misrepresentations. I wouldn't go so far as to say fraud, but where does "real estate agent" sit on those polls of "most trusted professions"? Houses aren't even fungible!

And if anyone thinks BTC/ETH transactions are slow and expensive (me!), around here the gas fee on real estate transactions is ~5% with a 6-month processing time...

I guess the difference is that you can live in a house. For the majority of people that's the real value.

Real estate market is also heavily (heavily) regulated, to the point that buying and selling houses require so much paperwork that it's not really convenient for scammers.

It's also quite stable, loans are secured by mortgages on the properties, I'm not sure anyone would accept bitcoins for the same purpose.

You sort of tipped around the main difference: Real estate is illiquid and intransparent sure, but it is a non-fungible productive asset, you can get people to pay you rents because they need precisely your building. There are no comparable income streams for bitcoin (outside of Ponzi "yield farming") so it is illiquid without any of the benefits of traditional illiquid assets.

rent is due after you bought the property.

which entails a lot of the aforementioned paperwork and checks and law abidings.

if bitcoin could provide the exact same level of security, it could be used as an asset, granted it failed as a currency.

the problem is it was designed precisely to not adhere to the standards everyone expects from "old-school" transactions, hence its main purpose is speculation, and it's barely good at that right now.

You can live in a real estate investment or grow food on it or run a business in it. Bitcoin is a bunch of 1s and 0s that is same as a blank canvas hung in museum and is priced at $20M. It is essentially useless, but people believe it’s worth something, so it keeps holding value. Until one day, it doesn’t.

I'm not a bitcoin maximalist, but you have to acknowledge that in this day and age that your definition pretty much applies to USD as well. People believe it's worth something. And so it is.

USD holds value because the government says it does. The government holds authority because they have a monopoly on violence. Or, if your less pessimistic, it's because people believe in the government.

Exactly

To paraphrase a quote attributed to Stalin - how many divisions does Satoshi have?

But then you have to explain why gift cards are worth something. The answer is, because someone will give you something for them.

Meanwhile there are a large number of entities that have already entered into long-term contracts denominated in cryptocurrencies and any of them would pay you something for it when they need to satisfy their obligations.

That doesn't mean the value never changes, but that's also true of government-issued currencies. That's what inflation is.

> But then you have to explain why gift cards are worth something

gift cards are vouchers

You pay $30 to the store so that someone else can spend the $30 in that store.

It's a certificate, not a currency, not a store of value.

It’s “buying power”

  gift card
  noun [ C ]
  uk /ˈɡɪft ˌkɑːd/ us /ˈɡɪft ˌkɑːrd/

  a card that can be exchanged in a shop or on a website for goods or services of the value that is printed on it

it's literally the same thing as cash, a check or a voucher.

it is also entirely dependent on the same external factors of cash, vouchers and checks: inflation, exchange rates, etc.

because it's simply a certification that you can spend that amount of money, in that currency, in that shop and that's it.

Also: a Patek Philippe is buying power as well

everything that can be exhchanged for something else can be defined as "buying power"

but an American Express or a gallon of water in the desert are buying power too.

the definition is too broad to be useful.

I’d counter that buying power is the only metric that matters. All these abstractions of buying power may distract and distance you from this most important metric - often to the benefit of companies and nation states.

> I’d counter that buying power is the only metric that matters

I'd counter that protection of buying power over long periods is what really matters.

My CD collection had an enormous buying power in the 90s, now it's almost worthless.

I reckon one cannot rely on buying power of CD or DVD or VHS.

> often to the benefit of companies and nation states.

In this regards people, companies and nation states interests are usually aligned, i.e a stable currency that provides protection against wild fluctuations and retains its buying power and its usefulness.

Unless you are an enemy of the people, I don't see why someone should not like it.

Good points. Consider all the different investment instruments out there. Abstractions on top of abstractions on top of abstractions of buying power. Yes, a stable currency is desirable. But volatile abstractions are also beneficial to powerful entities.

its a loan to the card issuer

an interest free loan, that's why it has "gift" in the name.

It works the same way as lending the money directly to a person, gift cards are simply more convenient to handle and are safer than cash, but other than that it's just a gift in the form of cash, no matter how many intermediaries are between the sender and the receiver, the input and the output will always match exactly.

If, for example, I give my friend Alex $20 to buy something for his little daughter but Alex uses it to bet on a football match and loses it, Alex has to take some money from his pocket and then buy the gift with his own money. Which is not different than saying he spent his money on the bet and bought the gift with the money I gave him.

If otherwise Alex wins, he will still buy the gift, but he will also have increased the initial sum by an x% which he can keep (or maybe try his luck again)

Buying a gift card is the same process, the company holding the money at one point has to give back something of the same exact value, it doesn't matter what they do with the money in between, what matters to the sender and the receiver is that the amount printed on the card is fully available at the check out (which is just lik getting the amount in cash and then paying with that)

Do gift cards go up & down 50% in a year and have large transaction costs?

Some of them do. Suppose the issuing company gets into some trouble and people fear they won't be able to make good, but then later they take care of it.

For that matter some government-issued currencies do that too.

when you say up and down you are referring to buying power. And yes, the buying power of a $20 grocery store gift card has gone way down the last few years. Consider how much milk and eggs you could buy in 2018 compared to today.

Gift cards are tethered to the dollar, with a discount, because they are essentialy unsecured loans to the gift card issuer.

I also would point out that very few if any people would point to gift cards as a durable store of value and new world currency.

Totally agree. I only meant to illustrate that all abstractions of buying power fluctuate in their ability to secure basic needs - food, water, shelter, supplies.

And the "tethered to the dollar" part is important. They are basically liquidity/risk discounted dollars, as are many of these examples of "buying power".

No one is tethering their Rolex price to BTC. No one is tethering their home purchase budget to BTC.

Why? It's all tethered to your income, in dollars, and your savings presumably mostly in dollars as well.

Even "jug of water in the desert" is tethered more to dollars than BTC because what are you more likely to have in your pocket, and why?

Dollars are tethered to the government taxing us in dollars, so we get paid in dollars, and our government has nukes & aircraft carriers and such. Everything then gets tethered to it because thats what we get paid & save in.

BTC is tethered to nothing, and there is no natural value you can back into such that you can justify any price level of it.

Other than its usefulness as "untraceable" (what people think, but not what is true.. it is more like "unblockable") cash, and for money laundering/drugs.. it is a trading instrument for punters.

> No one is tethering their home purchase budget to BTC.

Whether you tether the purchase of a home to bitcoin or the US dollar is more a state of mind, tribalism, etc. Both the US dollar and bitcoin have no intrinsic value. They both derive value from a human belief system - I believe they have value and that others believe the same. They are both just networks in that sense.

> Even "jug of water in the desert" is tethered more to dollars than BTC because what are you more likely to have in your pocket, and why?

This is silly. But to add to the silliness - you could have bitcoin in your brain. Just memorize your words.

> Dollars are tethered to the government taxing us in dollars, so we get paid in dollars, and our government has nukes & aircraft carriers and such

Now THIS is truly different. The US dollar has violence on its side. I concede that bitcoin is a peaceful currency - at least thus far. Hopefully it stays that way.

> Other than its usefulness as "untraceable" (what people think, but not what is true.. it is more like "unblockable") cash, and for money laundering/drugs.. it is a trading instrument for punters.

This is political bias and parroting talking points of anti-bitcoiners. While your other points are thoughtful, this is not. Why not just call bitcoin a butthead?

> USD holds value because the government says it does.

so how do you explain dollarization of failed economies? Such as lebanon, or venezuela etc?

Surely, you're not saying that the US gov't somehow is exerting violence on another country to make the dollarization happen.

The people in Lebanon and Venezuela trust that the US government will continue to exist and that they will either meet with people who want to do business with it, or will meet people who assume they will meet people who will, etc. So they have value.

So if people trust that Bitcoin will continue to exist and they will meet people who want to do business with it etc...

except bitcoin is one of the worst choices for that purpose

even the Iranian Rial is more reliable

can't edit anymore, the point is Iranian Rial is accepted by 90 million people in Iran, all the Iranian businesses and the Iranian government, there are much less bitcoin users, technically there are a lot more accounts, but that doesn't mean real people or real businesses.

Not surprisingly Iran and Russia are teaming up to create a new stablecoin and not adopting BTC, because using BTC right now is literally the best way to get caught (for example infringing sanctions).

The people that can afford to trust and use bitcoins for exchanges are the people who do not have to fear the surveillance of State actors/secret services/national agencies(NSA,FBI,Europol,China's central bank,...)/etc and that would be much better off using another FIAT currency (USD, EUR, etc.)

That's the only thing that gives Bitcoin value. So, in a crisis it can become false for some people, then spread to the people they know, etc.

With dollars, all Americans need them. So do international companies that transact with Americans. If you think the US government will hold, then that belief will be true, it's only a question of the number of steps.

> in a crisis it can become false for some people

it depends on what the crisis is, and whether this same crisis also makes people believe that the US gov't will not hold.

In general yes, but with the difference that the dollar (or other "real" currencies) are encoded in law to have a value with the whole state backing it.

US Dollar has value largely because the United States government is legally obligated to accept it to settle debts.

Also, any debt in the US can be paid with dollars. They even printed "for all debts, public and private" on the bills.

Yes that is one small dimension of why the dollar is valuable. But a far bigger part is the fact that using dollars enters you into the US financial (and by extension legal) systems which has been far more stable, reliable and predictable than other systems over the last century. For a point of reference consider Switzerland, whose currency is a minor reserve currency and whose banking and legal systems are globally appreciated, despite the fact that they have no power projection and a tiny population in comparison to their financial markets. The Swiss central bank has even deviated from their usual stable policy since 2008 and yet still they see inflows.

I have to agree, fiat currency seems very similar to bitcoin. Its a manmade currency essentially that is backed by nothing.

Bitcoin appears to be the next phase of that manmade currency.

Also the US government threatens (and occasionally delivers) military and financial harm on entities that refuse to use USD for certain transactions.

Yes, this is the key dimension of the "currency" front. But bitcoin "advocates" (a term I'll use for diplomatic purposes) say that within a context that implies that is somehow a low bar to clear or just a consquence of the monopoly of force or somehow morally questionable. But becoming something people trust (or at least have some amount of confidence in multiple dimensions in) is one of the most difficult things for any new asset class or medium of exchange.

Some of the main ways currencies and commodities get there are value stability (sticking within a certain band with <100% annual swings), wide acceptance and utility. After 10 years of many techno-smart people trying to engineer cryptos to become that we are nowhere near any of these promises being fulfilled.

Now do the US dollar!

I don’t think any of this is accurate. My house is a store of value but not easily traded for goods and services, but can be sold for local currency to facilitate that exchange. There are many crypto exchanges with conversion to many currencies, including fiat currencies, but also between other crypto currencies. This is how price discovery is accomplished. If it were illiquid as you claim then there would be a ton of arbitrage opportunity in the inefficiencies and mispricings of crypto currencies. However in recent times prices are fairly rational across exchanges and conversion to fiat. The fraud claims you have seen overblown, FTX not withstanding. But I’d note that all financial markets are rife with fraud, hence the regulation.

I don’t think regulation is a bad thing in crypto exchanges specifically. I think any rational crypto exchange would welcome it. Despite claims to the contrary compliant exchanges in many markets not aligned to big players start up all the time. That’s great, and I think a lot of crypto exchange operators have been hoping for a clear regulatory regime from regulators in the US. The current “you better comply with unwritten regulations or we sue you” regime is absurd.

> why its network would stop functioning

If it fails, it's most likely because block subsidy will become negligible in a few decades and transaction fees alone won't always provide sufficient security against re-org attacks.

Maybe. Others have made that argument before. So far, it's been proven wrong. The rewards are already pretty small, and things are still working. Maybe it could happen after block rewards go to zero? I don't know. But we'll find out if you're right over the next six years!

> So far, it's been proven wrong.

How can a prediction of what happens after 2050 (i.e. after a total of 10 halvings to make subsidy negligible) have been proven wrong "so far" ??

there is set amount of bitcoins to mint

transaction fees were intended to keep miners active

The "transaction fees won't protect against reorgs" argument assumes that miners count the value of future block rewards at 0. This is poor logic that models mining as a single game of the prisoner's dilemma. Modeling it as a repeated game arrives at the opposite conclusion: that most miners will cooperate to some degree, because the future value of their rewards depends on it.

I say this as someone very much opposed to the "deflationary" model, because I think it's bullshit that generates a "landed gentry" (thanks, spez) that can forever dominate the distribution of a currency. If you're going to make a currency, inflation of some degree is required to ensure fair(er) distribution over time.

I just think the idea that, when block rewards dissipate, miners will suddenly lose the ability to think more than one block into the future should be called for what it is: bad logic. It's also readily disproved by the most trivial glance at their history of long-term, forward-looking investment.

Except ~99.99% of BTC transactions happen in exchanges off chain and aren't visible to anyone, and have a history of being fraudulent at many exchanges that have failed through the years...

That's true for gold too: Most gold transactions happen in exchanges. But the fact that there are successful intermediaries in the gold market is not an argument against gold's viability as a store of value. Ditto for Bitcoin.

I don't think gold is a good investment vehicle nor means of exchanging value either.

Tell that to people who lost their entire life savings when their fiat currency hyper-inflated to zero value (Hungary, Zimbabwe, Yugoslavia, Germany, Argentina)

This is whataboutism.

The claim is that BTC surely isn't fraud because the chain is public knowledge.

This is irrelevant, because the vast majority of data is bullshit.

The gold market has been manipulated to and fro, even with regulations.

The idea that BTC isn't manipulated to oblivion JUST BECAUSE there's a public ledger (missing 99.99% of the data) is naive.

Whataboutism is a method of responding to an accusation by making a counter-accusation against an opponent. (What about her e-mails?)

When people talk about Bitcoin's potential demise, they are referring to its price and perceived value, not whether it will cease to exist necessarily.

Madoff also was not ultimately caught and his scheme ended because of the accounting fraud being revealed (i.e. the fraud was not that important). That happened later. He was caught because a market downturn resulted in him being unable to acquire new victims for the Ponzi scheme, which would have otherwise perpetuated it by taking new money in and using that to pay out existing investors.

The longer Bitcoin's network continues to function, more and more people will become aware of its resiliency. Governments may topple; banks may fail; exchanges may go bust; Bitcoin keeps on ticking. As long as the network continues to function, Bitcoin will have a price.

It's possible that more people are aware of Bitcoin than 18 months ago, but I doubt many think it's more resilient.

Since Bitcoin depends on a functioning network it seems more likely than something physical like Beanie Babies or baseball cards to one day become effectively worthless.

The US government has been around for quite some time. The British pound, longer. It will take hundreds of years to compare to that level of resiliency.

The British government has completed repayments on historically held debt which dates back to the 18th century[1] as recently as 2015 (they were related to the South Sea Bubble).

That's a 162 contiguous years of financial records.

[1] https://www.gov.uk/government/news/repayment-of-26-billion-h...

Well, I think what you’re talking about is perception of risk. The perception of the risk that it goes to 0 is probably decreasing over time. But the expectation of future gains based on past performance is also decreasing over time. Most of the investors I feel are worth listening to see this and conclude two things: it’s here to stay but probably can’t go much higher without the broad market also going higher.

I mean, maybe, but if you pick an arbitrary currency, weighted by "market cap", btc has an extremely long way to go before being an unusually long lived one.

I could understand the allure of the (ahem) "stability" of BTC if you lived in say, Argentina.

If you live in America with this viewpoint, its pure doomerism.

Someone with your mindset was probably saying something similar while living in Argentina in the 1920s, when it was among the top 10 wealthiest countries on the planet.

Hopefully there is no military overthrow of the US government concurrent with the largest economic slowdown in world history.

When did Argentina have the worlds reserve currency and nearly a century of economic dominance?

Doesn't the Bitcoin network continually require increasing power, storage, and bandwidth?

Isn't there a value of Bitcoin that if it falls below all mining is unprofitable?

Are these incorrect assumptions?

Bitcoin doesnt use much storage or bandwidth.

Power is more complicated. By design, Bitcoin has one block created by one miner every 10 minutes on average. All other work by all other miners is discarded and unused. So no, only a single miner is required to sustain the network. But, there is a economic incentive to add miners to the network when the price goes up, because even though only one miner gets rewarded per block, that reward is worth quite a bit. Currently approximately $1M of bitcoin are mined per hour.

There is no specific value at which all mining is unprofitable because mining difficulty is dynamically adjusted to maintain a 10 minute block generation rate regardless of the number of miners.

> When people talk about Bitcoin's potential demise, they are referring to its price and perceived value

And arguably, Madoff-style Ponzi schemes are more prevalent than ever.

Its network could stop functioning simply because it would no longer be profitable to mine it. Sure - a few hardcore believers would continue mining at a loss, but I doubt that they'd have enough computing power to secure the network properly.

Isn't difficulty set based on the previous block time?

No, the difficulty is updated every 2016 blocks. This should be once every two weeks, but if the worldwide hash power halves it'll of course take four weeks until it can update. The difficulty adjustment is capped to +300% / -75%.

The issue here is that the Bitcoin reward has to pay for the mining cost, but there is nothing preventing the Bitcoin price from dropping lower. So miners will either have to mine at a loss for (on average) a week until a difficulty adjustment, or turn off their equipment. Turning it off will make the wait even longer and the mining price per block will increase even more for the remaining miners - leading to more of them operating at a loss or shutting down which makes the problem even worse.

If the difficulty is too low then the network becomes vulnerable to a 51% attack. If it's too high then it becomes less profitable to mine and transaction processing speed slows down. So it has to be high enough to prevent attacks, but low enough for mining to be profitable.

> Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning.

I've been saying for years that Bitcoin will go down like Second Life. Remember when there were news stories about Sony or whoever buys an island for X million dollars? And now... I mean it's still there (presumably), I don't think they've turned off the servers or anything, but no-one cares and it's obviously not a good investment (and that's with it being propped up by a few people who actually enjoy the game, which Bitcoin won't have).

The ability to actually buy stuff with Bitcoin is already past its peak (more places are removing Bitcoin payment options than adding them). It's less in the news than it was. There probably won't be a specific collapse moment (when Tether's reserves get exposed as fraudulent and they stop withdrawals I expect Bitcoin's price will crash, but it's crashed before and there are still true believers left over). I mean eventually the last miner will turn off their rig, but it will be irrelevant long before that happens.

Presumably you have been saying this for a while and been wrong so far. At what point would you change your mind?

Predicting the demise of something does not mean you are incorrect until the day it collapses.

People have criticised Oceangate’s approach to security for years. By your logic I could have turned around to all of them and said “you’re wrong”, up until a few days ago when the CEO got trapped inside a submarine to die. The people who said their safety approach was a ticking time bomb were right all along, it just took time to be proven out.

There's no right or wrong answer to this since failure predictions are logically flawed.

Doomsday cult leaders no longer insist the world will end on a specific day; they insist it will end imminently after a series of vague events. Your skeptics will die of old age before you can ever be proven wrong.

Well, no, failure predictions can either be based on evidence or they can be based on nothing. The doomsday cult is based on nothing, the submarine safety prediction is based on looking at which precautions the company is and is not taking.

I don't think I have been wrong? Like I said, the ability to actually buy stuff with Bitcoin is in decline. I'd change my mind if I saw evidence of increasing Bitcoin adoption in the real economy.

Right - during the 2015-2018 hype-train for BTC we were seeing gimmicks like Bitcoin ATMs and retail storefronts with window-stickers for BTC as though it were a credit-card network. And a handful of online storefronts too. Those all seem to have been dialled-back, if not removed outright - it was silly and impractical: BTC added no value to the retail experience.

But where BTC does have utility is the underground economy: prior to Bitcoin if you wanted to buy drugs online you’d have to hassle with burner PayPal accounts or relive the 1970s by mailing-off an order form with cash in the envelope and hope you aren’t being scammed while waiting 28 days for order fulfilment.

So long as there’s demand for contraband, there’s a utility for BTC - which means it has some value, independent of its stability. But because BTC is also, in a way, a finite-resource (which can ne easily lost forever on a HDD in a landfill site…), it means, in the minds of modern-day libertarian gold-bugs with mass undiagnosed autistic spectrum disorder, it’s a safe, deflationary investment. Which gives BTC value. Which keeps the general public at-large interested, as well as the NFT-toting, smooth-talking cryptobrahs looking to exploit everyone else’s ignorance - which leads to demand for BTC, and the inevitable physical and irrevocable loss of BTC (landfills, lost-phones, etc) which then drives the price higher. The cycle repeats. Forgive my ignorance, but I don’t believe we’ve ever seen anything quite like this kind-of perpetual-motion-machine in economics before (“perpetual-value-machine”?). This is why BTC interests me.

Perpetual-anything-machines are impossible - that’s a given; but I just can’t fathom BTC’s value being reduced to zero (absent a superior replacement, of course) simply due to drugs being illegal.

> So long as there’s demand for contraband, there’s a utility for BTC

Drug money... while that was true at one point, you have to be the stupidest MF'er in this planet to deal with DNM tx with BTC at this point unless you have secure OPSEC (something most who operate DNM couldn't even do, see SR1/2).

The truth is BTC has more usecases than you are lining out, go look at Ukraine's Bitcoin address, that was what was using to fund early escape missions during the attacks of Russia when the central bank failed to operate and imposed liquidity collapse in the onset of the War. This was what led to the realization of United24, the official Ukrainian governments solution for continued fundraising (using not just BTC, but other alts too) for support in other critical needs--like invincibility centers that provide food/water/shelter in these war torn areas.

Want an even longer use case? Go look at Return Alive's BTC address going back a decade now, we as a community have been proving non-lethal aid to Ukraine since the Maidan Revolution in 2013 when the collapse of their currency and capital controls and rapid inflation took over.

Really I can go on, and while I don't deny our past (in fact I'm quite proud of our origins as a means to transfer value freely on the Internet) you are misled to believe it still operates much volume towards those ends these days because of the analytics and monitoring that is being done 24/7 by intelligence agencies and 3rd party affiliates for just this. Hell, I bet there are more scams/hacks by the North Korean cyber military than there is in drug money.

> Drug money... while that was true at one point, you have to be the stupidest MF'er in this planet to deal with DNM tx with BTC at this point unless you have secure OPSEC

Lots of stupid MFers out there. I know quite a few people who have mail ordered their drugs for 10 years using bitcoin. There’s lots of atms that cash in bitcoin out and have dubious identity checks. And there are still in person meetups to swap cash for bitcoin.

Not perfect, but easier than mailing cash or burner PayPal accounts.

This is also like the only use case for bitcoin in the developed world.

> BTC added no value to the retail experience.

You’re missing the point entirely. Bitcoin will gain usability parity with the US dollar. And bitcoin is a better currency that anything mutable and controlled by governments. Bitcoin is a currency that is not subject to the whims of unpredictable central government financial policies. Bitcoin’s buying power fluctuates because we are still dealing with The Fed monetary policies. In time that will smooth itself out. Aside from violence (US military), what is the US dollar’s features that make it better than bitcoin in any way?

> Aside from violence (US military), what is the US dollar’s features that make it better than bitcoin in any way?

using USD doesn't make me look like a criminal or a scammer.

And it actually work and is useful for everything that isn't shady.

Oh, yeah, almost forgot: I can go to a bank and ask for a loan in USD that I can then use to buy a house, start a business, go on a trip, instead of risking of losing everything the day after. I can repay the loan in comfortable installments, at a predictable rate which won't bankrupt me because I have to acquire bitcoins that are deflationary, so basically in 20 years my debt will have nominally grown up, instead of losing real value, due to inflation, hence costing me less, and whose price is unpredictable.

> I don't think I have been wrong? Like I said, the ability to actually buy stuff with Bitcoin is in decline. I'd change my mind if I saw evidence of increasing Bitcoin adoption in the real economy.

Based on what evidence exactly? Consider that an entire nation state has since adopted it as its national currency, along the USD in the last 3 years; that means it works in parallel with the USD. Not to mention that merchant adoption, while as you said may be in decline (citation needed), what you have instead is more and more commerce being dealt with on LN: as was always intended due to network bloat.

Listen, I get HN is entirely averse to BItcoin at this point (look at my post histpory, I prove it time and time again it's based on stuborness rather than fact), what I fail to understand is why you persist in this folly in thiking becasue it doesn't work for YOU, you assume no one else has any use for it.

Again, most here who work in tech are not c-level corps or founders so you don't understand very much about the narrow mechanics of day to day because you are not rewarded for doing so, and quite frankly are paid very well for your ignorance on these matters.

But try to understand that if even China has backed off with Hong Kong dealing with BTC, you have to come to terms with the fact that adoption in trackable and metric based analytics are out the window at this point. Exchanges are one way to track transaction volume and that has been as healthy (perhaps more so, I don't know I'm not a trader) than it was 5-6 years ago. I know this because I was there, helping scale this tech and giving it more usecases that even it's most ardent proponents couldn't see and used similar points of view as you are making now (hence USAF and it's MANY forks before that).

You are wrong, and the fact that you can't even admit that possibility is what makes your point even more invalid because you refuse to see a contrary POV.

You’re doing the ignorant a favor for no real gain. Bitcoin adoption will continue. Bitcoin’s progress remains unstoppable. No amount of downvotes can stop it. And the next giant leap in buying power will just make the anger and denial stronger here - a classic case of cognitive dissonance.

Pretty strong cult vibes :/

If wanting an immutable currency that is not controlled by a central government means I’m in a cult of like-minded, then guilty as charged.

Are you saying the islands in SecondLife are still retaining their 7-figure US dollar value today?

If something -- anything -- other than meth and murder-for-hire contracts gets priced in Bitcoin I would stop saying it's a dead end.

Meth/other drugs in general being purchasable via Bitcoin has value though. You and I might not find that useful or moral, but we shouldn’t pretend the drug market is a small or insignificant one either.

Right but if that's all it can be used for, it will eventually settle into a value below its equivalent dollar amount. That is, the amount of bitcoin you'll get for $100 will buy some fraction of the meth that $100 will buy. It will probably be close to 1:1 but that discount rate will be the only actually important question. The limited utility will function as a capital control, so it will be like Bahamian dollars.

> Right but if that's all it can be used for, it will eventually settle into a value below its equivalent dollar amount

That I agree with actually! Part of its utility in being used for drug purchases comes from the other uses for BTC meaning that theres liquidity. Without that, it's still useful for black market transcations, but less useful than it is today.

I've been saying for years that the sun will eventually turn into a red giant and consume the earth. But every day a same-sized yellow disk rises in the Eastern sky. At what point should I change my mind?

Second Life is still around, and appears fairly stable with a modest-sized user base: https://www.theguardian.com/technology/2023/jun/10/who-needs...

Roughly speaking, the folks "living" in Second Life are part of a strong online community, and don't much care about the "investment".

The sociology and economics of Bitcoin are very, very different from Second Life.

I think you missed their point. Ironically you kind of illustrated it quite well though.

We need source it is being removed.

Ransomware will keep it going for quite some time after the last pump and dump fizzles out, but it only needs a price of ~$1000 or so to facilitate that.

The fraud is likely in stable coins such as USDT, when it goes Ponzi up, everything comes down with it.

>(Government regulations cannot kill it; they can only drive it underground, as with gold.)

>Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning.

This can be done pretty easily, once enough countries ban and condemn it for its contribution to the climate crisis and to crime. There's no need to catch every transaction, just to ban it enough to shrink the mining pool. Once the active network has shrunk enough, the transparent permissionless structure ensures we can ran the obvious attacks on it.

Since it's now underground and these actors aren't the nicest of people, coordinating the forks to resist the attacks will be difficult and costly. People give up after each attack, which makes running another attack easier and so on. Eventually maintaining the network as is won't be worth it to anyone.

Very easy.

Only a small number of people can participate in new block chain entries, assuming demand is high.

These happen every ten minutes, and well under a hundred thousand transactions are allowed.

Get in line to spend your money; it may be years.

This would never work!

https://en.wikipedia.org/wiki/Bitcoin_scalability_problem

> whereas every single transaction in the Bitcoin network is visible to everyone and, moreover, cryptographically verifiable by everyone.

It’s pretty easy to hide wash trading in the ledger to manipulate the price of bitcoin to artificial levels.

Just because transactions are public doesn’t mean that there isn’t associated data hidden (eg, identities, if dead wallets are really dead, etc etc).

Bitcoin may be great, but to say it must succeed because it’s transparent doesn’t address the risk that there is no basis for value and it’s only purpose is speculation and tricking a greater fool to keep the price up.

Tell that to Gus Farber, who was arrested for selling gold after Roosevelt banned private ownership of gold (with certain exceptions): https://en.m.wikipedia.org/wiki/Executive_Order_6102

> Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning.

No, they don’t. There are a variety of scenarios that do not require the government to eliminate the ecosystem.

For starters, they could make if very, very difficult to use for large capital purchases (houses, cars, etc.)

They could impose fines on businesses for accepting crypto — or specific types of crypto — as payment for goods and services.

Can they completely eliminate your ability to trade a bitcoin with your friend? No, of course not, any more than the federal government retrieved every ounce of gold back when that was illegal. But they can make it so painful to use that most people simply won’t.