For that it would have to have zero intrinsic value, which in reality is lower bounded by the cost of mining (e.g. hardware, electricity, real estate, utilities, security etc.).
The costs of securing the network (e.g. mining) are what gives Bitcoin inherent value. The limited number of Bitcoins available then correlates the velocity of money (e.g. how much capital flows through the network) with the number of circulating Bitcoins and the mining costs.
Requiring a resource to produce does not give something intrinsic value. Intrinsic value is value that something has all by itself.
For example, if silver was used as a currency (as it was for almost all of human history) it has a value all by itself completely separate from its value as a currency. Silver (the element Ag) has thermal and electrical conductive properties that are unmatched. It is one of our most important tools in modern technology. It has also been used for adornment throughout all of history because it is pretty all by itself.
Bitcoin requires energy to create, but after creation it can't be used for anything, not even in the digital space. It is useless outside of its convenience as an intermediary for barter (currency).
Even that is fraught with problems, one of which is, it is completely trackable through all of its purchase history. It is an AMAZING tracking tool (its frightening how amazing it is). It puts Facebook to shame in its potential to track human activity.
the only reason why gold and silver have been regarded as a money is because you can't replicate it. You can only find it. So its scarce. Then they got used as industrial metals in the last 100 years.
You have to understand, the only reason why ANYTHING has value, is because humans say it has value. for 700 years, the British used wood for money and it worked great until they were tricked into switching to paper for currency. It was called the tally stick. The way it worked was simple. They would take a stick and carve notches into it. Each notch represented a certain amount of silver or gold. Then the bank would split the tally stick in two pieces. One for the bank, one for the customer. and the grains on the inside were unique like a finger print. So it couldnt be duplicated.
Then as the customer broke off notches to pay for debts. the person who received the notch would take it to the bank. The bank would match it with there copy. And a ledger would be entered into. And that was how banks operated for 700 years in england.
Its all about the TRUST in the trading pair. Bitcoin has this same feature, where you can not duplicate Bitcoin and put them in with the rest of the bitcoins. Just like you can't grow a tree and carve a branch and expect the bank to accept it. It just doesnt match up. Same with Bitcoin.
Bitcoin is a break through technology. It sovled the Byzantine General's Problem. It allows us to basically email money to each other without creating duplicates. When you send the money, I can be 100% certain that you no longer have that money and there is no third party needed to run the system. No govt. No corporation. No Organization. Just Bitcoin miners to process the transactions. And they get paid in 2 ways. Bitcoin mining rewards and Transaction fees.
the only reason why gold and silver have been regarded as a money is because you can't replicate it.
They were used as currency because of their scarcity and their intrinsic beauty (lustre). They were used as adornment before they were used as currency. That is an intrinsic value.
You have to understand, the only reason why ANYTHING has value, is because humans say it has value.
True, but that is not my argument. My argument is there are other values that we humans give to gold and silver besides their use as an intermediate for barter. Long before they were currencies they were sought after for their beauty. Bitcoin, like the paper dollar or the wooden dollar has no equivalent human given value external to its value as an intermediate to barter.
To put it another way, if Bitcoin did not have the valued property of being an intermediary for barter they would be utterly useless and no one would spend a single resource to create them. Gold and silver however would still be mined (resource expenditure).
I am not saying the idea of Bitcoin is bad. I am saying the implementation, without it being backed (secured) by something with ANOTHER human given value (like silver or gold have), as well as its intrinsic human tracking flaws, not to mention it being primarily owned by the CCP, all make it a very poor choice as a barter intermediate.
"Intrinsic" value is a faulty concept. It's always the case that humans value something based on its usefulness for a specific purpose.
The value is not an inherent property of something but a reflection of people's demand for it. Similarly, something only needs to be "backed" by something else if it is missing the properties that people value.
Bitcoin has many attributes that are fundamentally similar to gold (which humanity values at over $10 trillion), and are often superior precisely because of bitcoin's digital nature.
but after creation it can't be used for anything, not even in the digital space. It is useless outside of its convenience as an intermediary for barter (currency).
this is actually a good thing. Right now Silver is in all of our electronics. In our phones, computers and everything.
Well, a lot of people think Silver is too low in price. It should be much higher. Know what that means? The price of silver goes up, so the manufacturer has to raise prices to cover the cost of buying silver. So the cost of all products with silver goes up. And Silver isnt just in electronics. Its in medical stuff too.
Sorry, but the economy will NOT be held hostage by silver hoarders. Do you really want to get rich in silver if that means people can't afford medical care?
The fact that Bitcoin cant be used for anything Except money makes it super attractive. Its the purest form of money we have ever created so far.
I have no idea who Peter Schiff is, and anyone with the name Schiff would automatically be suspect to me.
Regardless, telling me to buy bitcoin by discrediting someone I have never heard of is not a meaningful argument for bitcoin, nor is it a meaningful counterargument against what I said.
What is the intrinsic value of the coin? It is immaterial, cannot be used without the hardware and software backing it. Even the original papers acknowledge the fiat nature of the currency, meaning it only has the value of faith that it has value.
The hardware INVESTED to operate was made on the promise of future investments providing a value, ultimately the miners only use their resources because they will see a return. A return they can only see by increasing users investments.
Bitcoin is not a ponzi scheme, which isn't to say that is doesn't have problems -- chief among them that the on-ramps are government-monitored exchanges that report to the IRS just as if you were trading stocks.
Not a ponzi scheme, just holds many of the same traits.
Pretending it is anything but fiat. Without having the ledgers backed by anything tangible it cannot hold any value beyond the value attributed by faith.
You can transfer value from person A to Person B anywhere in the world, with no permission from a bank, govt, corporation or organization, tustlessly in minutes or seconds. And its global. This isn't sending US dollars to China. Bitcoin is a universal money.
just wondering.. if someone would be poor how would they get any bitcoin in the first place, 60k isnt exactly cheap is it?
What about the wild price swings? if rose nearly 4k today? what about next week??
e.g if i put in $60k right now bought 1 BTC, 6 months time the price crashes 50% now my 1 coin is only worth $30k, who just stole my other $30k?
Not a very reliable way to store $$ long term is u ask me..
Now i hate the current financial system but atleast with fiat currency the value remains stable and im not going to wake up next week and my life savings will be gone...
WIth current system all i have to deal with is inflation and interest rates affecting the buying power of my $$$ and these are usually 1-5% a year or 0.25/0.5% on CB interest rates.
Seems no different that trading stocks to me.. just gambling.
Also with supply being limited is there not a huge risk of a financial whale coming along and dropping a few bill in and capturing the market? like a hostile takeover via stock ownership?
Also who processes all the payments?
I dont know jack about crypto, never really trusted tech atall... never owned a smartphone... :D :D never will.
P.S Formatting on this site is abysmal.. this WAS a proper paragraph CBA to fix it.
No, Bitcoin does not operate like a ponzi scheme.
For that it would have to have zero intrinsic value, which in reality is lower bounded by the cost of mining (e.g. hardware, electricity, real estate, utilities, security etc.).
The costs of securing the network (e.g. mining) are what gives Bitcoin inherent value. The limited number of Bitcoins available then correlates the velocity of money (e.g. how much capital flows through the network) with the number of circulating Bitcoins and the mining costs.
Requiring a resource to produce does not give something intrinsic value. Intrinsic value is value that something has all by itself.
For example, if silver was used as a currency (as it was for almost all of human history) it has a value all by itself completely separate from its value as a currency. Silver (the element Ag) has thermal and electrical conductive properties that are unmatched. It is one of our most important tools in modern technology. It has also been used for adornment throughout all of history because it is pretty all by itself.
Bitcoin requires energy to create, but after creation it can't be used for anything, not even in the digital space. It is useless outside of its convenience as an intermediary for barter (currency).
Even that is fraught with problems, one of which is, it is completely trackable through all of its purchase history. It is an AMAZING tracking tool (its frightening how amazing it is). It puts Facebook to shame in its potential to track human activity.
the only reason why gold and silver have been regarded as a money is because you can't replicate it. You can only find it. So its scarce. Then they got used as industrial metals in the last 100 years.
You have to understand, the only reason why ANYTHING has value, is because humans say it has value. for 700 years, the British used wood for money and it worked great until they were tricked into switching to paper for currency. It was called the tally stick. The way it worked was simple. They would take a stick and carve notches into it. Each notch represented a certain amount of silver or gold. Then the bank would split the tally stick in two pieces. One for the bank, one for the customer. and the grains on the inside were unique like a finger print. So it couldnt be duplicated.
Then as the customer broke off notches to pay for debts. the person who received the notch would take it to the bank. The bank would match it with there copy. And a ledger would be entered into. And that was how banks operated for 700 years in england.
Its all about the TRUST in the trading pair. Bitcoin has this same feature, where you can not duplicate Bitcoin and put them in with the rest of the bitcoins. Just like you can't grow a tree and carve a branch and expect the bank to accept it. It just doesnt match up. Same with Bitcoin.
Bitcoin is a break through technology. It sovled the Byzantine General's Problem. It allows us to basically email money to each other without creating duplicates. When you send the money, I can be 100% certain that you no longer have that money and there is no third party needed to run the system. No govt. No corporation. No Organization. Just Bitcoin miners to process the transactions. And they get paid in 2 ways. Bitcoin mining rewards and Transaction fees.
Bitcoin is a beatiful money system.
They were used as currency because of their scarcity and their intrinsic beauty (lustre). They were used as adornment before they were used as currency. That is an intrinsic value.
True, but that is not my argument. My argument is there are other values that we humans give to gold and silver besides their use as an intermediate for barter. Long before they were currencies they were sought after for their beauty. Bitcoin, like the paper dollar or the wooden dollar has no equivalent human given value external to its value as an intermediate to barter.
To put it another way, if Bitcoin did not have the valued property of being an intermediary for barter they would be utterly useless and no one would spend a single resource to create them. Gold and silver however would still be mined (resource expenditure).
I am not saying the idea of Bitcoin is bad. I am saying the implementation, without it being backed (secured) by something with ANOTHER human given value (like silver or gold have), as well as its intrinsic human tracking flaws, not to mention it being primarily owned by the CCP, all make it a very poor choice as a barter intermediate.
"Intrinsic" value is a faulty concept. It's always the case that humans value something based on its usefulness for a specific purpose.
The value is not an inherent property of something but a reflection of people's demand for it. Similarly, something only needs to be "backed" by something else if it is missing the properties that people value.
Bitcoin has many attributes that are fundamentally similar to gold (which humanity values at over $10 trillion), and are often superior precisely because of bitcoin's digital nature.
this is actually a good thing. Right now Silver is in all of our electronics. In our phones, computers and everything.
Well, a lot of people think Silver is too low in price. It should be much higher. Know what that means? The price of silver goes up, so the manufacturer has to raise prices to cover the cost of buying silver. So the cost of all products with silver goes up. And Silver isnt just in electronics. Its in medical stuff too.
Sorry, but the economy will NOT be held hostage by silver hoarders. Do you really want to get rich in silver if that means people can't afford medical care?
The fact that Bitcoin cant be used for anything Except money makes it super attractive. Its the purest form of money we have ever created so far.
I have no idea who Peter Schiff is, and anyone with the name Schiff would automatically be suspect to me.
Regardless, telling me to buy bitcoin by discrediting someone I have never heard of is not a meaningful argument for bitcoin, nor is it a meaningful counterargument against what I said.
What is the intrinsic value of the coin? It is immaterial, cannot be used without the hardware and software backing it. Even the original papers acknowledge the fiat nature of the currency, meaning it only has the value of faith that it has value.
The hardware INVESTED to operate was made on the promise of future investments providing a value, ultimately the miners only use their resources because they will see a return. A return they can only see by increasing users investments.
Bitcoin is not a ponzi scheme, which isn't to say that is doesn't have problems -- chief among them that the on-ramps are government-monitored exchanges that report to the IRS just as if you were trading stocks.
Not a ponzi scheme, just holds many of the same traits.
Pretending it is anything but fiat. Without having the ledgers backed by anything tangible it cannot hold any value beyond the value attributed by faith.
You can transfer value from person A to Person B anywhere in the world, with no permission from a bank, govt, corporation or organization, tustlessly in minutes or seconds. And its global. This isn't sending US dollars to China. Bitcoin is a universal money.
I just explained the intrinsic value to you.
The argument that it's immaterial is false as well. It very well exists physically, as the collection of all involved parts.
PMs and fiat currency cannot be used without their respective infrastructure either.
By your reasoning they are now worthless, because you don't accept the costs associated with mining PMs or printing paper currency.
It's okay - you tried. user2827 can have fun staying poor
just wondering.. if someone would be poor how would they get any bitcoin in the first place, 60k isnt exactly cheap is it? What about the wild price swings? if rose nearly 4k today? what about next week?? e.g if i put in $60k right now bought 1 BTC, 6 months time the price crashes 50% now my 1 coin is only worth $30k, who just stole my other $30k? Not a very reliable way to store $$ long term is u ask me..
Now i hate the current financial system but atleast with fiat currency the value remains stable and im not going to wake up next week and my life savings will be gone... WIth current system all i have to deal with is inflation and interest rates affecting the buying power of my $$$ and these are usually 1-5% a year or 0.25/0.5% on CB interest rates. Seems no different that trading stocks to me.. just gambling.
Also with supply being limited is there not a huge risk of a financial whale coming along and dropping a few bill in and capturing the market? like a hostile takeover via stock ownership? Also who processes all the payments?
I dont know jack about crypto, never really trusted tech atall... never owned a smartphone... :D :D never will.
P.S Formatting on this site is abysmal.. this WAS a proper paragraph CBA to fix it.