[dtech]

Bitcoin and other cryptocurrencies have ~zero inherent value, due to their non-speculation use-cases like payment being very limited or still early development (smart contracts). Unless you count BTC in black market I guess.

USD has inherent value, it's the only currency where you can pay taxes in, and if you want to do business with government or government employees - who are ever only paid in USD - you must accept USD.

[ulzeraj]

There is no such thing as inherent value. Value is subjected to the individual who makes decisions on the margin.

[Swenrekcah]

Maybe there isn’t inherent value in currencies, which crypto is not.

In assets there is can of course be inherent value (food, a sturdy house, land, etc.).

[ulzeraj]

Its more complicated than that. If you already have some maybe having more of that specific thing is more a hassle than a benefit. Or maybe you don't value that thing at all.

What value has a premium steak to a vegan?

If your house is on 0.5 acre of land and you add another acre it might great but if you had 500 acres of land and added another one you wound't even notice.

Why people tend to value diamonds more than water which is essential to live? If you receive two copies of the same magazine you like to read does the second copy holds some value to you?

[Swenrekcah]

Inherent value is real. Market value of the thing is dependent on a million things but an axe has inherent value in the same way a feeble banknote hasn’t.

The steak has calories and nutrients, regardless of who holds it (until it goes bad). Those are inherently valuable to any human being.

Your secondary point is about the law of diminishing returns, it’s a non-sequitur.

Water is inherently valuable for obvious reasons. Diamonds have inherent value in their hardness although that has little to do with their market value, that isn’t based on inherent value.

The magazine isn't inherently valuable. The information in it could be if one can decipher it. But additional copies of information don't make new information, so one or a hundred magazines, it makes no difference in inherent value.

[samarama]

Bitcoin’s inherent value is

1. Immutability

2. Limited supply

3. Censorship-resistance

4. Independence of governments, nations, banks, institutions, corporations

5. Accessibility

You can also pay your taxes in crypto in many countries.

The dollar’s inherent value is very weak and not really tangible.

It’s 2022 and people still don’t get that.

[gls2ro]

> 4. Independence of governments, nations, banks, institutions, corporations

Here is a very direct question:

How does BTC or any other currency protect itself from a goverment?

Imagine that a very big government decides to mine BTCs, will not they control the BTC if they have enough miners? And when I say a government controls imagine: slowing down mining, making it illegal, or limiting it in general population, forcing people to declare thei cryptocurrencies, putting a cap on how much one person can hold personally and forcing you to keep them in an official wallet ...

So how can a crypto currency be independent from a government. The government makes laws and as a citizen you are forced to follow them. Crypto cannot escape this, no matter the technology as the control is not technological, is legal, political and social. It is a social contract that I agree a technology can make it harder to discover some nasty business a citizen is doing, but that does not mean it cannot be control.

Don't get me started on corporations. Imagine Google or AWS decides to use his computing power to mine BTCs or whatever crypto. They will in fact control de market.

Please hypothetically prove me wrong with arguments.

[samarama]

> and when I say a government controls imagine: slowing down mining, making it illegal, or limiting it in general population, forcing people to declare thei cryptocurrencies, putting a cap on how much one person can hold personally and forcing you to keep them in an official wallet

This all already happened multiple times, but miners are so distributed across the globe that this has nearly no impact.

It’s also pretty hard for a country to spin up this much mining power, because it simply takes a lot of time to manufacture ASICs.

It’s also very expensive. $34B at the very least and rather $100B. https://gobitcoin.io/tools/cost-51-attack/

No country has this much free cash available for shenanigans like this, not even the US.

[danaris]

That's not "value". Those are "attributes". A person may value those attributes or not, but they do not have inherent monetary value.

The currency of a nation has inherent monetary value because it is backed by the state; the details of what that means will vary from jurisdiction to jurisdiction, but except in states undergoing massive crises, you can still be sure that if you hold their currency, you have something of value and can transact business.

Bitcoin is backed by nothing but other people holding Bitcoin.

As for the attributes you list:

1. Immutability is a double-edged sword. There are legitimate situations where you want mutability.

2. Artificial scarcity of a digital thing is only beneficial if you are among those holding large amounts of it.

3 & 4 (basically the same). This is both a huge negative for many people, and only true until those institutions' policies, laws, regulations, etc catch up with Bitcoin and either fit it within their existing structures or ban it entirely.

5. It's really not that accessible unless you're already fairly wealthy and digitally savvy.

[CabSauce]

All of those things are true (to varying degrees) of all of the thousands of crypto currencies. That's inherently the problem. As soon as another one comes along, the *value* of the earlier iterations gets reduced. There's no limit on the creation of new crypto currencies.

[psyc]

Bitcoin supply is not effectively limited until a satoshi is no longer adequate to express the price of a good. The 'supply' of Bitcoin doesn't only increase with mining, it effectively also rises with Bitcoin's price. Say I need to order one pizza per week. In late 2011, one BTC lasts me one week. At today's price, the same coin lasts me more than 50 years. There's no need to bid up the price of a whole coin in a (hypothetical) world where whole coins are scarce. You just buy less of it, because nothing is actually denominated in BTC - that would be unsustainable. Everything is still denominated in fiat.

[Yizahi]

Why did you list Bitcoin negatives instead of positives?:)

1. Immutability - clearly a negative feature, no way for humans to manage transactions and correct mistakes.

2. Limited supply - very bad for a "currency"

3. No censorship resistance in bitcoin, but ease of tax evasion due to exterritorial nature. IRS may find you easily but can't do anything. On the other hand oppressive regimes can both find you can prosecute you because in that case you are physically in the regime's country.

4. Dependence on a handful of anonymous guys in the non extradition offshore printing tokens to pump price with zero oversite. I pick governments. Also Bitcoins are not really independent from governments for the lawful citizens.

5. Zero accessibility after more than a decade in production.

[Fnoord]

You forget to mention the cost of Bitcoin and other cryptocurrencies. The cost of electricity, the environment. The cost of securing your assets. I can guarantee you, if a clever goon comes across you in the middle of the night in Amsterdam, and they know you got cryptocurrency assets with you, they'll get them off you (que XKCD ref. of what happens when you get coerced to give away your private key). And I bet they'll be able to smell the hipsters from miles away. Oh wait, these don't frolic around in those neighborhoods in Amsterdam. Cause stuff there goes via (small amounts of) cash, mainly.

Independence, you are very much dependent on the internet, miners, etc. Yes, you can use the tool to avoid detection of a nefarious state actor. But you'd be breaking the local law, willingly and knowingly. That's a risk. At one point, police are going to recognize these sweet 'lil Ledger and Trezor hardware wallets. Furthermore, if a large local economy would collapse, like say in my case EUR, it'd take Bitcoin with it. I admit, it makes sense to avoid currency in small economies in crook countries, but you're choosing for your own benefit instead of the state you live in.

Accessibility, since a lot of people use mobile smartphones, they cannot sync the blockchain to it. Many are dependent on third party like exchanges. Hardly independent of corporations.

Immutability, you can lose your private key and be done with it. If I lose my bank card, I can disable it and just get a new one. With NFTs, these depend on a third party resource. Which depends on USD or EUR or whatever in order to be paid. These also depend on authority of whoever made the blockchain or smart contract.

You didn't mention anonymity, because Bitcoin isn't. Yes, it takes effort, but it can be anonymized. The reason it supposedly doesn't happen is 1) if you are investigator and know a vulnerability to do so, you're best to keep it private for reuse 2) you apply parallel construction instead. But specialists who can do this exist. Its just that they're expensive, so they only go after big fish not Pablo who sends some Bitcoin from El Salvador to USA.

> You can also pay your taxes in crypto in many countries.

(It is called cryptocurrency, not crypto, but yes you can recognize cryptocurrency proponents by the way they call their asset.)

No, I cannot, as Bitcoin is not a currency. I have to pay my tax in EUR.

> It’s 2022 and people still don’t get that.

This kind of straw man is useless.

[ch4s3]

A Ponzi scheme is a specific type of scam where new investors are lure in with the promise of great returns and portions of their deposits are used by the scammer to pay off early investors who ask to realize some of their returns. The central scammer pockets the difference and eventually runs off with all of the deposits.

Crypto currencies if anything are a bit like distributed pump and dumps, but at that point you're just talking about asset speculation.

[sschueller]

But it's not a Ponzi scheme. It's a currency with small adoption like that of a third world nation.

[dtech]

I'd say Ponzi-scheme is a justified classification, since returns are funded by new entrants or additional purchases, instead of the asset producing value itself like a company stock or a house.

Even something like gold with no value production - whose price is quite stable because of that by the way - has value because people want it for jewellery and industry.

[sschueller]

You could say the same for overvalued stock like TSLA but I don't think anyone would call Tesla a Ponzi scheme. Most of it's value is speculation not actual profits or sales.

[acdha]

> Most of it's value is speculation not actual profits or sales.

“Most” is the key difference: a share of Tesla is fractional ownership in a real business which has proven capable of selling real products which people want. Some fraction of that is definitely speculative but far from all of it, and there's no reason to think that the value would decline to zero under any feasible economic situation.

A Bitcoin, in contrast, has no value other than what you can convince someone else to buy it for. Nobody needs it to conduct business, it's trivial to set up competing blockchains, and the deflationary model is designed to make you profitfrom everyone who starts buying later despite not having created any new value.

[lupire]

It's not a currency for anyone who is holding it long term, by definition.

[tim333]

Does that also apply to anyone who has money in the bank long term?

[Fnoord]

> USD has inherent value, it's the only currency where you can pay taxes in

I don't know, I pay my taxes in EUR, I live in EU. But I get your point. Moreover, USD is the most dominant coin in the world. Even outside USA, a lot of people depend on it.

[DarylZero]

By the same logic though, many internet drug dealers only accept BTC.

"Inherent" implies independent of any individual buyer demanding it. Even if the buyer is federal govt.

[sunshinerag]

“ who are ever only paid in USD - you must accept USD”

Are you saying it’s inherent value comes from it being a protection racket.?

[UnpossibleJim]

I'm curious about one thing as far as this statement goes... it's a little bit of a nonsequiter though. When/if the US starts to tax crypto and crypto gains, does that show that they have more of a legitimate value?