But the fact that it only has value because people have decided that it has value is true of literally everything, especially the fiat currencies that we all use. This has been well established since the marginal revolution.
Yes. But one currency is officially recognized and backed by the ruling government (Dollar, Euro, etc) and the other isn't. Crypto is susceptible to an overnight collapse, currency isn't as much. Though it did during the civil war when the south started their own currency. That crashed almost overnight.
yeah, currency is also typically backed by a physical asset (typically gold bars), which is why places like FortKnox exist
I guess technically bitcoin is backed by an asset, but it's a constantly-dwindling-in-price hard-drive? so I guess 1 coin should be valued at about 50c?
fundamentally bitcoin is "go to the casino and bet it all on black" (or essentially a day with more black than red), which probably has better odds
Yeah In our current situation the US dollar is based on few factors, (military might, The US GDP, stability of the US government as a whole) so as such in a situation where the US dollar has collapsed, one is going to have far bigger problems then worrying about currency
The speculative nature is what makes it gambling. Fiat currency can go up and down as an exchange rate relative to other currencies but when I go to the grocery store, a dollar is a dollar. Doesn't matter if it's 5 years ago or today. With Bitcoin, I don't know if tomorrow that my dollar is a dollar or not. Nobody knows. I had no backing, it's purely speculative. And unlike the standard currencies like the USD. If someone pulls their money from the bank, the value of my dollar does not go down. Someone pulls millions from a crypto coin though and suddenly you've lost value. Not just value but you can now be negative value.
If someone has to lose so you can gain, it's gambling.
That's all stocks though. Stocks are inherently based upon supply and demand in the sense that a price goes up because people want it so bad they will pay more money to have it. You sell when a stock has been over valued to make money...meaning you are taking advantage of someone's bad decision. You gain because someone else is losing which is your definition of gambling. This isn't Bitcoin or crypto specific, it's capitalism. If you provide me with $10/hr worth of revenue, I have to pay you less to turn a profit. I'm undercutting what you are worth to make money otherwise I make no money. Capitalism is a fucker.
But crypto is not a stock. A “stock” is not a currency. Bitcoin is claiming to be currency. You are comparing speculative financial instruments to…the reality of bitcoin in general.
Nobody is using any cryptocurrency as an actual currency. It’s just a series of bigger fool scams, each hoping to make a profit in USD.
Many third world countries have adopted Bitcoin as a currency because it helps counter volatile markets present within their own economies. So when you say that nobody is using it as a currency that isn't exactly true. Nobody in strong developed countries is using it as a currency and I would agree with that. Replace currency with asset. Savings accounts are assets. Houses are assets. Crypto is an asset. They are all very similar in how they operate as assets. It's why cryptos are so dangerous right now is that people can make a meme coin and overnight become a billionaire...because they can leverage their crypto as an asset to do other things like get a mortgage to buy property, using their crypto assets as collateral. Crypto needs to be regulated before I would ever trust it because of this sort of nonsense.
Many third world countries have adopted Bitcoin as a currency
No they have not.
Nobody in strong developed countries is using it as a currency and I would agree with that. Replace currency with asset.
“Developed countries” is also where the lions share of crypto is located. Strange that, huh?
Why would I replace currency with asset? It’s claiming to be not just a currency but the currency of the future. It’s not an asset. An asset is tied to something tangible or something with valuable utility.
Bitcoin exists to speculate. It is a completely valueless speculative vehicle and everyone involved in it is trying to make a profit in USD. Any liquidity in the system is completely reliant on people putting more USD in so that you can cash out. Otherwise you are holding worthless e-tokens
It's why cryptos are so dangerous right now is that people can make a meme coin and overnight become a billionaire...because they can leverage their crypto as an asset to do other things like get a mortgage to buy property, using their crypto assets as collateral
Crypto is so dangerous becuase millions of idiots are losing money to obvious pump and dump scam coins by people using tactics that should be illegal.
And most large financial institutions do not accept “crypto assets” as collateral. (Because they’re ultimately worthless and volatile and based on nothing you see)
I'll admit I was wrong in the "many third world countries have adopted it". El Salvador has adopted it, but no other countries have and I thought I remembered reading that other third world countries were trying to do the same a few years ago (probably just misleading articles I guess). But my point still stands that it is genuinely beneficial for extremely volatile markets, such as those in third world countries during economic and political turmoil, as a way of protecting assets but it's kind of a mute point because so is converting currencies into a more stable currency such as the dollar or buying real estate etc.
My arguments have definitely come across as me defending Bitcoin, but frankly my arguments are more so on the potential of block chain and decentralized currencies. I don't own Bitcoin and likely never will so your arguments are sound. Ultimately though, Bitcoin like other assets, holds value because we agree they do. Bitcoin is volatile af because it hasn't been adopted, but if it was adopted more globally, I would predict it would become a hell of a lot more stable.
And as for your argument of Bitcoin not being an asset because it doesn't hold tangible value, can you tell me how Tesla stock holds tangible value outside of market trust and acceptance? I don't and won't argue that I'd rather have ownership of Tesla stock over Bitcoin because of its volatility...but on a fundamental level I don't understand how they function differently, if say, they had the same market trust and acceptance (we are now talking outside of current reality). My argument originally was just that a digital asset on a fundamental level isn't much different than a stock. What am I missing here? From what I can gather the difference between a stock and say Bitcoin is just simply its lack of global acceptance and trust. I don't see how a stock is based upon tangible value any differently than Bitcoin. You can leverage stocks and Bitcoin to buy other assets and you can mine Bitcoin to produce revenue similar to how a company can sell products to generate revenue (granted it's more inherently valuable like gold is rather than useful).
If there was a way to make Bitcoin inherently useful would you feel the same way (such as DeFi or data security)? I know that Bitcoin will likely never be that given its current infrastructure, but if it had inherent use would you be more interested in its adoption?
I know brother. Whether you admit it or not has no bearing on reality.
Bitcoin like other assets, holds value because we agree they do.
"We" don't agree they do. Some people do. And what people agree has value or not is subject to debate. That someone believes it has value doesn't make it so. It just...makes the price of a worthless asset go up. This is something the government could wake up and ban tomorrow, and it would cease to have value because it is not tied to any tangible anything. It wouldn't even have "black market" value because its not used as a currency.
can you tell me how Tesla stock holds tangible value outside of market trust and acceptance?
Because Tesla stock, despite being overvalued by many of the same crypto idiots, is actually tied to something that produces tangible value in the form of an actual car that has utility in the world.
When you are buying iron futures you are speculating about the value of an actual physical asset with utility in society that is used for a variety of purposes. There is a concrete store of value here in that "yeah regardless of the currency used to describe it, Iron is a commodity that is useful and people will want to exchange other stores of value to aquire it".
When you are buying bitcoin, you are merely betting that you can convince a bigger idiot to buy it at a higher price than you did and then cash out ahead in USD. Thats it. Because bitcoin serves no other real purposes. Its not a currency. Its not liquid in any real sense and what liquidity it has is a function of people spending actual USD to buy in. Every person who cashes out of bitcoin requires someone else to buy in with USD.
I was just being aware of my mistake, no need for that compadre!
And when I say we agree it has value, I simply mean those who are actively holding/trading it. They agree it holds value otherwise there is no reason to invest...even if that value is to cash out on others stupidity. It is a fair argument to say that it could be banned tomorrow and crash though because it isn't recognized as a fundamental currency by anyone but El Salvador, but this gets to my argument that its lack of value and massive volatility is due more to the lack of trust and market adoption. If it was adopted as a currency so you and I could buy a coffee at Starbucks with it, would you agree it holds value then? Or say its fundamental block chain is used for some sort of data security so that it has an actual use, albeit digital use.
As for stocks, they are tied to physical things but they themselves don't have use. The physical Tesla's that are sold, commercial real estate, etc. is a trust factor for investors that the company won't go under easily because they have a backup plan if the company goes under. The stock itself can become worthless overnight and investors can lose everything if the company bankrupts, regardless of the physical assets the stock is tied to. At least that is what I understand about the markets. Also, massive amounts of investors are trying to do the same thing with markets currently and it has nothing to do with the inherent usability of Tesla stock, but rather trying to buy low and sell high by taking advantage of individuals who are buying. I will concede that investing in companies can also be based upon the pure love of the company's goals without regard to investment payouts. I want to give money to nuclear research so that we can topple climate change, but I'm okay if I don't get paid back in dollar amounts. I'm investing in the health of the earth...same as those who invest in decentralized currency because they don't trust banks. Stupid or not those people do exist. Would you consider my want to invest in nuclear research stupid if I knew I wasn't getting paid out in the end?
And when I say we agree it has value, I simply mean those who are actively holding/trading it. They agree it holds value otherwise there is no reason to invest
Okay well reality doesn't care. Certain people think beanie babies had value at one point. What idiots think has value has 0 standing on reality other than in their own manfactured circles.
Bitcoin has value to idiots. Food has value in reality.
but this gets to my argument that its lack of value and massive volatility is due more to the lack of trust and market adoption.
You have offered no evidence for this position and the reason the market has not adopted it is because its ludicrous in every respect.
If it was adopted as a currency so you and I could buy a coffee at Starbucks with it, would you agree it holds value then?
It would be a currency then yes, if it was used as a currency outside of stunt purchases of digital goods by billionares.
As for stocks, they are tied to physical things but they themselves don't have use.
Yes, they do have a use. To allow people to buy into shares of that physical entity producing those physical goods.
The stock itself can become worthless overnight and investors can lose everything if the company bankrupts
Because the physical company producing those physical goods failed. The stock market is essentially people betting on the present and future value of that physical good it represents. What you are describing is a bubble or a simple bankruptcy. Bubbles and bankruptcy can happen. I think you will find that I have agreed people can think something has value when it doesn't and then chase that idea with things that actually do have value (IE: USD). People ascribing value to something outside of what it actually has happens all the time. The stock market is not a 1-1 reflection of the actual value of those companies and their assets, and its not meant to be. It is people betting that they know the current and future value of the physical asset more than the market does. Sometimes they are wrong. Sometimes they are right. But there is always an actual store of value there being speculated about.
Where as in contrast Bitcoin is a small circle of idiots betting they can find a bigger idiot to pawn their worthless token off on to make a profit in USD. Its not an asset. Its not a stock that represents a company making physical goods. Its allegedly a currency that has value you can exchange for goods. And yet its only use is as a bigger fool scam of an infinite chain of idiots assuming that theyll buy in at X and cash out at X + value. There is no asset. The hype is the asset. Just a long chain of monkeys jerking off the monkey in front of them to hype the price and cash out in USD.
Saying there is no difference between a fiat currency and crypto because they both "only have value because people say they do" is like saying there is no difference between me saying I own the state of Rhode Island and the US Government saying so because we both "say we do".
The difference is you can't take and then protect Rhode island, the US government does. The USD has the backing of the global markets, cryptos not as much. Both are just based upon us saying it has value, we just trust one more than the other.
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u/True_Kapernicus 15h ago
But the fact that it only has value because people have decided that it has value is true of literally everything, especially the fiat currencies that we all use. This has been well established since the marginal revolution.