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Bitcoin has few attributes of money but all the attributes of a collectible

93 pointsby iokevinsabout 4 years ago

24 comments

graemeabout 4 years ago
The funny thing is that Bitcoin will basically only have value as a collectible as long as substantial numbers of people believe this essay’s argument is <i>false</i>.<p>People want to collect bitcoin at current valuations because they are convinced it will become a currency&#x2F;store of value of the future and hence rise in value.<p>If everyone suddenly switched to believing “Oh bitcoin doesn’t do anything but it is a fun collectible which also has mining costs to track ownership” its value would plummet.
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DubiousPusherabout 4 years ago
I don&#x27;t know why there&#x27;s an article that makes the rounds once a month analogizing bitcoin to some other thing when..<p>1 bitcoin is its own thing<p>2 bitcoin has a clear analog in the form of gold<p>Collectibles are a terrible analogy because<p>1 they are not fungable and bitcoin is<p>2 they are not easily converted into currency whereas bitcoin is<p>3 they carry novelty and bitcoin does not (cryptocurrency may carry some novelty but each individual bitcoin does not).<p>4 their value is based on nostalgia turned speculation whereas bitcoins is more complex (though still speculative)<p>5 neither is really good for anything other than maybe as a value store (though both are questionable on that front too)<p>I could go on. Gold is genuinely a pretty good analogy for bitcoin. People buy both believing they can be converted into money later or directly traded. Both have pools of true believers, spectators and novelty purchaers. The main difference is simply that bitcoin does not have the long history that gold does.
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Ansil849about 4 years ago
As a casual observer I see the cryptocurrency space only seriously used by two groups of people: those who want to buy goods&#x2F;services which are controlled in their or the seller&#x27;s jurisdiction and so need a bit more anonymity than Paypal; and people who run ICO and more recently NFT swindles.<p>I have yet to see a widespread other usage of cryptocurrency.
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cyphertruckabout 4 years ago
This article is knocking down a squadron of strawmen. First off, bitcoins key attribute is not “privacy” but censorship resistance. It’s why wikileaks has been able to keep operating all these years after being cancelled by the mainstream payments industry. Not to mention many smaller, politically oppressed activist organizations, and much of the marijuana industry.<p>Secondly, the attributes of money are, according to Rothbard from memory:<p>- hard to counterfeit: bitcoin has this better than anything else.<p>- a store of value (not price stability.): It’s doing this great, just don’t buy late in the post halvining revaluation period. (Bitcoin haters don&#x27;t seem to know the halvening exists. Bitcoiners are not worried about “price stability”.)<p>- divisible: down to 1&#x2F;100,000,000 of a bitcoin, further possible with lightning. This rnables micro transactions.<p>- immune to spoilage: bitcoin can’t dissolve in water like salt (a previous form of money) and is quite robust, and can be backed up!<p>- easy to transport: bitcoin can be stored in any number of ways, more portable than paper money even.<p>- fungible: bitcoin is pretty fungible, but anti-freedom forces are trying to change that.<p>- liquid: bitcoin is extremely liquid with a global exchange network and ATMs all over and multiple p2p exchange services like localbitcoins.com to serve even places like the Sudan. Is paypal easy to use in the Sudan? Bitcoin is a more liquid form if money than anything other than the US Dollar and is competitive even there.<p>What bitcoin IS NOT, is a collectible like baseball cards. Baseball cards are absolutely not fungible— that is what makes them collectible! A babe ruth rookie card in mint is worth a lot more than last years random rookie card.<p>The author of this piece doesn’t understand what money is, or why bitcoin is the way it is, which means they haven’t done basic research.<p>I understand, certain people really hate bitcoin— and for good reason. Bitcoin will eventually obsolete the fiat inflation system which has created the wealth inequality in much of the world. The system that lets politicians buy power and escape responsibility for violating rights.<p>Bitcoin destroys the number one tool of human oppression.<p>A tool which, by the way, paid money to indoctrinate people into beliefs that result in them hating bitcoin.<p>But bitcoin isn’t alive. The hate doesn&#x27;t affect it. Bitcoin is a well constructed set of incentives.<p>Embrace or ignore, your choice.
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runeksabout 4 years ago
&gt; Roughly speaking, though, money is an accounting mechanism for keeping track of debt, with its value ultimately backed up by a central government&#x27;s willingness to accept it for tax payments.<p>This doesn’t make sense. Debt is money owed. So if money is “an accounting mechanism for keeping track of debt” then we have a circular definition.<p>Money can be completely separated from debt. And until around a hundred years ago — where gold was and had been money for hundreds of years — it was. A silver or gold coin is not anyone’s debt, yet it was used as money for centuries.<p>An excellent critique of the idea that money is created by governments was written by Carl Menger in his essay from 1892 entitled “<i>On the Origin of Money</i>”: <a href="https:&#x2F;&#x2F;is.muni.cz&#x2F;el&#x2F;1456&#x2F;podzim2009&#x2F;MPE_MOEK&#x2F;um&#x2F;8972262&#x2F;menger1892.pdf" rel="nofollow">https:&#x2F;&#x2F;is.muni.cz&#x2F;el&#x2F;1456&#x2F;podzim2009&#x2F;MPE_MOEK&#x2F;um&#x2F;8972262&#x2F;me...</a><p>Menger defines money as, simply, “the most liquid good” — where <i>liquidity</i> i, essentially, defined as “how much value you lose when you exchange to and from a certain good”. For example, if you have a hundred chickens and you sell them in exchange for wheat, after which you immediately buy back chickens with your wheat, you will lose more value (chickens) than if you were to use gold as an intermediate commodity. This gives rise to a “common” intermediate commodity, because everyone wants to lose as little value as possible when selling&#x2F;buying, and this intermediate commodity is money.<p>Of course, this has changed by now, since each country now issues their own currency and disincentivizes the use of competing monies&#x2F;currencies through various means (primarily by defining their own currency as the “one true measure of value” by charging capital gains taxes on competing monies).
thesausagekingabout 4 years ago
This doesn&#x27;t make any sense. That&#x27;s a poor definitely of money. And Bitcoin does not have &quot;all of the elements of a collectible&quot;. Collectibles have cultural, artistic, or other value on their own and are limited numbers of a set (&quot;non-fungible&quot;). Bitcoin is very fungible. If you own 2 BTC, there aren&#x27;t specific Bitcoins that are marked for you.
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brutaltruthabout 4 years ago
Congratulations to the author on missing that it&#x27;s possible to swap tokens with DeFI, that bitcoin is one of the most liquid instruments in the world, and that Bitcoin isn&#x27;t competing with cash: it&#x27;s competing with a ledger entry at a bank that can go bust denominated in a currency that can be printed at will.<p>(Leaving aside 3-10% fx conversion fees, ACH delays, wire deadlines, and more that prevent &quot;dollars&quot; from being a useful international or digitally transferable form of &quot;money&quot;)<p>But otherwise good take circa 2010 ;)
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eMGm4D0zgUAVXc7about 4 years ago
Whenever people argue as strongly about something as they do with &quot;is Bitcoin a currency?&quot;, I think there&#x27;s a heuristic which can be applied:<p>If people argue very much about if X applies or not, then X probably applies to a certain part close to 50%.<p>So Bitcoin kinda is like money, and kinda is not.<p>So can we just stop the arguing and move on to figuring out ways to make use of it, or write code to improve it if you don&#x27;t like the as-is state, given that it exists and won&#x27;t go away? :)
jdnordyabout 4 years ago
A key difference between collectibles and bitcoin&#x2F;cryptocurrency is that collectibles don&#x27;t claim to be money nor are they trying to replace current money systems. I&#x27;m no expert on money, how it works and how it gets value, but I would be interested to find an article discussing whether cryptocurrency has enough of the qualities of &quot;money&quot; to replace any current money system.
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paxysabout 4 years ago
The explanation I have seen works best for a non-technical audience is – Bitcoin is digital gold, and there is a global ledger which automatically tracks who owns how much of it.<p>There is a finite amount of it out there, and it has to be &quot;mined&quot;.<p>There is nothing that makes it different from any other &quot;coin&quot; or really any other combination of bits (just like gold isn&#x27;t unique among all the elements in any way), but it is simply what most people decided would be the one.<p>No country or central government decides how much Bitcoin is worth. It is all up to people trading on many individual exchanges. Or you can buy&#x2F;sell it directly without using an exchange, all same as gold.<p>Is Bitcoin (or will Bitcoin ever be) a currency? This one is complicated, and goes into subjective discussions about what currency even means.
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syllable_studioabout 4 years ago
I don&#x27;t agree with this assessment at all. I think the immense value of bitcoin and other technologically advanced, secure, decentralized networks comes from the detailed network communications which they enable. They allow global financial transactions through a powerful medium in a way that has never existed before. This has nothing to do with baseball cards. The fact that decentralized networks enable NFTs and collectibles is a small subset of the value and power of decentralized networks.<p>The network is the value. To me, this is what bitcoin is. <a href="https:&#x2F;&#x2F;medium.com&#x2F;the-capital&#x2F;the-network-is-the-value-an-essay-about-the-value-of-a-bitcoin-c49fec8c3d1b" rel="nofollow">https:&#x2F;&#x2F;medium.com&#x2F;the-capital&#x2F;the-network-is-the-value-an-e...</a>
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didibusabout 4 years ago
It&#x27;s a new technology, I don&#x27;t think comparing it to collectible is totally accurate.<p>As a collectible, it can choose to print more of itself if needed, all it takes is a majority to agree to it by altering its protocol (which could also result in a fork).<p>As a collectible, it can also trade itself digitally, but cannot be copied.<p>As a collectible, it keep tracks of all transactions between parties (even though the parties are anonymous).<p>So I mean, it is what it is. It has resemblance with gold, with fiat currencies, and with collectibles, but it&#x27;s also none of those.<p>And similarly, different cryptocurrencies and blockchain based technologies have similarities with one another, and yet important differences.<p>I think the question that matters more is: could it be used as money?<p>The article says it needs to be usable to pay a central governments taxes, that&#x27;s just a matter of policy, so it seems like it could.<p>It also says it has to capture dept, well that&#x27;s an interesting difference here, some other crypto could work as such, but Bitcoin has a fixed limit right now. I don&#x27;t know if money needs to capture dept, that&#x27;s what it does now, it didn&#x27;t always.<p>And so I think I won&#x27;t agree with this articles definition of money, I recommend people read wikipedias take instead: <a href="https:&#x2F;&#x2F;en.m.wikipedia.org&#x2F;wiki&#x2F;Money#Functions" rel="nofollow">https:&#x2F;&#x2F;en.m.wikipedia.org&#x2F;wiki&#x2F;Money#Functions</a><p>&gt; Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context<p>Maybe you don&#x27;t consider Bitcoin generally accepted quite yet, but it could be, and I think that could make it money if we wanted too. And that&#x27;s because it has all the functions needed to do so: it can store value, it has a unit of relative measure, and it provides a medium for its exchange.<p>Which leads us to the most important question: Why would we use it as money over the alternatives?
nxpnsvabout 4 years ago
Can I turn this around to understand why anyone would care about baseball cards?
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trimboabout 4 years ago
Bitcoin is not a collectible any more than individual gold bars are collectibles.<p>A collectible can be compared in value to another collectible of the same type. I might want a 1979 Dave Kingman card because I&#x27;m nostalgic for Dave &quot;Kong&quot; Kingman. Others will buy the Dave Kingman card to sell it to people like me, but we all give the card value based on its condition, the player, the year, etc.<p>But a Steve Macko card and a Dave Kingman card are completely different in value. They are independently valued. Bitcoin is not.
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sMarsIntruderabout 4 years ago
I really don&#x27;t care getting downvoted, but I really think this is the worst explanation of what bitcoin is. There&#x27;s a book that I strongly recommend to the author of this article: the bitcoin standard. The book gives also some fundamentals of what money is, and what bitcoin solves and can solve. (talking also about bitcoin layers) I understand this is a divisive topic, but there&#x27;s really nothing to with the baseball cards here.
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rjakobssonabout 4 years ago
The reasons I buy Bitcoin is to have a SoV that is borderless, unconfiscatable, easy to carry with me and transfer, and which doesn&#x27;t care about which group is currently running the national monetary policy. Time will tell if this is a good use for it, but so far it looks quite promising.
RcouF1uZ4gsCabout 4 years ago
Addendum:<p>Now imagine that these baseball cards, instead of featuring professional baseball players, instead featured people who had run on a giant hamster wheel for some time at some speed. Also, the more baseball cards that get made, the longer&#x2F;faster the person has to run on the hamster wheel.<p>Initially, you could run on the giant hamster wheel for a few minutes and make a baseball card. Now, because so many baseball cards have been made, you have to run for months on a giant hamster wheel.<p>Eventually, professional athletes figure out that instead of using their athletic prowess to play sports, they can actually make more money by taking their athletic ability and running on giant hamster wheels. In addition, many metal shops have also figured out that instead of making other stuff, they can maximize their revenue by instead concentrating on making giant hamster wheels so people can run on them to make these cards.
qwertoxabout 4 years ago
The feature of being able to sign a message in order to prove that you own a certain wallet is one which I never see discussed. It&#x27;s a pretty useful one.
brbsixabout 4 years ago
<p><pre><code> Even its strongest selling point, absolute privacy, is mostly a lie </code></pre> That only became a supposed selling point among the uninformed as a result of widespread misrepresentation in the media. At least from my perspective, nobody using it very early (i.e. 2011-12) was ever under any illusion that privacy or anonymity were a feature. People using it for illicit purposes have never been. Mixing services and informal brokers willing to exchange cash for BTC were widely available for that reason even then. Later of course BTC-&gt;XMR-&gt;BTC and then CoinJoin et al.
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purplecabbage77about 4 years ago
Something this article misses though is that Bitcoin, unlike stamps and Beanie Babies, is digital, which I&#x27;d argue makes a huge difference.<p>Imagine if you could exchange Beanie Babies with anyone in the world with an internet (or satellite) connection. That seems...at least a little more useful?
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bitcoinmongerabout 4 years ago
Are we just going to ignore the environmental impact of Bitcoin?
reasonsabout 4 years ago
Anyone else think Bitcoin is false hope hidden in layers of impressive technology? Like Q conspiracies targeting smart people. Heh, I was duped by both.
khazhouxabout 4 years ago
One difference though is that all baseball cards were acquired for pennies originally, then grew in value. You don&#x27;t have to spend a month of heavy-duty electrical bills or $50K to buy a fresh baseball card or a beanie baby or a pez dispenser.
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alwillisabout 4 years ago
Of all of the bad articles about bitcoin, this is among the worst.<p>Here’s the best short description of bitcoin I’ve seen:<p><pre><code> Bitcoin is a non-sovereign, hard-capped supply, global, immutable, decentralized digital store of value. It’s an insurance policy against monetary and fiscal policy irresponsibility from central banks and governments globally. </code></pre> —@travis_kling