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Merged Bitcoin - Part 3

jeremyp said:
There's anther point which is that, if nobody was mining gold, it would still be possible to speculate on its value as a commodity. The energy costs will be practically zero because when you buy gold, it isn't delivered to you (unless you are buying it to make it into something), it just sits in a bank vault and somebody in the bank just makes a note that you now own the gold, not the seller.
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Gold is essentially a proxy for the economy of India at this point. 40% of all the gold mined worldwide in 2021 went to the Jewelry market there.


Globally about 80% of all gold production goes into Jewelry. About 10% goes to other industrial products. Most of the remaining 10% goes to speculators but some does still go into the financial system. for 90% of the gold produced there are shipping costs, but it's also going to produce very real products.
 
psionl0 said:
Can you prove that a ban on bitcoin would be more successful than a ban on drugs?
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Why does it need to be? The ban on sexually assaulting children or rape in general is poorly enforced, therefor by your reasoning we shouldn't bother with criminalizing them at all.
 
ChrisBFRPKY said:
Please be more specific.
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I buy x amount of Bitcoin, which costs me £5000.

Some time later I sell it and, because the price has rocketed, I now have £1,000,000.

Where did that £995,000 come from?

I want to know what harm, if any, generating that £995,000 did to my fellow citizens, the environment, society in general, so I can determine whether donating that money to charity as you suggested would really make the exercise ethically acceptable.
 
Let's see if I can clarify what I'm asking with a couple of examples.

Suppose I buy a painting by a struggling artist for £5000 and some time later, after the artist becomes fashionable, sell it for £1,000,000. I know that £995,000 has almost certainly come from rich people who have driven the price higher in an effort to make as much profit as possible. They were never going to donate that money to charity or fund something worthwhile but with small profits. So if I donate the money to charity, that's done some net good.

Suppose I invest £5000 in a company that is making a scam product like homeopathic remedies. Some time later I sell my shares for £1,000,000. I know that money has mostly come from (or at least been enabled by) poor people who have been bamboozled into buying something worthless. Even if I donate my profits to charity, it's unlikely I've helped make the world a better place.

I'm essentially asking which of these scenarios investing in Bitcoin is closest to.
 
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Pixel42 said:
I buy x amount of Bitcoin, which costs me £5000.

Some time later I sell it and, because the price has rocketed, I now have £1,000,000.

Where did that £995,000 come from?

I want to know what harm, if any, generating that £995,000 did to my fellow citizens, the environment, society in general, so I can determine whether donating that money to charity as you suggested would really make the exercise ethically acceptable.
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I understand. As I mentioned in my post above, Bitcoin and other crypto should be considered a commodity IMO. Profit comes from speculation and trade. As far as personal morality, that's up to you.

Would any fellow citizens be harmed? Unknowable. Did trader Bob buy Bitcoin at $20K and sell it a $10K? Did trader Bob move his Bitcoin to a wallet on his PC and lose the private keys? You can theorize any number of scenarios yet you cannot know if anyone was harmed. Same with any other commodity. If you've ever purchased a product from China, was child labor used to produce it? How can you know?

Was the Environment harmed? Again, have you ever bought anything from China? Then yes. Any production or transportation of any product will harm the Environment. The nice thing about Bitcoin production is that most mining facilities use renewables, especially Solar power and the transportation costs are minimal.

Will society be harmed? This one is easy: Nope, society will not be harmed. Wealth increases standards of living, creates jobs, promotes education and growth, communities prosper.

In the end it's up to the individual to decide. What can one invest in to create wealth that does no harm or has no negative effects for each category: the Environment, people and society in general? The answer is nothing.
 
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ChrisBFRPKY said:
I understand. As I mentioned in my post above, Bitcoin and other crypto should be considered a commodity IMO. Profit comes from speculation and trade. As far as personal morality, that's up to you.

Would any fellow citizens be harmed? Unknowable. Did trader Bob buy Bitcoin at $20K and sell it a $10K? Did trader Bob move his Bitcoin to a wallet on his PC and lose the private keys? You can theorize any number of scenarios yet you cannot know if anyone was harmed. Same with any other commodity. If you've ever purchased a product from China, was child labor used to produce it? How can you know?

Was the Environment harmed? Again, have you ever bought anything from China? Then yes. Any production or transportation of any product will harm the Environment. The nice thing about Bitcoin production is that most mining facilities use renewables, especially Solar power and the transportation costs are minimal.

Will society be harmed? This one is easy: Nope, society will not be harmed. Wealth increases standards of living, creates jobs, promotes education and growth, communities prosper.

In the end it's up to the individual to decide. What can one invest in to create wealth that does no harm or has no negative effects for each category: the Environment, people and society in general? The answer is nothing.
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Bitcoin differs from all other commodities in that it has no intrinsic value. It’s value is purely based on the greater fool theory. One invests in the idea that a greater fool will come along who will pay more at a later date. Not because there is a greater need for the commodity just because they think there will be an even greater fool after them.
 
lomiller said:
Net present value of future earnings.

When you own shares you own a fraction of that companies future profits no matter whether they return that to you in the form of dividends or re-invest it for you in the form of retained earnings. These future earnings have an equivalent value in present day money (called net present value)which gives a company it's value. If future earnings increase so does the value of the company.

This won't translate to bitcoin, since it has no future earnings.


There is utility in getting back and forth to work, and from the customer perspective there is an overall increase in utility. The problem with oil companies is that a large part of the cost of oil is socialized instead of being paid for by the company or it's customers. These socialized costs reduce economic efficiency and overall economic productivity in the long run and therefor hurt consumers, even those benefiting from artificially cheep gasoline.



On the contrary there is value in meshing the needs of buyers with those of sellers so long as there is no monopoly or market manipulation involved. This added value increases the overall goods\services produced by the economy and makes everyone a little richer.



Bitcoin doesn't have the positive economic benefits of the other things you mention.

The lack of economic benefits to offset the high infrastructure and energy costs means the mere existence of bitcoin makes everyone a little poorer. Since those costs are socialized, the people causing the problem get to benefit financially from doing so. Regulation (AKA laws against socializing the costs of your economic activity) is a key part of limiting the damage these types of schemes do the the economy and are probably entirely appropriate with bitcoin.
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1. Just like Gold has no future earnings.
2. Oil companies refine and sell a commodity. Policies that affect that commodity affect the price the consumer pays.
3. I realize Real Estate and brokering it is not an evil profession, neither is profiting from it.
4. We disagree. Bitcoin is and has been an economic benefit. Energy cost is offset more often than not by renewables. It would be a difficult argument to make that Bitcoin has not increased the installation and use of renewables. Every product or commodity reflects a cost in energy to produce and transport. It would not be out of the question to speculate that the Bitcoin mining industry uses more renewables than any other single industry.
 
Dr. Keith said:
Bitcoin differs from all other commodities in that it has no intrinsic value. It’s value is purely based on the greater fool theory. One invests in the idea that a greater fool will come along who will pay more at a later date. Not because there is a greater need for the commodity just because they think there will be an even greater fool after them.
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One could also argue that Paypal has no intrinsic value. Though it does seem to be an electronic method to store and transfer wealth, although not nearly as secure as Bitcoin. The value is in blockchain technology. The World banking industry agrees. IMO the Bitcoin is the commodity produced by the blockchain. You can't have one without the other.
 
I can use Paypal to buy something or send money to someone without worrying that the value will have changed between my clicking send and their bank receiving the money.
 
Captain_Swoop said:
I can use Paypal to buy something or send money to someone without worrying that the value will have changed between my clicking send and their bank receiving the money.
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That's the same with bitcoin too. It changes price quick, but not that quick. Worst I've seen was 10% in 20 minutes, when Elon Musk changed name of his twitter channel. But that was unprecedented, and to this time never repeated, usually it's several times slower.
The whole bitcoin trading is just bitcoin transactions .. and it has never been an issue.
 
Captain_Swoop said:
I can use Paypal to buy something or send money to someone without worrying that the value will have changed between my clicking send and their bank receiving the money.
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Of course you can. Likewise, I can send a friend $100 in USDC and it will still be worth $100 USD when they receive it, and the day after. I can move mine for a much cheaper fee than Paypal, often free. I foresee most banks, if not all, will someday have their own stable coins to transact business on a routine daily basis. It's cheaper, more efficient and far more secure than moving tons of cash around the World.
 
Captain_Swoop said:
If mining becomes unprofitable and it all collapses, will we see cheaper graphics card?
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Be careful. The last time bitcoin crashed, in 2019, people repacked their mining graphics cards into original packaging and returned them, and some of them were totally thrashed but sold as “new -open box.” This will happen again if it’s not already.
 
ChrisBFRPKY said:
Of course you can. Likewise, I can send a friend $100 in USDC and it will still be worth $100 USD when they receive it, and the day after. I can move mine for a much cheaper fee than Paypal, often free. I foresee most banks, if not all, will someday have their own stable coins to transact business on a routine daily basis. It's cheaper, more efficient and far more secure than moving tons of cash around the World.
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Now do UST, TITAN, OUSD, Basis Cash, Digital Dollar, SafeCoin or USDN … or wait 3 months and do USDT.
 
Dr. Keith said:
Bitcoin differs from all other commodities in that it has no intrinsic value. It’s value is purely based on the greater fool theory. One invests in the idea that a greater fool will come along who will pay more at a later date. Not because there is a greater need for the commodity just because they think there will be an even greater fool after them.
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WOW. Nobody has EVER claimed that bitcoin has "no intrinsic value" before. This is the first time this has ever been discussed.

Thank you for pointing out what nobody knew.
 
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