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Comment by XorNot | Hacker News Reader

Bitcoin will just die. The problem wit pretending it's an asset is you're doing exactly that - pretending. When you hold stocks you hold actual ownership of a productive corporation, when you hold bonds you hold repayment promises from productive corporations or governments which can tax their citizens etc.

When you hold Bitcoin...you don't hold anything which can convert into something useful at the end of the day - you hold the useless result of expended computing power. A bitcoin isn't a password which unlocks anything, it doesn't convert back into computing power - it can't do anything into the future.

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What do you hold when you hold USD in a bank account? The best argument I've heard for the value of USD is:

1. is that you can pay your US federal and state taxes in USD

2. and many companies and individuals will accept USD in trade for goods and services.

Measuring BTC by that same rule you'll find:

1. You can pay your Ohio state taxes in Bitcoin [0],

2. and you can trade BTC (Bitcoin) for some goods and services (overstock for example).

Thus if USD has value by the measure above than BTC must share some of that value. The value of BTC might be significantly smaller than USD but it must be non-zero.

>When you hold stocks you hold actual ownership of a productive corporation

Not every company is productive. The stock is worth what someone is willing to pay for it now or at some future point. Companies have issued stock as cryptocurrency tokens.

>When you hold Bitcoin...you don't hold anything which can convert into something useful at the end of the day - you hold the useless result of expended computing power

You raise an interesting point here. Should currencies have a use other than being a medium of exchange? For example you can burn paper money to generate heat or melt down coinage into useful metals. Does having that property make paper money or physical coins better as a currency? Goldbugs would say yes, I'm less sure.

[0]: https://www.wsj.com/articles/pay-taxes-with-bitcoin-ohio-say...

>>1. is that you can pay your US federal and state taxes in USD

>>2. and many companies and individuals will accept USD in trade for goods and services.

First of all to have USD someone needed to borrow it first and they need to return it. The USD you hold is useful for someone else to pay their debt back. This is much more important than taxes.

>>Thus if USD has value by the measure above than BTC must share some of that value.

No, the reasoning is based on missing the point of fiat currency: someone else owns USD to the central authority with a lot of power.

>>For example you can burn paper money to generate heat or melt down coinage into useful metals. Does having that property make paper money or physical coins better as a currency? Goldbugs would say yes, I'm less sure.

The point is that USD represents someone's debt. They will need to come up with goods/services to pay that debt back if they don't currently own enough USD. BTC represents wasted power and its only value is a hope someone wants to accept it as payment even though no one really needs to (unlike USD).

> First of all to have USD someone needed to borrow it first and they need to return it.

This is a novel concept to me - could you please elaborate on that or provide suitable search keywords?

Look up "Credit theory of money".

Thanks!

You can’t actually pay your Ohio state taxes with BTC. They convert immediately to USD when you pay with BTC. If it didn’t convert, you can bet they would not accept BTC.

I don't hold any bitcoin or cryptocurrency and am a crypto skeptic in general but isn't this argument commonly rebutted with the comparison to gold, to which all of the same criticisms apply but which has nonetheless maintained value for millenia?

Gold at least has legitimate industrial uses that put a floor under its valuation.

Arguably the whole human civilisation is based on imaginary things - that is on 'pretending'.

There's nothing make believe about the trillion dollar US armed forces that backs the full faith and credit of the US dollar.

This is a tired argument, comparing Bitcoin to stock and using words like "actual" in the context of stock while using words like "pretending" in the context of Bitcoin.

Most stock today doesn't pay dividents and has no direct relationship to the company's assets. You own some tradeable tokens and you bet on them going up or down in value. Implying stock ownership gives you something that's tangible and non-speculative is the real pretending.

fewer than 20% of the stocks in the S&P500 do not pay dividends:

https://www.dividend.com/investor-resources/sp-500-companies...

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