Topic: Is energy/computer hardware the "gold standard" for Bitcoin? Critique my analogy - page 2. (Read 2622 times)

Awesome, exactly the sort of insight I was looking for. The technical angle is what appeals to me, but likely won't resonate with the type of person that is asking for information.

Why not just start at the other end?

Why do the USD and GBP have value?  Ask your audience to explain that to you... after all, they clearly believe that those currencies *do* have value.  They'll probably tie themselves in knots but it's not hard to help them see that a currency doesn't have to be "backed" by something to have value in the real world...  so once you've established that things aren't at all clear in the "real" world, you only then have to establish that Bitcoin is at least as good as what we already have.

i.e. you don't need to argue from first principles to win people over.... start from a shared common point of understanding.

To bridge from USD to BTC, I would probably seek to address the legal tender issue first --- use Scotland to demonstrate that it's an irrelevance.   Then discuss the adoption/utility argument.... that's just a point in time statement... and you can dismiss most other objections to BTC under this umbrella.

That really just leaves the "why Bitcoin is better" side of the argument, and scarcity is a key angle.... First establish that guaranteed scarcity is a huge difference as compared to currencies with an inflationary central bank.   Then demonstrate that the claim for scarcity is credible.

And, critically, the credibility of the claim comes from the incentive structure in place amongst the existing users... if anybody tried to change the 21M coin limit, the incentive is for existing users (miners) to reject this as it would devalue their existing holdings.  It is this incentive structure that creates the scarcity.... not technical details of the mining algorith, the cost of power or anything like that.

 "It is the Coca-Cola is virtual currency. Or, really the Facebook or virtual currency. How many FB clones are successful?"

 It is the Coca-Cola of virtual currency. Or, really the Facebook of virtual currency. How many FB clones are successful?


Typing too fast.....

Ultimately, the network effect/popularity gives Bitcoin value. Yes, BTC is useful and limited, but the technology itself can be easily replicated (LTC, PPC, etc., etc.).

Bitcoin is valuable as progenitor of the first successful crypto-currency model. BTC has brand appeal, which I find quite interesting. It is the Coca-Cola is virtual currency. Or, really the Facebook or virtual currency. How many FB clones are successful?

And how many currencies end up in Branding Magazines??? https://bitcointalksearch.org/topic/2013-03-21-brandchannel-bitcoin-sees-broad-global-adoption-of-its-controv-156112

I'm by no means detracting....BTC is brilliant. It is part tech stock (incredible tech story), part currency, part commodity, and even, in a sense, similar to a piece of fine art (e.g., it can be perfectly replicated but only the original holds great value).

I believe it's difficult to assign BTC value based on its usefulness because any of its clones have the same or very similar features. That would be like saying Facebook is valuable because of its features (ability to add friends, message, etc). No, Facebook is valuable because it was first mover and those features are only useful because everyone uses FB.

No. That energy is required for mining bitcoins is merely a technical implementation detail.

What gives them value is that they're limited and useful. That's all. They'd be as valuable if no energy was required. It was just the most sensible way to incentivize and issue them to those users that secure the network.

https://bitcointalksearch.org/topic/m.1646796

I have been proselytizing Bitcoin since 2010 and wanted to ask the community to critique and help me fine-tune what is essentially my sales technique for selling folks on Bitcoin.

When I discuss Bitcoin, people tend to get a little perturbed and start saying "well how is it worth anything!?". At this point I begin using the analogy that Bitcoin's value comes from utility, adoption, and scarcity. Utility is obvious - you can buy almost anything with BTC that you can with USD (and in some cases more). Adoption is also not difficult to convey. Scarcity has always been the sticking point.

I started using an analogy (in combination with describing the halving blocks and "designed scarcity" of the system) that Bitcoin does in fact have a gold standard: energy. This "gold standard" is superior to actual allegedly-gold-backed currencies in that it cannot be divorced from utilizing energy for production. Because mining is required to find blocks/solve equations, you are also implementing scarce man-made tools (GPUs/ASICs) to mine bitcoin from the scarce inputs (electricity).

I have taken it further at times and described that Bitcoin is truly a modern currency due to using the collective knowledge of all of mankind (the microprocessor, etc) to create a store of value. People tend to like this angle - it sounds epic and intriguing

Hack away! I want to have as close to an unindictable spiel as possible when talking to people who really know their stuff regarding currency/forex/economics.