118
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 17 Dec 2024
118 points (97.6% liked)
Asklemmy
44129 readers
247 users here now
A loosely moderated place to ask open-ended questions
If your post meets the following criteria, it's welcome here!
- Open-ended question
- Not offensive: at this point, we do not have the bandwidth to moderate overtly political discussions. Assume best intent and be excellent to each other.
- Not regarding using or support for Lemmy: context, see the list of support communities and tools for finding communities below
- Not ad nauseam inducing: please make sure it is a question that would be new to most members
- An actual topic of discussion
Looking for support?
Looking for a community?
- Lemmyverse: community search
- sub.rehab: maps old subreddits to fediverse options, marks official as such
- !lemmy411@lemmy.ca: a community for finding communities
~Icon~ ~by~ ~@Double_A@discuss.tchncs.de~
founded 5 years ago
MODERATORS
Bitcoin isn't gold or oil.
Gold is a thing. It has some utility. You can make other things with it. You can reprocess it into different things.
Oil is a thing. It can be burned as fuel, or made into other things.
Bitcoin is a ledger protocol with limited entries. It is good for peer-to-peer transfer of cash, and speculation. The speculation aspect is a pyramid scheme though, as it's only backed by the hope that people keep paying more for the ledger spaces, which undermines its function as a medium of exchange, and is unlikely to last as alternative ledgers are abundant, including those that are better suited for private exchange like Monero or ZCash.
Lacking intrinsic value, the only reason to create a strategic reserve of Bitcoin is like that of any other foreign currency. So, market manipulation? A lack of stability in your own currency (but Bitcoin is mostly USD backed)? International exchange (but USD and Euros are better)?
There will never be a default on US debt unless it's by choice. US debt is in US dollars, which the US makes. There will be inflation. Goods may end up being exchanged in another national or international currency someday. It won't be Bitcoin.
The jewelry and industrial value of gold is minimal to its reserve value. Vast majority of gold is in form of bars sitting in national vaults. Zero intention of ever using those bars for jewelry/industrial applications.
Bitcoin's advantages over gold include
No. You can buy bitcoin miners in bitcoin. Electricity costs are always charged in local currency.
QE worked last time because China helped QE by also buying up US bonds. A much larger QE with US at war/tariff war with whole world will put USD at a credibility crisis, if not in next recession then the one after that. Fractional banking is the real ponzi scheme, and a banking crisis, a property collapse that causes bank collapse. Colonial currencies are not an option to escape USD devaluation, unless they free themselves from servitude. Chinese policy has so far not embraced strong currency value. Bitcoin will always be protection from financial collapse/decline.
Yes, but it provides a lower limit to the value. The lower limit of the value of a mark on a given distributed ledger is nil. Also most of your points are general to all blockchains, not particular to Bitcoin, which has problems specific to its protocol and the choices made at its inception.
Sorta? Proof: Gold exists. You just have it. I'm not sure how much "harder" it is to prove that a physical thing is what it appears to be than it is to prove that a particular cryptographic signature is validated for a particular distributed ledger by the consensus processing power of said ledger. Security: Eh? Digital currencies are stolen all the time, remotely. Theoretically one could make a very strong passphrase that would be virtually impossible to crack before the heat death of the universe, but in practice most passwords aren't that strong and remote attacks are easy to iterate, while physical things take effort to get to and gold is heavy as shit. Plus. a determined and energy-rich actor could shoot for a 51% attack without sending a single troop across a border. Same for war pillage.
Most physical goods that are treated as stores of value are functionally rai stones. That's basically what money is. It doesn't matter where something physically is, but rather how do the parties to the transactions understand the exchange. And I mean, if a pirate steals your doubloons, he gets caught and hanged, or they are repossessed at the point of a gun from whoever he traded them to on the black markets, etc. If a hacker cracks your key, you can maybe find him, maybe not. If you find him you can hit him with a wrench until he transfers the numbers back to you, but if he expires first you're SOL. Divisibility in Bitcoin is meaningless. State-issued currencies can be divided to whatever fraction the issuers deem necessary. Bitcoin particularly is hard-capped at a satoshi.
These are all social constructions. A sovereign state says you "own" a 100-acre plot of land. You "sell" half for some quantity of Bitcoin. The state later fails and some polite but armed people come and tell you all 100 acres are theirs now and if you give them trouble they will use a tool called a "gun" to make little pieces of metal called "bullets" poke holes in your head until you are no longer what could reasonably be described as "alive". So with your passphrase in your head (and no new holes) you leave. Where do you go? Somewhere where there are other nerds who will take your distributed ledger units in exchange for the necessities of life (or a local currency with which to procure the same), but what do they get in exchange, really? A promise of labor? Nah, you're Bitcoin "rich". "Rights" to the land you just left? Nope, the gentlemen with the guns have that. All they get...is Bitcoin, which is only worth whatever the faithful believe it is worth, or what a state or state-like actor tells you it's worth by the barrel of a gun.
Apples and oranges when speaking of gold, USD, and other mediums of exchange, but yeah blockchains are cool and interesting and even potentially useful in their own right.
That's.just.false.
Is it though? Is it "better"? Bitcoin specifically, as I think I mentioned before, insofar as it is an "asset" at all, is deflationary, which makes it a lousy medium of exchange. You're basically saying that the supply of gold (or other material mediums of exchange) can increase, as if it's a bad thing. Stability of value (something Bitcoin still lacks) is a good quality in an asset to be sure. Deflation on the other hand is just wealth transferring to someone for not doing anything. Essentially economic rent. Gold is generally deflationary too, but that's a problem it shares with the Bitcoin ledger. The little bit of potential increased production of gold around the margins isn't even a bad thing.
This isn't a common problem in stable nation-states, though in a war zone or active coup sure, a passphrase might be easier to secure.
I bought beer with Bitcoin once. Buying things with Bitcoin is neat. But...can the factory that makes the ASICs buy the components with Bitcoin? Can the component manufacturers buy their materials with Bitcoin? Do all the workers down to the miners of rare-earth minerals take their wages in Bitcoin? Then pay their rent and buy their groceries with Bitcoin? No I think they use their local currencies. I expect even the ASIC resellers mostly have to sell their Bitcoin for legal tender before then use that legal tender to purchase...things. And for any given nation-state, the collapse of that state would probably impact the value of Bitcoin negatively relative to the level of investment from the people. If the USA goes Mad Max (Australian setting, I know), even put aside the computers and network access needed to maintain a blockchain (other countries exist, etc), what is the impact of the evaporation of all the USD which were use to acquire BTC on the exchange rate for said BTC in the still-existing nations? Do you think all the Bitcoin rich American refugees crossing into Canada and Mexico are gonna get more poutine/fajitas per satoshi than before the collapse? Less? About the same? Come on now.
ftfy
Like any other fiat currency, blockchain currencies (including Bitcoin) rely on faith and credit. USD derives its value from the USA's ability to swing its dick around internationally. Gold derives its value from speculation + (utility * rarity). Blockchain currencies, separate from their ability to be converted to state-issued currencies, derive their value from the full-faith-and-credit of nerds.
bitcoin reserves are auditted as held with full confidence any instant. Gold reserves depend on confidence of last auditor last time it was done, and it would be national security to lie that the reserves are still there.
a 51% attack has a small chance to undo a spend that was done just in last hour
IOUs are not as good as money, IOUs based on a "trust me bro its still there asset" is not as good as IOU based on bitcoin, and an IOU based on fractional reserve inflatable currency is far worse than asset based IOU.
Trying to sell gold coins to pawn shop or gold dealer gets a bad price relative to IOU trading. Global bitcoin exchanges often have the best prices, but nations you'd want to escape will tend to have problems that put a premium on bitcoin because of its escape advantages over gold. The argument that you need to convince bakers in your new country to accept bitcoin is not real. But its easier than gold, tulips, or other currency, or land deed in civil war country. Replace baker with someone on craigslist, and its still easier.
You're arguing here that paying with Bitcoin is bad for the payer because value is certain to go up. That means it's good for the buyer/receiver, which makes it easier if you need something physical/consumable from your "wealth".
Bank panics/failures are frequent enough that the system relies on bailouts for them. Deposit insurance is something customers pay as a hidden fee, but often taxpayer bailouts supplement the failures. Settlement "failure" happens often too. "Trust me I'm solvent bro" is a bad system that has and will regularly fail.
USD has no relevance to value of bitcoin. Mad max with internet access can trade for go juice or guns and bullets. Gold would tend to have very low value because Fort Knox is indefensible. Preparing for global mad max is different than preparing for local chaos. Communal leadership skills you can use to convince building fortifications and somehow secure food access is needed for communal survival. Wealth onto you would come from an ability to impose hierarchical tributary power system.
It can alter or reverse transfers as long as it's going on.
That would be better actually, because there might be a real thing somewhere which the writer of the IOU will give the bearer upon demand. Bitcoin is "Thanks for the $97,430.23 bro trust me bro someone will give you that much or more for that ledger entry in money, goods, or services bro I swear bro because it's scarce bro".
Yeah, today it is easier, because it's bolstered by drug dealers, nerds, and speculators who do their day-to-day living mostly in USD. But in 30 years? I'm not psychic, but I'm guessing that drug dealers will switch to more privacy-focused systems, (tech) nerds will switch to more technologically interesting systems, speculators will find other things to speculate on, and the...right-libertarian nerds might keep the network humming along at a much lower valuation if they don't all collapse in existential horror at the price drop.
"Certain" is an overstatement, but yeah, you can't really use a deflationary money, because it makes more sense to hold it. Money, as a medium of exchange, needs to be stable, erring on the side of inflation. Bitcoin is bad at being money.
That's the theory, but aside from being no way to create an economy, it doesn't follow IRL does it? People aren't exactly clamoring for my Bitcoin. My inflationary dollars are far more in demand.
And yet even the ASICs I can buy with Bitcoin, like the beer I once bought with Bitcoin, all describe their prices foremost in USD. Because that's mostly what it's actually bought with, and sold for.
You know, blockchains are neat and by virtue of that Bitcoin is neat. But there's nothing particularly good about it, and it's rife with flaws. Its principles are flawed, and it's not backed up by anything but hopes and dreams. It's a fun thing to gamble with, but there are more interesting blockchains, and no blockchains are mature enough to be really anything more than just fun to mess with.
You accept $20 because you are confident it is worth $20 tomorrow. You put it in a bank hoping the interest will cover inflationary depreciation, and hoping the bank will give it back when you ask for it. Btc does not have that 2nd risk, but you can still accept it as payment and sell it on an exchange shortly after, if you trust bank IOUs more.
You can't buy beer with gold or amazon stock, though can with bitcoin, even if cash is easier. Investments are a separate market, and they all have the buyer's hope of higher future value.