Either you're a bitcoin zealot or not. If you're not a zealot and its just 'free money', there's nothing worth talking about.

If you're a true believer, you're right to make a new kind of 'fake' money because the old one has some bad rules sometimes.

The real believer has to think some part of: a central bank, JP Morgan, and VISA, are 'bad' for society, when we measure the value they contribute, compared to the value they extract.

From a tech perspective I think we can agree that's true for at minimum 1.5 out of 3 of them. ( 2.5% interchange charge, wtf. )

But if the line of thinking to use bitcoin requires a concept of "contribute/extract in a society", then bitcoin is a horrible and terrible thing to happen.

We've got a bunch of guys who've become incredibly wealthy, by doing almost nothing of impact. They could have worked as teachers, bridge engineers, build companies, or become VISA sales representative, and they would have contributed something to everyone they interact with.

bitcoin's ratio of "contribution" (wealth generation) vs wealth redistribution, are far worse than any other system it claims to be in a league with.

I'm not in favor of banning while i write this, but there is nothing worth celebrating its rise or to celebrate the people who rose with it, for the same reason you don't celebrate hereditary nobility.

I agree Bitcoin is not a productive asset. However, is there an obviously better way to bootstrap a new form of decentralized money?

The author of the article classifies Bitcoin as an "early bird game" which is defined as a zero sum game where early players win at the expense of later players (and for every winner there is a loser). I don't really understand it. Is it possible for a deflationary currency to keep going up in purchasing power forever? I feel like it is. The productivity of our species as a whole is not like a zero sum game (at least not until some absurd physical limits).

There are so many interesting questions about how Bitcoin and other cryptocurrencies can work in the future! I am definitely more of a zealot at the moment!

- In options pricing. The intrinsic value is determined by what the contract says happens at expiration. The contract is enforced by the authorities like any other legal contract. The extrinsic value is the name we give to the value that must exist to make up the difference between the intrinsic value and the current market price. It's sort of like the "dark energy" of the option.

- Gold is said to have intrinsic value because it can be used as a material in ways that other material's can't. It can be used as an input to whatever industrial process regardless of what humans have to say about it. There is additional value implied by the price of Gold, just as there is with the price of an Option.

Intrinsic value means something like "if the other market participants disappeared, the value the last person holding the thing could still get from it". Maybe as a matter of semantics, you would exclude this from the "economic perspective". In the case of Bitcoin, intrinsic value may just not exist (as you seem to imply).

Correct me if I'm wrong, but it seems from the rest of your post that you see intrinsic value as "non-economic usefulness".

But gold's primary usefulness is as the best physical hard money due to it's fundamental properties:

scarce, divisible, indestructible, recognisable, fungible, assayable (its weight, colour and softness)

However, your definition states:

> "if the other market participants disappeared, the value the last person holding the thing could still get from it"

and money has no use/value if there is no one to transact with (i.e. no other market participants)

So if we were to agree that intrinsic value is the usefulness of something but with the exception of any purely economic/market use, then to use "it has no intrinsic value" as an argument for why something would not be a good money (as the author does) makes no sense, as it ignores the exact usefulness that would make it a good money.

Edit: nvm I see you're making a different point, that the usefulness of a thing is not correlated to the value. But still I think demand is not entirely divorced from usefulness.

This is why it has a market cap of $18T. Not because it's shiny, or used in electronics - it's predominately because there are trillions of dollars of economic value looking for a safe place to be stored. Safe from theft by legislation (see https://thegreattaking.com), and safe from theft via supply inflation (see https://imgur.com/a/DG8zWbe).

I think intrinsic does exist from an economical perspective in a somewhat roundabout way. In the most banal case, in the US, a dollar has actual (intrinsic?) value. I'll grant you it's merely a piece of paper, with some number of calories released if you burn it; but as a practical matter, it can be used to pay your taxes - a necessary thing if you live in the US. (There's a whole side conversation about how money is created, but let's put that aside for the moment)

Honest question, does the dollar have intrinsic value, or not? It's not much different from BC in the abstract, but laws, conventions and traditions grant it some intrinsic-ness, even if it's just to keep the IRS off my doorstep.

I kind of fall on the side of the OP. If BC isn't much better than the dollar in abstract terms, why bother treating it differently from a good weekend in Vegas?

If we talk about plain usefulness, then both the dollar and bitcoin are useful as money - they have fundamental properties that are well suited for use as money.

However, the dollar has a great weakness - its scarcity is both poor and artificial.

Poor because its supply doubles every decade (halving the economic value it would otherwise have). This effectively sucks half the value out of the dollars that make up our wages, pensions and savings, and injects it into the new dollars.

Artificial is a weakness because it can be created effortlessly by a select few people (the banks) and it's supply is only limited by interest rates which are set by the same people. This means that the banks can create money effortlessly that everyone else has to work for, making them EXTREMELY rich through the interest payments on the money they print while doing negligible work (they can create billions of dollars at a few keystrokes).

On the other hand, bitcoin has fixed issuance ultimately culminating in perfect scarceness (hard limit of 21M) and the creation of new bitcoins requires work of equal value (just like gold for example), which keeps everything fair.

Also, demand / supply equals value, not price. The price is determined by the value / value of the thing you're pricing in.

For example the value of the dollar is halved every decade through supply inflation, which doubles the price of something even if its economic value has remained constant (real estate and gold are good examples)

But they massively failed their core challenge, which would have made them great successes — they never solved the problems of security and usability. (and no, wallets, cold-wallets, hardware keys are all still vulnerable and clumsy to use, and confirmation times randomly jumping between 50-2500 minutes in the last month [0], not usable). The result was clear years ago when many vendors who had started taking BTC and ETH payments started quietly dropping the option.

And the people thinking BTC is a Store Of Value for prepper-survivor-type collapses are hilarious; you can dig up your hoard of gold, but when the electrical grid and the internet dies, good luck transacting in any cryptocurrency.

So, the only thing setting it's value now is the Greater Fool Theory — the expectation that a greater fool will come along to buy at a higher price. The BTC whales cannot cash out at the paper "value" they see today. Which is exactly the scam Musk is trying to run on the US Govt. The "Strategic Bitcoin Reserve" will fleece the US citizens and taxpayers into being the buyer of last resort, allowing the whales to cash out.

Sad ending to a technology that started with so much promise. All because those in the field never really did the hard work of ensuring it was broadly usable, instead just focused on promoting it.

[0] https://ycharts.com/indicators/bitcoin_average_confirmation_...

At the current moment I think there's a lot of value for BTC, ETH, and cryptocurrencies in places/industries where access to stable financial infrastructure is either difficult, limited, or otherwise unavailable. Until the UX problems are fixed I think cryptocurrency will just not find the adoption it needs to drive volume beyond speculation, which is the volume it needs to hit some form of stable pricing.

[0]: https://ycharts.com/indicators/bitcoin_average_transaction_f...

Ummm, not in my experience. I washed my hands of the lot some years ago, but was seeing ordinary transactions (with good fees paid) taking 6-24 hours to get confirmed. This was after getting accustomed to watching confirmations start popping in within minutes. Yes, I understand this was partially resolved, but "partially" is doing a lot of heavy lifting, and I see no assurance that the network will not again see such conditions, for no apparent reason to the end user. Of course there are also other better-performing coins, but none have gained the traction of BTC.

Of course we technologists can better understand and so tolerate these delay issues, but just the fact that we must explain it means it will never see wide acceptance. And that is even if the other usability and security problems are solved. When I'm reading this week of people losing millions or hundreds of millions in BTC, ya they got phished, got caught at a low-attention moment, etc... it's a problem, especially since those are experts familiar with the ins-and-outs. There is no way an average Joe & Jane would even consider putting their kid's college funds in crypto, nor should they.

If you have to explain your product like that, you are already lost. Once again, the crypto industry must do the HARD work of solving those problems. But at this point it may be too late.

I saw the crypto hype about how the entire world was about to run on web3 and knew it made no sense.

That made my opinion of crypto as ‘tons of people with no understanding of technology or the real world’

That cooled off and then watched the opposite. Tons of people tell me bitcoin would hit 0 even though it had been useful far before the 2021 hype.

Now I don’t know how I feel. Bitcoin has a fixed supply and I think it can serve as a store of wealth in that way if we all agree to it (author sort of disagrees with this).

I’m realizing I’ve maybe met other people decide for me how I feel about it.

Most of the properties then attributed to Bitcoin simply were not there. It was not untraceable, it was not a libertarian wonderland free from the possibility of regulation.

It also never claimed to be any of those things. It claimed to be a secure distributed process for moving values around on a publicly visible ledger. The distributed nature meant that it is difficult to impossible to deny individuals access to making transactions.

The value attributed to numbers in the ledger comes down to what people feel it is worth. This is no different to money. There is a common refrain from some bitcoin sceptics that money is different because the government will accept it, so you can still pay your taxes with money. This simply is not true. Governments get to make the rules. There may be consequences, but they can make whatever rules they want. I dislike using the word fiat because that has become more of a tribal shibboleth than a meaningful word. Nevertheless if a countries' money became worthless in the eyes of everyone, you can be assured that a government will change the rules rather than collect taxation that it can't spend. Sometimes dictatorships just change the rules arbitrarily, democracies might do so because it is the least worse outcome. The net result is the value comes from the calculation of how likely that the government will change the rules. That likelihood of a change in how a currency will be accepted is the same for both money and bitcoin. The likelihood is different, but the estimation is fundamentally the same.

I don't buy the argument that crypto should be banned because there are many crypto scams any more than I think that medicine should be banned because of the existence of homeopathy, medical magnet bracelets, or Auriculotherapy. Focus on the bad things in the category, not the category. There is an argument to be made that misleading claims should be regulated. In general, laws do cover those behaviours, it is enforcement of those laws that has been lacking.

I do think the price of bitcoin has risen unexpectedly quickly, causing much of the issue of energy use, being subsidised by the mining reward caused more mining that is needed for the security of the network. A slower rise in value would have mitigated this. The long term future, once all coins are mined, is designed to be supported by transaction fees. The distributed nature enforces healthy competition. In the transaction fee funded era, the competition grants the most efficient block miners the greatest profit.

Bitcoin is not nearly as useful as I thought it would be by now. This is not for a technical reason. Many people who accepted payment in Bitcoin ceased doing so. This has made a backward trend. What I did not expect was this trend is largely driven by opponents of Bitcoin campaigning and placing pressure on places that accepted bitcoin.

I agree with the early assessment in this article "If I were a banker, I'd be afraid." What worries me, is the possibility that this popular opposition is driven from an influence campaign financed by the owners of services that would be challenged by a successful Bitcoin. You may think of this as a conspiracy theory, and in a way, it is. I am not claiming that such at thing definitely exists, just that if I were in their position, with their ethics and their resources, that's what I would have done.