Cryptocurrency - where's the actual value?

[WindyCommon]

When it comes to intrinsic value, it is important to remember that rare is not the same as valuable. It doesn't really matter whether the rarity is naturally created (eg gold) or artificially created (eg BTC). Many things are rare; few are valuable. For all their faults, sovereign fiat currencies represent a call (via taxation) on the productive capacities of their issuing nations. CC's - in their present formats - have no such depth.

Behemoth said:

It allows anyone with a computer & internet connection to make a financial transaction independent of third parties and thus independent of their fee structures (banks, forex) and broader currency interference (government manipulation of currency to meet fiscal targets). Transactions are reliable, secure, cheap, quick and worldwide. If you don't see that these capabilities are of value, then just move on

Are you really suggesting that the reliability, security, cheapness, speed and global applicability of CC's are unmatched by existing payment systems? This is a nice idea, but it isn't reality today. You only need to read the various questions here about wallets/exchanges/cold storage etc to understand that this is - at best - still a nascent technology with many practical hurdles to overcome.

I see an exciting future for blockchain technologies, but I don't see that any one particular implementation (eg BTC) is likely to sustain dominance. It seems more likely to me that blockchain technologies will somehow be regularised/adopted within our existing financial infrastructure; they won't replace it.

If I am correct the technologies will have lasting value, but the instruments through which they are presently expressed (the myriad of coins) may well not.

[cheddar]

bongtom said:

When the Great War starts and all the networks go down then who'll be laughing, apart from Nakamoto?

Edited by bongtom on Wednesday 6th September 17:12

Not those holding paper money that's for sure, anyone with physical gold and silver holdings will probably have a chuckle though

[AW111]

The Spruce goose said:

No individual or organization can control or manipulate the Bitcoin protocol due to this.

Do you have any comment on the forking of the bitcoin protocol?

[Behemoth]

WindyCommon said:

Are you really suggesting that the reliability, security, cheapness, speed and global applicability of CC's are unmatched by existing payment systems? This is a nice idea, but it isn't reality today. You only need to read the various questions here about wallets/exchanges/cold storage etc to understand that this is - at best - still a nascent technology with many practical hurdles to overcome.

Yes I am. For those that use BTC, it works. In the early days of the internet, connection to the network was equally challenging. Probably more so, as it involved sourcing & configuring hardware. All that changed as adoption grew. You don't use BTC, so it's clear you wouldn't have this insight.

There are money moving solutions that already use Bitcoin as the underlying carrier. Take a look at Circle when you have a moment.

[TooMany2cvs]

Behemoth said:

Yes I am. For those that use BTC, it works. In the early days of the internet, connection to the network was equally challenging. Probably more so, as it involved sourcing & configuring hardware. All that changed as adoption grew. You don't use BTC, so it's clear you wouldn't have this insight.

Oh, well, that's OK, then. It works... now.

Behemoth said:

There are money moving solutions that already use Bitcoin as the underlying carrier. Take a look at Circle when you have a moment.

So to move money from A -> B, you move it from A -> Bitcoin -> B? Well, yes. But... what's the benefit? Sure, there's a benefit for them - while the BTC market's rising, there's short-term speculation gains. But what's the benefit for you over any other cheap money-mover, transferwise or whoever?

Anyway, just looking at Circle, there's no mention of bitcoin being involved. Is that because they're well aware it'll scare punters away?
https://www.circle.com/en-gb/

[anonymous-user]

""But Circle isn’t totally giving up on Bitcoin. While you won’t be able to send Bitcoin between friends (transactions will be denominated in currencies like Euro and USD) the company says they will still be using Bitcoin as a settlement token on the backend.""

https://www.google.co.uk/amp/s/techcrunch.com/2016...

The people that use circle, nobile user s won't be scared away because it use btc to settle. Some of you statements are farcical.

[TooMany2cvs]

The Spruce goose said:

""But Circle isn’t totally giving up on Bitcoin. While you won’t be able to send Bitcoin between friends (transactions will be denominated in currencies like Euro and USD) the company says they will still be using Bitcoin as a settlement token on the backend.""

https://www.google.co.uk/amp/s/techcrunch.com/2016...

Odd that you didn't continue your quote on to the next para...
"To do this Circle is launching a protocol called Spark, which lets digital wallets exchange value using blockchains. It seems that the company is hedging its bets on Bitcoin by building protocols that could still exist in case Bitcoin’s popularity decreases to the point where using its Blockchain becomes unsustainable."

The Spruce goose said:

The people that use circle, nobile user s won't be scared away because it use btc to settle.

So why not shout about it, if it's such a good marketing tool? I'm not talking about Bitcoin fanbois here, I'm talking about Auntie Mildred, who might want to send some Xmas pressie cash to Ickle Johnny on the other side of the world, and would rather do so cheaply. Quick google or ask of her neighbour, and a few providers come up. Is she going to be lured in, or scared away, by mention of how it uses Bitcoin on the back end? Remember, if she's ever heard of Bitcoin at all, it'll be in conjunction with news stories about "the dark web".

[anonymous-user]

"Mobile payment users tend to skew young, with more than 7 in 10 belonging to the Millennial (39%) or Gen X (33%) generations, reports the Pew Charitable Trust in recently-released results of a survey conducted by SSRS. The data also reveals that compared to non-users, mobile payment users tend to have higher incomes and higher levels of education."
http://www.marketingcharts.com/industries/financia...

Why would they market to people that Dont use mobile payments, your arguments always seem too far diffuse?

[Behemoth]

TooMany2cvs said:

So to move money from A -> B, you move it from A -> Bitcoin -> B? Well, yes. But... what's the benefit? Sure, there's a benefit for them - while the BTC market's rising, there's short-term speculation gains. But what's the benefit for you over any other cheap money-mover, transferwise or whoever?

Anyway, just looking at Circle, there's no mention of bitcoin being involved. Is that because they're well aware it'll scare punters away?
https://www.circle.com/en-gb/

Yep. Circle's business model relies less on speculative gains (which are highly volatile anyway), much more on profit margins. They will be making a far greater cut than Transferwise etc could ever achieve. The benefit for the end user is irrelevant as long as it's functional, reliable and low cost.

Private blockchains can never achieve the same resilience and therefore security as a properly distributed and decentralised blockchain. That's a core tenet of Bitcoin. Any private blockchain running within even the largest private banking business or network of banks is a very pale imitation of Bitcoin's resilience, security and power. Which came to the fore in the 90s battle between Compuserve, AOL & the internet? There were so many in those days who point blank refused to countenance the idea of a decentralised democratised system (IP - internet protocol & Berners-Lee's WWW protocol) would come out on top. Yet here we are.

[Benjaminpalma]

BJG1 said:

Same place the value in fiat currency is - faith.

No – currencies are provided in exchange for goods and services.

Bitcoin is provided in exchange for helping to create and secure Bitcoin.

Currency has value.

Bitcoin are tulips.

Behemoth said:

Yes I am. For those that use BTC, it works.

Until the Emperor’s New Clothes moment, tulips worked.

Benjaminpalma said:

So if coins are given out for mining - that is solving mathematical problems and in so doing helping to ensure the security of the system - where's the actual value in cryptocurrencies, other than as speculated-upon e-tulips?

I appreciate all your input, but I can’t yet see the difference between a Bitcoin and a tulip bulb. Except that tulips are nice to look at.

[Behemoth]

Benjaminpalma said:

BJG1 said:

Same place the value in fiat currency is - faith.

No – currencies are provided in exchange for goods and services.

Bitcoin is provided in exchange for helping to create and secure Bitcoin.

Currency has value.

Bitcoin are tulips.

Behemoth said:

Yes I am. For those that use BTC, it works.

Until the Emperor’s New Clothes moment, tulips worked.

Benjaminpalma said:

So if coins are given out for mining - that is solving mathematical problems and in so doing helping to ensure the security of the system - where's the actual value in cryptocurrencies, other than as speculated-upon e-tulips?

I appreciate all your input, but I can’t yet see the difference between a Bitcoin and a tulip bulb. Except that tulips are nice to look at.

Oh dear oh dear. There is no analogy with tulips in functionality. Absolutely none, whatsoever. BTC functions. That's what I mean when I say it works. It wouldn't matter if 1BTC were worth 10p or £100k. The system works and has worked from the very beginning when values were miniscule. The work required to create new coins or to manage transactions is self regulating and fluctuates according to extent of use.

[Benjaminpalma]

Behemoth said:

Oh dear oh dear. There is no analogy with tulips in functionality. Absolutely none, whatsoever. BTC functions. That's what I mean when I say it works. It wouldn't matter if 1BTC were worth 10p or £100k. The system works and has worked from the very beginning when values were miniscule. The work required to create new coins or to manage transactions is self regulating and fluctuates according to extent of use.

As I've said before, I know about functionality. It's clever. Not as clever as the emergence of life itself - as seen in a tulip bulb - but it functions well. Nature is self-regulating.

Yet neither Bitcoin nor over-priced tulip bulbs reflect effort other than, in the case of Bitcoins, mining them.

Dear God - someone please find any some evidence - any evidence - anywhere - of Bitcoins having any value whatsoever other than a demonstration of the cleverness of a blockchain-based decentralised ledger.

[Behemoth]

Let's just see what it takes for a currency to function well. Maybe that'll sort out your tulip obsession.

Needs to be easily transportable
Needs to last a long time, preferably indestructible
Needs to be easy to divide

Tulips don't do any of these things. Gold, diamonds and even cash aren't very good at some of them either. Bitcoin does them all, easily.

Any better?

[Benjaminpalma]

Behemoth said:

Let's just see what it takes for a currency to function well. Maybe that'll sort out your tulip obsession.

Needs to be easily transportable
Needs to last a long time, preferably indestructible
Needs to be easy to divide

Tulips don't do any of these things. Gold, diamonds and even cash aren't very good at some of them either. Bitcoin does them all, easily.

Any better?

In the context of the times in which the tulip mania existed, tulip bulbs fulfilled all these requirements.

In my fruitless quest to unearth (geddit?) any value to Bitcoin - other than its own elegance and efforts made to create and secure it - I can only find compelling comparisons to tulip mania by the BBC's Rory Cellan-Jones.

[TooMany2cvs]

Benjaminpalma said:

I can only find compelling comparisons to tulip mania by the BBC...

Oh, gawd, here we go with the real foaminess...

[NickCQ]

Behemoth said:

Let's just see what it takes for a currency to function well. Maybe that'll sort out your tulip obsession.

Needs to be easily transportable
Needs to last a long time, preferably indestructible
Needs to be easy to divide

Tulips don't do any of these things. Gold, diamonds and even cash aren't very good at some of them either. Bitcoin does them all, easily.

Any better?

Can you educate me on the division of BTC? I've seen people talk about holding fractions of BTC but how is this done? Is there a middleman that holds the actual BTC and sells fractions syntehticaly, or can the actual item be divided? Forgive my ignorance...

[talkssense]

You can buy property with Bitcoin now.

Not sure who the AML stuff and source of wealth checks etc work though !

https://www.pressreader.com/uk/the-herald/20170906...

[TooMany2cvs]

NickCQ said:

Can you educate me on the division of BTC? I've seen people talk about holding fractions of BTC but how is this done? Is there a middleman that holds the actual BTC and sells fractions syntehticaly, or can the actual item be divided? Forgive my ignorance...

Angle grinder.

[Dr Jekyll]

Benjaminpalma said:

I appreciate all your input, but I can’t yet see the difference between a Bitcoin and a tulip bulb. Except that tulips are nice to look at.

Can you see the difference between a £10 note and a tulip bulb?

[NickCQ]

Dr Jekyll said:

Benjaminpalma said:

I appreciate all your input, but I can’t yet see the difference between a Bitcoin and a tulip bulb. Except that tulips are nice to look at.

Can you see the difference between a £10 note and a tulip bulb?

Yep, it's all about national income and government power to levy taxes on that income denominated in GBP. As discussed upthread. Doesn't exist yet for BTC.