Topic: BTC NOT BACKED BY ECO SYSTEM - page 2. (Read 299 times)

Bitcoin can have other things built on it too (like backed tokens - the only thing real world exchangeable in the entire cryptospace going from your own definition). What are you going to make out of those smart contracts that are tangible and usable except other tokens?

It can't enforce contracts well either external to its network (yet at least - for eth).

Bitcoin is a secure distributed blockchain and network, its value comes from the security of the network and its community's ambitions for building on it, supporting it and using it.

nothing is 100% backed.

stable coins are 99% backed by a 'promised' reserve of fiat peg. but recently a stable coin has failed to prove its reserve backing and crashed

gold is not purely backed by its "shine" its actually backed by the labour and cost of its creation. but this backing cost is also not 100%

bitcoin also is backed by its creation cost, but this also is not 100% of the variable price


lets make this very simple.
the very cheapest cost to acquire/create bitcoin is its backed value. the "no go" zone no one wants or can go below to get bitcoin because no one on the planet can mine or sell bitcoin for less

finding the cheapest mining/acquisition cost on the entire planet is the backed value.

right now bitcoin is backed by about $15k value because no one on the planet can get bitcoin for less by any means.

gold is backed by the cheapest mining rate on the planet hich is about $900

ethereum is PoS which if you calculate out the validators calculates to a $40 backing

fiat is not backed by common utility its backed by things like min wage
but min wage is not the same as cost of living. yep when the min wage vs cost of living spread increases, its called inflations

what you can do is create some visual display
take an assets max price it ever achieved.
take its cheapest acquisition price right now
take the look at the price

black is the no go zone price wont go below
green yellow red is the speculative risk window where the price will wiggle in-between

the [] border is the current price in its window





as you can see gold max ATH was about $2.075k and its current price is about $1.66k  but the lowest price it can possibly achieve is $900
meaning that its price in its window puts it in the yellow. meaning it can fall alot

Ethereums cheapest acquisition cost is about $40 the highest it ever achieved is $4.8k. so although ethereum is in the green it can still fall by alot

bitcoins max was about $75k. and is currently priced at $19.6k but its lowest possible cost to acquire is at $15k meaning its in a very good value spot where it cant go down much more

from this you can also work out how much of the PRICE is backed by the lowest cost acquisition backed value no one dares sell below

EG gold is 54% backed
EG bitcoin is 76% backed
EG ethereum is 3% backed

you then learn things like when bitcoins price was at the ATH it was only value backed by its underlying cost of about 20% which was also when it was in the red, so not a good value time to have bought bitcoin

but now the price is at $19.6k its very good value backed
better than some other assets

Probably your friend has the wrong impression of what a true economical ecosystem is.

Smart contracts can be used in some deals, but that doesn't mean they have an ecosystem it means they have applications for it, an ecosystem is a situation where each of the parties involved is interdependent on the other and can influence them, there is no real business other than some stupid jpg game that has anything close to resembling such a thing. Just because two people might want to make a deal that would be replicated in a smart contract doesn't mean they are forced to do it or they don't have the option of completely ignoring smart contracts and preceding in a traditional way, just as the entire world is doing right now!

None of those businesses (tokens) are matching one of the main points in the definition, and that is a "constrained" space limited by borders or laws, just how tether can issue tokens with the same value on Tron and ditch Eth without a fuss all those systems can be recreated in an instant within a different border. None of the said parties is completely interdepended of the other one.

Furthermore, 99% of the altcoins there are just participants in this mess, issuing tokens on a different chain, what's the backing they are receiving, at the end of the day every single token altcoin NFT and even Bitcoin is backed by only one thing, the trust of the people who would spend x amount on it, thinking that that's how much they are worth it, nothing else. Crypto kitties were valued in hundreds of thousands of dollars, now they are worth pennies, what's their backing power?

Chill out, you seem to be shouting through these all caps.

He's right about bitcoin being speculative but he shouldn't be biased with the altcoins because they're all speculative. And to tell that it's not backed by anything, the entire market is being backed by bitcoin and talking about the use case. He's skipping the reality that bitcoin is the widely accepted cryptocurrency. If his basis is about having a smart contract as the real use case of a project then he should start to learn more about real-world use case which bitcoin has.

First of all ETH isn't backed by smart contracts but if offers a way to create smart contract as well, however this does not mean the smart contract has any value. Similarly other alts do provide value but is their price actually a barometer of the utility provided by it? Ofcourse not. Coming to btc it's utility is the easy transferring and storage of value which no other asset outside Crypto world provides this is what is bringing btc's value.

This is indeed an interesting topic, but @OP, *please* edit the uppercase!

Let's now analyze your friend's arguments:

1) "BTC is not backed by any asset or business". Not true. Bitcoin has the strongest ecosystem of all cryptocurrencies. There are lots of businesses working with it, exchanges, miners, merchants, other service providers, financial businesses (Grayscale etc.). And of course all the users and hodlers. Every Bitcoin bought by these entities, or on behalf of them, is the "backing" Bitcoin has.

2) "ETH and major alts have asset backing and real use cases". I would take this with a huge grain of salt. Of course Ethereum has an important ecosystem too. But most of the services offered by the businesses working with ETH smart contracts are directed to a single public: people wanting to speculate with ETH tokens. For example, most DeFi projects are contracts where you exchange one token for another one, speculating which one could become more valuable. There are DEXes where the most valuable items are - other DEX tokens (circlejerk anywhere? ). NFTs have a bit more real-world backing, but are also at the end used mainly for speculation. The way NFTs are currently used is also quite strange, often they seem not even contain a hash of the "digital work" they're representing. The only topic where I think ETH has indeed a better "backing" than BTC are stablecoins and derived assets. But the businesses assoaciated with them are often quite shady, so I don't know how "valuable" that backing may be (see the whole Tether controversy and of course Terra/Luna, even if it wasn't primarily ETH-based. Maker/Dai had problems too in the past, they may return.).

In conclusion, I don't think that the "ecosystem backing" ocurring in ETH is stronger than Bitcoin's. I would argue the opposite.

Ugh, would you mind if you lower-cased for a sec? You know. Like an ordinary person who doesn't yell at you.

Bitcoin isn't backed by an asset, because it is itself an asset. Just like gold isn't backed by anything other than its shiny physical beingness, bitcoins are units that reflect to a digital currency that is supported by merchants who have collectively and individually recognized it can work in favor of them.

Today One Of My Friends Argued With Btc. Btc Is Not Backed By Any Asset Or Business. So Btc Is Only For Speculation Purposes.

Eth And Other Major Alts Have Asset Backing And Real Use Cases. For Example - For Eth; Smart Contracts Can Be Used In Contractual Deals.
Specially Alts Have Eco System. Btc Does Not Have.

I Stuck Because I Don't Know A Counter Answer To This. Please Explain How To Counter Attack This.