Topic: Why is Bitcoin the Dumbest Thing Ever Invented - page 3. (Read 1947 times)

I actually disagree here a bit. "Value of use" is indeed a category in different schools of economics. And I actually think there is such a thing, even if it is, as you wrote correctly, influenced by subjective valuation.

The error JamesNZ commits instead (probably deliberately, just to troll, as one can see in his despective tone, typical for trolls who want to impress by simple rhetoric tactics, not by arguments) is that he compares Bitcoin to a "good" in the sense of a "material good" or "physical good". It is instead a platform or service, like I explained to him above (and he chose to ignore that because he knows I'm right ), and thus its economics are similar to the one of the "postal service", not the "packages". Or even better, to a social networking service.

Thus, the "value of use" is the value the platform is delivering to the users, not the "value of use" of the empty boxes themselves. I actually think if Bitcoin wasn't "useful" it would be indeed potentially valueless. I actually do criticise many "tokens" because of a similar reason JamesNZ applies incorrectly to Bitcoin. Examples include BRC-20 and most Runes. They are not platforms because they don't have blockchains, they only "exist" on a blockchain. They have no "value of use" at all. They can have still a market value tied to some future expectations. For example, one could expect that the creator of a succesful token may launch a platform in the future and thus "have value of use like a platform". Or that it could be transformed into an "utility token", and "utility tokens" do normally have a "value of use" because they're tied to a concrete service of a company. But I think this is wishful thinking in 99% of all cases, and the remaining cases are almost all things like in-game currencies which have a very limited "value of use" and only in a specific group of often limited size. In-game currencies can have market caps of a few millions but not billions like some BRC-20's had in their heyday.

Another error one could commit is to think that the value is the one which can be extracted by the company of the postal service, because such a company doesn't exist in the case of BTC (it exists in the case of many altcoins though). It is instead a sum of a lot of different types of "values of use" which people can achieve with the Bitcoin platform. Platform economics is complex, and I think even JamesNZ should know its basic assumptions, but he's too lazy to adjust his house of cards a bit.

If "real value" is subjective, then it's real from some people's viewpoint.  Everyone needs food, but not everyone agrees on a specific dollar amount for a loaf of bread.  "Real value" essentially means something is necessary, but there's no universally agreed-upon price for any product.  

You've also deliberately overlooked my question about what occurs if the government becomes corrupt, printing money out of thin air, and granting them to themselves—a scenario that's entirely plausible given the corruption associated with those in power.  What do these dollars signify, when there's no debt recorded?  

There's no such thing as "real value" in this world.  Each person perceives value differently, and the nearest thing we have to an "objective value" is market value, determined by concrete factors like demand and supply. 

There's no such thing as "real value" in this world.

That's real value of food and dollars, and of course, it is subjective.

You can keep going on and on about the same stuff.  Is this some sort of enjoyment for you?  Writing without any real substance just to feel like you've made a point?  

There's no such thing as "real value" in this world.  Each person perceives value differently, and the nearest thing we have to an "objective value" is market value, determined by concrete factors like demand and supply.  

I am not talking about market value or price, but about real value.

Suppose that someone invented a crypto postal service. Or is short a crypto-post. Its purpose is to transfer envelopes and boxes quickly, safely, and decentrally. However, there is a catch. The envelopes and boxes are empty. They hold nothing. From the outside, the crypto-post would look similar to a traditional post. Because obviously, a traditional post transfers envelopes and boxes. And that crypto-post transfers them as well. But in reality, it would be the dumbest thing ever invented given that people need letters, documents and products, not envelopes and boxes. The latter only serves as a container to hold the former.

The so-called crypto-currencies, such as Bitcoin, are exactly like our hypothetical crypto-post. From the outside, Bitcoin looks similar to traditional currencies. It is a system that has units transferred between people. If you have a bank account or a banknote, what you have is some name such as USD, EUR, or GBP, and a number that represents the quantity of units in a banking system. If you have a Bitcoin account you also have a name - BTC and a number that represents the quantity of units in the Bitcoin system. But the catch is that the units in the Bitcoin system are empty. They are like envelopes and boxes in our crypto-post. They are containers that hold nothing.

On the other hand, units of traditional currencies are containers that hold a debt-based asset. Namely, these units are created by commercial banks issuing loans or by central banks purchasing government bonds. So if you have for example dollars, you have a resource that the US government and masses of individuals and companies need for satisfying debt owed to the US banking system. If your neighbor has a $500K loan with a mortgage on his house, while you have $500K, you have something they need to get rid of the mortgage. Just like people need food to get rid of hunger. When you have an item that can satisfy people's needs, you have a valuable resource, you have an asset.

Given that units in the Bitcoin system are not created by issuing loans or purchasing bonds, they don't hold a debt-based asset. They neither hold some tangible asset like a precious metal or food nor some intangible asset like a patent, copyright, or license. Also, they don't hold equity of some company, like shares. Simply put, in the Bitcoin system, people have empty units, units that hold no asset. Consequently, there's nothing to assign value to.

Often, people would say that Bitcoin is simple and thus better than a complex banking system that manages fiat currencies. But of course Bitcoin is simple given that it manages empty units. Fiat currency units hold a debt-based asset and managing debt is complex. It includes credit assessments, contracts, collaterals, foreclosures, etc. Implementing those requires both people and infrastructure. In the case of Bitcoin, however, the author just wrote a protocol that tells people: "You have 10 units", "you have 0.5 units", "you have 50 units", etc. It is literally like giving people play money for kids or Monopoly money - they get 'monetary units' for trading purposes but these units hold no asset. They are empty. People currently pay $70K for such a unit. Also, managing these units requires the consumption of enormous amounts of electricity - 141-160 terawatt-hours annually according to some estimates. Imagine the absurdity of giving up 70 thousand asset-holding units only to get 1 Monopoly-money-like unit. Or the absurdity where a postal service spends as much electricity as the entire country of Norway only to transfer empty envelopes and boxes. That's why Bitcoin is the dumbest thing ever invented.

I hate it with passion when someone shows how mentally derailed they can be in public by saying what doesn't make sense to people hearing that, "bitcoin'' the whole world knows and believes in, to be the best digital currency invented, turns out to be the dumbest thing ever invented to them. Is that not stupidity cos it only an insane person will have such reasoning, not someone stable in reasoning

Point proven.  All they can do is try to sell this spurious notion that people "need debt".  Evidently, they don't, because we've now spent over a decade running a successful economy without debt.

Every day that passes by is further proof that OP is wrong (as are their multitude of other accounts attempting to sell the same lie).  

Not dollars specifically, but rather their market value.  You contend that $1 holds the same value as a McDonald's burger.  However, I'm asserting that this equivalence holds only under the condition that the US government and central bank exercise responsible monetary policy.  If, for instance, they opt to print $10 trillion out of thin air, the value of the dollar diminishes. This principle is grounded in basic economics—supply and demand—and applies not only to assets and products but also to currency itself.  

I'm intrigued as to why you find this concept challenging to understand.  

OK, so you also can't explain the rarity of the collectibles I've mentioned. You're evading the question. If you continue this way this will be my last post on the subject, as that clearly shows your lack in understanding.

I have described well why Bitcoin satisfies people's needs, because at least in your "postal service" analogy it would be a postal service with characteristics which no other service can bring (USPs). I think you simply need to educate yourself on the concept of "platform services" and how they accrue "value". The best analogy is of course not a postal service, but a service in the information economy. A social networking service like Instagram, Facebook or X fits a bit better as an analogy: the bigger the ecosystem of people willing to enter it and use it, the bigger is the value.

The analogy is however not perfect, as in a centralized system like Facebook the operator can extract a big part of the value via advertising. But it's not the only party extracting value, for example companies/freelancers can also extract value due to its usage for marketing purposes, or to sell goods in the case of social networks with a marketplace. Something similar occurs with Bitcoin: exchanges can earn fees, merchants can sell products, people save fees using Bitcoin in comparison to Western Union or banks. So think "Facebook minus Meta". Also of course people hodling expecting future gains, but that wouldn't work if the other parts of the ecosystem weren't present. All these are reasons why people are willing to use it to store and transfer money. The "value of a Bitcoin" is, as I wrote, only the aggregate of the value which is put into the system, each Bitcoin transaction continues to be a private contract.

Regarding rarity. The concept of rarity or scarcity applies to assets, to items that can satisfy people's needs.

I'm intrigued as to why you find this concept challenging to understand. 

The idea that dollars are based on faith is just a popular myth.

Continuing this discussion seems futile.  You're incorrect in dismissing the faith individuals and institutions have in the currency, as well as in the stability guaranteed by the government and the central bank.  Your belief that $1 always corresponds to an underlying asset is fundamentally flawed.  I cannot stress this point enough.  If you fail to grasp this concept, you're unlikely to appreciate the beauty of Bitcoin.  

No, I don't trade the box itself. I put value inside the box, and only once the box is filled, then it can be traded (the value inside the box is traded, not the envelope). Read again the part about "Stage 2" and private contracts.

That's what describes your comment best. I think you didn't even read my post.

OK, but then explain me something: Why is a stamp or coin where a failure in the printing machine made look one character slightly different, much more valuable than a stamp/coin with the correct character? (This is actually why I brought this example up, but your understanding seems to be too limited to grasp that ...)

The reason has actually to do with "rarity", not with the "senses" you "explore" the item with. The difference can explain 99% or more of the value. This is also the case for Bitcoin. If Bitcoin was not rare it would not have a value.

If you now do another Freudian rationalization and say that "collectibles are also stupid", or "this kind of collectible is stupid" then ok. Then we simply have an opposite view about what "stupidity" is If you try to explain the price of the failed coin/stamp with something which has still to do with the "senses" the collector "explores", for example because he likes the way the failed character looks, then I believe that you still believe in the Santa Claus story that people buy these things _not_ to invest or even launder money but "because they are beautiful".

Hahaha. I see that you as well repeat the same nonsense that the box is not empty if you trade it for something.

This is called Freudian rationalization. Or playing dumb.

Collectibles are something that people can touch and see, explore with their senses.

Bitcoin is the dumbest thing ever invented.

...That's why Bitcoin is the dumbest thing ever invented.