Bitcoin update.

[lardy]

Nobody is, as far as I know. I said it was similar to a Ponzi.

Or to be more precise with what I said in #69, as I think people are going to jump on this, the current reliance on getting new investors is the similarity with a Ponzi.

[OurManFlint II]

Or to be more precise with what I said in #69, as I think people are going to jump on this, the current reliance on getting new investors is the similarity with a Ponzi.

But its nothing like a ponzi.

Miners mine the bitcoin. Existential arguments aside for now, we assume IT is a thing, it is on the bitcoin ledger and thus now existing. The miner now has a thing, the miner goes to the market and sells it, and then that thing is bought, sold and traded and exists (again putting aside the question exist). A Ponzi is robbing peter to pay paul, where nothing exists i fail to see the similarity.

[lardy]

But its nothing like a ponzi.

Miners mine the bitcoin. Existential arguments aside for now, we assume IT is a thing, it is on the bitcoin ledger and thus now existing. The miner now has a thing, the miner goes to the market and sells it, and then that thing is bought, sold and traded and exists (again putting aside the question exist). A Ponzi is robbing peter to pay paul, where nothing exists i fail to see the similarity.

But why are people buying, selling and trading?

Imagine if you bought one bitcoin for £1,000 and you knew that it would still cost £1,000 in five years (hypothetical, ignoring inflation, etc). How much interest would there be in buying it today?

Probably very little. Most people only want it because they think it'll go up in value, and the only way that happens is if more new buyers increase demand.

That's the similarity with the Ponzi. When new buyers 'run out' the value drops as there's nothing to sustain it, which I think we're seeing now.

Like I said, I'm not shitting on it. Bitcoin will have an upward trend again.

[Optimistic Nick]

But why are people buying, selling and trading?

Imagine if you bought one bitcoin for £1,000 and you knew that it would still cost £1,000 in five years (hypothetical, ignoring inflation, etc). How much interest would there be in buying it today?

Probably very little. Most people only want it because they think it'll go up in value, and the only way that happens is if more new buyers increase demand.

That's the similarity with the Ponzi. When new buyers 'run out' the value drops as there's nothing to sustain it, which I think we're seeing now.

Like I said, I'm not shitting on it. Bitcoin will have an upward trend again.

But bitcoin has a purpose beyond speculation. In fact its entire purpose exists beyond speculation. If the project succeeds it will eliminate money laundering and fraud. It will do away with banks. Credit card fees will be a thing of the past, as will credit cards. It is not a ponzi scheme. It might be a bubble, but that is not the same as a Ponzi scheme.

But the underlying concept is excellent. The purpose was not to create an asset that people could speculate on, it was to fix a systemic problem. And blockchain can really do that. Crypto is using the blockchain to transfer value, but blockchain is increasingly being used to transfer assets directly as well through NFTs. Getting your head around swapping fiat currency for crypto takes quite a big step; getting your head around swapping crypto for the "ownership" of (for example) an image through an NFT takes a massive leap. And honestly, I've not made it yet. I had a small part to play in the creation of some NFTs recently but it does feel like something of a lottery as to what will blow up and what will whimper. For example would someone on here be willing to pay money to "own" this board's Bale sell-on clause post? Hockey, basketball etc cards go for MILLIONS of dollars and on the face of it they are just valueless pieces of card that have no utility - is it any more ridiculous that ownership of digital versions of these things could go for huge sums too? So you could have a blockchain-based panini album in future. It rather lacks the social benefits of trading physical cards in the playground, but this time the big kid can't nick them because you can prove they are yours. A trivial example maybe, but you can quite easily see how something like this could revolutionise the music industry (again).

I'm really struggling to get my head around the many and various use cases for blockchain, and in particular the taxation of cryptos and NFTs which is where I have a professional interest. But fundamentally - the concept of blockchain is absolutely brilliant and I really hope we do manage to make use of it as a society.

[WJ99mobile]

But bitcoin has a purpose beyond speculation. In fact its entire purpose exists beyond speculation. If the project succeeds it will eliminate money laundering and fraud. It will do away with banks. Credit card fees will be a thing of the past, as will credit cards. It is not a ponzi scheme. It might be a bubble, but that is not the same as a Ponzi scheme.

But the underlying concept is excellent. The purpose was not to create an asset that people could speculate on, it was to fix a systemic problem. And blockchain can really do that. Crypto is using the blockchain to transfer value, but blockchain is increasingly being used to transfer assets directly as well through NFTs. Getting your head around swapping fiat currency for crypto takes quite a big step; getting your head around swapping crypto for the "ownership" of (for example) an image through an NFT takes a massive leap. And honestly, I've not made it yet. I had a small part to play in the creation of some NFTs recently but it does feel like something of a lottery as to what will blow up and what will whimper. For example would someone on here be willing to pay money to "own" this board's Bale sell-on clause post? Hockey, basketball etc cards go for MILLIONS of dollars and on the face of it they are just valueless pieces of card that have no utility - is it any more ridiculous that ownership of digital versions of these things could go for huge sums too? So you could have a blockchain-based panini album in future. It rather lacks the social benefits of trading physical cards in the playground, but this time the big kid can't nick them because you can prove they are yours. A trivial example maybe, but you can quite easily see how something like this could revolutionise the music industry (again).

I'm really struggling to get my head around the many and various use cases for blockchain, and in particular the taxation of cryptos and NFTs which is where I have a professional interest. But fundamentally - the concept of blockchain is absolutely brilliant and I really hope we do manage to make use of it as a society.

Exactly that

There can be speculators/ponzi style investors and still have a base value to its practicality

That's where the art lies - knowing what it's worth.

[Rjk]

But its nothing like a ponzi.

Miners mine the bitcoin. Existential arguments aside for now, we assume IT is a thing, it is on the bitcoin ledger and thus now existing. The miner now has a thing, the miner goes to the market and sells it, and then that thing is bought, sold and traded and exists (again putting aside the question exist). A Ponzi is robbing peter to pay paul, where nothing exists i fail to see the similarity.

but the question remains over the value of "the thing"
If you mine up a load of gold, the price will go up or down, but you'd expect there to be a floor below which it won't go, because the gold itself has some use.

At the moment many people want bitcoin, but only because they think the price will go up. If everyone thinks the price will go down then it will go down, everyone will sell and it will become completely worthless. There is no floor.

It is relying on enough people believing they can make money out of having it to retain any value. like tinkerbell coming back to life in peter pan.
If enough people lose faith in that then its dead.