[angry_albatross]

The price of bitcoin should generally not be considered newsworthy. There is no underlying value there, and engaging in this weird distributed Ponzi scheme is harmful to society. We can all do our part to help make it irrelevant by ignoring it completely, or maybe engaging in thoughtful conversations with the people who have been misled into thinking that this is a reasonable "investment".

[bhollan]

A friend of mine escaped the Myanmar coup via bitcoin, so I don't think it's a purely zero-value enterprise. I agree, and there are many economists who also agree, that there is a strong odor of "tulips". But that's literally been the line from the haters for over a decade.

That said, I was laughing off environmental concerns over it until I read that, electrically, it's effectively a 'ghost state' in the US.

https://www.eia.gov/todayinenergy/detail.php?id=61364

[rossjudson]

Two questions:

1) How many people do you think are successfully escaping evil regimes via Bitcoin?

2) Energy concerns around Bitcoin/Crypto have been well-known for years. For you, how did it stay in the "laughing off" state until your position changed?

My off-the-cuff answer on energy would be to make it fully illegal to use grid electricity for mining, but that mining operations are free to generate their own electricity (and even sell the excess back to the grid, possibly replacing some set of peaker activities).

[kraftman]

This may be a dumb question, but whats the underlying value of regular money? From my understanding it used to be backed by gold but isnt anymore, and governments print more when they need it?

[mindcandy]

From what I understand, the US Dollar is backed by: The IRS requires taxes be paid in dollars. It's a federal offense to refuse payment in dollars for purchases under US jurisdiction. The US has negotiated other countries to require payment in dollars for oil and maybe other goods. The world generally has confidence in the dollar as a fairly stable currency that is unlikely to collapse.

What did I miss?

My understanding of what backs Bitcoin is: By mining Bitcoin, you are provably putting yourself into a financial loss and therefore are provably motivated to turn that around into a profit. Buying Bitcoin is also equivalent to mining in this regard. That means around the world, millions of people are motivated to the tune of nearly a trillion dollars to ensure that the system continues to not only keep working, but grow more valuable.

[dakial1]

You might also ask what is the underlying value of gold. You can do nice stuff with it and has some industrial applications, but it held value historically because of its scarcity. That's why countries changed it, because they realized their economies were more valuable that their gold stash (and it gave much more economic policy freedom)

An economist might give you a more intricate answer, but basically the underlying value of the (fiat) money today is basically the power of the issuing country's economy and government (who is the one guaranteeing the fiat validity)

[skybrian]

Government tax collection, which in turn depends on the economic health of the nation. If a country’s economy collapses and/or the government is weak at collecting taxes then inflation becomes more likely.

One effect is that the government currency is the unit of value for tax accounting. For the US, you need to figure out what your income is in dollars in order to do your taxes. For assets in other currencies, you need to convert.

Another effect is taking tax payments in government currency. However, I suspect it would be much the same if the government did the currency exchange for you? Whoever does the exchange will drive up the demand for government currency.

[its_ethan]

One (of several) ways to think about this would be that money backed by the government treating it as the legal tender for settling any and all debts within that country. So the underlaying value is partially just trust in that governments ability to enforce laws related to the exchange of money and/or settling of debts between it's citizens/users of the money.

If a government issued money but never imposed/enforced penalties for failing to pay debts, that money would probably be pretty useless (less underlaying value), and some other form of money would emerge (probably one backed by actual value, like gold/scarce resources).

[GenerWork]

It's backed by government force.

[staticman2]

People don't want to barter so they agree to take money. It's useful because you don't want to take your salary in hens or goats or GPUs or whatever and trade them for things you need. That use provides the value.

History doesn't suggest that trading with papers that can be exchanged with gold works better, is my understanding. The U.S. was on a gold standard during the great depression.

[haunter]

>but whats the underlying value of regular money

That I can spend it.

[RetpolineDrama]

>There is no underlying value there

Plainly wrong on its face when they are immediately exchangeable for $50k USD, which no one in their right mind would argue "has no underlying value".

The rest of the argument can be dismissed as easily. That said, your argument sums to "it's not newsworthy because it's X and X is bad". Unfortunately for you, newsworthy news is more often than not bad thanks to human psychology.

[tayjohno]

Liquidity ≠ value.

There are plenty of highly liquid investments that are quite speculative, like gold, but you can at least make some reasonable assumptions and say "Would people still pay for a gold ring if it cost $1,000/oz? $10,000/oz? $100,000/oz? There's a natural feedback because of the underlying value of the object.

How do you do the same with Bitcoin? People point to factors of the technology as having some inherent value, but if things like divisibility or the distributed ledger were what give cryptocurrencies their value, then any crypto currency should be just as valuable as any other. There are other intangibles that help explain why Bitcoin out-values other coins, like the brand recognition, or the network effect, but there's no explanation for what those are worth. The problem with this is that bitcoin goes up _because_ bitcoin goes up, and bitcoin goes down _because_ bitcoin goes down. There are no other levers to move the price other than sentiment.

[baal80spam]

> immediately

I doubt that.

> $50k USD

Uh, minus a hefty exchange fee.

[rvz]

> We can all do our part to help make it irrelevant by ignoring it completely,

Good luck with that.

As much as you hate it or not, Bitcoin, Ethereum and all the other cryptocurrencies are here to stay.

The next time Bitcoin crosses another milestone up, down or sideways, I shouldn't see you complaining about it again on HN.

[npoc]

Bitcoin's going to eat the world. The rest are going to 0.

[tnel77]

You definitely seem open to polite conversation.

[lurking15]

> We can all do our part to help make it irrelevant by ignoring it completely

Streisand effect would like to have a word