Topic: The Stories on Bitcoin's Value - page 2. (Read 420 times)

A warning to other reader, OP recycle his discussion from old thread to this thread. Here are short snippet from his other thread,

Source: https://bitcointalksearch.org/topic/bitcoin-and-the-urban-myth-of-the-money-of-the-future-5474861


Source: https://bitcointalksearch.org/topic/a-simple-reason-why-bitcoin-is-not-money-5472154


Source: https://bitcointalksearch.org/topic/a-simple-reason-why-bitcoin-and-crypto-prices-must-fall-to-zero-5467415


But since OP bother rewrite his points, moderator couldn't just delete/lock the duplicated threads.

Bitcoin's value doesnt come from its actual features; it comes from its groundbreaking technology and the way it changes the way money works. Take a look: Bitcoin is not controlled by a single entity, which means it challenges established financial systems and provides an option to centralized banking systems. There is no one provider that needs to be redeemed; its a peer-to-peer system that doesnt need to be trusted. Your case is based on old-fashioned ways of valuing assets, without taking into account the new features of blockchain technology and digital scarcity.

Another important point that is missed in the comparison with foreign currencies and stocks is Bitcoin, like these other instruments, gets its value from the opinion and use of many people. Fiat currency is also just numbers and promises, but everyone accepts it. Bitcoin's potential lies in its ability to provide an alternative banking system that is not controlled by a single group. If we just brush it off as numbers, we miss the big effect its already had on how we think about money and value.

I don't know where you are those 'too good to be true' words but I know one book that is excellent and informative for you to explore Bitcoin and its potential.
The bullish case for Bitcoin

Bitcoin is a Proof of Work blockchain and bitcoins are created by Bitcoin miners with their inputs for mining so there are intrinsic values for each bitcoin.

Estimating the Cost of Bitcoin Production
Realized Price chart.

That is not true! What about art or collectible items? Do they have intrinsic value? Or redemption value?

It's not right to twist facts to try and make bogus arguments.

Yeah, that are the stories I am talking about.

You have a very shallow version of value "Anything I can't stuff into my belly has no value".
Let's start with gold.


Now art. An art student is able to paint the mona lisa 1:1 so that only experts will know the difference. So why is his work worth a maximum of $1000 and the original is worth billion? both are equally pleasing to the eye... Because utility is not the only thing that gives value.
Coming back to utility, bitcoin has a better stock/flow than gold, it is divisible to cents, it can be easily transferred, it is easy to sell and buy with low spreads (you don't risk buying a fake like in the case of gold), it cannot be seazed, its secured by through a network that cannot be attacked (tested in battlefield for 14 years) it cannot be printed like fiats and it is an ideal escape from the system but according to you, it has no value because you can't put it in your belly.
Money is moving to bitcoin not because old users are pumping up the marketing machine, but because the current system is bad for the retail investor. Go and buy shares. As soon as something bad starts happening in the company, first the insiders will start selling (you will buy more on the correction), then the insiders' family (you will buy again), then their friends, then the large funds will start selling, which have priority to information and finally everything You'll find out when you're 40% underwater. Go and buy bonds that have had negative real returns for years (adjusted for inflation) and their price is susceptible to changes in rates (TLT investors are short 40% in last 3 years)

You've all probably heard the stories on Bitcoin's value. Stories that portray Bitcoin not only as valuable, but precious. Stories by which buying bitcoins is one of the smartest things you can do. Well, all of that is just cheap propaganda. A bait to lure you to buy something worthless.

Bitcoins cannot be eaten or drunk. They cannot be seen like artwork or heard like music. They cannot be used to operate computers and execute specific tasks like computer software. They cannot be driven like a car or worn like jewelry. In short, bitcoins have no intrinsic value. When you buy them, you only get a short record, e.g. '5.1234 BTC'.

If someone issued a record and offered it to the public, they must redeem it. The record has to have redemption value. Casino chips, fiat currencies, shares, or gift cards are examples of such records. When you hold them, all you can see is a short string of characters written on a digital, plastic or paper media. There is nothing intrinsically valuable to consume or utilize. That's why their issuers must redeem them for something.

Casinos redeem their chips for cash. Banks redeem their currencies for debt servicing and liens release. Namely, the units of fiat currencies are issued as debt owed to banks - individuals and companies owe it to commercial banks based on loans, while governments owe it to central banks based on bonds. That's why the banks redeem deposits and banknotes for reducing or closing that debt and releasing liens on the property that secures it. Corporations, if they decide to end their business operations, redeem their shares for funds from liquidated assets. Finally, retailers redeem their gift cards for goods or services.

On the other hand, Satoshi Nakamoto, as the issuer of bitcoins, does not redeem them. He issues them through the protocol he wrote, but never redeems from anyone. If you invested electricity to make his system work and got bitcoins for it, Nakamoto won't redeem them even for a dime. Everyone who holds bitcoins knows this. They know that bitcoins have neither redemption nor intrinsic value. They know that bitcoins are worthless. That is why they are forced to get rid of them. Sell them to someone else. And to do this successfully, they need to publicly promote Bitcoin as valuable. They need to compare it to gold, diamonds or artwork. They must say it is the superior version of fiat currencies or money in general. That it can save us from greedy banks. That it is revolutionary like the Internet. That it is scarce. That it solves corruption or financial and economic problems. That it can lift poor countries out of poverty. They need to sugarcoat Bitcoin.

All these stories are of course ridiculous. They would be such even if bitcoins were units of equity, like shares or units of debt, like fiat currencies. But bitcoins are units of the number 21 million. Nakamoto came up with it in his imagination and wrote a protocol for assigning its units to online addresses and storing them in a decentralized database.

Numbers, whether they are stored centrally or decentrally, don't have magical powers. They cannot solve corruption, play the role of artwork or precious metals, lift countries out of poverty, save us from banks, or be scarce. They cannot be money if they are non-redeemable because there's nothing to compare with the value of goods and services. Those who make up or spread such stories know very well they are ridiculous. But they do it out of necessity. They invested huge amounts of redeemable or intrinsically valuable items into the scheme and it is necessary for them to get such items back. On the one hand, they don't want to be the bag holders. On the other hand, they want to profit from the scheme as much as possible. And that is literally all the wisdom behind the stories on Bitcoin's value.