[0wing]

Because there's no inherent value and it's just traders making up theories, I would conclude there's this set of game theory:

  1. Buy bitcoins or release media PR to pump price
  2. Buy future shorts
  3. Sell a large enough order to trigger margin calls and stop losses
  4. Profit twice from your BTC sale, and short sale
  5. If you believe the price will return, buy back in cheaper
     than you sold due to other panic sellers

[passwordreset]

Could you please give me your reason for believing that there is no inherent value in Bitcoin?

[simonsarris]

Copied from an argument in another thread on the same thing:

Any currency that a:

1. strong entity circulates and

2. wants back

is fundamentally valuable.

> American dollars have value because the US Government taxes things, like land, and if you do not pay those taxes they will send you mean letters (trust me) before resorting to other means (trust Al Capone). You pay these taxes in US dollars. You just having dollars does not make them valuable. And dollars are not valuable because they are backed by gold or silver or sea shells. What makes dollars valuable is that the government wants them back.

https://hackernoon.com/the-guns-of-bitcoin-1f779309a718

Ways to destroy the US dollar value: Destroy the US tax collecting power, or have the US ask for taxes in a different currency. If the US started collecting taxes in Euros, the value of the US dollar would disappear instantly.

The US is a strong entity and has no incentive to ruin the value of the dollar. It will not start collecting taxes in Euros. Or Bitcoin. Why would it give all that power away? More likely is that Bitcoin gets made illegal or very difficult to use. At the end of the day, if you have US-protected assets, you will have to pay US dollars to the US gov and this will continue to give USD value.

Bitcoin has no such strong-entity backing, so it has no fundamental value. Bitcoin people are obsessed with the idea that mere possession is important. It's not. Ask people with loads of marks or Zimbabwe dollars.

[passwordreset]

Thanks for the response. If I understand the argument correctly, then the claim is that 1) a currency that fits the criteria - circulated by a strong entity who wants it returned - has value, 2) Bitcoin does not fit that criteria, therefore 3) Bitcoin has no value.

I don't know if you're supporting this argument or not, but it is flawed in a manner that is called "denying the antecedent". To borrow an example, the following argument is flawed: 1) If you're a logic instructor, then you have a job, 2) you are not a logic instructor, therefore 3) you do not have a job. This does not follow, and is not a valid argument. One can simply point out that there are other jobs than logic instructor.

This is the same form of argument as was made in your post. Surely, then I must be able to point to some other thing that has some value which is also not circulated by a strong entity. Rare-earth minerals come to mind. Sunken treasure. Works of art. Illegal drugs, certainly. Stolen goods, clearly, and I would think any illegal market has to be seen as coming from a weak actor. All these are examples of things that have value, but do not fit the given criteria.

It is unfortunate, but it appears that people who believe this argument are fooling themselves. I hope they do not fool others.

[Fnoord]

GP wrote "fundamentally valuable" and "fundamental value". You completely ignored the "fundamental" part.

> Surely, then I must be able to point to some other thing that has some value which is also not circulated by a strong entity. Rare-earth minerals come to mind. Sunken treasure. Works of art. Illegal drugs, certainly. Stolen goods, clearly, and I would think any illegal market has to be seen as coming from a weak actor.

Oh right, some lovely examples, if you could stop the comparison with gold (can already see it coming: "nowhere did I write that" yeah you did: "rare-earth minerals") that'd be great. Gold has been recognized as having value for centuries. Its a physical product. It has this value world-wide, in all layers of society. It has a track record, a reputation. It can be traded both ways. A disadvantage is that the person who verifies its purity also is the one buying or selling it. Not layman-friendly (Bitcoin is neither though as people have no clue how it works, how to safely store it, etc; I'd argue it is worse.).

Cut diamonds (such as e.g. in jewelry), on the other hand, is like gold's evil twin. It has practically no resale value. The moment you buy one, its nearly worthless (ie. worth a lot less) than it was already. Its because it can't be reused. That means diamonds are overvalued. But because they're so desired for specific occasions and what not, its a matter of finding a fool who wants to buy them.

> Sunken treasure. Works of art. Illegal drugs, certainly. Stolen goods

A lot of these suffer from the same problem as diamonds. Either they're owned by collectors who also own normal money like USD and EUR with which they pay for their errands (which you can't with BTC either). Or they're trying to get it converted to either unwashed or washed USD or EUR.

For me, Bitcoin has no value, because I cannot use it. Virtually no shop accepts it because these people know full well the disadvantage of a slow, expensive transaction and because they can't use it anywhere anyway.

Furthermore, the default currency and price quote in our societies is still USD, EUR, or what have you. Not BTC. So if its going less well in society (ie. major recession), the default currency is what's going to allow you to keep your chin above the water. Those are times where you'll be able to use a currency like USD and EUR but where people are going to want to sell their possessions such as gold, diamonds (good luck with that!), works of art, sunken treasures, and BTC. But who'd want BTC then? You cannot use it to buy groceries. The bakery doesn't accept it. The butcher doesn't accept it. The bank doesn't accept it. The insurance company doesn't accept it. The gas station doesn't accept it. Practically nobody on your current list of monthly and weekly expenses accepts it. That means that, at such point, since BTC is linked to USD and EUR, the demand for BTC is extremely low because people are going to need USD and EUR to pay for their living. At such a point, BTC will crash and will be useless. Same for the other cryptocurrencies. Nevermind a time of war where electricity is scarce, since we're so dependent on it.

Such is the difference between value and fundamental value. Bitcoin has no fundamental value. It is akin to like rare obscure random paintings what a bunch of loons decide they want to give for it. And they can't easily trade that, either.

Then I wonder what's worse: the regulated government being allowed to print money, or some dudes in China being able to use very cheap electricity and allowed to "print" money. Guess who's more aligned with the interests of the average EU and US citizen?

> It is unfortunate, but it appears that people who believe this argument are fooling themselves.

Ah, right, you remained civil, and then you resorted to this. How cute.

Unfortunate for whom? Is it unfortunate for someone to miss out on a ponzi or pyramid scheme? Depends on 1) their moral compass (if aware of scheme) 2) exactly when they made the choice to not join in. In essence, they're not losing out on anything since they're keeping their USD or EUR nice and safe (or for example invested in companies). So, nice projecting & nice straw man.

> I hope they do not fool others.

Let me guess: because you want confidence in BTC because you got involved in it? OK, crystal clear, just be opaque and say that. Either way, nice projecting & nice straw man.

[passwordreset]

I went through my message a few times just now, and for the life of me I can't find the place that ignited your vitriol. I was prepared to say "I apologize, I'm sorry I offended you," but in retrospect, I see now way which I could.

My post concerned a previous comnmenter's logical error. It explained the error as clearly as I could, although you seem to have missed that point. You do realize that you can change the word "value" in my post to "fundamental value" or "intrinsic value" or "donuts" and it will still exemplify the error, right? People who believe arguments presented in this form believe a clear falsehood. Let me be specific again, it's not the conclusion that's false, but the argument itself is flawed. If you believe a flawed argument, then you are being fooled.

Everything else that you posted comes from you. Every friggin thing, and that's hilarious, because it's so friggin irrelevant to my post. The argument is flawed, and you're having a tizzy for some unknown reason. That's fine, up to the point where you start trying to claim any kind of knowledge about me, at which point it becomes a straight-up lie.

So, apologize. You apologize to me. Apologize for believing that which is obviously flawed. Apologize for claiming that you know what I want, and then saying "nice projecting". Re-read your last three sentences. If you understand what either "projecting" and "straw man" are, then you will notice it in your own handiwork. How you saw it in mine is anyone's guess.

So, crystal clear, _you_ apologize to _me_ because _you_ are being an illogical _ass_.

[webninja]

Technically you don't even "possess" Bitcoin. The network possesses them for you. You just have a private key that authorizes you to send the Bitcoins that are held on the network for you.

[0wing]

Namely the codebase, history, delusional claims, and alternatives (other crypto-networks) that make Bitcoin obsolete.

See also the false equivalency to gold:

If you understand the computer science behind Bitcoin, you'll realize how ridiculous the false equivalency to gold is.

1. The claim of "rare" doesn't exactly hold true.

Consider the 10,000 BTC pizza - how did this happen? This was the direct result of Satoshi's economic policy, granting vast sums of BTC to mint out very quickly very early for a short duration to the very small pool of people who ran the software. Satoshi's algorithm produced BTC in plentiful quantities enabling the 10,000BTC pizza - thus it wasn't rare if you were Satoshi and the dozen other early whales hording as much as possible, until the algorithm begins cutting off the production and limiting later users from producing coins, starving the economy. Now there's a psychological game being played, where public relations and marketing must convince new users to buy in. Because the exchanges are unregulated, they can manipulate the spot price though wash trading and painting the tape [2] (where trades are falsified and you just sell the same item back and forth to your friend for a higher and higher price).

The supply was created by running a piece of software. It's not magic. Most of the supply was produced very early on and as much as 30% of all Bitcoins are owned by less than 100 people.

  Best estimates are that there are about one million 
  holders of Bitcoin;  47 individuals hold about 30 percent, 
  another 900 hold a further 20 percent, the next 10,000 
  about 25% and another million about 20%, with 5% being 
  lost.  So 1/10th of one percent represent about half the 
  holdings of Bitcoin and 1 percent close to 80 percent 
  (http://www.businessinsider.com/927-people-own-half-
  of-the-bitcoins-2013-12). The concentration of Litecoin 
  ownership is similar 
  (http://litecoin-rich-list.blogspot.com).  
  Most of the big wallets have been in place from early on, 
  so sitting back and watching your capital grow has been a 
  very successful strategy.


  The distribution of Bitcoin holdings  looks much like the 
  distribution of wealth in North Korea and makes the 
  China’s and even the US’ wealth distribution look like 
  that of a workers’ paradise

2. Easy migration to more advanced e-cash services, LTC, XMR, ETH, so on See: https://coinmarketcap.com/currencies/views/all/

3. Bitcoin network requires ASIC miners, largely centralized in China [3]. Assuming the inveitable surpassing of a more advanced cryptosytem making Bitcoin obsolete, as the market is informed there will be a decline in BTC's spot price and once this falls below the cost of OPEX for miners, the hardware goes offline and the network will cease to function. Maximalists will attempt to offer an emergency fork, in any attempt to save their "investment", just as they have developed the lightening network to create centeralized payment hubs, so "investors" can act as liquidity providors and take fees, instead of miners.

4. Electricty usage is unsustainable, GOTO 3

[1] https://bitcoin.stackexchange.com/questions/86/is-it-possibl...

http://www.businessinsider.com/bitcoin-inequality-2014-1

[2] https://www.youtube.com/watch?v=6r04gfWfRkE

[3] https://qz.com/1055126/photos-china-has-one-of-worlds-larges...