One is backed by aircraft carriers and the force of law, the other is backed by math and an egregious amount of energy usage.
Don’t see how it precludes the ‘having value’ part of things.
Of course not to the same extent as in crypto currencies, but still.
Bitcoin is not backed by anything. Thus it has wild swings.
About that...
https://www.currentmarketvaluation.com/models/buffett-indica...
For investors to get that growth they desire, they need exponentially more new money to come into the system. If I buy 1 BTC at $40k, to double my money I need to sell it at $80k.
Maybe I sell it to one rich guy, maybe to two people on my level each buying 0.5 BTC at $40k, or maybe to 1000 poor people each buying .001 BTC at $80. But somehow $80k needs to come into Bitcoin.
Eventually you run out of people in the world with more money to buy in. And since the Bitcoins themselves aren't useful, the person who bought the top is SOL. The whole utility was "get more money out than you put in" and there's no bigger buyer left to make that possible, so now what is it good for? That's why people compare it to a pyramid scheme because pyramid schemes have an identical problem, with everybody making money until there simply aren't any more rubes left to buy in.
The dollar, even though it's still just scraps of paper and shared make-believe, doesn't have this scaling problem. People aren't holding onto their dollars expecting them to double in value. It's a currency, i.e. a handy abstraction layer over bartering, not an investment. I use the dollar because it beats trading my software development labor for chicken eggs from my boss's side-gig farm and then trading those for apples and gasoline and mortgage payments and electricity. I don't expect to get more out than I put in.
Stable currencies make sense and work. Double-your-money schemes run out of steam. It's that simple.
-- edit --
I will give Bitcoin credit though for being the first decentralized pyramid. It doesn't die, so if you miss the peak in one cycle, you can always hope that a few years later it'll come back in style and reel in a bigger crowd before collapsing again.
Why is Bitcoin of value? Because we burned energy mining it!
This circular argument is the supposed value proposition of Bitcoin.
Bitcoin not so much.
NFTs are status symbols, but i haven't seen bitcoin worn as jewellery yet. In any case, if people could use bitcoin to paint their house, its value wouldn't go up
But this is not the entire world, it's not even the majority of the world. It is a pyramid scheme in the sense that those who invested first will gain the most but at the same time that is true for basically any technology.
If you "got in" early on the web and started creating websites for example the likelyhood that you will be successful increases with time. You learn what works and what doesn't, you get ahead of everyone else.
Just to be born earlier could make you rich, just buy a good domain name and sit on it. People like me born later wouldn't stand a chance. People who created websites early that solves really obvious stuff is hard to compete against just because they were early in a new tech.
I have huge respect for the pinboard guy but I am not really sure saying "Bitcoin is a pyramid scheme" is going to help anyone.
Yes I agree, but at the same time it is also true that you could be that guy.
If Bitcoin turns out to actually be used in the wild in the long term, for asset storage or otherwise, you will be the one missing out.
Basically, Bitcoin and other crypto investment right now is all about FOMO. If it's gonna be important for many people in the future the valuation that it has now is nothing and could easily double many times.
I have just a tiny amount in bitcoin and eth to be frank. I am not sure I believe in the crypto space or not and so far I have missed a great opportunity because I was being too negative.
Honestly, stock investments is basically the same thing. If you invest early, you may get a big reward but the risk is greater that it won't amount to anything. The same is true for crypto.
The upshot of this whole situation is that many people outside of tech circles are now buying crypto as a form of lotto ticket, except when the dust settles, a bunch of people will be holding crypto that they want to use. It's possible the current gold rush will help crypto go mainstream.
Whoa there mate, that's pure hyperbole - straight up FUD.
If the government wanted to they could outlaw possession of cryptos - that would be attacking it. They have instead just wanted to levy taxes on it the same as all other 'investments' so their action very different to what you said. Can't bother to read the rest when your premise is just deceptive.
I like Maciej, but making factually incorrect claims is not helpful.
I was originally fascinated by crypto, but the more I've come to understand it the more I suspect the world has lost its mind.
Not a recent phenomenon.
Power, ideology, or capital naturally organizes with some sort of gradient, and as more participants that enter into a system, it bolsters the authority of the system itself.
If you don't like power, ideology, or capital, pursue love and peace. Or my advice is to try all of the above.
(Joke!)
Since this person fails to understand this in the crypto markets and many others who fell for the run up to 60K and it retraced backwards are the same ones crying 'scam' in 2018.
Learn to ignore the hype and sit at the bottoms when no one is taking interest like in March 2020.
There's no such central authority with Bitcoin and there aren't further expectations of payment either- value fluctuates but you're always going to have the same amount of coin unless you personally do anything about it. If Bitcoin is a pyramid scheme, then every penny stock is also a pyramid scheme.
I do wish these kind of posts that appeal to the lowest common denominator were less prevalent on Hacker News, as they're particularly found whenever there are big price swings so it's nakedly obvious what they're truly about.
