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Old 3rd July 2020, 06:56 PM   #633
Roger Ramjets
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Originally Posted by The_Animus View Post
I just find the constant predictions of its death and some of the arguments made against it to be a bit over the top.
Bitcoin as originally envisaged is pretty much dead. It has become just another 'asset class', buoyed up by speculators looking to make money from nothing. Nobody talks about it being used as a cash replacement anymore, because it has failed in that role. As a means of getting free from the evil government it is a double-edged sword - unstable, rife with fraud and criminal behavior, and no protection for victims (libertarians probably think that's fine, but Bitcoin won't achieve the wider adoption they yearn for without fixing these flaws).

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I have heard of fiat currencies. There are a lot of different ones. Some used far more than others. Over time they have been prone to many of the things you highlighted earlier such as offshore accounts, tax evasion, gambling, consumer loans, and speculation. I've heard there has been instances of fiat money becoming worthless practically overnight. I've also heard that these currencies and the exchanges between them have been manipulated in the past for personal profit at the expense of everyone else.
All true, but with one big difference - oversight. Most governments have laws against abuse of their currencies, and constantly crack down on criminal activities. Fiat money becoming worthless overnight is rare, generally being the result of a failed state (which has more than just monetary problems).

Bitcoin is only backed by the 'invisible hand' which never seems to be around when you need it. Bitcoin does nothing about stopping criminal activity - it actually enables it. Bitcoin has always been far more volatile than any major currency, making it a frustrating medium of exchange (but great for speculation).

Originally Posted by Scopedog
I see bitcoin as a very simple video game implementation from a sophisticated, innovative engine (called blockchain)... Bitcoin is both stupid and visionary. Why would anyone want these tokens earned by the computer player? Why do people want hats or whatever in online games? Bitcoin evolved into a tulip bulb investment simulator. I'm sure this analogy can be improved.
I think your 'analogy' is actually pretty close to reality. If it had just remained a currency simulator played by geeks for fun then it wouldn't be a problem. Unfortunately it was let out into the real world, where nefarious uses were found for it.

We should remember that Bitcoin (or any cryptocurrency) is not blockchain. Most of the flaws in Bitcoin would remain even it had a different carrier. Some of its flaws are the result of not considering evil intentions, others are due to not understanding how economics works. Blockchain is not responsible for any of that.

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Have you read the paper where Satoshi Nakamoto presented the theory of the blockchain and introduced bitcoin? The author seemed quite sincere and earnest in their intent to solve the 'double-spending problem' via blockchain and for people to actually use bitcoin as currency to buy pizza or whatever. I can't imagine how he could have predicted that speculation on bitcoin would lead to the bitcoin purchase price of a pizza in the past being equivalent to millions of dollars later.
I think you are probably right - not because the result isn't blindingly obvious, but because it fits the typical libertarian anarchist's mindset. They always spout on about how governments are evil and fiat currency is doomed, but they never suggest an alternative that is properly thought out. Most seem to understand little about the realities of economics, and naively think that people will act responsibly when given the freedom to do whatever they want.

If 'Satoshi Nakamoto' really wanted Bitcoin to be the solution he talked about, you would think he would have made at least some effort to predict how it would behave. Bitcoin is highly deflationary by nature, which any economist can tell you is a bad thing. It doesn't take a genius to figure out what would happen to the price if it was widely adopted, nor to calculate the amount of electricity required. My bet is he was so enamored by his own cleverness that he didn't even bother to do the sums.
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Last edited by Roger Ramjets; 3rd July 2020 at 07:00 PM.
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