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Comment by adhesive_wombat | Hacker News Reader

Have we decided yet if this is a speculative value store, or a currency?

It's a giant tulip bubble. Bitcoin was never supposed to be a store of value. It's a decentralized currency that many scam artists and criminals use to transfer wealth -- alongside with consuming massive amounts of energy, bitcoin does nothing but bring a huge net negative value to society: https://digiconomist.net/bitcoin-energy-consumption

But hey, let's keep this up and see how long it lasts :)

Sorry but why the downvotes? Because some techno-bros here like being part of a giant pyramid scheme? Seriously - can anyone even counter or give some sort of benefit that bitcoin brings to society that isn't already available by the existing systems we use? I'm really interested in hearing them - because so far, I'm not really sure that I see the light at the end of the tunnel. What value does bitcoin bring to society?

probably because it's 2023 and you're still regurgitating this superficial cryptoskepticism. there's been countless attempts over the years to answer your question, including on this website. if you still need to ask it, then the charitable interpretation is that you haven't been paying attention; in that case, you shouldn't consider yourself in a position to assert your opinion on the matter, either.

here is just one example: https://news.ycombinator.com/item?id=32103472

And this doesn't even begin to discuss the broader DeFi ecosystem (https://www.youtube.com/watch?v=H-O3r2YMWJ4) and NFTs (https://news.ycombinator.com/item?id=35473327). Defi and NFTs haven't gained much traction outside of early adopters (and probably won't, because their reputation won't get redeemed) but the technology is nevertheless valid and operational.

It doesn't (unless fiat currency inflation is some apocalyptic issue maybe?).

But then do credit default swaps or collateralized debt obligations bring much benefit? Even gold and diamonds feels sort of marginal really. I'm not trying to excuse bitcoin, but to single it out as a pyramid scheme, no intrinsic worth etc. seems to ignore other financial instruments that might also have those qualities.

Credit default swaps: were initially created as a way for banks to manage their exposure to credit risk. They were essentially insurance contracts against the default of a borrower defaulting so they played and to this day play a huge role in mitigating risk -- their use in speculation etc.. only became prominent after 2008.

Collateralized debt obligations: created as a way to pool and securitize various types of debt, providing a means for financial institutions to manage risk and enhance liquidity. Just because a few banks and institutions used them to create complex tranches of debt which 'attempted' to reduce risk while massively misusing statistics and increasing it which resulted in 2008 doesn't mean that CDOs aren't useful.

Gold: I suppose you haven't heard about its applications in electronics and connectors, bonding wires, connectors, switches, thin film applications and coatings and hugely used in the production of medical devices and in the aerospace industry?

Diamonds: this one I agree semi-agree with. The only reason they have value is because the De Beers limited supply and there was demand -- but the demand is there because people use them as a status symbol and men use them to show their 'love' or commitment to their partners so this one is questionable.

By those measures, you may as well say Bitcoin is "useful" for Chinese millionaires to evade exchange controls whereas before they were forced to have Rolexes up their arms on the plane from Shanghai. Or in supporting the graphics card market. And none of those applications for gold explain its price movements when, for example, Russia invaded Ukraine. That the other two instruments were as you say used in speculation means they also had no intrinsic worth in their price, no?

I dunno, I feel like crypto is just an exaggerated version of most other asset classes, not at all uniquely terrible in its own right.

I'm not debating whether it's useful or not -- I'm debating whether it brings a net positive to society. So far, its been used to avoid sanctions and currency loss by nutty regimes running countries -- as well as massively used by criminals to conduct fraud -- not to mention the few exchanges which are shady as hell one of which has just been revealed to be a giant scam (FTX). It turns out that regulation can come in to be useful when stuff like this happens -- no? I've personally seen a few firms attacked by ransomware criminals demanding bitcoin as payment and I've seen countless of new outlets reporting corrupt regimes using it to fund their programs (like North Korea using it to fund their nuclear program: https://www.cnbc.com/2023/09/06/north-korea-hackers-stole-cr...) with none of the crypto-enthusiasts reporting on this. Add in the enormous energy expenditure used to keep the charade up and you have a worthless pyramid scheme being hyped up and branded as 'the next Rosetta stone' of asset-classes or currencies or whatever it is that they're branding it as by people who have 0 understanding of how economics nor money nor banking work. These days though all the above doesn't matter. As long as someone gets theirs and 'stonk only go up - GME and AMC' wave of 'investors' is here so I'll just watch this and take notes, but mark my words: this idiocy will be branded as one of the most illogical and delusional pyramid schemes ever crafted by man when we look back through history.

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