"Blockchain is useful, Bitcoin is not" — How do you respond to this?

[BlackHatCoiner]

I've already told you once not to entertain trolls, what gives?  

Apologies, but bullying no-coiners is just such a pleasure. I can hardly refuse to engage.

If a person has a working brain, they recruit themselves as soon as they learn the basics of the world's monetary system and the basics of what Bitcoin offers. What would we call this, inverse pyramid? 

As I had once said:

Bitcoin is a pyramid scheme where to participate you must not buy any bitcoin. New participants who are short on bitcoin find themselves at the lowest levels of the hierarchy. The longer they stay short, the greater the financial damage they suffer when the pyramid eventually collapses!

[legiteum]

Tokenized RWA is completely useless, it is just a duplication of an existing ledger.

So is Bitcoin. Digitally-stored financial ledgers signifying a balance have been since the 1970s. And the concept of a ledger has been around since ancient times.

Technology changes all of the time, and changes how we present and store these ledgers, and they might provide benefits in doing so, as did Bitcoin at one time.

Tokenized RWAs have significantly less regulations (read: none), which many find to be a benefit. If you do the same thing with a "decentralized ledger" (in heavy scare quotes, since there's no real legal definition of that), then RWA offerings, as I understand it, are regulated no differently than an ICO is, which is to say not regulated at all under the current US government under Trump.

I agree that if tokenized RWAs are brought to the same regulatory level as traditional broker-based offerings, then the blockchain aspect will cease to have any value and I suspect that brokers will just resume using the IT systems they've always used instead of re-writing all of that code.

By the way, when people ask me to give a very brief summary of what Bitcoin or Blockchain is, I give them a two word answer:

Regulatory Arbitrage.

That's it. That's the only unique benefit blockchain (and by extension, Bitcoin) offers. Everything else it does can be done better with other technologies, and insofar as regulations change (either making blockchain more regulated, or non-blockchain less regulated, or both) its unique value as a technology diminishes. One uses a "decentralized" architecture to ensure their business is regulated the same way Bitcoin is, which is to say not at all.

As you are happy to point out, if it's not Bitcoin-style POW decentralized blockchain, then it's not "really" decentralized, and I agree. But over half of the "decentralized" market cap and probably 99% of daily transactions in the broader "blockchain business" aren't done this way, which means the market has clearly indicated that true Bitcoin-style decentralization is not a requirement.

Bitcoin has no practical utility beyond being a speculative investment instrument.

You've used the phrase "speculative investment instrument" so many times that makes me wonder if you're familiar with the fact that every single investment in the Universe is speculative. There is no investment that is not speculative.

I agree completely. But other things, like say AAPL, have utility outside of their role as an investment, because they make computers and iPhones and so on. Bitcoin doesn't do anything but the speculation part.

And more specifically, fast and cheap stablecoins have utility in their ability to make fast and cheap value transfers, and people need to move money around all of the time, so there's a need for a product like this. Yes, even a "stable" stablecoin can be looked at as a risky investment since you are betting on the company holding your money, but the markets seem to discount that risk at a pretty low level for the most part since most are regulated and have a good track record.

But yes, holding any sort of asset including USD or gold or bullets or whatever carries a risk of some kind, (and individuals can assess those risks differently, etc.).

[d5000]

Satofan44's is the only valid answer. Bitcoin is one of the few really meaningful applications of blockchain, and (together with Monero and few others) the only one that actually solves a problem.

ETH-style smart contract platforms "seem" to solve a problem but you don't really need a blockchain for most applications because most tokens are managed fully by centralized entities too. The most notable exception with some merit is perhaps Dai. But everything with a centralized switch, including stablecoins, RWA and other tokens, can be solved in other ways (centralized client-server model) with much less resource usage. You could even apply some blockchain-like features but without the whole "consensus" stuff - hashing and chaining together database entries is indeed useful for transparency but that was already known in the 90s or even 80s (Chaum's work).

I think the most relevant advantage of centralized "blockchains" is of regulatory nature. A centralized blockchain operator outsources responsibility for security to the "consensus" (e.g. validators) and thus can operate with less costs and less regulatory burden (if Tether operated with a client-server model, it would have to do KYC for every user and would be basically PayPal). This increases resource usage of the "chain", but the true costs (validators have to be paid!) are hidden (so it's not transparent at all) due to the token's hype generation machine which increases the price of useless "platform coins" making their founders rich. Basically the investors pay a premium for "blockchain" to the validators but don't even realize it - until the coin crashes.

(For this reason, I don't know why our beloved Haypenny spammer tries so hard to attack Bitcoin in this thread and others. Their totally centralized system is much more a competitor to Ethereum )

OpenAI bet: "This company will generate revenue, build products, create value."
Bitcoin bet: "More people will want this because... more people will want this."

You make the Bitcoin "bet" sound like it's a "greater fools game". But that's actually how social networks work. Bitcoin is a social network with its value derived (partly, apart from other stuff spanish thread) from Metcalfe's law, only that there is no centralized entity managing it. And do you question the legitimacy of the Meta stock's price?

I am however a bit in line with your criticism of the "value determined by speculators" model some Bitcoiners do propagate now. For me, Bitcoin, if it is not used as a currency (not necessarily for daily payments, but for widespread saving and larger value transactions) it doesn't really make sense. Volatility is thus a problem to solve. It is currently solving naturally (volatility is decreasing for years) but for me the tendency is a bit too slow. See this thread for a hint how it could be (almost) solved, without having to wait for a multiplication of liquidity.

[PrivacyG]

The ATH price of $120 000 USD begs to differ. The >100 million people who invested $1.41 Trillion USD into Bitcoin are not idiots. They know exactly what they are doing.

Just a little correction here.  Market Cap does not mean the amount of Money that has been invested in Bitcoin.  It means how much the total amount of Bitcoin would be valued at considering the current Price.

You can see this with Pumps and Dumps.  The Market Cap may double from 1 Million to 2 Million Dollars in a day.  This does not mean 1 Million Dollars were invested.  It only means it is now valued twice.

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People stick the 'Artificial Intelligence' or 'Asset' tag on any thing and they think it will grow all of a sudden.  I am guessing this is their attempt to catch the train they missed years ago hoping the trip will feel the same way.  Artificial Intelligence, Blockchain, Tokenization et cetera, they are all useful in particular conditions and circumstances but this does not mean they will be THE one thing we will not be able to live with out.

It is still very difficult today to get people to know why Bitcoin is important or better than any other Digital Currency.  It is incredibly difficult to let people understand that although Artificial Intelligence does get better with time, it does not mean as much as people think.

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So is Bitcoin. Digitally-stored financial ledgers signifying a balance have been since the 1970s. And the concept of a ledger has been around since ancient times.

None of us here see Bitcoin as the first ledger ever, ledgers clearly existed before but show me a successfully working concept like Bitcoin.  Decentralized and every thing it is.  If it was simply another ledger, it would be worth as much as a new Excel file.

How exactly is it useless?

[hd49728]

Just a little correction here.  Market Cap does not mean the amount of Money that has been invested in Bitcoin.  It means how much the total amount of Bitcoin would be valued at considering the current Price.

You can see this with Pumps and Dumps.  The Market Cap may double from 1 Million to 2 Million Dollars in a day.  This does not mean 1 Million Dollars were invested.  It only means it is now valued twice.

Many people misunderstand market cap like it shows how big, good and strong a project is, so they are easily manipulated by market makers, social media, influencers about potential altcoins that can flip Bitcoin in market cap or similarly with new altcoins want to flip old top altcoins to join top market cap ranking area.

1miau who left the forum has a good topic on this matter.
Bitcoin vs. Altcoins – projected Marketcap.

You can see how market caps are useless to help many top altcoin projects maintaining their top positions, many of them even died.
https://coinmarketcap.com/historical/

[legiteum]

None of us here see Bitcoin as the first ledger ever, ledgers clearly existed before but show me a successfully working concept like Bitcoin.  Decentralized and every thing it is.  If it was simply another ledger, it would be worth as much as a new Excel file.

How exactly is it useless?

Bitcoin isn't "useless" in the absolute sense. A rock you find in your backyard can be used as a hammer, so it's not "useless", technically speaking. But I suspect if you picked one up and asked somebody, they would probably use the word, "useless".

The question is whether it solves a problem that another technology doesn't solve better. As a speculative meme investment, Bitcoin is not unique in that role (there are literally millions of other such investments). As a means of transferring value between two entities, Bitcoin is not unique--and there are far better ways of doing it today. So Bitcoin doesn't do anything that other things can't do far better.

Bitcoin's regulatory arbitrage used to be a useful and unique advantage, but now digital currencies are legal, so it's now necessary to build a system the government can't easily shut down since no government is trying to shut any of them down.

[bitbollo]

imagine we have just discovered many new metals, that brings many properties...You will never use a duttile metal has the main idea of "metal".
You can probably use gold, silver not aluminium.

the idea and concept of blockchain has been shaped also with bitcoin by itself. you can't define bitcoin without blockchain and the best properties have been shaped with bitcoin.

if we have used a meme coin or a shit coin the working product was completely different and the same concept of blockchain was not the same of the today.

[goldkingcoiner]

The ATH price of $120 000 USD begs to differ. The >100 million people who invested $1.41 Trillion USD into Bitcoin are not idiots. They know exactly what they are doing.

Just a little correction here.  Market Cap does not mean the amount of Money that has been invested in Bitcoin.  It means how much the total amount of Bitcoin would be valued at considering the current Price.

You are right about Market Cap not being the same as money invested in Bitcoin. My mistake.

What I should have said is: The >100 million people who invested a  tremendous amount of time and/or money into Bitcoin are not idiots. They know exactly what they are doing.

[BlackHatCoiner]

How exactly is it useless?

What don't you understand, PrivacyG? It's not useful unless it buys you Pokemon cards and latte on Starbucks. Otherwise it's just a sparkling store of value.

The question is whether it solves a problem that another technology doesn't solve better.

Bitcoin does something that no other technology has managed to do. It allows people working at McDonald's to outpace the portfolio of PhD graduates on Finance & Economics, by just stacking sats. Imagine spending four years for a Finance degree, just so that a McDonald's cashier beats you on performance!

[legiteum]

Bitcoin does something that no other technology has managed to do. It allows people working at McDonald's to outpace the portfolio of PhD graduates on Finance & Economics, by just stacking sats. Imagine spending four years for a Finance degree, just so that a McDonald's cashier beats you on performance!

Correct, Bitcoin's only utility today is its price appreciation, when present.

Of course those amateur investors are really just using Robinhood et. al., not Bitcoin per se, and they can--and recently have--simply clicked a different button on their app to invest in other memes like ETH or XRP or TSLA or NVDA or whatever the hottest thing is this minute. And many of the "crypto bros" that had driven Bitcoin's price so high are switching to sports betting apps instead. Again, it's just another button on the iPhone screen to most people...

[BlackHatCoiner]

Of course those amateur investors are really just using Robinhood et. al., not Bitcoin per se

Plenty of people I know just stack using some Robinhood or Binance, but they withdraw them to some dumb hardware wallet setup with address reuse. I would bet that most people who have read and understood that bitcoin is for long-term funds, have practiced self-custody instead of leaving them on an exchange app. The people you're referring to have not understood bitcoin, and just try to make a quick buck.

The fact that "amateurs" are outpacing Wall Street investors raises an interesting question about just how "amateur" stacking sats really is.  

[LFC_Bitcoin]

I don’t respond to it because I don’t have the time or patience to debate with idiots. It’s a comment that doubters used to FUD us with over a decade ago. If you want to respond just tell them to remember their opinion in 10 years and check the price then. You just can’t save some people.

[Satofan44]

Apologies, but bullying no-coiners is just such a pleasure. I can hardly refuse to engage.

There is an argument to be made on the necessity to respond, I think I've interacted about this with d5000 in another thread about another user. However, from the other side it is evident that many of the trolls fade away as soon as they are being ignored. Except those that have true mental diseases, they usually disappear as the lack of responses fails to give them the energy to continue their nonsense.

Satofan44's is the only valid answer. Bitcoin is one of the few really meaningful applications of blockchain, and (together with Monero and few others) the only one that actually solves a problem.

Very few people sadly understand this, it is nice to be around those that do. 

ETH-style smart contract platforms "seem" to solve a problem but you don't really need a blockchain for most applications because most tokens are managed fully by centralized entities too. The most notable exception with some merit is perhaps Dai. But everything with a centralized switch, including stablecoins, RWA and other tokens, can be solved in other ways (centralized client-server model) with much less resource usage. You could even apply some blockchain-like features but without the whole "consensus" stuff - hashing and chaining together database entries is indeed useful for transparency but that was already known in the 90s or even 80s (Chaum's work).

I remember some of the early ETH conferences, they were so full of shit talking about how every single function in the world would be replaced by a smart contract. It was a complete lie, and even most of the usage today is for things where the crypto industry itself created the demand (DEX, lending, etc). Very few smart contracts have any real world use, and even those are very inefficient and mostly pointless.

I think the most relevant advantage of centralized "blockchains" is of regulatory nature. A centralized blockchain operator outsources responsibility for security to the "consensus" (e.g. validators) and thus can operate with less costs and less regulatory burden (if Tether operated with a client-server model, it would have to do KYC for every user and would be basically PayPal). This increases resource usage of the "chain", but the true costs (validators have to be paid!) are hidden (so it's not transparent at all) due to the token's hype generation machine which increases the price of useless "platform coins" making their founders rich. Basically the investors pay a premium for "blockchain" to the validators but don't even realize it - until the coin crashes.

That is a good argument to be made, but I don't know how beneficial that turned out to be in the end? Instead of doing KYC once to use Tether, now I have to do it many times if I am using any kind of platform that uses it. It crates more risk, KYC duplication and other issue. Furthermore, don't give them any ideas with this. I am sure that some entities are exploring mandating KYC on some of the existing or future chains.

(For this reason, I don't know why our beloved Haypenny spammer tries so hard to attack Bitcoin in this thread and others. Their totally centralized system is much more a competitor to Ethereum )

We need more of this version of you. 

I don’t respond to it because I don’t have the time or patience to debate with idiots. It’s a comment that doubters used to FUD us with over a decade ago. If you want to respond just tell them to remember their opinion in 10 years and check the price then. You just can’t save some people.

It is a fair point to be made, but a fair balance has to be made. If everyone was like this, Bitcoin would have never grown as much as it has in the same time frame. Many of the people that have joined would not have in the absence of a persuasive educator. Still, there is only so much that a single person can or should do about this.

[PrivacyG]

1miau who left the forum has a good topic on this matter.
Bitcoin vs. Altcoins – projected Marketcap.

I only found out about 1miau yesterday..  I was in shock, two of the most respected and in my opinion best people around here are now gone.

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The question is whether it solves a problem that another technology doesn't solve better. As a speculative meme investment, Bitcoin is not unique in that role (there are literally millions of other such investments). As a means of transferring value between two entities, Bitcoin is not unique--and there are far better ways of doing it today. So Bitcoin doesn't do anything that other things can't do far better.

Bitcoin's regulatory arbitrage used to be a useful and unique advantage, but now digital currencies are legal, so it's now necessary to build a system the government can't easily shut down since no government is trying to shut any of them down.

I would really like to know how the Government will shut down Bitcoin.  By Government I am assuming you are talking about Trump the World Leader because Bitcoin is clearly only influenced by the existence of Trump and no other thing and Biden would have solved every single Bitcoin problem and even if Trump was not even a Presidential candidate in 2013 and Presidents of most countries did not even know what the hell it was about Bitcoin still did All Time Highs round after round but it is evidently a Trump thing only and after the departure of Trump Bitcoin will just die for ever unless Trump goes away RIGHT NOW and is replaced by Biden again which will solve all the World problems because Bitcoin only exists in the United States clearly and evidently.

The question is whether it solves a problem that another technology doesn't solve better. As a speculative meme investment, Bitcoin is not unique in that role (there are literally millions of other such investments). As a means of transferring value between two entities, Bitcoin is not unique--and there are far better ways of doing it today. So Bitcoin doesn't do anything that other things can't do far better.

It seems like I missed out on a lot of things.  Since when is Bitcoin a Meme?  If it is, it has to be the longest successful Meme ever considering it has been absolutely destroying All Time Highs every four years!

Show me a FAR better way of doing it today.  Do not get too excited, by doing it I mean transferring value.

Of course those amateur investors are really just using Robinhood et. al., not Bitcoin per se, and they can--and recently have--simply clicked a different button on their app to invest in other memes like ETH or XRP or TSLA or NVDA or whatever the hottest thing is this minute. And many of the "crypto bros" that had driven Bitcoin's price so high are switching to sports betting apps instead. Again, it's just another button on the iPhone screen to most people...

Bitcoin has apparently been the hottest thing in the last 9040229 minutes.  How many of 'this minutes' left until it finally dies?  Teach me!

[legiteum]

The question is whether it solves a problem that another technology doesn't solve better. As a speculative meme investment, Bitcoin is not unique in that role (there are literally millions of other such investments). As a means of transferring value between two entities, Bitcoin is not unique--and there are far better ways of doing it today. So Bitcoin doesn't do anything that other things can't do far better.

Bitcoin's regulatory arbitrage used to be a useful and unique advantage, but now digital currencies are legal, so it's now necessary to build a system the government can't easily shut down since no government is trying to shut any of them down.

I would really like to know how the Government will shut down Bitcoin. 

I have no idea... I certainly never said nor implied it would. In fact my comment above implies the opposite of that, which is that Bitcoin was designed to make it hard for a government to shut down the network.

The question is whether it solves a problem that another technology doesn't solve better. As a speculative meme investment, Bitcoin is not unique in that role (there are literally millions of other such investments). As a means of transferring value between two entities, Bitcoin is not unique--and there are far better ways of doing it today. So Bitcoin doesn't do anything that other things can't do far better.

It seems like I missed out on a lot of things.  Since when is Bitcoin a Meme?  If it is, it has to be the longest successful Meme ever considering it has been absolutely destroying All Time Highs every four years!

No doubt Bitcoin is the most valuable pure-meme investment ever created. But yes, Bitcoin is a meme, or a name, or a brand--call it what you will. It's called out as a "meme investment" because it has no other utilitarian value outside of its name.

Show me a FAR better way of doing it today.  Do not get too excited, by doing it I mean transferring value.

Practically any other crypto, for starters. Like Solana, XRP, Hedera, and even ETH. Bitcoin is one of the slowest, most expensive networks out there.

Bitcoin has apparently been the hottest thing in the last 9040229 minutes.  How many of 'this minutes' left until it finally dies?  Teach me!

No idea. I never implied Bitcoin would "die", or even made a guess as to its future price point since there's no way of knowing that. (Unlike many here, however, I also don't pretend to know with 100% certainty that Bitcoin will go UP in price, either).

I think you are confusing the fact that I don't accept the Bitcoin maximalist mythology with the idea that I must therefore be anti-Bitcoin. I don't see anything wrong with Bitcoin, and it works just fine, and it might even go up in price. If it makes you happy, invest in it, and you might even profit. But if you try to tell me Bitcoin has magic powers that it obviously doesn't, then don't expect me to believe it .

[PrivacyG]

I have no idea... I certainly never said nor implied it would. In fact my comment above implies the opposite of that, which is that Bitcoin was designed to make it hard for a government to shut down the network.

You said a system no Government can shut down is necessary.  If Bitcoin was that system, you would not say that in the first place,

but now digital currencies are legal, so it's now necessary to build a system the government can't easily shut down since no government is trying to shut any of them down.

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No doubt Bitcoin is the most valuable pure-meme investment ever created. But yes, Bitcoin is a meme, or a name, or a brand--call it what you will. It's called out as a "meme investment" because it has no other utilitarian value outside of its name.

Which meme made Bitcoin get to the 2013 All Time High?

No idea. I never implied Bitcoin would "die", or even made a guess as to its future price point since there's no way of knowing that. (Unlike many here, however, I also don't pretend to know with 100% certainty that Bitcoin will go UP in price, either).

I think you are confusing the fact that I don't accept the Bitcoin maximalist mythology with the idea that I must therefore be anti-Bitcoin. I don't see anything wrong with Bitcoin, and it works just fine, and it might even go up in price. If it makes you happy, invest in it, and you might even profit. But if you try to tell me Bitcoin has magic powers that it obviously doesn't, then don't expect me to believe it .

You were calling Bitcoin useless and compared it to a rock a few Replies ago.

[legiteum]

I have no idea... I certainly never said nor implied it would. In fact my comment above implies the opposite of that, which is that Bitcoin was designed to make it hard for a government to shut down the network.

You said a system no Government can shut down is necessary.  If Bitcoin was that system, you would not say that in the first place,

I said it WAS necessary, which is why Bitcoin got off the ground in the first place. When Bitcoin was launched, an unregulated digital currency was illegal (and many systems existed before Bitcoin that were more centralized were either shut down or heavily regulated). Bitcoin's decentralization is what made it exist.

Of course, now that digital currencies are de facto legal (which is very much due to Bitcoin's popularity), this feature is no longer necessary. That's why ETH moved to PoS, and most digital currencies today are de facto centralized. Decentralization is just a waste of resources now that digital currencies don't have to hide from the authorities.

No doubt Bitcoin is the most valuable pure-meme investment ever created. But yes, Bitcoin is a meme, or a name, or a brand--call it what you will. It's called out as a "meme investment" because it has no other utilitarian value outside of its name.

Which meme made Bitcoin get to the 2013 All Time High?

"Bitcoin"

No idea. I never implied Bitcoin would "die", or even made a guess as to its future price point since there's no way of knowing that. (Unlike many here, however, I also don't pretend to know with 100% certainty that Bitcoin will go UP in price, either).

I think you are confusing the fact that I don't accept the Bitcoin maximalist mythology with the idea that I must therefore be anti-Bitcoin. I don't see anything wrong with Bitcoin, and it works just fine, and it might even go up in price. If it makes you happy, invest in it, and you might even profit. But if you try to tell me Bitcoin has magic powers that it obviously doesn't, then don't expect me to believe it .

You were calling Bitcoin useless and compared it to a rock a few Replies ago.

Lots of rocks are very valuable. Take diamonds for instance  . If people want that rock really really REALLY bad, then the rock becomes more valuable regardless of its utility. Bitcoin has no unique utility even if does some things (like a diamond can be used to cut glass, there are better tools and most don't use them that way).

[BlackHatCoiner]

Translation of the post above: The free market is actively choosing to value decentralized, permissionless, inflation- and corruption-resistant money -- while my limited, arrogant understanding reduces it to a "meme." But of course, my limited, arrogant expertise in politics and economics has convinced me that value is objective and that people should instead hold some garbage centralized shitcoin just because their government permits so, or park their savings in some stock riddled with counterparty risk.

Could I have made a mistake somewhere and missed the opportunity of a lifetime? Absolutely not. The market must just be hallucinating - for seventeen straight years.

[cryptosize]

DOGE is a memecoin (the most popular/successful one), not BTC.

Either legiteum is ignorant (poor IT skills/perception), or he is actually a malicious actor spreading disinformation/FUD.

ps: Haypenny is neither a memecoin, nor a cypherpunk-inspired cryptocurrency (i.e. BTC, XMR).

It's purely a centralized shitcoin made to benefit its founder.

[sbercoin.one]

So I've read through all this and honestly — most of it is the same old "is Bitcoin money or not" debate. We've all seen this a hundred times.

That wasn't my question though.

I was asking something pretty simple: BlackRock, JPMorgan, Franklin Templeton — they're all building tokenized stuff on blockchain now. Yields, regulation, the whole package. And it's growing fast.

Meanwhile Bitcoin just sits there. No yield, no nothing. Price goes up because people think price will go up.

So what happens when those institutional products start competing for the same money? That's what I wanted to discuss.

Instead we got a philosophy class about what money is.

legiteum in #62 actually got it — "Regulatory Arbitrage". That's the real Bitcoin edge. Operating outside the system.

But what happens when the system takes the tech and builds something most investors actually prefer?

"True believers will hold" — sure. But that's a $10K thesis, not $100K.