Ask HN: How many of you believe in Bitcoin and why? | Hacker News Reader

Ask HN: How many of you believe in Bitcoin and why?

27 pointsParker_Powell37 comments

I don't believe in Bitcoin because it is a scam.

Bitcoin is a digital currency that has no intrinsic value and its price is determined solely by supply and demand. It is not backed by any government, which means that it can be used to finance terrorism or other illegal activities.

As the price of Bitcoin increases, more people are attracted to it, which then drives its price even higher - creating a self-reinforcing upward spiral that is unsustainable and will eventually collapse.

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I believe in Bitcoin. Specifically, in the sense that the concept of digital money it created is never going to go away now that it's out. It will have the staying power in human life precious metals, paper currency, bank deposits, stocks and bonds. It will exist as long as the internet exists, long after you, me, and everyone on this forum is dead and gone.

If you think it's a scam and going to collapse then don't hold any of it.

"It is not backed by any government, which means that it can be used to finance terrorism or other illegal activities."

Besides that fact that this statement is simply untrue because the government of El Salvador has backed Bitcoin, it is not logical. The endorsement or support or lack of endorsement/support of any currency or money doesn't determine or even influence whether or not it can be used to finance terrorism or other illegal activities. Government backed money funds such things all the time, and will continue to do so regardless of what happens with Bitcoin.

I suspect that because you don't like Bitcoin you associate it with bad things, rather than the other way around, though I could be wrong... it is a popular opinion that governments should have direct control over the money of every individual, and Bitcoin is designed to make that difficult. I suspect this is also true of most who oppose Bitcoin because of environmental concerns. No doubt there are those who really are concerned about the energy use, but most are just dismayed that they were wrong and these reasons are just coping mechanisms to avoid having to admit it.

> but most are just dismayed that they were wrong and these reasons are just coping mechanisms to avoid having to admit it.

Cryptocurrency proponents love parroting that idea. It’s like they are dismayed at the harm caused by cryptocurrencies but don’t want to give them up, so they fabricate scenarios where other people are petty as coping mechanisms to avoid having to admit it.

Besides that fact that this statement is simply untrue because the government of El Salvador has backed Bitcoin, it is not logical.

When people say that they mean, you know -- large, stable, democratic governments. Which El Salvador (and the CAR et al) are essentially the opposite of.

> I don't believe in Bitcoin because it is a scam.

This is a part where I can't agree. A scam assumes someone is profiting on purpose. Bitcoin supply is largely diluted now though some early adopters made big, this was mostly by chance. That is, unless you think Nakamoto is still hiding for the big pay-off.

> Bitcoin is a digital currency that has no intrinsic value

There is no such thing as "intrinsic value". The value gets assigned by people and market participants.

> and its price is determined solely by supply and demand

Everything is.

> It is not backed by any government

Hardly anything is backed by governments. Also, outside of the Western bubble, many governments defaults on stuff they back...

> which means that it can be used to finance terrorism or other illegal activities

Most terrorism is financed by governments (big surprise!) and most illegal activities will prefer cash/banks/real estate because of the easier on-off ramps to the real economy. You can't launder money with Bitcoin.

Okay. Not sure what the issue here is. Bitcoin doesn't have a regulatory body for "market stability". It's anything but stable.

I don't "believe" in Bitcoin. Bitcoin is there whether you believe in it or not. It has shown itself to be quite resilient to governments and censorship (if you follow the China bans) and unlikely to go away any time soon.

>> Bitcoin is a digital currency that has no intrinsic value

> There is no such thing as "intrinsic value". The value gets assigned by people and market participants.

I'll leave out the discussion of the value of a company and fundamental analysis as off-topic here. Let's focus on currencies instead. The value of a currency is not its exchange rate. Just because Bitcoin is worth 38910.69 USD, does not mean it's more valuable as a currency than a dollar. 1 GBP being worth 1.25 USD doesn't push people to use GBP in place of USD. The value of a currency stems from two factors: liquidity and stability. The reason for the dominance of USD in international trade is the stability people around the world expect from it, compared to other currencies, as well as its liquidity (almost everyone accepts dollars, sometimes even more eagerly than their local currency). Bitcoin fails on both fronts. There are still loads of things I can't buy with Bitcoin (admittedly this aspect is changing). Stability^W volatility of Bitcoin is a meme since its inception. A currency whose value changes so dynamically is a shitty currency. It is more similar to a gambling game than to a currency (and has similar psychological effects on the players). Notice that noone ever "invests in a currency" (other than as a shorthand for investing in something that's sold in that currency), that would be nonsensical, given that the whole point of a currency is so that its value changes as little as possible. So... I guess saying that "Bitcoin is a digital currency that has no intrinsic value" is wrong mainly due to the first part of this sentence. Instead I'd say: Bitcoin is not a currency, but a speculative financial asset.

One of the biggest values of currency is that you must have it to pay your taxes.

Right — if it was going to crash, wouldn't it have done so the last... 40 times it crashed?

Many people's desire, whether from envy or disdain of the technology, has been the same those last 40 times and nothing will convince them that it is worth something. It goes up? Scam. It goes down? Worthless. It stabilizes? Worthless scam.

One can substitute "bitcoin" for "fiat USD" and _most_ of the arguments against it are also against fiat and any other traded commodity. Bitcoin's shining difference to fiat currency is that it isn't backed by any singular entity. One can see that is good or bad as they choose.

I believe in Bitcoin as a peer-to-peer currency, but it failed to become that due to the poor choice of emission. The capped emission that was heavily tilted toward the first few years is responsible for the fear of missing out, wealth concentration on early adopters, and use as a speculative vehicle.

With a pure linear emission, Bitcoin would now, after 13 years, still have a yearly supply inflation of 7.7%, and remain more suitable as a means of exchange than a store of value. Its price would be way lower, and its environmental impact much less.

Bitcoin is an energy-wasting competition masquerading as wealth. Bitcoin values are literally scores of proof for how much energy has been wasted "finding" and then trading it around, which wastes more energy.

But then people will also waste energy and throw real money into NFTs, hats, cosmetics, virtual spaceships... Bitcoin is just more of the same. An exploitation of some primitive human brain fart for percieved status in a rigged game.

Bitcoin's killer feature is speculation for the stupidity of people. What small cryptographic utility it might ever have is eclipsed by the illusion of currency and investment. It is a marketable enigma.

Bitcoin is the digital equivalent of gold. (As long as people continue to use it as such).

Advanced cryptocurrencies such as Ethereum and Algorand are more suitable for commerce.

The basic concept of cryptocurrency, which sadly is generally missed because many people have turned it into a get-rich-scheme like everything else, is to *use math and computer science to reduce or eliminate cheating in databases that record monetary balances*. The techniques are far superior to the legacy (secret) databases used by banks.

I agree with the digital gold analogy. The value of bitcoin and other blockchain currencies is solving the double-spending problem online.

Gold and paper money solves it in the physical world. Gold because it’s dense and easy to check for forgeries (although gold is not used everyday now, is it). Paper money obviously has counterfeiting and serial numbers. But neither of these can be exchanged online.

If we agree that blockchain currencies are a way to exchange value online, then the question is: are they better than credit cards and banks?

Right now, it’s not clear to me that they are, because of the emissions from mining, and the relatively slow transaction rate. Time will tell if the digital currencies will scale better than they are now.

By the way, when comparing emissions of digital currencies with banks, do analysts include the physical bank infrastructure, such as all the bank’s retail branches, and associated employees and other overhead?

Take a look at Algorand. 1000+ TPS (going to 10000 within a few months), blocks in 4.5 seconds, fees less than one penny.

Bitcoin is a means of transferring value peer-to-peer across the internet. I believe in that. I also am interested in the predictable inflation schedule and limit on issuance---I think it's a nice option to have.

Bitcoin is actually pretty unfriendly to terrorist groups because it's a public ledger, making it relatively easy for law enforcement to track. By contrast, being backed by a government doesn't actually make, say, the dollar immune to nefarious uses.

Value is in the eye of the beholder. If Bitcoins sell for $38k then they're worth $38k... right now. As the payment network related to Bitcoin spreads wider, its utility goes up, and the value to holders increases. This is similar to how a fiat currency's value largely comes from the ability / obligation to pay taxes in that currency, but rather than being created by governmental mandate, it is developing organically, bootstrapping.

If the Internet had had a payment system built into it from the beginning, spam may never have become a problem. Advertising would not have been the only effective way to monetize. And so on. Getting to a micropayments world with the Lightning Network or whatever comes after it is a technological revolution that will likely have wide-ranging consequences.

Some of my reasons.

> If the Internet had had a payment system built into it from the beginning

That's quite an ask. HTTPS only arrived half way through its existence.

Of course, it is counterfactual. I was just trying to illustrate the point that payments would come in very handy for internet infrastructure.

My prediction: Bitcoin will someday after ETH2 merge happens everyone will see PoS is better. ERC771s and the entire backlog will release and suddenly bitcoin will show its age and money will leave because btc is not a good investment unless you got in early.

Later after the market has moved, bitcoin will go out of fashion, it will fall to a hashrate attack attributed to lack of use & disinterest.

Everyone like to shill their own coin. Eth has plenty of laughable problems. Bitcoin just don't give a shit, and that's the beauty of it.

I don't think Bitcoin is a scam. It attracts lots of criminals of various forms due to the lack of regulation. I don't get the part about funding terrorism and illegal activities. Surely dollars are still the most useful currency for that?

I think digital currency is here to stay. Further, I think most people are wrong about it what it will mean. People seem to see it as some utopian freedom. What I see if a cash replacement that has traceability on a scale which was never possible before. And it's all public (at least for most of the coins). If your government said tomorrow that all your cash would be converted to a digital currency like bitcoin but all existing regulation would be in place then they could watch literally every cent you spend. Further, if it stayed public like bitcoin, so could advertisers. They wouldn't need to place like buttons all over the web to watch what you're doing. They could just watch your account. Using any kind of anonymisers would be made among the harshest of crimes so you cannot escape the observation.

I hear a lot of proponents saying digital currency is the way to reduce the power of government and the banks. I think, in the end, this will give both power on a scale never before dreamed.

I myself am not into bit coin. but.... I don't think you articulated any arguments against it.

> it is a scam.

How so?

> Bitcoin is a digital currency that has no intrinsic value

Fiat currency has no intrinsic value either. Aside from precious metal coins.

> not backed by any government, which means that it can be used to finance terrorism or other illegal activities.

Illegal activity is older than bitcoin. It can be and is financed with government fiat currencies.

Unless you just mean the convenience of using banking systems.

> creating a self-reinforcing upward spiral that is unsustainable and will eventually collapse.

I agree here. The value of bitcoin is based entirely on more people wanting to buy-in. But this is not much different than any other commodity/currency hybrid such as gold.

I created a poll to go along with this thread:

https://news.ycombinator.com/item?id=31262447

I'm open to suggestions on editing the wording/options.

(FYI, HN supports polls: https://news.ycombinator.com/newpoll)

Exchange of anything that can get you goods or sevice, I will term that as currency for laymen terms. A kilogram of rice can be currency. Back in the days, people used beads/rare stones/sea shells for trade after the barter system. Now we see USD as a global acceptable currency and other local currencies limited to a country.The starting point for me to believe in Bitcoin or any other crypto would be when I can pay my taxes with it. Some would say, with this approach one would loose the value/wealth creation opportunity. But for me and many like me, atleast crypto right now is not an investment option to go all in.

I got an awesome idea. I'm going to burn CPU cycles to make magic numbers that mean nothing to anybody except me and my buddies, based on an erudite sounding white paper that has plausible but nonsensical foundations that feed off conspiracy theories and a pile of libertarian ideals that can't possibly work.

Next, I'm going to find some rubes to read it, and they will give me money to own those nonsensical numbers. Those guys are going out to farm more rubes. We aim to say all sorts of new finance is now possible while enabling nothing but crime and fraud.

Rinse. Repeat.

if it isn't completely obvious, I think the whole thing is unhinged

> an erudite sounding white paper that has plausible but nonsensical foundations

What is nonsensical about the white paper?

It is the first solution to the double spend problem, thus the first decentralized money system. Cryptographers had tried to create such a system for at least a decade, but no solution had been found before.

And it has been proven beyond a doubt that it works, and it's secure. It's kind of insane that the first solution to something is good enough to handle over 10 years later an almost 1 trillion market cap (thus a massive incentive to hack it / break it).

It has of course some big limitations, which is to be expected for the first solution to a problem. Namely, it's kind of a "brute force" solution, with this I mean the inefficient aspect in terms of energy usage. And it has very low throughput (TPS). It still is however, a breakthrough paper. It takes you from having no solution to a problem, to having a working solution.

The shame is how slowly it has progressed from there. It's been over 10 years and the efficiency part is only now being almost solved with ETH PoS. And the throughput part seems quite far away. Also the UX of most software that allows you to interact with cryptocurrency is still awful.

The bitcoin whitepaper is one of my favorite papers in fact. It is very approachable with minimal cryptography knowledge and only 9 pages long. And very simple, unlike more modern cryptocurrency papers.

The crypto part is fine, not that I can claim to understand it.

The trustless model where the paper insists that irreversible transactions are the only acceptable form of financial settlement is hubris and ignorance.

> the paper insists that irreversible transactions are the only acceptable form of financial settlement

The paper never insists that irreversible transactions are the ONLY acceptable form of financial settlement. In fact it says "the system [financial institutions] works well enough for most transactions".

It points out that there is NO electronic system that allows no reversible transactions, as you can with cash. That's why it's titled "Bitcoin: A Peer-to-Peer Electronic Cash System". The author wanted something similar to cash, but electronic.

Besides that, discrediting a paper just for the introduction, which is just the opinion of the author regarding why they think such paper is interesting, is short sighted in my opinion.

Maybe short sighted. But given the current state of crypto currencies and the culture surrounding them, it seems an entirely fair assessment. That crypto currencies are designed to eschew third parties is a defining feature that attracts people who don't care to be scrutinised.

Mostly, those people are looking to bypass the law.

Crypto currencies encourage illegal activity by design. The paper sets that out, in plain sight in the introduction.

What you're saying boils down to the age old discussion regarding privacy, "nothing to hide", etc that has been discussed a million times. I suggest searching for previous discussions regarding this.

Even then, I don't think a technology should be disregarded just because it has some use cases that you disagree with.

Also you vastly overestimate how much crypto is used for "illegal activities". The reality is that it's almost entirely used as an investment, similar to gold.

> Crypto currencies encourage illegal activity by design.

They definitely don't ENCOURAGE illegal activity. You can argue they can maybe facilitate it. It still is much worse than cash for illegal activity in most cases however.

And by the way, just because something is illegal does not mean it's bad. A lot of things that are legal and accepted now were illegal before. And even if you agree with all current laws in your country, remember that there are a lot of other countries, maybe not entirely democratic, with very different and unfair laws.

> They definitely don't ENCOURAGE illegal activity. You can argue they can maybe facilitate it.

This is what I like to call the "sawn-off shotgun" idea. Sure, there might be a legit use for a sawn-off shotgun, but they are never used for that[0].

I would agree that speculation is the most common use for Bitcoin, although I'd more characterise that as rube farming. If you attempted to launch a security with the characteristics of Bitcoin, you'd be in jail. When the music stops, there simply won't be any chairs.

As for disregarding a technology because I don't agree with the use cases, it's perfectly legit to avoid pyramid schemes and greater fool farms for the same reason. The often-cited-but-always-missing good use cases for crypto currencies are such a tiny proportion of what it actually gets used for they become a novelty.

[0] https://en.wikipedia.org/wiki/Sawed-off_shotgun#:~:text=guns....

I believe in digital currency as an incredible exercise in human logic and reason. If there's a value assigned to that, so be it, but I want and need to be involved in this whole algorithmic exercise because I live and work in the industry.

Am I relying on crypto to retire? Hopefully not, and anyone who does may want to reconsider balancing their portfolio. It can go away as easily as it arrived. I don't think it will, but there's a chance that it's a Palm Pilot in a world if iPads.

Why do you have to 'believe' in it, it's just a digital currency - does following it in an almost religious as being a replacement for money is that what you mean?

> As the price of Bitcoin increases, more people are attracted to it, which then drives its price even higher - creating a self-reinforcing upward spiral that is unsustainable and will eventually collapse. You could say this about housing and the stock market as well, and I don’t think those are scams. This is just price discovery. Also, the price of bitcoin has “collapsed” several times in its history, much like the stock market.

It's really interesting that an asset which should only prompt the question: "Will it go up or down?" generates the question "Do you believe?" instead.

The secular parts of the country are completely exposed to such phenomenons, because in reality they aren't really secular, they just substitued one religion for another.

Bitcoin as a concept is great but it's too slow. Lightning solves this a bit but seems like unnecessary complexity.

I also want the value to stabilize before I start using it. Bitcoin as an investment is scary I'm not sure where the current price comes from and why it keeps going up. Once it levels off I'd be happy to use it.

There many reasonable arguments against Bitcoin and this is not one of them. Many valuables have no or barely any intrinsic value, their value is based on rarity. Bitcoin guarantees that rarity.

Is gold a scam?

>Bitcoin is a digital currency

Nope.

It's more accurate to understand it as a store of value, like gold or art or baseball cards. All of which only have value because other people will give you fiat currency in exchange for some.

If it makes you feel better, Bitcoin was likely created by the US Government (unless you believe in Satoshi/Santa). There is around $70 billion in bitcoin sitting unused in the original wallet somewhere, something only the US Government could resist burning through. Once you realize the origin myth and its effectiveness as a tool for destabilizing other currencies and extracting wealth out of unfriendly countries by bypassing their currency controls, you realize the US Government backs it, so why shouldn't you?

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