Sorry if I gave the wrong impression. This is my opinion, not a statement from his article. I edited my post.
Bitcoin - steer clear or not?
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Sister Sara
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Thanks for clarifying @parfert1 but the sentiment is akin to the "too big to fail" sentiment. Bitcoin allows users to transact peer-to-peer without the need for a third party central authority to validate the transaction against double-spending.
The value of that utility is in the eye of the beholder.
In my own personal opinion everyone would benefit to hold some amount of bitcoin.
The value of that utility is in the eye of the beholder.
In my own personal opinion everyone would benefit to hold some amount of bitcoin.
Sister Sara
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Yes, but so are the typical arguments that governments would ban it, its energy use would boil the oceans, it will return to zero (this one still persists but without a timeframe then we can also say with confidence the human race will return to zero too).
That would suggest that bitcoin is political?
I would not subscribe to that, certainly political leanings may influence individuals perspectives of what bitcoin is or isnt but bitcoin in itself is not political. It's price may be influenced by politics but in itself its just a computer network like other computer network.
Speaking of politics and bitcoins value. It was suggested by @letitroll that he doesn't know why bitcoin is down today, this week, this month etc . One probability is the forthcoming midterm elections in US and the forecast for Republicans is not good. Trumps election campaign advocated for the US to be the 'global leader in Bitcoin mining' and a 'crypto-friendly country' and the right to self-custody of bitcoin, probably inducing a bitcoin bounce - btc was roughly $70k on voting day in November 2024, a month later it was $100K.
No significant legislation has passed to best of my knowledge to support any of Trumps proposals and if Republicans lose control in either house then the prospects are becoming more limited. So those that speculated on Trumps policy's on his election may be induced to sell-off now, and as it stands btc has returned to $70k.
newirishman
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I am curious for what purpose exactly? Just looking my own situation (working in multi-national very large company in a tech role, I travel a lot, my wife works in a multi-national investment manager; I am a bit of a tech geek; )
Neither in my professional life nor my personal life did I ever see the need for Bitcoin.
Heck, even the blockchain use cases are essentially "artificial", as in that I haven't found a use case that can't already be solved as easy without blockchain.
I can see a point if you like to gamble ( I don't ) but I think there is zero benefit to holding any amount of bitcoin.
Sister Sara
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I totally respect that opinion but as mentioned earlier in the case of Russia, their currency was effectively black-listed in the international monetary system. If a Russian investor/speculator had kept 1m roubles in bitcoin at the time of the invasion of Ukraine would be valued higher now.
Closer to home, we are part of a great economic experiment called the €uro. To all intents and purposes the Euro has brought price stability for the period of its existence? Unless you focus in on property prices and other asset prices then this is not as clear cut.
I'm of the view to wanting the euro to work, I think its a good idea. Favourable sentiment alone is not enough to make it work and I buy bitcoin in the event of the demise of the euro and the unknown consequences of how it may fail, or when it may fail.
Just as bitcoin may go to zero, the euro may go to zero. I'd be inclined to think at this juncture that the euro would return to zero before bitcoin will. I could of course be wrong.
Duke of Marmalade
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The fact that the early speculation looks now way off beam was not my point. My point was that Bicoin's ONLY rationale both in the eyes of Natoshi and all the "rational" early advocates was as a medium of exchange - it is not capable of having any other utility.
A rather trite argument then follows to the effect that BTC is not per se political. Guns aren't political. Nuclear bombs aren't political. Truth Social isn't political. But if you have not noticed a huge ideological cult around Bitcoin you haven't been paying attention.
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I think BTC is best thought of as a risk on - risk off barometer for retail trader enthusiasm......sometimes the hive minds can only see blue skys ahead, other times the sky darkens and the hive mind is focused on negative sentiment.
GENUIS act was passed (creating regulatory framework for stablecoins or 'dollar gift cards' as I like to call them) and a crypto market structure bill is in the works....in some ways I welcome both....for the longest time the crypto story was crypto financial innovation was being held back because of shortsighted regulation or boomers who didnt understand the tech......these two frameworks essentially put that oft repeated excuse to bed....the reality is likely to emerge which is token driven, defi, utlitilty token backed services are a niche hobbyist activity mainly inhabited by nerds and cassandra types who think the Government is about to collapse or three letter agencies are out to get them.
As I've said many times.....we are now 17yrs into the innovation that was distributed ledger technology that its proponents said would change the world and not a single product or service I use or my friends use on a daily basis is underpinned by crypto on the frontend (transactions, payments, utility token driven services (remember web 3.0)) or supported on the backend (bank tech, payment tech, databases, consumer tech, e-commerce, supply chains etc etc.).
Cryptos penetration into the real world rounds down to ZERO.....and relative to expectations that underpinned the sector a decade and half ago its laughable to see how little impact it has had in any industry or sector.
Duke of Marmalade
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It solved the "double spending" problem without needing a trusted custodian of the ledger. But it did not solve the need for a trusted custodian to anchor the ledger entry to real value.
Natoshi recognised this big defect and in a flight of wishful thinking suggested that the very utility of a decentralised medium of exchange would confer some "value" to the tokens.
No one has yet solved the problem of conferring real value to a tokenised entry on a distributed ledger without the trust of a custodian. Stablecoins illustrate the issues very clearly. A stable coin typically guarantees that its tokens can always be redeemed for US$. But that needs the likes of Tether to back the token with real assets and for the punters to trust Tether. Similarly for gold tokens etc.
Project Agorá will exploit developments in cryptography (partly spurred by the crypto phenomenon) to tokenise fiat like the € on a distributed ledger underwritten by the ECB.
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newirishman
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That’s some strawman you are pulling up here.
For all intents and purposes the Euro works - and that’s beside that fact that bitcoin is backed by nothing, whereby the Euro is backed by one of the biggest Economic Areas on the planet.
If by “the euro may go to zero” you mean hyperinflation (not sure what else you could mean) -
Does that mean hyperinflation is impossible? Of course not. Just (still ) very very unlikely.
And you haven’t answered the purpose of bitcoin question.
CharlieMac
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I was going to ask you @Duke of Marmalade why you think Bitcoin will never be adopted as a currency.
This is your line of thinking it seems. Does Gold have a custodian? I suppose it has credibility built up over millennia.
Buying GBP, USD, CHF, or gold or shares would also achieve the same purpose.
Gold is a tangible thing. It can be used for decorative purposes, but it also has industrial applications and therefore has value as a raw material.
Duke of Marmalade
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It is not just me. The cult has long given up on any meaningful role as a medium of exchange.
It's ultimate fatal defect is that it has no anchor to real value.
But at a practical level it brings nothing that the vast majority of the populace are missing of a medium of exchange. Have you ever been in a position where you rue the fact that you haven't a few bitcoin to buy something?
Not sure I understand the question. Gold Tokens do require a custodian.
To be absolutely pedantic Bitcoin does not need a custodian. Your entry on the blockchain is your token (assuming you are on the blockchain and not just with an exchange.) But here is the rub. There is no value per se to an entry on a computer ledger. I have an entry on my bank online account. It is worth absolutely nothing. But it does signify that I have money with my bank.
CharlieMac
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@Duke of Marmalade I don't know what you mean by "a trusted custodian of the ledger"? Do you mean like a central bank presiding over a currency in financial governance terms or literally bitcoin does not need to be stored somewhere like gold does (except maybe a computer hard drive?) and in a sense FIAT currencies that need to be in a bank account. Maybe you mean both the governance and the storage?
I see what you mean, given its volatility, no one really agrees on what value bitcoin has and it might always have trust issues for that reason unless everyone can agree how to anchor its value to something.
Sister Sara
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Is that not a use case?
I mean, you are effectively talking about gambling sentiment here and there is already a massive global gambling industry to serve the purpose for retail trader enthusiasm. If bitcoins only use case is for that alone, it does still provide the punter a better position than the horse racing and roulette table punters have who bet, knowingly, that the odds are set against them from the get-go.
I was more relating to Bitcoin specific legislation. That said, the above Act is nothing but a by-product of the emergence of Bitcoin in the first instance and the whole crypto industry that followed it.
...opponents said would boil the oceans and return to zero.
Perhaps if we can acknowledge that neither of the extreme predictions have materialised then concentrate somewhere in the centre of what is actually occurring?
The Genuis Act and the attempt to regulate the whole crypto industry is a consequence of the emergence of Bitcoin. That is an impact at governing levels across government and the financial and tech sectors. I dont recognise what is laughable about that, Im wondering what other impacts bitcoin may have already had and may have in the future.
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Duke of Marmalade
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Sorry, I am using the hubristic jargon of the meme.
When I buy a pot of marmalade at Dunnes Stores, I flash my Mastercard. Then the systems of my bank, Dunnes' bank and Mastercard between them make sure I have the funds to back up that transaction. Now there are certain parties who are not keen that so many prying eyes can see my liking for marmalade. The most innocent requirement is for very large cross border (legitimate) transactions which would not be cleared in the matter of seconds that I am able to get a pot of marmalade. There are of course less innocent reasons for wanting to be completely anonymous.
So bitcoin is a "distributed ledger" on the internet with its own computer programs (called a protocol) for ensuring all transactions are valid. In theory this could take 10 minutes - which is another reason why existing card facilities are far superior for the vast majority of peoples' needs.
Sister Sara
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With respect I was answering this
I fully respect that if you, and your good wife, never see a need for bitcoin then you dont buy it.
That is not to say that others may see a need for it.
I already pointed out to you the Russian retailer being penalised by the US for the actions of his political masters and how he would have benefitted from holding bitcoin.
As far as Europe is concerned, and the euro-zone, it is sitting on top of a political melting-pot of nationalities and cultures. The history of Europe points to fragmentation and if that occurs in the EU/Eurozone (sorry, I should say if that happens again) as it likely will, then I see no harm in keeping some wealth outside of the political institutions that back the EU and ECB for fear of the impact that such fragmentation may have on my wealth.
This is a use case for bitcoin. You may not agree, you dont have too, but its now wrong for anyone to say that there is no use case for bitcoin.
Duke of Marmalade
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I never heard about "boiling the oceans" link please.
The overwhelming consensus of economists was and still is that "zero it is and onto zero it shalt return".
The cult itself concedes a non-trivial possibility of that happening, and no, not in the sense that in the long run we are all dead.
Guthries' ransom demand is in Bitcoins for a reason
The Guthries' ransom demand is in Bitcoins for a reason
Ransom notes for Savannah Guthrie's mom demanded millions in Bitcoin. Here's why criminals like it.
www.usatoday.com
Sister Sara
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The "boiling the oceans" is a euphemism of negative energy use of bitcoin. Here is an example of one of the more extreme headlines Bitcoin Is on Track to Consume All of the World’s Energy by 2020
And therein lies the contradiction. I'm led to believe that if I buy S&P 500 ETF that it is based on some sound factual information - top 500 companies in the world, producing real products, producing real profits etc.
I'm led to believe that all this information can be analysed and that rationale investment strategies and choices can be discerned from this information.
All of that it true, only one discerning feature of any investment is time - one day, one year, 5yr, 10yr etc. Each timeframe providing a different investment strategy and choice.
If Bitcoin has no value, no use etc, then it shouldn't be hard to provide a reasonable timeframe as to when it will return to zero?
To date, opponents of Bitcoin have either been horribly wrong (as in the lost opportunity by persuading others not to buy) or simply cannot provide a reasonable timeframe for something that is apparently intrinsically worthless will return to zero.