I’m not sure we’re talking about the same thing; when I say “devalue the dollar,” I mean the US dollar loses purchasing power. This has provably been happening since 1913. The USD has lost 96% of its purchasing power in that time.
If it’s been going on for 50 years and things have continued to improve during that time period, then that shows the inflation is stable. Unstable situations don’t last for 50 years. If the US dollar ever does undergo hyperinflation or a collapse of some sort, bitcoins aren’t going to help the people who have them. That’s like expecting gold to be of value in an apocalypse. Why would anyone want it?
Yeah, inflation is a thing, but it’s really not that harmful.
What is harmful is deflation. It takes hyperinflation to damage an economy, but just a bit of deflation can crash it.
So, how do cryptocurrencies or other goldbug inspired economic stores of value deal with this? How do they increase the money supply to allow the economy to grow?
Can I have a fractional reserve with bitcoin, or does the bank need to wait until people have deposited enough money into it before it can loan out the money to a small business?
At least gold is something that you would have. Bitcoin relies on modern infrastructure to exist. If there is no internet, there is no bitcoin. The kind of collapses that this is supposed to be secure against are the kind of collapses that would entirely wipe them out.
As a little comment, Turkey has had two crypto exchanges come down in the last days and by the end of April the Turkish government is apparently going to either ban cryptocurrencies altogether or put severe strictures on their use.
https://www.google.nl/amp/s/www.bbc.co.uk/news/world-europe-56871403.amp
https://www.bloomberg.com/news/newsletters/2021-04-25/turkey-s-cryptocurrency-boom-turns-to-bust
A few things – I’ve been dabbling in the crypto market, and my transaction fees have been a couple of dollars total. I’m not sure what transactions this chart is referencing.
Two, you can get debit and credit cards through cryptocurrencies now, and while I don’t have any experience with those, I can guarantee you that using one to buy a cup of coffee is not going to cost you $29.
Third, Bitcoin is predominantly a store of value cryptocurrency; it may or may not turn into a daily use cryptocurrency, but there are plenty of others that will work just fine for that.
I was going from memory, but according to this source it’s zoomed up quite a bit in the past year to over $400K USD. So that makes it more favorable.
To my knowledge the common definition of ‘average’ always refers to ‘mean’.
Sure, but there are hundreds of millions of people who play video games, compared to a relatively tiny number of Bitcoin farms in the world.
Who are you to decide for others what they’re allowed to find entertaining? Who are you to say there’s more social value in sitting on the couch moving imaginary cars across the screen vs. moving imaginary numbers across the screen? At least the currency has the benefit of facilitating an economic transaction.
If any altcoin ever serves high-volume small transactions, it’s probably not going to be Bitcoin. Others are waiting in the wings to improve constraints like throughput and energy consumption. But I’m not speaking to feasibility of replacing the dollar, I’m speaking to (1) its social good vs. social harm, and specifically (2) the fact that the energy consumption is framed in misleading and scaremongering terms.
Is Bitcoin a net negative to society? Nah, no more than video games.
This would be a problem if we still had the same number of dollars that we had in 1913. But we have more dollars now, so it’s not a problem, and the economy keeps functioning just fine.
ETA: This is why we got off the gold standard. The amount of gold couldn’t keep up with the amount of new wealth being generated.
Um… I get the the feeling you don’t actually know how crypto exchanges work, or what they do.
They are dealing with you exclusively in dollars, and issuing debit and credit cards in dollars. They are also keeping a total of – theoretically – how many bitcoins you have on account with them.
Your transactions don’t correspond with actual bitcoin transactions.
They just keep track of numbers in their accounting software. If you ever cash out in bitcoin, they will have to do an actual bitcoin transaction to issue you with the right amount of bitcoin. I assume that they have the keys to any bitcoins you may ‘own’, so I hope they’re keeping them safe.
The US dollar is backed by the US economy, the supranational Euro is a better example of a fiat currency. AFAIK, no major currency these days is backed by gold. And while Bitcoin can be and is used to pay for goods and services, that does not in itself give the Bitcoin any backing, it merely means that it can be used for transactions.
Ultimately, a Bitcoin is a figment of computer’s imagination, although, as I said previously, financial transactions are increasingly being done electronically. And all software can be hacked, which is why I wonder if the Bitcoin is really as secure as people think.
The problem with Bitcoin is as GreenWyvern pointed out above, that its transaction cost is crazy high, and that the energy use to keep the system going is unacceptable.
Yes, definitely.
Favorable to what? As I said, this seems to be the currency of the ultra wealthy and drug cartels, not the average person.
Not always. It’s not uncommon for one to use median, with the knowledge that most will think that they mean mean. That’s why I asked. Do you know that they are using the common usage, or are you just assuming?
Sure, but now you are moving the goalposts. Originally you said, “similar to someone playing a video game.”, and now you are comparing them to everyone playing all games.
Did I say that they were not allowed to find it entertaining? No, I did not. Please check your straw at the door, thankyouverymuch.
We are not comparing the utility of transactions against gaming, or at least I find such a comparison to be completely useless and misleading. We are comparing the cost of these transactions against other forms of financial transactions.
Okay, so you are saying that bitcoin is useless for everyday use?
Okay, make the case for them, then. Right now, we are talking about the shortcomings of bitcoins.
No, you are comparing it to things that it is completely unrelated to, in order to dismiss the concerns that are raised. How about actually addressing those concerns, rather than dismissing them based on a fallacious comparison?
I fail to see how video games are related. Is it also no more of a negative than driving, shopping, eating meat, buying a new car, getting your hair cut, getting your dog groomer?
There is probably a whole list of things that you don’t find to be important or that you find to be a social negative that you could bring up, rather than actually address the concerns that are raised about bitcoin.
Yeah, they aren’t backed by the FDIC, and there are no regulations.
If your bank CEO makes off with the depositor’s money, which very rarely if ever happens, then the account holders will be made whole (up to $250,000 per account, anyway), and anyone who allowed or enabled this will be prosecuted severely.
If your crypto exchange makes off with your money, which has happened quite a number of times, then simply say goodbye to it.
It leads to a more favorable energy-per-dollar ratio, which is a way to contextualize the energy use beyond “it’s a lot.”
Non-sequitur, unimportant.
I can only go from my life experience that when a report or person says “average”, 100% of the time they are talking about the arithmetic mean. Without exception. If you use ‘median’ interchangeably with ‘average’, prepare to have every math teacher on earth mark you wrong, unless you elaborate on the more abstract academic definitions of the same. ‘Average’ is ‘mean’, you may depend on it going forward if this had previously been causing you confusion.
tl;dr yes, I assume ‘average’ is ‘arithmetic mean’, as do most people who are familiar with math.
The goalpost is in the OP. Are bitcoins a net negative to human society? If I want to compare them to a similarly wasteful phenomenon, then I compare all the bitcoin miners to all the gamers. I’m sorry if I threw you by beginning with a small-scale analogy, but I assure you my goalpost is aligned with the OP.
You did state that bitcoin isn’t a game, and my reply remains “according to whom?”
I am addressing the OP because I find it an interesting question. It seems like you are addressing some other question (speaking of moving the goalposts), I suppose because it’s easier to defend. But it’s not what the OP was asking.
Sure, if it makes you happy. In relation to the OP, what do you think that proves? Is a thing of value to society only if it facilitates everyday financial transactions? I own an egg-slicer that doesn’t do that, but it’s extremely useful for other purposes.
If you’re talking about the shortcomings of Bitcoins, why would you want me to make the case for something different? It’s not clear that you understand what you’re talking about here.
Again, I am speaking to the question posed in the OP. Are bitcoins a net negative to human society? I am not addressing the question of “is Bitcoin a good everyday currency” or “nice people don’t use bitcoin”.
Since nobody has really bothered to define what we mean by “net negative to human society”, I chose to frame it as relative to another high-intensity computational activity that requires similar energy and hardware (video games). If your metric is consuming large amounts of electricity while producing nothing of value, then video games are abundantly net negative to society. But if we say their entertainment value offsets that, or the fact that the game itself is a product and can generate positive externalities, then maybe they’re a net benefit to society. I think those same terms are very applicable for evaluating Bitcoin.
If you want to debate whether Bitcoin is net positive for society, as specified in the OP, I’m here for that. If you want to debate “bitcoin is unsuitable for everyday use”, I won’t disagree. If you want to debate “bitcoin is only for druglords and rich people,” that seems like an uninteresting and unimportant conversation to me.
How on earth did you reach such an absurd conclusion? Every part of this is wrong, and you’ve gone and layered a silly conspiracy theory on top of it.
Which part are you disputing, that criminals make major transactions in bitcoin, or that bitcoin is the most traceable currency in history? Both are fairly well established.
Help me understand this traceability thing. Of course there’s a permanent record of every Bitcoin transaction ever, publicly available. But people have their crypto password to access it, so they think it makes them anonymous. But if a guy buys a truckload of crack, and the authorities can prove that the purchase was for crack, then the buyer goes to Starbucks and gets a cup of coffee, they’ll know that this particular buyer went to that Starbucks at that time. And if he tries to transfer Bitcoins into dollars into his bank account, they have the info for the Bitcoin exchange and the bank? Can they effectively subpoena the data from the Bitcoin exchange?
The transactions are anonymous. Unlike a bank account, for example, your name doesn’t have to be associated with a transaction.
On the other hand, all transactions are trackable - every transactions is literally open to view to everybody.
If you can link a transaction to an individual - because knowledge of date/time of transactions, IP addresses should you not take some precautions, one of your transactions ships items to your address and has your name on it, you order a set of clothes that match your height and build, etc - then an identity can potentially be linked to that usage.
It’s not a direct connection but the more transactions you do, the more easily your identity can be linked to those transactions.
So, “anonymous” in the sense that your name is not directly attached to any of this but trackable in the sense that your identity can sometimes be trivially deduced.
I assert that I can conduct a bitcoin transaction that can’t possibly be traced to me, using only a standard bitcoin client, and an appropriately secured computer. Can you demonstrate that I am in fact wrong and I can’t do this without being traced?
If you can’t, then you need to stop going around claiming Bitcoin is the world’s most traceable currency, which is a hobby horse I’ve seen you flogging in other threads.
You’re saying two different things here - as I noted in the post above, transactions are simultaneously both “anonymous” and entirely trackable. Their traceability is by design as is the anonymity.
Bitcoin is literally designed to be totally traceable, which again, is separate from the fact that it is also designed to offer user anonymity. Those are not synonymous, though many people use those concepts interchangeably anyway.
The initial hope of some people was (and still is in many cases) that the anonymity was perfect, i.e. the identity of who made a particular transaction could not be deduced. This ultimately turned out not to be the case.
The traceability of transactions weakened the anonymity in several cases because we don’t live our entire lives through the blockchain. There are surely several transactions that cannot be linked to individuals but there are also several examples where they can. The existence of people caught money laundering and drug dealing via bitcoin exchanges, caught through linking transactions to their identities is direct evidence of that.
There’s nothing to subpoena. The Bitcoin exchanges stores no information about the identity of the transaction parties, no name, no IP address, zilch, nada, nothing. The sole form of identifying information is the an alphanumeric string called the wallet address.
As others have mentioned, all Bitcoin transactions are entirely public and transparent regarding the amount, the timestamp, and the amount of the transaction. Anyone can read this information, anyone can download it in its entirety, it persists forever. If you leak your wallet address to someone, then you’d better be quite careful what you do with that wallet, because the assumption is that someone will be watching it forever.
But… this is true of any sensitive banking information. You don’t leak your account number. You don’t leak your PIN. If you do, then you’re no longer secure. So you protect those things.
Where Bitcoin differs to a traditional banking account is that you can be your own account custodian and transfer agent. There’s no gatekeeper, nobody verifying who you are, nobody requiring 2 forms of ID. If you want to remain wholly anonymous, you can create an account without asking anyone’s permission, use it for a transfer, and then destroy it. Although the network will forever retain the ID of that account, it has no information linking that account to you. If you’re diligent and conscious about security, then it can never be linked to you.
Folks will point out that transactions can be inferred by nature of transactions you make, or by your counterparty ratting you out, or using personally identifiable information in an order related to the wallet. This is true, but it’s unrelated to Bitcoin’s design. No matter what tech you use, it will always be true that the technology can only be as secure as the end-user’s own security practices. IOW if you lose your bank debit card with the PIN written on it, and your account gets cleaned out, this wasn’t a failure of banking security, it was a failure of a consumer to safeguard their private data. Same with Bitcoin.