I snipped your opening paragraphs to just this line, but I address all of it: While the whitepaper doesn't explicitly delve into 'Shortie Syndrome' there is other evidence that Satoshi was also pushing the libertarian angle somewhat, this quote for example:In other words BTC was invented to make long distance payments quicker and less transactionally expensive than conventional banking facilities.
I don't think these are requirements, and I think bitcoin is proving it. Bitcoin is showing that people are willing to choose a speculative store of value that offers both more potential upside and more potential downside instead of steady predictable downside (fiat) or less-upside/less-downside (gold, in my opinion).You list out the requirements of a money system and for sure BTC has them, as do fiat currencies. But it lacks at least two key requirements that fiats have....
1. Mises' Regression requirement - that it traces back to something of "real" value. Sorry, the circular argument that it is money because it is money doesn't cut it for me.
2. With fiat money we have a reasonable assurance of what the price of real things will be at least in the short to medium term. If we were to have a poll of what do we think the inflation rate will be over the next year it would show how remarkably trusting we are on this front. To put it in pictures, a company should have no difficulty in recruiting a contractor for one year at say €8,000 per month but I doubt whether even you would contract to work for a year for 0.5 BTC per month.
...I contend that almost all of the "value" it currently has is speculation that it will get even bigger...
When wikileaks got cut off from all traditional fiat channels and started accepting bitcoin they had no other choice. Bitcoin was the only option that fulfilled the functions of money for their use-case. This is bitcoin providing value in and of itself. You can call it circular and say it's not enough, but I disagree. In short, I think by now Bitcoin has proven Satoshi's thought experiment to be true - If something can fulfill the functions of money in enough ways that make it stand out from the alternatives it can be enough even in the absence of intrinsic value or government backing, but the hardest part may be bootstrapping it.But then there was the missing link - Mises' Regression Theorem or rather Plain 'Ol Common Sense (POCS) - how can it serve as money if it has no (intrinsic) value? He wanted any value at all, you can see that in his musings "value, any value". And then out of necessity he squared the circle and he admits it was circular. He postulates that if even some folk are prepared to accept it as a transaction for real goods then, there you go, it has some value ergo (here's the big leap) it has value for everybody and is a self fulfilling medium of exchange i.e. money.
Thanks, and I respect your position, as I said when I finished explaining the technical 'how and what' of bitcoin and mining - the 2nd half is the harder part - as it's more down to opinion and economic theories which are hard to prove. It's a leap of faith in a way, though as time has passed and the more I re-think it such as explaining it here the more sense it seems to make to me - but I accept I might also be wrong. I have no doubt it will continue to be a roller coaster, that's half the fun.fpalb very interesting post as usual. Your individual points are hard to dispute and that’s why I gave my eppur si muove response because I fear that no matter how convincing your arguments I will never recant
One thing I cannot dispute is that some (intelligent) people think it has value as evidenced by your good self. Ergo in line with Satoshi’s thought piece it attains that missing link to make it money. Maybe it will survive on that basis but it’s price is destined to be roller coaster.
Bitcoin being banned in the US was one of my biggest fears for the system in 2013. I only bought in significantly after watching senate hearings which made it clear they had no intention of doing so.One thing it will never be allowed to be is a mainstream currency. That’s because its main strength - it cannot me managed- makes it totally unsuitable for society’s needs just as the gold standard before it proved unfit for purpose.
Look, this is so many steps and years away that it's not worth debating, this would be the very last steps of adoption. bitcoin needs to succeed as digital gold first and needs to increase the transaction rate and become mainstream for internet payments and remittances and all of the other things where it can have more of an edge over legacy stuff.Will there come a day when BTC is mainstream? Investopedia speculates 15% adoption. Will there be a day when 3 or more of those tills will be dedicated to BTC because 15% of the population are being paid in BTC?
You should look into M-pesa in Kenya if you haven't already. They leapfrogged so people have mobile phones (not yet as sophisticated as our smart phones of course, but how long?) and solar power without having domestic electricity, a wired phone network or a bank account.Now as to the use of bitcoin in those parts of the world that do not have our highly sophisticated money transmission systems, the idea that equipping these folk with $500 Smartphones is the solution seems ludicrous to me.
For some people bitcoin is just a speculative investment, for others it's a medium of exchange for the niche cases where it's advantageous over competitors, and for others it's ideological:Yet there are no passionate debates about the benefits of banking investments at 3am in the morning. Is bitcoin a form of "identity investment", you might not have much money invested but you want to be associated with it
I have now looked into M-pesa. In what I am about to say I may have got the wrong end of the stick in which case I stand to be ejectedYou should look into M-pesa in Kenya if you haven't already. They leapfrogged so people have mobile phones (not yet as sophisticated as our smart phones of course, but how long?) and solar power without having domestic electricity, a wired phone network or a bank account.
Smart phones are so useful and being produced in such numbers that I work under the assumption that in the near future the vast majority of the world will have a phone and internet access. Especially when Zuckerberg, Musk and others are pushing hard to provide the necessary infrastructure.
We're just looking at the 'medium of exchange' aspect here. My views on this are that pretty soon everyone will be paying for everything with their phone. In brick and mortar shops you'll be making contact-less payments with it. Other payments will be made via apps - online banking for bills, dedicated apps like the one to top up your leap card (if not tapping the phone itself instead of a leap card), paypal for other things. All else being equal, practicality wins, and this is why physical cash is disappearing.Now I know you were not claiming that M-pesa was a crypto. But on the contrary it seems to underpin that crypto has nothing to offer in this space. One of the promos for mobile banking which I read quotes the example of the daughter needing to send money home to her family. Being unbanked she hithertofore had to place the money in notes in an envelope and trust someone to physically deliver it. Now with her mobile banking she can to this instantly mobile to mobile. But she is transferring currency she believes in. It is held by a trusted party like Vodafone. Her security is the good ol' PIN technology. No need for her to have miners work through 10s of millions of nonces. Bitcoin would cut out the need for a trusted party as Satoshi intended but the idea that she would have any confidence in knowing she has a secure and transferable amount of nothing doesn't wash.
Eppur si muove it is worthlessWe're just looking at the 'medium of exchange' aspect here. My views on this are that pretty soon everyone will be paying for everything with their phone. In brick and mortar shops you'll be making contact-less payments with it. Other payments will be made via apps - online banking for bills, dedicated apps like the one to top up your leap card (if not tapping the phone itself instead of a leap card), paypal for other things. All else being equal, practicality wins, and this is why physical cash is disappearing.
I think M-Pesa or paypal or anything else that works better than crypto as a medium of exchange will be used instead of crypto. So I think we will see a continuation of crypto only being used as medium of exchange in cases where it is is better, which right now is a set of niche cases like this one I wrote about recently . The previous two posts I wrote on the same page of that thread also relate to the reasons bitcoin might be used over alternatives, particularly by merchants.
One advantage is the global nature. M-pesa is fine until you want to transact with someone in a country that doesn't support it. We still don't have a system apart from crypto that's available worldwide, I guess paypal is the closest. Paypal is interesting because they originally were trying to make something like bitcoin, something outside the existing financial system, but they found they couldn't do it due to the regulatory burden and this is why I think a product from a company will never directly compete with bitcoin entirely, as Peter Thiel, co-founder of paypal said:
“PayPal had these goals of creating a new currency. We failed at that, and we just created a new payment system. I think Bitcoin has succeeded on the level of a new currency, but the payment system is somewhat lacking. It’s very hard to use, and that’s the big challenge on the Bitcoin side.”
So yeah, basically I agree with him I think bitcoin has its work cut out for in the mainstream medium of exchange aspect, and so much of it depends on how the technology will improve in terms of speed, cost, ease-of-use and transaction throughput and this is hard to predict. It is more competitive in the store of value aspect currently.
Censorship-Resistant transaction that is not subject to seizure.What gives bitcoin its value.
I understand the scarcity aspect, (like gold), I understand the security, anonymity and ease of use aspects, (I say understand, I mean accept at face value, because life is too short to follow then query the explanations, I'm not as brave as the Duke). I understand the network aspect.
However none of these, to my mind, make bitcoin worth more than a debit card linked to a bank account with no money.
Fair enough, if you give up your private key, then yes your bitcoin can be "seized"The Feds in the US are looking to shift more than $9M worth of Bitcoin from a single seizure, so that last piece is a fallacy.
Leo you are mistaken here.The Feds in the US are looking to shift more than $9M worth of Bitcoin from a single seizure, so that last piece is a fallacy.
Correct, they can't compel the blockchain to give it up, but in search & seizures authorities are successfully seizing bitcoin. So as stated in the linked article, it is resistant to seizure, but it is still subject to such in certain circumstances.But they can't compel the blockchain to give up anything.