Bitcoin is an often requested topic, though a pretty simple one: stay away!
The explanation is simple: no currency has inherent value. A dollar bill is just a piece of paper (or textile or plastic) with symbols on it. You can't use it for anything. It is still in use, because other people accept it as currency. Why do they do it? Because the government says so. Every national currency has a government behind it with a guarantee:
Bitcoin is not such thing. There is no government which is legally bound to accept bitcoin as tax, nor forces any private vendor to accept bitcoin for services. It's completely volunteer. If the belief that it will be accepted is damaged, bitcoin will unavoidably failcascade. It's just a matter of when.
While Bitcoin is now strong ...
Please don't comment on technicals how Bitcoin is safe. It's irrelevant. Just because no one can steal your bitcoins, it doesn't mean they are valuable. I still have original red dots from elementary school, signed by our teacher, 10 could be exchanged for a Mickey Mouse sticker. They are authentic, yet they worth nothing, as the shops aren't bound to accept it for Mickey Mouse stickers. Only the teacher herself did that as a volunteer act to motivate students. Bitcoin is just the same.
PS: This is because of a honest mistake by CCP devs. It's not like anyone could predict that highsec citadel markets will be a disaster.
The explanation is simple: no currency has inherent value. A dollar bill is just a piece of paper (or textile or plastic) with symbols on it. You can't use it for anything. It is still in use, because other people accept it as currency. Why do they do it? Because the government says so. Every national currency has a government behind it with a guarantee:
Bitcoin is not such thing. There is no government which is legally bound to accept bitcoin as tax, nor forces any private vendor to accept bitcoin for services. It's completely volunteer. If the belief that it will be accepted is damaged, bitcoin will unavoidably failcascade. It's just a matter of when.
While Bitcoin is now strong ...
Please don't comment on technicals how Bitcoin is safe. It's irrelevant. Just because no one can steal your bitcoins, it doesn't mean they are valuable. I still have original red dots from elementary school, signed by our teacher, 10 could be exchanged for a Mickey Mouse sticker. They are authentic, yet they worth nothing, as the shops aren't bound to accept it for Mickey Mouse stickers. Only the teacher herself did that as a volunteer act to motivate students. Bitcoin is just the same.
PS: This is because of a honest mistake by CCP devs. It's not like anyone could predict that highsec citadel markets will be a disaster.
19 comments:
More and more misses coming from you lately.
Basically, you miss every time you mention Putin, and now you mention #1 advantage of bitcoin as its disadvantage.
> Unlike with normal currencies, there won't be a government figure to stand next to the IMF representative.
Exactly this is the reason bitcoin is worth so much. No government feeds on it. It won't go to wall street in case they fail. It won't drop in value because state that issued it has failed. No Trump can take yours and give it to Mexico so they can pay for his wall. No Putin can take yours, credit $1 bil worth of it to Venezuela, and never see it again (true story).
Yes, its market value can go up and down. Just like any currencies and goods. Yes, it can be speculation, but that's also true for everything. Imagine Trump tweet "Avocados are the reason for nipple cancer. BAN IT!", does that mean we should all stay away from Avocados because that may be said, despite all their positive effects? Nonsense.
Less misses, more gaming, Gevlon.
Bitcoin is a speculation vehicle (Not a commodity.), and certainly not a currency.
If you think bitcoin is an actual currency, you're a fool. Sure, goofy shit can be used as currency when needed... like cheap cigarettes in prison, those shards in Asheron's Call for a few years... etc.
There are people that will accept bitcoin in trade? But they are generally diehards or just converting in real time to what they really want... which is actual money.
Of course, if you're laundering cash from one country to another... bitcoin is great! Especially if you can get locals to buy and trade it to you... like in some kind of ransom demand or trade for drugs.
This is not the currency of the future. And I'm not even touching it's technical difficulties. Which are legion.
There is clearly some value in using currency in trading, and Bitcoin offers one of the most efficient ways of trading goods available to us. A degree diploma is inherently a worthless piece of paper but it still might help you land a job, so is an electronic code that allows you to buy drugs to battle cancer etc. I don't understand why you find the lack of "inherent" value to be so problematic. Furthermore, I don't see how you (of all people) assume that traditional fiat currency is somehow safer because of government backing.
"Bitcoin is not such thing. There is no government which is legally bound to accept bitcoin as tax, nor forces any private vendor to accept bitcoin for services. It's completely volunteer. If the belief that it will be accepted is damaged, bitcoin will unavoidably failcascade."
Well... the same applies to the stock market, bonds, friendly favors, social norms, diamonds, metals, professions, artwork, and so on. What's your point? That only governments can sustain the normative aspects of society? I find it less likely that a Jackson Pollock painting will lose all of its value (as there is no "inherent" value in it) than for some government to royally fuck up their credibility to the point of destroying the currency they were backing, after all, history tells us that has happened a number of times.
Bitcoins and similar currency are backed by organized crime in a way, similar to which governments back their own currencies. BitCoins allow trading stuff on the so-called "Dark Net".
Interesting how the value of bitcoins is spiking now. Wonder what that is about.
@Anon: actually Trump and Putin can destroy bitcoin by banning their legitimate usage in their countries. If no law-abiding shopkeeper can accept payment in bitcoin (they have accounting and tax laws to follow too, so they can't do it under the table), you can only trade with small-time guys buying crap over the internet and criminals. Demand drops, price drops and people flee in fear of other countries follow the ban.
Avocados have inherent use (eat it), so there are avocado "sinks". Bitcoin can only be traded, not consumed, so anyone buying it will sell it in the future, there are no "bitcoin sinks".
@Smokeman: I didn't mention technical problems, because those can be fixed or another cryptocurrency (Etherium?) accepted in its place. But the central bank problem can't be solved without an actual country/alliance behind it.
@Isaac: diploma has an institution behind it with its prestige and government accredition. Diplomas from "internet universities" worth nothing.
"Well... the same applies to the stock market, bonds, friendly favors, social norms, diamonds, ... professions, artwork, and so on." Indeed. Have you noticed that we use neither of them as currency? (Metals were deleted from the quote because gold can be used to some limit, but losing ground due to its limits)
Who the hell is Jackson Pollock? I wouldn't trade my food or tools for a canvass with some paint on it because of its name.
Why do you think highsec citadels are a disaster?
There are many problems with them (the ability for someone like yourself to place 1k fake buy orders and block out real ones for example), but, monopolising the market is neither new, nor unique to citadels.
@Maxim: spiking is because of pump and dump
@Anon: the best counter of monopoly is multiple small time traders. Citadels are a high barrier of entry, you must build one 25B and have the connections to the "right people" to not explode it. Otherwise you can't trade competitively. Before citadels, everyone could enter the field.
> actually Trump and Putin can destroy bitcoin by banning their legitimate usage in their countries.
If US and Russia ban them, it would hardly be the end of bitcoin. Its value would surely drop, but should they ban their own currency, that currency is rekt, while bitcoin will survive it.
> If no law-abiding shopkeeper can accept payment in bitcoin (they have accounting and tax laws to follow too, so they can't do it under the table), you can only trade with small-time guys buying crap over the internet and criminals. Demand drops, price drops and people flee in fear of other countries follow the ban.
Well, first, no connection to reality as Russia officially greenlighted bitcoin 6 months ago. There is a whole village that accepts bitcoins for goods it produces, and in Russia, normal citizens aren't even a subject for accounting and tax laws - they can give money freely to each other and it's business that pays people who is responsible for deducing tax money from their pay and paying it to the state, so you can legally trade anything you made for anything you like, including bitcoins. And looking at charity fundraising reports, where bitcoins have already occupied 33% of all donations, you can clearly see which currency people trust more. Ruble is racketing after every Putin's stupid slip of mouth (yesterday joke about women just made it go down 2% in last 24 hours), and it got almost totaled losing two thirds of its value a year ago due to a certain state oil company debt coverage loan Putin is personally responsible for. So, while I somewhat agree he's capable of harming bitcoin (can't destroy it, and I personally won't give a fuck if he bans it and will continue using it cuz it's impossible to prove anyway), he's done way more harm to ruble than the worst he could possibly do to bitcoin.
> Avocados have inherent use (eat it), so there are avocado "sinks". Bitcoin can only be traded, not consumed, so anyone buying it will sell it in the future, there are no "bitcoin sinks".
Treat avocados as an abstract example, I tried to find a silly thing, and nipple cancer from avocados was the first thing which came to my mind. For heaven's sake, people in Russia buy real estate and land only to sell it in the future, with no plans to use them whatsoever, and I'm fairly sure bitcoins are better than those, since those are hard to trade, and bitcoins are easy.
tl;dr As a russian, I stand my point: bitcoin is still a better currency than ruble, exactly because it is not dependent on irresponsible petty criminals like Putin. As long as there is a demand for a commodity which has value in a fact it cannot be ruined by delusional senile crooks, there will be demand for bitcoin.
one of the advances of the industrial revolution was standardisation. someone of today can just get any 10mm nut and it will fit any 10mm bolt. and a socket set to work on a BMW is the same as one to work on a Toyota or Ford. but it took them to the 1980s.
having a crypto currency to build a transaction framework around will help give that currency legitimacy. it also allows innovation in this space by not requiring each developer to redesign the wheel before they get started on the transaction system.
It is useful to buy drugs online so always have some value.
@Anon: I don't question that the current situation is good for Bitcoin. My point is that it has no safety net behind it. If something goes wrong, no one will stand and say "we will accept bitcoins no matter what" like a government or IMF stands by a national currency. It will be all men for himself.
@Next anon: Indeed it's possible that the future currency will be a cryptocurrency. But only if a government body stands behind it. And why would they stand behind Bitcoin which is already in the pockets of people who are not them, when they can just implement their own version and keep all the mining money for themselves.
@Last anon: sure, for criminals. But what can a decent guy do with it?
>petty criminals like Putin
Whoa whoa whoa. That's uncalled for. Putin orders assassinations and manipulates elections and invades countries. You can call him a criminal if you want to, but calling him a PETTY criminal is unfair.
>what can a decent guy do with it?
You can buy Bitcoin minining hardware. It's a totally safe bet because the price is going UP UP UP!
Please don't thing about the question "if operating a Bitcoin miner is profitable ... then why would the manufacturer ever sell one instead of holding onto it forever?" Just send us your BTC and we'll send you back a big heavy box of poorly-soldered electronics which may or may not burn your house down. Hooray for progress!
Gevlon:
"@Smokeman: I didn't mention technical problems, because those can be fixed or another cryptocurrency (Etherium?) accepted in its place. But the central bank problem can't be solved without an actual country/alliance behind it."
The greatest flaw is the non centralized blockchain itself. The only way to fix that is to centralize the blockchain (Which is the usual "solution" brought forward.) But that defeats the entire point of a cryptocurrency. You might as well just have digital currency in a central bank approved account just like you do now.
So basically, you have your point, which is that it's an unbacked, unstable speculation vehicle... and then you have this technical flaw that completely negates it's very point as a widely accepted "currency."
> I don't question that the current situation is good for Bitcoin. My point is that it has no safety net behind it. If something goes wrong, no one will stand and say "we will accept bitcoins no matter what" like a government or IMF stands by a national currency. It will be all men for himself.
What would your idea of "going wrong" be? Bitcoin federation declares war on the world? No such federation. Banned worldwide? So are many other physical substances, and look at them go, and bitcoin is not even physical, thus even less limitation, not to mention the moral aspect - we can agree that drugs are dangerous and that is a legit reason to be banned, what's the inherent danger in bitcoin? It's not even real! Cryptography is solid - there have been exactly 0 encryption breaches in the last 70 years, and if you know about math involved and algorithm complexities, you'll have a good idea why, not to mention it can be improved at any prospect of such breach.
About the only thing that can happen is that unlike laughable thing like "banning" someone will actually invest an astronomic sum into manipulation. That's the same for any currency and commodity, 5 years ago a grand oil manipulation pushed its value to almost 3 times it is now.
Guess what, manipulations come and go, it shall cause a wave, and pass on. I see no inherent danger more than what is the same in dealing with anything else.
I'd always take currency backed by an established and well-known criminal over a currency backed by what is essentially a shadow.
Which is why the dollar is still in a good shape, despite all the crap USA pulls on a routine basis.
>not to mention [Bitcoin] can be improved at any prospect of such breach.
Not exactly. It can be forked. Existing operators are not required to comply with the fork. Miners might reject it, because their hardware will be less effective on the revised protocol. The unimproved fork may grow faster than the improved fork, which means that the unimproved fork remains official.
Of course, uninformed people might continue to trade on the "wrong" fork and exchange real-world goods/services for the phantom payment. Then they'll get very upset when the rogue blockchain is abandoned and they discover that their transactions didn't actually occur.
>what's the inherent danger in bitcoin?
Intrinsically? None, it's safe. There are plenty of extrinsic dangers, though.
It's too slow for point-of-sale commerce, so people tend to rely on intermediaries. Therefore they don't actually benefit from the mighty cryptographic security of the currency; they're just doing business with a fallible real-world company.
If you make a purchases by transfering a fraction of your MTGOX balance to someone else's account, then you might as well be buying hundreds of PLEX and sending a few of them to an EVE player (in exchange for sex or drugs or whatever). MTGOX might announce that all of their Bitcoins were stolen by an insider; CCP might announce that they're banning you for RMT. In either case, your savings are gone.
Also: the fact that it's so closely associated with darkweb, narcotics, murder-for-hire, money laundering, and child porn. Conspicuous use of Bitcoin is pretty much an invitation to any nearby revenue officer: "I'm doing some shady shit over here! Please audit me for tax evasion!"
Read over your arguments again, but this time instead of bitcoin, apply them to gold. Does your warning also apply to gold? Gold has no significant "sink"- when it's made into jewelry, it can be melted back into bars. No government has to stand behind gold. If a government made using it as currency illegal, it would lose market value, but people would still want to use it as a store of wealth, so it would have value in either transactions hidden from the government or outside their jurisdiction.
Also, don't get too hung up on the transactional nature of bitcoin. I suspect its entire current market value is priced on its technical scarcity, not on the fact that you can use it to buy things. No real consumer has much of a reason to use bitcoin to acquire things (other than maybe decryption keys for virus-locked files or hard drugs).
@Basil: there is a reason why people used to use gold as currency and stopped. Government backed fiat currencies are better. The question "buying gold or bitcoin is dumber?" is irrelevant.
Just playing devil's advocate here: fiat currencies are better for us as a group, but commodity currencies aren't worse for an individual. Anything that can be reliably traded for something of value in the future will serve as a store of value. Cryptocurrency and gold users will likely cite that these are outside direct government control as one of the reasons they chose them.
If people are buying bitcoin or gold to pay for groceries and rent, then yes, that's stupid. If, though, they're using them to store wealth, it's plausible. If some sort of extremely unlikely technical financial apocalypse were to wipe out the debts and assets of everyone using just fiat currency, they would be the ones whose wealth store endured. That said, assuming nothing like that happens, they're wasting their efforts and could probably do better with a more traditional store of value.
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