The problem is people talking past each other. Using similar words, but focusing on different contexts.

Bitcoin itself has no intrinsic value - Correct, like most forms of currency, it's only value is as a token of an agreed upon trade value with another party.
The "value" in it is only as a form of exchange between two parties. The existence of Monetary exchanges where people are willing to buy and sell bitcoin with other forms of currency is establish a market value in a metric comparable to Government issued money we are used to. The "value" is set by what you can get by exchanging the bitcoin with someone else. Just like Gold has no value to me as an individual consumer, but someone is willing to trade me government backed paper money in exchange for it. Government backed paper I can then use to trade with other people.

What value do the equations actually solve in mining? The math is self-serving to Bitcoin. The math being computed is math related to Bitcoin's transaction system. Unlike a SETI or other distributed compute systems... it is not a system that has people 'mine' to solve problems for the rest of the world. The compute isn't being applied to some other problem solution, it's being applied to the block system behind Bitcoin's integrity. The "value" of the compute work is that it's actually a decentralized way to validate and strengthen the Bitcoin eco-system. People are rewarded to contribute to the compute power needed to validate the transactions themselves.

Bitcoin has integrity that is validated and strengthened by math and peer sharing rather than regulated record keeping by governments and "tamper proof" physical tokens.

Like all token currencies, it's only value is because of an assumed worth in exchange. A government currency is backed by an entity willing to trade a value for that token. A digital currency like bitcoin is not backed by anyone - it's monetary value is established by what the peers set it to be through their willingness to trade for it.

In that sense, the idea that pumping Bitcoin is a self-serving process, because driving demand for it, drives up the value of the token you may already be holding (Diamonds anyone???). And yes, another system could spring up and compete with it... the same way bitcoin just 'appeared' without any value backing it. But it's the attributes that make Bitcoin secure and independent... that make it desirable to use as a form of exchange. It's not completely arbitrary - it's just not backed by an exchange that one might considered 'guaranteed' to exist.. like a strong government entity.

The demand is largely in the markets that wish to stay out of the way of government monitoring and intervention. They have tried to mainstream some of this, but reality is the STRENGTH of these systems all comes back to the truth of its something you can use, and trust, without having to trust or reveal yourself to the government.

Mainstream retailers won't clamor for it unless it becomes a means to move or collect money cheaper.

Alternate forms of payment will grow demand by offering tools the prior method did not - but these do not displace the CURRENCY itself - just how it is moved.

Two flaws in your thinking
1 - It has complete transparency - every transaction is visible. What it doesn't require is tying a government known entity to a wallet and has anonymity - Very different from lacking transparency (that would be those closed door Fed sessions...)
2 - The idea that you want something AWAY from the government doesn't just mean 'nefarious' use - it can mean you wanted a system away from the baboons in government. Governments manipulate currency as part of their economic programs - designing a trade system AWAY from the government means you remove their ability to manipulate it.

Scenarios like Mt Gox tho can still happen... even without compromising the larger network. That's still an issue ... but one could argue the same risks exist in electronic funds handling at banks. Difference is banks are insured.

This line of thinking is wrong. Just because the encryption used is believed to be secure, that does not make it unhackable. Just like this week's disclosure on wpa2... even when the encryption itself was not broken, flaws in the protocol were found. Flaws in bitcoin have been found in the past as well. Flaws in AES, RNGs, etc... all been exposed before.

We talk about Stength in encryption - not as things as 'unhackable'.

But a safe at home holding worthless tokens is still worthless. Impenetrable wallets do not safeguard the currency. Major failures in how the currency is valued or traded would cripple your tokens even if they never left your wallet. Because all value is about a shared expectation- destroy that and value is hurt.

It's all speculative today.

If it's a currency of the future... then it will be available in the future. there is no reason to own it today except to speculate on its appreciation.

The system really can not move from where it is today to a global currency... so it will change, multiple times.

There will always be people speculating on future shortages, and the digital media world we live in now only fuels their ability to promote and liquidate when needed. Everything is speculated now... even Lego sets.

The only protection is educated buyers and self control. Unfortunately that is a tall order...

Those two things are nothing alike. One is an asset... one is a currency.

If bitcoin is looked at as a currency.... and in the future I need to buy $1 worth of milk... there will be $1 worth of bitcoin available for me to buy that milk. If not, bitcoin is not viable for currency at that time.

I do not need to buy bitcoin now to buy that milk in the future. I would only buy it now because I am trying to speculate on the future valuation of bitcoin.

The arguments over "value" is because people confuse this with an actual commodity. People buy and sell commodities because they are actually needed. The market invests in commodity futures and inventories because they aim to speculate on the future prices of those commodities. At the end of the day, there is a market for the actual thing, and an investment market around the price of that "thing".

Bitcoin has a limited supply, like a commodity might, but there is no actual market for bitcoin itself. All we have is the potential market for moving/exchanging it, and an investment market around the future prices of it.

It is not like the future price of a stock. It's more like buying and selling seats at a table to buy/sell things that don't exist. It's a market of stock brokers who actually have no physical companies issuing stock. But you are buying and selling the access to this market... of nothing.

It's pure speculation - and not a long haul one. For time is actually against it. The more time that goes by, the more risks of alternatives, flaws, etc that can devalue its future.

There is zero reason to buy bitcoin except as a speculator. The days of viable investment to just mine are long gone. The money is in getting over people to buy in... or pay you to move or organize it... or speculating on future prices. All of those things rely on people promoting the value and interest in the token. That's why people make references to Ponzi schemes, etc... because the only value to be made is by getting others to participate more.

If it was a pure currency with backing... one might argue you are shifting your today dollars into another form to protect it by moving into another form that has a better future. But we aren't facing a collapse of the US government backing of the dollar... or the number of governments that would rush in to stop that from happening.

People don't buy gold because they think the usd is going to collapse... they buy gold to speculate on its appreciation vs the usd.

Currency traders are just retrying to make money on fluctuations. None of it is about commodities or assets for the future.

Then I think we agree that the statement "unhackable" or "100% safe" isn't your best choice of words Especially in relation to physical currency. You can't take the physical currency out of my wallet. Electronic trading of that currency of course is riskier.. but if you are focusing on the digital wallet, its still inferior to physical assets in regard to remote risks. Of course, it adds extra access controls compared to other electronic formats... but as soon as we are talking about using bitcoin for convience transactions... all those layers of security will eventually be weakened in favor of access/speed. Like putting a wallet app on a smartphone, etc.

Yes, but unlike government backed currency, at least there is no regulation and backing in those exchanges. And much of the "value" of your coins is being determined by these non-regulated, unsecured agents. It's free market to the extreme... which isn't always good. While all the theory on the integrity of the bitcoin itself is all fine... people aren't actually buying/selling that. They are trading based on a market worth... a worth being established relative to other assets... by pseudo trusted entities. This is a benefit, but also a great risk. And given the entire model revolves around making money by moving almost imaginary things... the deck is stacked in favor of people ultimately trying to squeeze and maximize their personal gain.

The math behind mining and tracking transactions itself do not set a market value relative to other currencies. This is the side of the equation that relies on 3rd parties.. which are not incorruptible.

Art isn't a commodity in the context I was using. I was using commodities in the market context of Trading Commodities, Currencies, or Stocks.. since you brought up the analogy to buying a stock. Commodities as typically seen as Metals, Energy, and Agriculture.

Clear enough that you have zero interest in these things beyond something you wish to appreciate in value - zero interest in it as a crypto currency or anything else. Might as well be beanie-babies.

Yes, a typo - thank you. There are reasons to buy things besides speculation. This thread has been talking about "value" many times. But its clear your position and interest is purely one of a investment/speculation... and nothing about actually using it as a currency or its place in changing commerce.

What it cost you really has nothing to do with establishing value... just sets an expectation of what someone would expect as the minimum to recover. Value is set by BOTH parties, not one.

You are confusing the term. It may have value as a TOOL/Technology.. that does not equate to value in terms of a intrinsic value as a tradable commodity.

If it costs me $10 to make a pretty piece of paper... that doesn't mean it has a market value of at least $10 or some inherent value at all. Just that it had a cost to produce.

I LOL'd!!

You're trying to argue that .1% of the GLOBAL energy consumption being spent on a SINGLE THING that all it does is validate itself... is trivial??

Convert energy into something you think matters... That's like saying if you killed 7.6 MILLION people (0.1% of the world) it would be insigificant to look at.

Anything that even registers at the GLOBAL level is not trivially small.

Ugh... you should be able to comprehend that this kind of estimate can be created mathematical without actually measuring the actual use - which is what the disclaimer was really saying. This is a math problem with a known methodology/solution with known computing capabilities. We know the basic consumption model for energy compute... hence the estimation.

But I guess you think all those engineers who spec power and hvac in buildings are just fucking liars too...

The system is purely self-servicing. The calculations are used to validate the transactions in the bitcoin system - the compute power is not being applied to some external problem to solve like SETI, global warming, or general super computer needs. The compute is all focused on "itself" for a lack of a simplier definition.

It is not a distributed computing system for solving general tasks or other interests.

Yeah, but that's like a Smoker saying "If smoking kills, why am I still alive right now?". The fact the incident hasn't happened yet does not nullify it's probability or impact.

Bitcoin's value keeps going up because it seems the first rule of bitcoin is... you must hype bitcoin.

The skeptics still have valid concerns because the value or popularity of bitcoin does not alter the root issues people have with this iteration of the technology. It also doesn't address that nearly all the value is in SPECULATION - without any real backing... which is why people have a hard time believing it will weather any disruptors well.

Popularity and speculation can boost a value at a point of time - it does not make it more fundamentally sound.

But that's just it.... The future of Cryptocurency is not the same as the future of Bitcoin. Bitcoin is just one iteration... there is nothing locking it in place as 'the winner' or even a player!

So saying "block chain is the future..." or "cryptocurrencies are the future..." may all be perfectly valid... but that doesn't mean anything about Bitcoin. The only thing holding bitcoin in place is the current bitcoin holders and the miner's willingness to participate.

Think about this... let's say you are a major player in a economic loop... a person holding goods of value or a policy driver.. like a government. You've decided that blockchains are the future... you are big enough to shape the landscape. Do you think that entity is going to pick bitcoin as the foundation when someone else has already created all the value you start with zero?? Hell no.

A disruptor will start another system and lure people into buying into their model... not take an existing one completely controlled by other people... that itself is only anchored by history, not holding onto anything that intrinsically makes it hard to dislodge.

Look at how quickly something like Pokemon Go propagated... in weeks you had tens of millions of downloads. That is the new world order... with purpose something can spread to millions of installations in days. "prior footprint" means almost nothing anymore.

They don't need to 'stop it' - just have something else more interesting. Or what if a flaw comes out that erodes the credibility of the solution.. All it takes is for interest to move to something else... because the unit has no actual value of its own.

Remember right now, bitcoin is a property people are speculating in. It's not really being used as currency... it's being hoarded because people think it will be a commodity worth something. But it's not a commodity, it's a virtual token... whose valuation is driven by 'exchanges' and people within the community itself.

My point with the post was... if a major player were to move into the space, why would they adopt something where other people already hold most of the value? They'd start something new and try to push it's adoption. Now imagine if that player were the financials or a government... they have a lot bigger hammer to 'push adoption' with...

They can recover fees for processing the compute that validates the transactions. Today even the model functions in a market where miners can set rates on what they charge to validate transactions.

But the problem of becoming prohibit-ally expensive to compute is a problem as are numerous scaling problems the current system has... which is why most don't see it as a viable global currency in its current form.

Because if its not... it's purely a speculative investment whose only driving force is trading between speculators and without a future for the product, you kill the outlook of future escalation = the bubble pops.

It is when you have no trust behind it. Do you hold all goods until settlement? We know how that stunts consumer transactions (holding till check clears, etc) and would make it virtually useless for real-time exchange of goods. Settlement time isn't a big deal because we are dealing with institutions that have backing.. through insurance, capital reserve requirements, fraud protections, etc.

A currency that isn't stable... is risk for a business. They don't want to take on that risk when there are safer options available.

The speculative trading is great for the people collecting the fees and for the early adopters trying to time their sells... and is horrible for everyone else and the future of bitcoin actually having a practical use.

Right now it reminds me of the Penny Bidding auction sites. The action is in the transactions, not the actual product being sold. I don't trust the trading indexes or exchanges at all... the conflict of interest and lack of oversight is pure combustibles waiting to go up...

The dark web angle of bitcoin is interesting, but not really a significant component of if the thing should succeed or be legitimate.

What is far more important is the players who stand to be able to manipulate the market... aren't necessarily people you trust.

if you can't access your wallet... you're toast. Doesn't matter about Coinbase at all at this point. Transaction is done... its you who needs to recover your private key more than anything.

Just that Coinbase knows what wallet they sent to... doesn't help you. You still need the private key. no key... no access.

you gotta hope that your private key was stored somewhere where you can access it and if it was encrypted, that you know the passphrase.

There are easy backups... but just like digital photos, if you trust only a digital copy.. you are at that copy's mercy.

All key pair systems are like this (even the keypair behind SSL certificates for everything on the web). You lose it, the certificate is useless. The delta there is a Certificate Authority will sell you a new one because they don't use the private key to identify who you are.. they use other vetting. For bitcoin, without your keypair... there is no way (or one) to validate you as the owner of those other keys.

The same problem exists if you don't secure your keys properly.

These are the tradeoffs PKI has... and most people simply aren't used to treating their private key so seriously... they think its like a password that some entity could just reset, or revoke access, etc.

A key can be represented as text... just print it out and keep the copy safe. The wallet formats I'm less familar with, but I bet there is an offline version you could keep as well.

but Bitcoin mining IS verifying transactions - they are not separate things. Miners are rewarded for solving the block (group of transactions) in new BC (and potentially transaction fees).

The point in the article is not that bitcoin transaction load is only a tiny portion of the mining activity - but that the energy used now doesn't HAVE to be that way if you didn't have the current mining situation. The self-correcting difficulty metric is what is driving up the cost of mining due to the influx of mining ability (the 'strength of the network')... and the bitcoin craze drives people into mining... so the complexity continues to balloon. The pace of generating new blocks is relatively constant... but the more people that try to get involved, the more effort needed, and hence we get into the massive compute needed now.

The dozen PC example is if no one else was doing the work... not that a dozen PCs represent the work dedicated to transaction computing. It's kind of a stupid reference really.. because it represents a hypothetical that would only exist if bitcoin was dead

Trades happen when the buyer and seller criteria align... that doesn't necessarily result in a continuous line of prices.

The piece you are missing is those things provide something in return for their energy...

And let's be real... they are comparing the energy output of entire COUNTRIES..

But to spitball for you... a refrigerator made post 2000 should consume about 600kWh. In 2016, there were approx 126 million households in the US. If you assume 1 for a reasonable average.. That's 75.6GWh... compared to the 32.3TWh estimate from the source article. So Bitcoin is consuming 427 TIMES the amount of energy of all the fridges in the US. I considering the US probably has one of the highest rates of penetration for that kind of consumer good.. and the US is about 4-5% of the global population.. that means even at US rates (upper limit), Bitcoin is about 20x more energy than the thing that keeps our food safe at home... globally.

And Bitcoin does nothing.

Such a model always requires 3 separate parties to agree... The buyer, the seller, and the NEXT buyer. As such, the strength is only as good as the faith of the NEXT guy in the chain. Government backing works because the NEXT guy has faith in the government's willingness to trade him out... or if the thing traded itself has other uses, the buyer is confident they will be able to move it on again for value.

That's why having something BEHIND the unit is the difference that makes something stable or not. Bitcoin does not and is driven almost entirely by speculation. That means, as soon as confidence flops... so will any potential for trade value.

You don't need bitcoin to represent a verifiable token you can trade and pass along. Until someone with something of value is willing to stand behind bitcoin and garuntee its value to a commodity that makes sense outside of Bitcoin... it's value is only as good as the speculation that more people will get involved later.

Meaning.. it's just a time game. And there will be technical hurdle or pivot before the clock runs out anyway that will cause the shock.

Such logic assumes you have an audience that hasn't heard the bad news 'yet'. Not a theory to bank on in the world where social buzz spreads faster than actual news.

I might be banging a supermodel.. and get hit by a meteor at the same time. Maybe...

'once volatility eases up' - this is a misnomer in itself when there is nothing to stabilize it and its all fueled by speculation. That's why the issue is getting WORSE, not better.
The bigger the target it has... the more risk of government intervention or hacks or disruptors. The market isn't going to get better as it grows... it stands to get worse. Decentralized systems tend to get more chaotic/segmented as they grow... not settle down.

It's very hard to gain stability later when the system lives on 'ifs' and 'when'.

No. - he said he didn't know what it would do while he does have a track record on others. Uncertainty vs a probability based on past performance.

You missed the most important group...

- The people who have no interest in bitcoin's future as anything except something with lots of upside potential for appreciation in a short period - so it's a flipper's dream. The ones buying and pumping bitcoin as an investment purely because they see the potential to buy now, and sell much higher.

This group doesn't need to see bitcoin be anything but something to sell higher than they bought it. They don't care if bitcoin goes to zero.. as long as the crash is after they sold. They don't care if the doom is near.. because they feel they have so little exposure that if it crashes 'no big deal'.

This is the group that is pumping real money into exchanges... while the real manipulators are happy to see them and others keep coming in because they help validate their scheme.

SCAM doesn't mean worthless - it means misrepresented.

If you paid for your telsa and they delivered a chevy volt... you wouldn't argue "You still got 1/3 of what you were sold".

Its real easy to avoid being called out in an investment when you say "theres no telling how high it will go!" - because you've made no real commitment. That's just avoiding commitment, not being right because you timed it properly.

When people preach about "currency of the future" and why you should buy now.. that's gonna be scam territory.
If you preach "timing market pricing to make a profit" and you don't really give a shit about what bitcoin is... you're just an honest flipper, not scam-y.

The problem is, people who really are just flippers... but then use the scam-y points to try to justify their position as not just flipping for profit... or as reasoning to recruit others.

Yes, a ton. No people aren't recruiting in this thread, but they were using this argument to defend their buying/positions and why the future of prices is UP. Which is basically the same thing... creating an image of 'missing out' that creates pressure on others to get in for Fear of Missing out.

Don't be naive. Just because someone doesn't say it outright doesn't mean it's not there. It's one of the oldest tricks in the book... generate sales indirectly by raising awareness and setup the audience to make them draw the conclusion that they should get in, and don't delay or you may miss out! It plays out in so many cons...

All these stories and blogs about how great bitcoin is and how "the sky is the limit" are not historical pieces Running around boasting to strangers about how hot and success you are for investing in crypto is self-serving because all prior buyers benefit from new money and interest in the product.

It's not people just defending their own speculative purchases against external scrutiny. If it were, all they'd do is say "Scoreboard..." and laugh while counting their money.

And how many people do you think are really holding onto their own wallets vs people who are using online wallets? Still have to give (and maintain) identity information and banking details in those exchanges to realize any value.. and most now are doing that up front, because they aren't mining themselves... but buying.

When sites promote 'make sure you keep your recovery phase' as the backup strategy.. that is not really the same as keeping the wallet (addresses, and keys) offline yourself.

As usual, convenience will erode security and promote lax behaviors that will create liabilities. It just comes with the turf of dealing with the general population.

Do you seriously not grasp the difference between understanding and articulating something vs describing your own feelings?

Do you think every psychiatrist is really inflicted by the things they are able to describe?

... This kind of retort is just what people do when they have no real response. Just attack the messenger...

It will be when the next mt gox situation happens and your portfolio gets pummeled because of the backlash... or the rash of "I lost my millions..." wallet stories gain too much press and it slow things down. The public perception of bitcoin IS your concern since that is the only thing driving it.

The point is it really doesn't matter how far you can take security if the bulk of the pack isn't... and the ecosystem is promoting lax behaviors... it creates a tinderbox that is ripe to burn.

That was kind of my point... you can't point at the most extreme example of secure and act like that is the Norm. So yes, your 10%-20% maybe doing the most secure thing... that doesn't mean the entire market behaves that way. That means the risk and exposure for the larger market and the consequences it would bring... are real and represent a significant risk. So citing "perfect behavior" is not really a retort to the concern over accountability and recovery - the perfect behavior is not necessarily representative of the norm.

the center mass will move over the unstable ground... because the old but secure will be overtaken by the new, but less secure. This means the body as a whole is still at risk...

Your banking example is valid... but there are additional protections in place that either help someone recover from such mistakes, help cover losses, or systems to prevent a major incident from being catastrophic to the system as a whole. In short... protections that would soften the blow to the larger mass.

It's a simple fact that reliance entirely on key/pairs without the ability to re establish identity is a catastrophic risk to an individual. It's a security model that has tradeoffs that the general population has shown time and time again it can't handle. And the "convenience" features being put out there are making it more accessible- but aren't touching the basic tenant that the risk is based on.

It's a consequence of the pure decentralized model... trust no one in particular. That means there is never one entity to ultimately trust as an override. And it's difficult to move to a consensus/majority model that doesn't compromise you... especially when the voting power is not equally distributed (as is the risk in what is happening now in mining)

If you want an echo chamber... you're in the wrong place.

However, the vast majority of people in the world have never even heard of Bitcoin, much less crypto currencies. I personally ask every business that I enter if I can pay with Bitcoin.

remember when some people said there aren't people pumping bitcoin here... well what do you call this? When you think bitcoin is all UP UP UP - why on earth would you want to pay in bitcoin today? This is all about trying to create buzz to keep the speculation pump full...

Then what does getting an uninformed response cause you to smile?

Puhahaha

As for suing... buy a dictionary first.

You can't eat rubber either... but it still has a purpose and value.

The term is not pointless - not does it need to be limited to survival to have some value outside of a unit of trade

Yes and no. Yes in the pure sense of your argument, but no because many are valuing BTC for (ill-informed) reasons. The problem with your pure argument of 'people are valuing bitcoin... because its bitcoin, not zimbabwae-Coin" is "why bitcoin" is built on premises that can easily be surpassed by look-a-likes.. or BTC can crash from reasons unique to BTC and not other currencies (like a software flaw, etc).

Left in the open isn't as effective as a cooling housing that is forcing air in/out in specific ways.... because you aren't moving the ambient air or really getting the hot air 'away' when just left open.

Doing something stupid at scale... doesn't make it any less stupid.

A real DC uses hot and cool zones with forced air moving in specific directions to work with convection movement to ensure heat is moved out and cool is moved in. And for those who build custom hardware for their DC... like the googles of the world, etc... you build your heat exchangers on the hardware intended for that kind of setup. It's an integrated system.

That's frightening