this post was submitted on 21 Aug 2023
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Bitcoin: 4.7% believed to be in the hands of a single person, another 3.1% in the hands of four addresses. Deflatory so no incentive to use it to make transactions. Value depends on the network effect (i.e. a pyramid scheme). Small transactions now too expensive to be realistic. 24% of the supply was created in the first year, 35% over two years. Movement of funds takes too long to be useful. Those who got in early are guaranteed to be richer than those who got in late without having made any effort...
Crypto would be great as a replacement of the stockmarket but it's fighting to be cash instead and it's doing a bad job of it because it's cash as envisioned by tech bros, not actual economists.
Also wastes energy and hardware (which includes rare earth metals mined by slaves) to endlessly compute hashes. Great solution for a post climate change world let me tell ya!
Since nobody else responded to the stock market argument: it's how cash is envisioned to work by Austrian school economists, not the economists currently in charge. The average person needing to trust strangers with their money is not good.
It's an entirely different perspective on how money should work (that was de facto illegal for decades), and only now can we put our money where our mouths are.
I'm not pro crypto per-se, but your argument is only valid for bitcoin, not crypto. Most of it is even worse to be fair, but there is a future for sane crypto IMO.
I love posts like this, it lets me know most people still don't have the first clue what they're talking about. It's honestly a bit impressive how nearly every point you tried to make is either misleading or straight up wrong.
I love posts like this, it lets me know most crypto lovers don't have the first clue what they're investing in. It's honestly a bit impressive how you didn't even try to actually argue against what I said because it's just a list of facts.
Lol, you want me to spell it out for you dumb-dumb? Ok
You're talking about Satoshi Nakamoro here. Other than a few test cases, no Bitcoin has ever been moved out of these wallets and Satoshi disappeared in 2010. People have continued to donate to these wallets over the years as a kind of tribute and to burn coins. While it's technically possible he's still alive, the fact that there has been zero movement from those accounts and that any movement, no matter how small, would immediately be seen and reported on makes it unlikely that these will ever be touched.
Those are exchange addresses. It's like trying to say that 4 entities control a percentage of all US currency and then it turns out you're just talking about banks.
Except of course the security, the fact it can be used across borders by anyone with an Internet connection, in poorer countries it can be more stable than their own currency, and just general preference.
This is absolute nonsense with "pyramid scheme" attached to the end. As more people use it, the value goes up because it's accepted more and more places and has a higher liquidity? That's literally part of every currency ever.
You show your hand that you haven't bothered to update your views on Bitcoin since 2019. Not only are fees back to being low on the main network, with the introduction and adoption of the Lightning Network, fees are down to pennies or less.
Yes, that's how halving works. You present that with an insinuation that any point they could just mint more btc. This is ignorance at best, but more likely intentionally misleading.
Again, guess you haven't been paying attention for a few years. This issue has been solved with the Lightning Network with transactions usually going through faster than tap-to-pay transactions with a regular debit/credit card.
Welcome to every investment opportunity. Those who get in early take a higher risk for more reward.
So yea, every point either misleading, or straight up wrong.
We're blindly trusting this person not to do anything with their fortune!
Exchanges have never done anything shady and (for a second time) we're trusting them even though they're all established in countries with as little regulations as possible.
If something that can fluctuate by 50% of its value is more stable than your local currency you're not investing in it, you're buying USD, or in the case where you have access to Bitcoin you're buying stable coins.
What the network effect means is that the only reason it keeps its value is that more people buy it at a price where people who were there earlier are making profit. If there's no new buyers then it's worthless. See the pyramid drawing itself now?
So the technology is bad enough that it requires a separate tech to work properly? Going back to your people in poor countries, how do you expect them to deal with the transaction cost to move their funds in and out of the L2 when required if they can only afford to buy a couple of dollars worth at a time?
It just shows how much early adopters could pocket and how unfair it is if it was to become the default currency, even more unfair than regular cash.
See #5 and let's add that the reason fees are lower and transaction speeds faster is only because demand is low at the moment, Bitcoin's network hasn't changed. Still, when transactions were taking an hour or more to go through, how would you have dealt with paying for something if you had realized you didn't have enough funds on the LN and you needed to transfer from your regular wallet? Or very simply, if you're paying for something and the person at the receiving end is a true maximalists that sees how flawed the LN is, do you pay them hours ahead for something they're selling you? That's what I call a trustless transaction!
Oh so as pointed out in OP's meme it's not ok for traditional rich to be rich because they jumped on opportunities, but it's ok for the Bitcoin rich to be rich because they jumped on an opportunity, got it 👍
I'm not a crypto guy by any means. But your point 5 doesn't make sense. Almost all of our digital infrastructure is systems being supported by other systems.
If you want to look at debit/credit card processing that is legitimately "bad enough that it requires a separate tech to work properly". The banking systems that existed before cards needed new systems to process those payment methods. From the outside looking in, your critique could literally be applied anywhere for anything.
Again I don't even use Bitcoin. That's just a bad argument.
Thing is Bitcoin maximalists are always defending Bitcoin as being perfect, that's a major difference in the attitude of those who use the technology vs everything else (except Linux maximalists that are pretty much the same type of people).
To expand on that point and explain WTF I'm taking about:
Bitcoin's network is so slow and transactions so expensive when demand is high that people now need to move their funds to a parallel network (called a Layer 2) where transactions happen in isolation and when people close their "account" the funds are moved back to the main network with balances being updated based on what happened on the Layer 2.
A problem is that it doesn't eliminate the speed and fee issue completely as people still need to move their funds from Bitcoin's network to the lightning network (and back eventually). That means during busy periods you're still paying 30$+ to move your funds to the cheaper alternative and you still have to wait, potentially for hours, for that transaction to happen if you didn't have enough funds in your lightning wallet to pay for whatever you're buying. All of that means it's not worth it for someone who doesn't have a lot of money in the first place to buy Bitcoin to use it as cash, when the whole point of Bitcoin was to be trustless electronic cash (see Bitcoin.org for the whitepaper).
When transactions fees are low enough on the main network that small transactions aren't as issue anymore? Well the Lightning network isn't as useful anyway because transactions also happen quickly enough that it's not an issue in most cases.
The point of crypto is to have a trustless decentralized system. Not Lighting network has watchdogs making sure fraudulent transactions don't happen (not trustless) and a tendency to centralize: https://medium.com/@jonaldfyookball/mathematical-proof-that-the-lightning-network-cannot-be-a-decentralized-bitcoin-scaling-solution-1b8147650800
There's a whole lot of info out there about the flaws of both the main and the parallel networks and there's even maximalists that believe Bitcoin is perfect as it is and the Lightning network shouldn't exist.
The biggest difference imo between bitcoin and USD is that participation in bitcoin is completely voluntary whereas participation in USD is mostly not, especially when you look at the things done to maintain global USD hegemony and the consequences of leaders who try to, for example, trade oil in currency other than USD or create a hard currency for their country when the de facto currency is USD. Were someone to print (which i can't believe ppl in this thread don't realize is a turn of phrase) a bunch of new BTC then it would only affect people who voluntarily chose to participate in that system, whereas if someone printed a whole bunch of USD and injected it directly into the stock market, those affected worst by this are not in the system by choice, and many times they participate only by coercion.
Even the 4.7% figure was debunked a long time ago, it just gets repeated by people who don't care what's true in the first place.
You're right. But they don't want to hear it. Just like how most of the world believes in sky people and don't want to face reality.
The world has been living on FIAT currency since WW1 when virtually every country left the Gold Standard. It's been ingrained into everyone that deflation = bad, inflation = good. Yet at the same time every single financial advisor recommends dumping your savings into deflationary assets (houses, stocks, etc)... Okay. Makes sense to me.
It's almost as if one of the ideas behind having an inflationary currency is that people don't hoard it and invest in other things!
39% of Americans do not invest in the stock market. Fuck them I guess.
Having 2% deflation instead of 2% inflation would be good for the economy. It would be a baseline to compete against for companies and mean less people would invest in bad investments that just beat inflation.
We also need to stop this ludicrous idea of infinite growth of the economy forever in order to be able to afford to retire. It's detremental to the environment and to the quality of products the economy produces to expect such.
Inflationary policies and fiat currencies are the fuel behind both world wars lasting as long as they did.
Ancient Rome prospered with a strong currency, when they started debasing their currency it started the fall of Rome. The same will happen to us.
I agree that there is an unhealthy attitude to capital growth. That definitely needs to change.
As for the 39% of Americans not investing, how many have pension funds or other retirement schemes that do the investing for them? Regardless, they are free to choose what they do with their money. If they want to hold it, so be it.
A period of deflation might make for a good break, but not as a permanent solution. Investment inspires innovation, and innovation in new technologies will be vital in combating climate change.
I can't comment on the wars or Rome but I think there are multiple factors there, fiat maybe being one but of what significance?
Remember the last time you traded your house for food?
Yeah, me neither 👍
What's the title line of Bitcoin's whitepaper?
What is the difference between speculating in bitcoin vs speculating on forex or gold? Is gold investing a pyramid scheme?
But that is what the initial post said: bitcoin works as an investment, but not as a currency. Reading comprehension skills are through the floor.
If Bitcoin is only good for speculation and has no other real use because it's too cumbersome then it's like investing in tulips, and we all know how that ended :)
Real currency is backed by the work, goods and economy of a country. Gold is a mineral with intrinsic value because it's useful to make things with. Bitcoin is backed by the hope of making profit by selling to a sucker that will pay more than what you paid... And it was meant to be electronic cash but people got greedy, it's better for early adopters pockets to make people believe it's a store of value that's hard to trade (like physical gold, funny that) instead of something you can easily use to transfer real world money from one person to another without parking that money there forever...
But then you realise that the point of a store of value is that you invest X in it and you know that it will store that value and you'll be able to withdraw whenever you need to and still have X or very close to it. A store of value isn't something you speculate on, it's somewhere where you put your money when you're close to retiring or if you live in a country where inflation is very high.