Bitcoin: Magic Internet Money

(researchaffiliates.com)

37 points | by Bostonian 113 days ago

14 comments

  • arcticbull 113 days ago
    I mean yeah, the burden of proof here is very much on Tether, as it always has been. They've claimed it was backed 1:1 with cash, that was proven false. They then claimed its backed by all sorts of stuff maybe, who knows?

    What we do know is that their own website T&C says by holding a USDT token, they owe you nothing. They never have to allow anyone to withdraw a single penny. They can sail off to a (different) island and keep any assets they may or may not have, scot free. They're chuck-e-cheese tokens.

    They hired an auditor, then the auditor quit.

    They bank with a domestic bank in the Bahamas, Deltec (chaired by the creator of Inspector Gadget, Jean Chalopin), who they may well own. Just as they owned Noble in Puerto Rico before it was bankrupted due to their ownership being revealed. And guess what? The Bahamas' government domestic bank foreign liabilities do not show a 24B influx of USD over the last year.

    There's no reason - nor has there ever been reason - to believe Tether is anything other than a scam to enrich Tether and bank Bitfinex. The crazy thing is that USDT volume amounts for 80% of BTC trading volume. [1]

    I just can't understand the "well, let's just assume it's fine until proven otherwise" attitude. If that's your attitude I've got a tokenized bridge to sell ya.

    To call Tether a systemic risk to the entire crypto space is quite the understatement.

    [1] https://coinlib.io/coin/BTC/Bitcoin

    • vsareto 113 days ago
      The fact that Tether has gone on for so long is proof you can do these kinds of things on the year-long scale and have plenty of time to plan an exit well before the cards collapse. People have been calling the risk of Tether for a while (self included) but it just hasn't been realized. It's entirely possible it survives a significant amount of time for it to become a necessary part of BTC, whether that's ultimately good or bad.
      • aent 113 days ago
        They've been relatively modest with their scam for quite a while, e.g. they printed less than 5 billion in the first three years of their existence. Then another 5 billion in just 6 months, and then it went completely off the charts and now they are printing billions weekly, 2 billion just in the in the last 7 days. If they kept it reasonable they probably could have kept it on for a while, but at this scale it'll have to collapse.
      • xorcist 113 days ago
        How much of that volume is real though?

        Most of those calculations are based on self reported volume from exchanges no one has even heard of.

        How systemic that risk really is is not very clear since it is concentrated to certain types of exchanges where the regulatory risk tends to be already quite high. A bank run on them would still be huge.

        • Alex3917 113 days ago
          If you were a big Bitcoin miner and you knew that there was only $2,000 flowing into the ecosystem for every Bitcoin mined, which would you rather?:

          - Selling each Bitcoin for $2,000 to pay your electricity bills?

          - Selling each Bitcoin for $40,000 USDT, which you know is only backed by $2,000?

          Clearly the latter, because you make the same amount of money but get to keep 95% of your Bitcoin. The Tether fraud only makes sense if you assume that the miners aren't colluding, and that they don't make more money the more Tether gets devalued.

          • arcticbull 113 days ago
            The miners have to pay their electric bills in actual dollars, not play money, so they sell for cash. Even if USDT is completely 0% backed, miners can get the $40K USD for so long as the inflows exceed outflows.
        • gfody 113 days ago
          I read this in reader mode because I didn't want to click the accept cookie policy (clicking "decline" boots you). Then I saw all the comments here mentioning Tether and wondered if I just read a totally different article and it turns out I did. For whatever reason reader mode shows a totally different article. That's just.. not how the internet should be :(
        • kypro 113 days ago
          > Bitcoin is not unseizable. A quick google search of “bitcoin seized” will uncover countless instances of governments’ confiscating bitcoin from illicit businesses, including Silk Road. This reality contradicts part of the old narrative about bitcoin—that it is useful for criminals. Bitcoin is easily trackable on the public bitcoin blockchain, making it a bad choice of currency to use when committing crime.

          Could someone explain this to me? How would a government confiscate bitcoin held in a cold wallet? I get they can track it and potentially seize it if it was held on an exchange, but presumably anyone buying Bitcoin because they're worried about the government seizing their assets would not hold it on the exchange and would store it on a cold wallet?

          • paxys 113 days ago
            "Give us your Bitcoin or we hold you in a dark cell forever" is the usual way
            • arcticbull 113 days ago
              A rubber hose comes to mind.
              • capableweb 113 days ago
                You confiscate the cold wallet? It exists in physical space, and so does the government lackeys. Once they have that, they are just missing a passphrase and you to get access and seize it.
                • ur-whale 113 days ago
                  Not all cold wallets exist in meatspace.
                  • qeternity 113 days ago
                    If it exists outside of someone’s memory, it exists in meatspace and can be seized.
                    • ur-whale 113 days ago
                      Assuming you know it exists and where.
                    • chaostheory 113 days ago
                      Does it matter whether or not the cold wallet exists in a 14 eyes nation?
                  • robjan 113 days ago
                    A cold wallet is not secure against a battering ram to your front door and a team of paramilitary police.
                    • ur-whale 113 days ago
                      Governments have:

                          - guns
                      
                          - jails
                      
                      The threat of either of these is likely going to help you remember the password to your cold wallet quickly.

                      Obligatory: https://xkcd.com/538/

                      Your only protection is if they don't know your cold wallet actually exists, something that is rather hard to pull off with Bitcoin - it is easier with some other cryptos (Monero, ZCash, Beam, Grin)

                      • xapata 113 days ago
                        Depends which government and where this person resides.
                        • charwalker 113 days ago
                          If it isn't in an offline wallet it's likely with a legal entity registered somewhere or at least doing business in the US giving US courts jurisdiction. Even if not in the US, whatever jurisdiction they are under can enforce US rulings or court orders if allied or under treaty. If the FBI/etc follow the process to get a judge's signature saying the entity is holding illegally obtained or fraudulent assets of any kind, the entity can be liable if they do not cooperate.

                          Same thing as any order to seize or freeze financial assets but perhaps with more scrutiny given the pseudo-anonymity of digital currency. Same for acts by Congress that route through the Treasury to freeze assets like the Magnitsky Act.

                        • tedk-42 113 days ago
                          Ain't no magic. As countries boost their economies via cash stimulus packages, this cash needs to end up somewhere and two easy places are crypto exchanges and the stock market.
                          • asdff 113 days ago
                            It is pretty ridiculous that an appreciable percent of stimulus money intended to circulate within the national economy is being used for pure speculation. At least stock investments increase productivity.
                            • paxys 113 days ago
                              That's what happens when you offer tax cuts, business loans, 0% interest and other corporate bailouts as a means of economic stimulus instead of just direct payments to people who need it the most and will spend it on essentials.
                              • alwillis 113 days ago
                                The price of virtually all stocks has been inflated due to stimulus money, as some people are using stocks as a store of value and some are speculating.

                                The price to earnings ratio of Tesla is 1692—that’s nuts.

                                • ur-whale 113 days ago
                                  Agreed on the stock market valuations being crazy, but then: where would you park your stimulus money instead?

                                  Bonds?

                                  Gold?

                                  Real estate?

                                  The truth is, preserving wealth in 2021 isn't obvious at all.

                                  • paxys 113 days ago
                                    The top 2 economic problems of 2021: "I can't afford rent or food" and "I don't know what to do with all my extra money".
                                    • alwillis 113 days ago
                                      What people don’t get—everything denominated in dollars is also inflated by dollars, meaning when the printing of trillions dollars stops, real estate, stocks, etc. will crash.

                                      We’re well on the way to negative interest rates.

                                      The primary reason for the rise of bitcoin’s price from the low in March 2020 to $37,000 and change tonight is because it’s being used to preserve wealth.

                                      • lurker619 113 days ago
                                        Any articles with more details on your reasoning?
                                    • bb88 113 days ago
                                      TINA -- There is no alternative
                                • Ulrich2 113 days ago
                                  I dont understand that:

                                  1. So someone sells (potentially) worthless Tether for Bitcoin, ok.

                                  2. But who is selling his Bitcoin for Tether in these volumes? Miners need to sell for cash to finance their operations.

                                  • ur-whale 113 days ago
                                    > But who is selling his Bitcoin for Tether in these volumes? Miners need to sell for cash to finance their operations.

                                    I suspect there are exchanges where the BTC/USD pair does not exist, only BTC/USDT (Bitmex comes to mind).

                                    In which case, if you want to trade in and out of BTC/USD, Thether isyour only choice.

                                    I'd love to hear if people can easily withdraw actual USD from semi-shady exchanges such as BitFinex, Binance, etc...

                                    [edit]: and I agree with you, I wouldn't buy a USDT even if my life depended on it.

                                  • dyamanoha 113 days ago
                                    Bitcoin isn't legal tender and never will be. The primary reason is that the govt (and its in our best interests) needs to able to execute fiscal and monetary policy. No one wants uncontrollable inflation or deflation -- there's a reason why we use a fiat based money system today.

                                    The IRS has classified BitCoin as a commodity. That means whenever you transact in bitcoin (if you do it legally) you have to record the fair market value of the coin in USD so you can report and pay capital gains or losses. It's not practical to use it as a currency for legal transactions.

                                    Businesses have no interest in a money system that are anonymous because they have to deal with potential audits from the IRS.

                                    BitCoin similar to gold, except for the fact that gold has intrinsic value as a material input to manufacturing and it has to be acquired at market price.

                                    Bitcoin is a system that requires current holders to encourage new people to come in and purchase Bitcoin because that's their only viable exit strategy.

                                    So, Bitcoin is a commodity. It'll never be used as money and no major nation will treat it as legal tender. It has no intrinsic value. It's viable for black market transactions but that's it. The closest analogy I can think of is that it's like Beanie Babies (with certificates of ownership and authenticity). It's a Beanie Baby pyramid scheme.

                                    • jimmydorry 113 days ago
                                      You seem to be confused on quite a few points. In case anyone else reads this comment chain, here are a few points to keep in mind.

                                      >Bitcoin isn't legal tender and never will be. The primary reason is that the govt (and its in our best interests) needs to able to execute fiscal and monetary policy. No one wants uncontrollable inflation or deflation -- there's a reason why we use a fiat based money system today.

                                      Outside of speculation, many use Bitcoin to escape the effects of fiscal and monetary policy that they don't agree with (e.g. 35% of all dollars that have ever existed, were printed this year).

                                      >The IRS has classified BitCoin as a commodity. That means whenever you transact in bitcoin (if you do it legally) you have to record the fair market value of the coin in USD so you can report and pay capital gains or losses. It's not practical to use it as a currency for legal transactions.

                                      The law is always slow to catch up with innovation. It's a commidity for now, which makes using it more burdensome than it needs to be, but this can change overnight if it was given the status of a currency.

                                      >Businesses have no interest in a money system that are anonymous because they have to deal with potential audits from the IRS.

                                      Bitcoin is the opposite of anonymous. I'm not sure why people still get this wrong after seeing Bitcoin in use for 11 years. It is a well tracked public ledger of value. Companies can more easily open their books to audits, and the IRS can also verify these books using publicly obtainable information.

                                      >BitCoin similar to gold, except for the fact that gold has intrinsic value as a material input to manufacturing and it has to be acquired at market price.

                                      Bitcoin is digital gold. Its intrinsic value stems from many aspects (in no particular order):

                                      * ease of value transfer

                                      * time of settlement (settlement between banks will take up to 90days)

                                      * divisibility (a dollar only has two decimal points, while Bitcoin has 12 for now, but no real limit otherwise)

                                      * a zero-trust consensus system

                                      * and quite a few other properties. These are all intrinsic to Bitcoin. To claim that it has no value flies in the face of its pratical application for the last 11 years.

                                      >Bitcoin is a system that requires current holders to encourage new people to come in and purchase Bitcoin because that's their only viable exit strategy.

                                      Not sure why you feel this is true. Bitcoin would continue fine as-is with the current participants and activity. Perhaps the speculators would leave the system, but this is true of pretty much any speculative market activity and not the primary purpose of such a financial tool.

                                      • dyamanoha 113 days ago
                                        > many use Bitcoin to escape the effects of fiscal and monetary policy that they don't agree with (e.g. 35% of all dollars that have ever existed, were printed this year).

                                        The point I was trying to make is that Bitcoin will never replace a national currency, nor will Bitcoin ever get to the point where it accounts for any meaningful volume of payments for goods/services. No nation will let that happen because (agree with it or not), not having monetary policy controls will (not maybe) result in an unstable economy which is in no one's best interest.

                                        I'm not beyond convincing, but I need you to explain how you imagine a simple deflationary scenario playing out. Here it is. The govt. was asleep at the wheel, classifies bitcoin as a foreign currency and we transition over to bitcoin. The federal reserve has no teeth. Then, for whatever chaos theory reason, deflation begins to kick in. Every-day-Joe sees costs of goods decreasing relative to Bitcoin's purchasing power. Saving coin suddenly starts looking like an appealing investment strategy and he stops spending. Demand dries up bit by bit and goods get even cheaper in a positive feedback loop. What do you do?

                                        We really do want to keep inflation at around 2-4% for a reason. How do you achieve that with Bitcoin is in wide-spread use?

                                        > The law is always slow to catch up with innovation. It's a commodity for now, which makes using it more burdensome than it needs to be, but this can change overnight if it was given the status of a currency.

                                        Why do you assume that the law got this wrong? Again, the reason for this is because it's not in our national best interest to have a wide-spread alternative currency to the USD. I think the IRS absolutely classified this correctly.

                                        The vast majority of Bitcoin purchasers do so with the desire to make USD, e.g. https://www.reddit.com/r/Bitcoin/comments/7g9cmx/we_made_it_.... Typical bitcoin holders watch the market rate because even if they don't realize it, they all actually know it's not a currency in anything but name.

                                        > Bitcoin is the opposite of anonymous. I'm not sure why people still get this wrong after seeing Bitcoin in use for 11 years. It is a well tracked public ledger of value. Companies can more easily open their books to audits, and the IRS can also verify these books using publicly obtainable information.

                                        Personal identity isn't attached to wallets. It can be, but that's not within the scope of the idea of Bitcoin itself. Blockchain as a ledger has useful application for accounting purposes, but Bitcoin itself isn't a value add.

                                        > Bitcoin is digital gold. Its intrinsic value stems from many aspects (in no particular order):

                                        'Digital gold' is very different from real gold in that, well, it's not real and can't be used to produce anything physical. Real gold is an input to manufacturing value chains.

                                        * ease of value transfer * time of settlement (settlement between banks will take up to 90days) * divisibility (a dollar only has two decimal points, while Bitcoin has 12 for now, but no real limit otherwise) * a zero-trust consensus system * and quite a few other properties. These are all intrinsic to Bitcoin. To claim that it has no value flies in the face of its pratical application for the last 11 years.

                                        Not to be flippant, by why does anyone care about any of those bullets? Most people just want money to be stable so they know when they can retire and not worry about the purchasing power of their savings. And they want their money in banks so they can be FDIC insured.

                                        Here's a perspective on intrinsic value. When a person sells a house for a significant capital gain. They don't just exit the housing market. They still need to live somewhere and they reinvest at least a portion (or sometimes more) capital back into the housing market.

                                        So yes, you can talk about whether something has intrinsic value in if it holds value but that's really missing the point in a significant way.

                                        * National currency has value because it enables stable commerce * Commodities have value because they are used by humans * Bitcoin is classified as a commodity but has no intrinsic value

                                        > Not sure why you feel this is true. Bitcoin would continue fine as-is with the current participants and activity

                                        Maybe. Some people are going to sell their bitcoin and retire taking that money out of the system, most likely permanently. A bunch of people crowd funded that. So how does the next inline "get rich off of bitcoin"? I think it's pretty straightforward.

                                    • wpietri 113 days ago
                                      It's pleasant to see somebody that's clearly part of the Bitcoin community admitting basic facts like this. E.g., "Bitcoin is not a capital asset or a store of value." and "The price of BTC is nearly certainly a bubble and likely manipulated." That's been obvious for quite a while, but there are an awful lot of people who are as invested in the myths of Bitcoin as they are in the cryptocurrency itself.
                                      • marcell 113 days ago
                                        While Tether may indeed be a fractional reserve, that doesn't seem like an existential threat to bitcoin.

                                        At any given time, a small scale bitcoin holder (<1000BTC) can liquidate their entire position on Coinbase and withdraw USD to their bank account within a few days. A large holder would have to be more careful, but the market is big enough to liquidate 10,000 BTC over a week or two with minimal price impact.

                                        Given this, we can see from revealed preferences that most small and large bitcoin holders are not liquidating their positions for USD. Whether or not Tether is a fractional reserve doesn't really change this.

                                        That said, if Tether is revealed to be a fractional reserve, it would almost certainly be a huge short term shock to the system for bitcoin. Liquidity between exchanges would be shot, and the news would scare many investors away from the market. I wouldn't be surprised to see an 80% short term drawdown in that scenario, similar to when Mt Gox crashed. But again, this doesn't really change the long term dynamics I described above, since holder's ability to liquidate BTC for USD was never an issue.

                                        • wpietri 113 days ago
                                          > While Tether may indeed be a fractional reserve, that doesn't seem like an existential threat to bitcoin.

                                          Depends on how much Tether's driven the current bubble. A 90% fall from peak is perfectly plausible; that's where it was 2 years ago. And it could go much further. Will Bitcoin vanish? No, but it after a whole new set of people have their fingers burned, it could become effectively irrelevant.

                                          It's important to remember that the supply of new cryptocurrencies is basically infinite. Bitcoin has a brand recognition advantage over the others, but if its brand becomes "a giant vehicle for fraud that people lost absurd amounts of money in", there are plenty of other ways for speculators and marks to gamble.

                                          • ur-whale 113 days ago
                                            >Bitcoin has a brand recognition advantage over the others

                                            It's a little more than brand recognition: there's also a network effect involved (à la Facebook / WhatsApp) that makes it hard for the other cryptos to compete even though they may have better tech.

                                            There's also the hashing power, which - if you leave the tree-hugging arguments aside for a second - secures the network integrity quite effectively and is hard to match by contenders.

                                            • wpietri 113 days ago
                                              It'll be interesting to see how much network effect is left after a significant brand hit. One of the purposes of exchanges is to cross-connect networks. Quitting Facebook is hard, because you need to get all your friends to move. But if you're just a speculator seeking volatility and liquidity, switching is pretty easy.

                                              The hashing power will decline drastically in a crash, as many existing miners will become uneconomical. If that happens, I'll be very interested to see where that mining power goes. Another currency? A 51% attack on the way out the door?

                                          • arcticbull 113 days ago
                                            Re: fractional reserve. Fractional reserve banking without a backstop is dreadful and was a major contributor to the Great Depression. Luckily, we learned from that and created the FDIC. It's not at all the same thing and you cannot consider fractional reserve banking to be equivalent to fractional reserve banking with a backstop.

                                            The mechanics are different too, where a bank loans money it doesn't have and leaves itself with a negative balance until the loan is repaid (which btw, also has to be backed very carefully). They're just printing money to buy BTC and pump it.

                                            Last, they also don't owe you any money or other assets if you try and withdraw. They can say no, and tell you to stuff it. Read their T&Cs on their website.

                                            > That said, if Tether is revealed to be a fractional reserve...

                                            What do you mean? Their lawyer admitted it in court two years ago. [1]

                                            [1] https://www.coindesk.com/tether-lawyer-confirms-stablecoin-7...

                                            • bb88 113 days ago
                                              So here's the scheme (or scam depending on your point of view):

                                              1. Tether exchanges BTC for USDT

                                              2. Tether prevents people from exchanging USDT for USD

                                              3. Tether immediately sells their newly gained BTC for USD

                                              4. Ideally Tether would back USDT with a 1:1 in assets in USD.

                                              Point #4 is under debate. But since #2 exists it's unclear that even if #4 is true, Tether would stop a run on USDT.

                                              What it really looks like is that Tether figured out a way to extract capital out of the crypto market by buying assets and replacing them with worthless IOU's. Meanwhile the founders have walked out the back door with suitcases of cash.

                                          • ogogmad 113 days ago
                                            What's the point of Tether? Is it to move money between exchanges while avoiding KYC/AML?

                                            Didn't work for me when I was using Bitfinex. They asked for KYC when I tried to withdraw some Tether. Now I'm at a loss in trying to understand the point of it.

                                            • thinkloop 113 days ago
                                              It's to exit your crypto positions without the costly process of going into fiat.
                                              • ogogmad 113 days ago
                                                Why is converting to fiat any more expensive than selling for Tether?

                                                [edit]

                                                Maybe I've figured it out: It's essentially a way of moving a sum of fiat between exchanges without going through a bank. If you withdraw to a bank, then you have to wait a while before you can move that money back into an exchange. At least that's my experience.

                                                • x3n0ph3n3 113 days ago
                                                  Exiting to fiat requires KYC reporting and taxes. Tether, in many settings, allows you go get away with _not_ doing that.
                                                  • arcticbull 113 days ago
                                                    > Exiting to fiat requires KYC reporting and taxes. Tether, in many settings, allows you go get away with _not_ doing that.

                                                    The IRS has been very clear, when you swap one crypto for another, it's a taxable event. Generally it's not a good idea to avoid the reporting.

                                                    [edit] Cleaned up as I likely misread your statement.

                                                    • usmannk 113 days ago
                                                      Is discussing a venue for (possible, depending on your location) tax fraud equivalent to admission of participating in tax fraud?
                                                      • arcticbull 113 days ago
                                                        Thanks for pointing that out, I've edited it to clear up what I meant. Poor wording on my part.
                                                      • ur-whale 113 days ago
                                                        > it's a taxable event.

                                                        In USistan

                                                    • ogogmad 113 days ago
                                                      But that requires that the exchange doesn't impose KYC requirements when you withdraw Tether. Do such exchanges exist? Are they legal? Bitfinex, which is closely affiliated with the company that runs Tether, actually does not allow you to withdraw Tether without doing KYC. This circles back to my first post.
                                                      • arcticbull 113 days ago
                                                        There are plenty of non-Bitfinex un-banked exchanges that allow you to do whatever you want, including the DEXs.
                                                        • ogogmad 113 days ago
                                                          OK, so let's say you buy and sell crypto using DEXes, and take home your profit in the form of Tether (or another stablecoin). What happens if you want to spend it on things? You can't use Amazon, eBay or any supermarket because none of them take Tether - so you're left holding a bag of useless Tether. Again, what is the point?
                                                  • frankenst1 113 days ago
                                                    Tether is also a "crypto position" and does not hold any special tax exemption status. If you exchange your crypto asset A for any other crypto asset B (e.g. Tether) it creates a taxable event under most jurisdictions.
                                                • ur-whale 113 days ago
                                                  This is a pretty balanced article written by someone who's been in the trenches since pretty much the start of the story.

                                                  Worth a read, the arguments pro and con Bitcoin are well argued, and the fact that Bitcoin in 2021 is a different beast than in 2013 (in term of its properties) is an interesting - and likely valid - point of view.

                                                  • thorwasdfasdf 113 days ago
                                                    I don't see how Tether can influence the price of bitcoin when bitcoin's market cap is more than an order of magnitude greater than Tether. Even if every single piece of tether out there was fraudulent, it would only have a tiny impact on bitcoin.

                                                    People downplay bitcoin because it can't be used as cash. It's not supposed to be. It's a store of value. And, in a world where fiat currency is being printed endlessly like monopoly money, there's really only 2 asset classes left: Stocks and Bitcoin, and maybe gold. Do you really want to put ALL your money in equities? No, and neither does anyone else. People want diversification. And Bitcoin, is a great way to diversify your portfolio with a store of wealth.

                                                    People call it a ponzi scheme. but, it's just metcalf's law. the usefulness of a network is based on the size and amount of participants. is facebook a ponzi scheme? is the US dollar a ponzi scheme? if no one believed in the dollar then it wouldn't be worth anything either -> Just ask all the countries with failed fiat currencies who underwent a period of hyper inflation. I'm not saying that's going to happen to the US dollar. but, i'm saying, fiat money requires people to have faith in the US dollar, just as people are now gaining faith in bitcoin. that's not a ponzi scheme, that's called Network effects.

                                                    This is not 2017. 2017 was a period when people in their underwear were speculating on bitcoin. there's 2 types of bitcoin investors: the hodlers (which know what bitcoin is for and hold it for almost forever), then there's the speculators. It just happened that in 2017 very few people understood bitcoin's purpose and so 80% of it was speculators and 20% hodlers. This year in 2020, the perentage of buy and hold investors is much greater, which means the drop from the top will be much less than last time. there will always be some speculators, but as bitcoin ages, the percentage of hodlers to speculators increases and thus these large price spikes will also decrease.

                                                    • DeRock 113 days ago
                                                      > I don't see how Tether can influence the price of bitcoin when bitcoin's market cap is more than an order of magnitude greater than Tether

                                                      Prices are set on the margin, and 80% of BTC trading volume is done using tether.

                                                      • howlgarnish 113 days ago
                                                        If you read Satoshi's original Bitcoin paper, it's very clear that it's supposed to be "cash" (a medium of exchange). All this "store of value" stuff came about afterwards, when people needed a justification for the valuation of something that has become eminently unsuited to actual usage.
                                                        • thorwasdfasdf 112 days ago
                                                          that may have been the original intent but that's not very valuable. we already have electronic forms of cash payment, we don't need bitcoin for that.

                                                          The IMMENSE value of bitcoin is that it can't be devalued. This is huge. In a world where nearly every fiat currency is being devalued and debased at a rapid base, there are many who are desperate for a store of value that's stable. no other fiat currency can offer this guarantee.

                                                      • WC3w6pXxgGd 113 days ago
                                                        "Events of August 2017 altered the trajectory of bitcoin. A little known but drastically important change occurred to the bitcoin source code with the addition of segregated witness (separating signature data, or witness, from transaction data) (Nguyen, 2017)6 and the contemporaneous decision by BTC miners to keep the block size at 1MB.7

                                                        The technical details of the change are outside the scope of this article, but the outcome is that bitcoin is no longer a digital cash system as described by Nakamoto (2008)."

                                                        Does anyone have an explanation as to why these changes make bitcoin no longer a digital cash system?

                                                        • rbtprograms 113 days ago
                                                          Once you accept that everything is a simulation and nothing is real, the price of Bitcoin makes perfect sense.
                                                          • dnprock 113 days ago
                                                            Bitcoin itself is real. The price of Bitcoin is a reflection of the bubbles on the other side. The other side is a simulation.
                                                          • geraldbauer 113 days ago
                                                            Bitcoin the new gold (or store of value - hint: did you know? gold is a mineral - that's not subjective but objective)!? Sorry, Bitcoin is comedy gold! The internet of money! LOL. The bitcoin ponzi and the austrian economics bullshit (e.g. value fluctuates based on demand - it's all subjective!) to the max lies get ever bigger. For a good summary published just a couple of days ago of the "state-of-the-fraud", see Why Bitcoin is a Ponzi (Learn how the Investment Fraud Works) [1]

                                                            PS: The damage to our planet is not subjective but objective and very very real [2]. The CO2 footprint or the electronic waste is going up.

                                                            [1]: https://openblockchains.github.io/bitcoin-ponzi [2]: https://digiconomist.net/bitcoin-energy-consumption