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Comment by 7e | Hacker News Reader

What value does it provide?

None. Its a scarce resource that has been mutually agreed upon to be desirable. Much like gold or diamonds. Sure they have some limited use in non jewelry applications but nothing that justifies their prices vs the existing supply besides people just agreeing they are valuable.

As a store of value though vs gold it has more positives. Much easier to transport a billion dollars worth of btc than gold.

Much easier to self custody.

Truly limited supply, they pull more gold out of the ground every day.

The world literally just got together and decided BTC is what they want and the price reflects that. Its a fascinating case study just in that regard.

The video is here: Page is terrible, video is about 1/3 down

https://finance.yahoo.com/video/buying-bitcoin-buying-nyc-ap...

To me it's never been that "intrinsic value" of Bitcoin makes much sense, but that it holds up a mirror to the incumbent system and how little that makes sense either!

Agree, so much of our global financial system is just made up and produces wealth from the ether. Credit default swaps...

Credit default swaps are not magic; if you can correctly predict future default risk you can use CDSes to take money from people who predict wrong (and this also provides information to the market, encouraging the underlying to be more accurately... never mind).

It's desirable by people who have it - that's not the world. That's people who have stake in the game.

Totally valid, but more and more people want it every day and are buying it. The new etf's have provided them with an alternate method of doing so and are currently the most successful ETF launch of all time. The daily demand of the ETF's far outstrips the number of new coins generated weekly. Add in the fact that that newly generated supply is getting halved in a few weeks and you have a good outlook for BTC pricing.

> more and more people want it every day and are buying it

This is incorrect. From Coinbase SEC filings, retail trade is 1/8 of what it was in 2021, last time the price was this high.

Even as the price has risen over the course of the past year, less and less people have wanted bitcoin every day. We have the numbers on this from the largest actual-dollar crypto exchange.

Miners have hoarded coins since 2021 because if they sold them the price would cash. They took out loans against their mark-to-market value instead. (Two such lenders were Silvergate Bank and Signature Bank.) When you see sudden multi-thousand dollar crashes in the bitcoin price, it's often a miner having to dump.

The ETFs have taken in $10b net in their entire existence, and a lot of that seems to be churn from other bitcoin-exposed securities.

It's not clear you're informed on the market you're expounding on at such length.

Same as fiat money in this regard.

The same is true for the US Dollar (the Russians certainly don’t want it).

Further, the same has been true for the Argentinian Dollar for decades.

Many other currencies that I could name as well.

Oh, russians are those who want it the most.

You can certainly buy more things in this world with dollars than roubles

Ok, Russian government to be clear.

Diamonds are not a store of value. Diamonds are a rare and well marketed jewelery item. Gold jewelry costs substantially more than its melt gold value, but stores value in medallion and bullion form.

Self custody is part of why Bitcoin is valuable -- self custodians deflating it by losing their keys. The other part is speculative hype.

I’d add that it has a huge decentralized network of purpose-built hardware securing it, and a huge swarm of decentralized nodes enforcing its rules, and making it hard for a small group of people to change its rules. That’s worth something, it makes it closer to something like gold, which has hard natural physical constraints, but without some of the limitations of physical goods (ease and speed of transferring).

Actually, there is an underlying value.

What is the the underlying value if a dollar? Or euro?

On first sight, there is none. But when the IRS knocks at your door to collect taxes, you will need to cough up dollars. Or euros when you live in europe. Rubel, yen or gold won't do.

That provides the underlying value of the dollar. Or the euro.

Now what about BTC ?

When the ransomware hacker knocks at your door, you'll have to get bitcoin. Dollars or rubel won't do. That provides the underlying value of the bitcoin.

Bitcoin can be used to pay transaction fees for permanent storage, timestamping, and distribution of arbitrary data - typically but not necessarily transaction data - without reliance on a trusted third party.

Maybe that's circular. Some people say the US dollar has value because it can be used to pay taxes.

Collateral for borrowing funds.

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