Why Bitcoin will collapse in price.

[PenAndPaper]

To paraphrase Eric Voorhees,
Bitcoin is unfortunately the name of two things.

1) it is the name of the Bitcoin protocol, which describes how the block chain, mining, etc. works.
This protocol performs some useful functions that no other money system can currently match. (Fast cheap transfer to any where in the world, robust etc etc) The Bitcoin protocol clearly has a value, and the value comes from its utility.
2) The Bitcoin protocol has been implemented to allow transfer of a digital currency, this currency is also called Bitcoin. A Bitcoin has no intrinsic value and is commonly misuderstood to be what Bitcoin is all about.

The bitcoin protocol and bitcoins per se cannot be seperated when you talk about intrinsic value. Bitcoins cannot exist outside the protocol and the protocol has no meaning without bitcoins.

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[porc]

To paraphrase Eric Voorhees,
Bitcoin is unfortunately the name of two things.

1) it is the name of the Bitcoin protocol, which describes how the block chain, mining, etc. works.
This protocol performs some useful functions that no other money system can currently match. (Fast cheap transfer to any where in the world, robust etc etc) The Bitcoin protocol clearly has a value, and the value comes from its utility.
2) The Bitcoin protocol has been implemented to allow transfer of a digital currency, this currency is also called Bitcoin. A Bitcoin has no intrinsic value and is commonly misuderstood to be what Bitcoin is all about.

The bitcoin protocol and bitcoins per se cannot be seperated when you talk about intrinsic value. Bitcoins cannot exist outside the protocol and the protocol has no meaning without bitcoins.

Yes.

And my question to bitcoiners is still unanswered: What can I do with bitcoin? What is its value?

In before: I can dump it on the next guy.

[User_513]

To paraphrase Eric Voorhees,
Bitcoin is unfortunately the name of two things.

1) it is the name of the Bitcoin protocol, which describes how the block chain, mining, etc. works.
This protocol performs some useful functions that no other money system can currently match. (Fast cheap transfer to any where in the world, robust etc etc) The Bitcoin protocol clearly has a value, and the value comes from its utility.
2) The Bitcoin protocol has been implemented to allow transfer of a digital currency, this currency is also called Bitcoin. A Bitcoin has no intrinsic value and is commonly misuderstood to be what Bitcoin is all about.

The bitcoin protocol and bitcoins per se cannot be seperated when you talk about intrinsic value. Bitcoins cannot exist outside the protocol and the protocol has no meaning without bitcoins.

Yes.

And my question to bitcoiners is still unanswered: What can I do with bitcoin? What is its value?

In before: I can dump it on the next guy.

What can you do with Bitcoin? Conduct trade with others and/or hold onto them as a store of value. What is Bitcoin's value? The value is determined by market demand.

There will only ever be 21,000,000 Bitcoins, so their value can never be diminished by inflation of the supply. Trade conducted exclusively in Bitcoin isn't subjected to taxes. What is it worth to have a medium of exchange that can't be devalued and that some 3rd party doesn't feel entitled to help themselves to whatever share of that they want? The day is coming when it's going to take a LOT of government fiat to convince anyone to part with their BTC.

[porc]

To paraphrase Eric Voorhees,
Bitcoin is unfortunately the name of two things.

1) it is the name of the Bitcoin protocol, which describes how the block chain, mining, etc. works.
This protocol performs some useful functions that no other money system can currently match. (Fast cheap transfer to any where in the world, robust etc etc) The Bitcoin protocol clearly has a value, and the value comes from its utility.
2) The Bitcoin protocol has been implemented to allow transfer of a digital currency, this currency is also called Bitcoin. A Bitcoin has no intrinsic value and is commonly misuderstood to be what Bitcoin is all about.

The bitcoin protocol and bitcoins per se cannot be seperated when you talk about intrinsic value. Bitcoins cannot exist outside the protocol and the protocol has no meaning without bitcoins.

Yes.

And my question to bitcoiners is still unanswered: What can I do with bitcoin? What is its value?

In before: I can dump it on the next guy.

What can you do with Bitcoin? 1) Conduct trade with others 2) and/or hold onto them as a store of value. What is Bitcoin's value? 3) The value is determined by market demand.

4) There will only ever be 21,000,000 Bitcoins, so their value can never be diminished by inflation of the supply. 5) Trade conducted exclusively in Bitcoin isn't subjected to taxes. What is it worth to have a medium of exchange that can't be devalued and that some 3rd party doesn't feel entitled to help themselves to whatever share of that they want? 6) The day is coming when it's going to take a LOT of government fiat to convince anyone to part with their BTC.

1) Dumping BTC on the next guy does not give BTC value.
2) if there is no value, BTC can not function as a store of value.
3) price is not an indication of value. Over the long term the market will price value correctly. Over the short term wild fluctuations can lead to high prices for things with little (tulips) or no value (BTC).
4) Scarcity is a word describing the availability/ quantity of something. It cant be equated with value (deadly insects are not valuable to you but scarce).
5) False you have to pay capital gains taxes on bitcoin gains in dollars. If you dont sell them for dollars but trade them for a good this counts as a sell.
6) I dont share this opinion (I do think fiat will collapse, but bitcoin will collapse as well).

[TeeBone]

To paraphrase Eric Voorhees,
Bitcoin is unfortunately the name of two things.

1) it is the name of the Bitcoin protocol, which describes how the block chain, mining, etc. works.
This protocol performs some useful functions that no other money system can currently match. (Fast cheap transfer to any where in the world, robust etc etc) The Bitcoin protocol clearly has a value, and the value comes from its utility.
2) The Bitcoin protocol has been implemented to allow transfer of a digital currency, this currency is also called Bitcoin. A Bitcoin has no intrinsic value and is commonly misuderstood to be what Bitcoin is all about.

The bitcoin protocol and bitcoins per se cannot be seperated when you talk about intrinsic value. Bitcoins cannot exist outside the protocol and the protocol has no meaning without bitcoins.

Apparently many people disagree with you that the bitcoin protocol has no meaning without bitcoins because people are willing to pay 40 bucks for litecoins using the same protocol.

Fact is, the scarcity argument that BTC is limited to 21 million is a complete and utter myth. It can be replicated a gazillion times over with the exact same properties, just called by a different name.

How absurd would it sound if you applied this false btc scarcity logic to something like gold. If tomorrow, someone invented material that looked and behaved like gold, the exact same properties, etc with an unlimited amount that can be created but called it Koalapuss instead of gold, would gold be scarce anymore ? Obviously not, the price of gold would plummet to zero.

I can see value in the bitcoin protocol. Bitcoin itself is worth nothing. Zilch. It is no different then litecoin or quarkcoin or tulipcoin. And all of them are worth nothing because they can all be run on the same bitcoin-like protocol and therefore an unlimited supply of these 'coins' can be created.

When this finally dawns on people, watch out. You'll be seeing bitcoin suicides. Whether intentional or not, this has all the makings of a grand pyramid model. In a hundred years, btc might be talked about similar to how tulipmania is mocked now.

[paratox]

Apparently many people disagree with you that the bitcoin protocol has no meaning without bitcoins because people are willing to pay 40 bucks for litecoins using the same protocol.

Bitcoin and Litecoin work on the same protocol? So you mean I can send you LTC to your BTC address?

Fact is, the scarcity argument that BTC is limited to 21 million is a complete and utter myth. It can be replicated a gazillion times over with the exact same properties, just called by a different name.

BTC is still limited to 21 million even if there are 21 million other altcoins in existence.

How absurd would it sound if you applied this false btc scarcity logic to something like gold. If tomorrow, someone invented material that looked and behaved like gold, the exact same properties, etc with an unlimited amount that can be created but called it Koalapuss instead of gold, would gold be scarce anymore ? Obviously not, the price of gold would plummet to zero.

If you could produce something with the exact same properties as gold, it would be gold. But you are right in that case the value of gold would likely fall ... If you could produce unlimited bitcoins the same would happen. But that's (currently) not possible, because it would work on a different blockchain an therefore cannot be the "exact" same.

I can see value in the bitcoin protocol. Bitcoin itself is worth nothing. Zilch. It is no different then litecoin or quarkcoin or tulipcoin. And all of them are worth nothing because they can all be run on the same bitcoin-like protocol and therefore an unlimited supply of these 'coins' can be created.

You are right that all coins are crypto currencies, but they don't have equal properties, therefore are not interchangeable.

When this finally dawns on people, watch out. You'll be seeing bitcoin suicides. Whether intentional or not, this has all the makings of a grand pyramid model. In a hundred years, btc might be talked about similar to how tulipmania is mocked now.

We will see what the future holds. It's true that btc could fail, but I wouldn't bet on it...

[toknormal]

porc -

Your appraisal of Bitcoin from the outset is flawed.

You've based your conclusions on the wrong observations - observations which are incidental to the fundamental nature of "money" and not central to it.

Cryptocurrencies are a *token*. A token of value. Their utility value to the economy is in functioning as a form of money. They have no other utility value. Conversely, there is no other technology available to man which can fulfil this function in an electronic trading environment. For this reason alone they have value.

The fact that they are not spendable in Tescos or Wallmart is incidental to this. I can't spend a lump of Gold either.

Lets now look at the non-electronic environment and see how it compares.

In the "physical" world, Gold is basically a physical Bitcoin. Its primary use is a "token" or "placeholder" for value. It has very little utility value other than this function - to operate as a peer to peer form of money that does not require a counterparty - i.e. the physical equivalent of a "Bitcoin". It is not backed by anything, has few industrial uses to speak of, but has certain properties (basically scarecity and resistence to counterfeiting) which allow it to function as money.

Since it is not backed by anything, we say it has "intrinsic value" - or put another way, it represents the last element in a call chain of trust.

In an electronic trading environment such as the internet, there is a need for a transmittable entity which can perform the function of money that gold did in the physical. Banks do not actually transmit "money" - they just increase a number in one account and decrease it in another. There's no sense in which anything is actually "transmitted" in this process and since the whole operation is so arbitrary it requires a huge amount of counterparty involvement to give "value" to those arbitrary numbers.

Bitcoin on the other hand is the genuine article - it is a uniquely identifiable electronic entity which is transmittable through the public network without the need for a counterparty.

If you don't appreciate the collosal implications of this for money, the banking system and the economy in general, then fair enough. Nobody realised that travel agents were dead in the water the day the World Wide Web was invented either. But those implications are academic - not a question of subjective value, market value, popularity or whether you can "spend" them or not.

[PenAndPaper]

To paraphrase Eric Voorhees,
Bitcoin is unfortunately the name of two things.

1) it is the name of the Bitcoin protocol, which describes how the block chain, mining, etc. works.
This protocol performs some useful functions that no other money system can currently match. (Fast cheap transfer to any where in the world, robust etc etc) The Bitcoin protocol clearly has a value, and the value comes from its utility.
2) The Bitcoin protocol has been implemented to allow transfer of a digital currency, this currency is also called Bitcoin. A Bitcoin has no intrinsic value and is commonly misuderstood to be what Bitcoin is all about.

The bitcoin protocol and bitcoins per se cannot be seperated when you talk about intrinsic value. Bitcoins cannot exist outside the protocol and the protocol has no meaning without bitcoins.

Apparently many people disagree with you that the bitcoin protocol has no meaning without bitcoins because people are willing to pay 40 bucks for litecoins using the same protocol.

Yes they are willing to pay money to use a clone of the bitcoin protocol as well. That's in favor of my argument not against.

[JorgeStolfi]

Governments can pass laws that make it illegal to mine bitcoins.

Why woud they want to do that?

Once mining becomes unprofitable, there is no point in outlawing it.

While mining is still profitable, it adds to the bitcoin supply and hence lowers the value of coins in people's wallets. You get bitcoin inflation, just as governments printing causes inflation of ordnary currencies.  This will make bitcoin less attractive.

Moreover, the government will profit by taxing the miners' income.

[Zarathustra]

To paraphrase Eric Voorhees,
Bitcoin is unfortunately the name of two things.

1) it is the name of the Bitcoin protocol, which describes how the block chain, mining, etc. works.
This protocol performs some useful functions that no other money system can currently match. (Fast cheap transfer to any where in the world, robust etc etc) The Bitcoin protocol clearly has a value, and the value comes from its utility.
2) The Bitcoin protocol has been implemented to allow transfer of a digital currency, this currency is also called Bitcoin. A Bitcoin has no intrinsic value and is commonly misuderstood to be what Bitcoin is all about.

The bitcoin protocol and bitcoins per se cannot be seperated when you talk about intrinsic value. Bitcoins cannot exist outside the protocol and the protocol has no meaning without bitcoins.

Yes.

And my question to bitcoiners is still unanswered: What can I do with bitcoin? What is its value?

In before: I can dump it on the next guy.

What can you do with Bitcoin? 1) Conduct trade with others 2) and/or hold onto them as a store of value. What is Bitcoin's value? 3) The value is determined by market demand.

4) There will only ever be 21,000,000 Bitcoins, so their value can never be diminished by inflation of the supply. 5) Trade conducted exclusively in Bitcoin isn't subjected to taxes. What is it worth to have a medium of exchange that can't be devalued and that some 3rd party doesn't feel entitled to help themselves to whatever share of that they want? 6) The day is coming when it's going to take a LOT of government fiat to convince anyone to part with their BTC.

1) Dumping BTC on the next guy does not give BTC value.
2) if there is no value, BTC can not function as a store of value.
3) price is not an indication of value. Over the long term the market will price value correctly. Over the short term wild fluctuations can lead to high prices for things with little (tulips) or no value (BTC).

1) Dumping Gold or Gold 2.0 on the next guy does give value.
2) Therefore both are functioning as a store of value
3) Price is an indication of value. Over the long term you will be quiet. Very quiet.

[Zarathustra]

1) Any widespread media of exchange that ever existed, always had inherent value (something). The reason for this is that people will only exchange something for something. NOBDODY! wants to exchange something for nothing. Bitcoin has no inherent value (examples of inherent value: water thirst, food hunger, house shelter, gold, art decoration/pretty/ industry). Thus bitcoin has already failed in this aspect.

Stop this 'inherent value' BS! There is no such thing. There is no value before these things (Water, Gold, Gold 2.0) are used by somebody/something external .

Peter Schiff is spreading the same BS, and most Bitcoiners have heard this BS for years.
http://www.youtube.com/watch?v=mFcTJAQ7zc4

[porc]

porc -

Your appraisal of Bitcoin from the outset is flawed.

1) You've based your conclusions on the wrong observations - observations which are incidental to the fundamental nature of "money" and not central to it.

Cryptocurrencies are a *token*. A token of value. Their utility value to the economy is in functioning as a form of money. They have no other utility value. Conversely, there is no other technology available to man which can fulfil this function in an electronic trading environment. For this reason alone they have value.

The fact that they are not spendable in Tescos or Wallmart is incidental to this. I can't spend a lump of Gold either.

Lets now look at the non-electronic environment and see how it compares.

2) In the "physical" world, Gold is basically a physical Bitcoin. Its primary use is a "token" or "placeholder" for value. It has very little utility value other than this function - to operate as a peer to peer form of money that does not require a counterparty - i.e. the physical equivalent of a "Bitcoin". It is not backed by anything, has few industrial uses to speak of, but has certain properties (basically scarecity and resistence to counterfeiting) which allow it to function as money.

3) Since it is not backed by anything, we say it has "intrinsic value" - or put another way, it represents the last element in a call chain of trust.

4) In an electronic trading environment such as the internet, there is a need for a transmittable entity which can perform the function of money that gold did in the physical. Banks do not actually transmit "money" - they just increase a number in one account and decrease it in another. There's no sense in which anything is actually "transmitted" in this process and since the whole operation is so arbitrary it requires a huge amount of counterparty involvement to give "value" to those arbitrary numbers.

Bitcoin on the other hand is the genuine article - it is a uniquely identifiable electronic entity which is transmittable through the public network without the need for a counterparty.

If you don't appreciate the collosal implications of this for money, the banking system and the economy in general, then fair enough. Nobody realised that travel agents were dead in the water the day the World Wide Web was invented either. But those implications are academic - not a question of subjective value, market value, popularity or whether you can "spend" them or not.

1) I think it is central. Without value, the medium of exchange will not be accepted.
2) As I have said before: Without beauty it would never have become money. The money function is dependent on its beauty, as without beauty, nobody would have accepted gold in the first place. Bitcoiners want me to believe, that scarcity is enough.
3) See I dont have to have trust that people accept gold. Its beautiful. People always wanted it and always will. This knowledge is why it is great money. With bitcoin that is backed by nothing (like you state), I do need trust that nothing is accepted for something in the future. I also have to trust that Bitcoin is not replaced by litecoin or some future technology. I dont think its suitable for these reasons.
4) Interesting point. If the nothing would be backed by something, the transfer technology would have value. Right now you are transferring nothing (BTC) at a cost. Normally we would call that a waste.

[Zarathustra]

porc -

Your appraisal of Bitcoin from the outset is flawed.

1) You've based your conclusions on the wrong observations - observations which are incidental to the fundamental nature of "money" and not central to it.

Cryptocurrencies are a *token*. A token of value. Their utility value to the economy is in functioning as a form of money. They have no other utility value. Conversely, there is no other technology available to man which can fulfil this function in an electronic trading environment. For this reason alone they have value.

The fact that they are not spendable in Tescos or Wallmart is incidental to this. I can't spend a lump of Gold either.

Lets now look at the non-electronic environment and see how it compares.

2) In the "physical" world, Gold is basically a physical Bitcoin. Its primary use is a "token" or "placeholder" for value. It has very little utility value other than this function - to operate as a peer to peer form of money that does not require a counterparty - i.e. the physical equivalent of a "Bitcoin". It is not backed by anything, has few industrial uses to speak of, but has certain properties (basically scarecity and resistence to counterfeiting) which allow it to function as money.

3) Since it is not backed by anything, we say it has "intrinsic value" - or put another way, it represents the last element in a call chain of trust.

4) In an electronic trading environment such as the internet, there is a need for a transmittable entity which can perform the function of money that gold did in the physical. Banks do not actually transmit "money" - they just increase a number in one account and decrease it in another. There's no sense in which anything is actually "transmitted" in this process and since the whole operation is so arbitrary it requires a huge amount of counterparty involvement to give "value" to those arbitrary numbers.

Bitcoin on the other hand is the genuine article - it is a uniquely identifiable electronic entity which is transmittable through the public network without the need for a counterparty.

If you don't appreciate the collosal implications of this for money, the banking system and the economy in general, then fair enough. Nobody realised that travel agents were dead in the water the day the World Wide Web was invented either. But those implications are academic - not a question of subjective value, market value, popularity or whether you can "spend" them or not.

1) I think it is central. Without value, the medium of exchange will not be accepted.
2) As I have said before: Without beauty it would never have become money. The money function is dependent on its beauty, as without beauty, nobody would have accepted gold in the first place. Bitcoiners want me to believe, that scarcity is enough.

1) It is accepted already.
2) Gold 2.0 is valued also for its cryptologic beauty and for many reasons more. (cryptology; from Greek κρυπτός, "hidden, secret")

Gold was accepted as money in the first place because it was demanded by organized violence of the state (priests and warlords).
It still has no value in the rainforest, where humans are not enslaved by the state mafia.

[samurai1200]

People always wanted it and always will.

 I'd like to point out that this is not true. Otherwise I have no stake in this argument. /leave

[traderCJ]

porc do you have anything positive to say about bitcoin?

[porc]

porc do you have anything positive to say about bitcoin?

Yes. It is one of the most successful pyramids that ever existed.

[traderCJ]

porc do you have anything positive to say about bitcoin?

Yes. It is one of the most successful pyramids that ever existed.

So, no, you don't have anything positive to say about it.  Thanks, that's what I thought.

[Zarathustra]

porc do you have anything positive to say about bitcoin?

Yes. It is one of the most successful pyramids that ever existed.

No, the Gold Pyramid existed a bit longer. Of everything that you are talking about in this thread, the opposite is true.

[flynn]

Fact is, the scarcity argument that BTC is limited to 21 million is a complete and utter myth. It can be replicated a gazillion times over with the exact same properties, just called by a different name.

I don't think so : if I make paintings and sell them, it's NOT going to make Picasso's paintings value decrease.

[traderCJ]

When you understand that the future value of everything you don't personally consume is dependent upon mass psychology, you understand that all investments are pyramid schemes.  It's just a matter of getting on board with the best of the schemes.